Document:

Exhibit
4.1

 

BOISE CASCADE CORPORATION

 

and

 

U.S. BANK TRUST NATIONAL ASSOCIATION

 

 

Fourth Supplemental Indenture

 

Dated as of October 21, 2003

 

 

Supplement to Indenture of Boise Cascade Corporation

dated as of October 1, 1985,

as amended as of December 20, 1989,

August 1, 1990 and December 5, 2001

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I

  
	
   

  
	
  AMENDMENTS

  
	
   

  	
   

  
	
  Section 1.1

  	
  Amendment as to All Securities

  
	
  Section 1.2

  	
  Amendment as to the Notes

  
	
   

  	
   

  
	
  ARTICLE II

  
	
   

  
	
  GENERAL TERMS AND CONDITIONS OF THE NOTES

  
	
   

  	
   

  
	
  Section 2.1

  	
  Designation, Principal Amount and Authorized Denomination

  
	
  Section 2.2

  	
  Maturity

  
	
  Section 2.3

  	
  Interest

  
	
  Section 2.4

  	
  Book-Entry Form

  
	
  Section 2.5

  	
  CUSIP Numbers

  
	
  Section 2.6

  	
  Security Registrar and Paying Agent

  
	
   

  	
   

  
	
  ARTICLE
  III

  
	
   

  
	
  REDEMPTION
  OF THE NOTES

  
	
   

  	
   

  
	
  Section 3.1

  	
  Notices to Trustee

  
	
  Section 3.2

  	
  Selection of Notes to Be Redeemed or Purchased

  
	
  Section 3.3

  	
  Notice of Redemption

  
	
  Section 3.4

  	
  Effect of Notice of Redemption

  
	
  Section 3.5

  	
  Deposit of Redemption or Purchase Price

  
	
  Section 3.6

  	
  Notes Redeemed or Purchased in Part

  
	
  Section 3.7

  	
  Optional Redemption

  
	
  Section 3.8

  	
  Mandatory Redemption

  
	
   

  	
   

  
	
  ARTICLE IV

  
	
   

  
	
  COVENANTS APPLICABLE TO THE NOTES

  
	
   

  	
   

  
	
  Section 4.1

  	
  Applicability of Covenants

  
	
  Section 4.2

  	
  Repurchase at the Option of Holders Upon Change of Control

  
	
  Section 4.3

  	
  Repurchase at the Option of Holders Upon Asset Sales

  
	
  Section 4.4

  	
  Restricted Payments

  
	
  Section 4.5

  	
  Incurrence of Indebtedness and Issuance of Preferred Stock

  
	
  Section 4.6

  	
  Liens

  
	
  Section 4.7

  	
  Dividend and Other Payment Restrictions Affecting Restricted
  Subsidiaries

  
	
  Section 4.8

  	
  Merger, Consolidation or Sale of Assets

  

 

i

 

	
  Section 4.9

  	
  Transactions
  with Affiliates

  
	
  Section 4.10

  	
  Designation of Restricted and Unrestricted
  Subsidiaries

  
	
  Section 4.11

  	
  Sale and Leaseback Transactions

  
	
  Section 4.12

  	
  Business Activities

  
	
  Section 4.13

  	
  Payments for Consent

  
	
  Section 4.14

  	
  Reports

  
	
  Section 4.15

  	
  Waiver of Certain Covenants

  
	
   

  	
   

  
	
  ARTICLE V

  
	
   

  
	
  EVENTS OF DEFAULT WITH RESPECT TO THE NOTES

  
	
   

  	
   

  
	
  Section 5.1

  	
  Applicability of Events of Default

  
	
  Section 5.2

  	
  Events of Default

  
	
  Section 5.3

  	
  Acceleration of Maturity; Remedies

  
	
   

  	
   

  
	
  ARTICLE VI

  
	
   

  
	
  MISCELLANEOUS

  
	
   

  	
   

  
	
  Section 6.1

  	
  Effectiveness

  
	
  Section 6.2

  	
  Successors and Assigns

  
	
  Section 6.3

  	
  Further Assurances

  
	
  Section 6.4

  	
  Effect of Recitals

  
	
  Section 6.5

  	
  Ratification of Indenture

  
	
  Section 6.6

  	
  Governing Law

  
	
  Section 6.7

  	
  Counterparts

  
	
   

  	
   

  
	
  Exhibit
  A

  	
  Definitions

  
	
  Exhibit
  B-1

  	
  Form
  of 2010 Note

  
	
  Exhibit
  B-2

  	
  Form
  of 2013 Note

  

 

ii

 

FOURTH SUPPLEMENTAL INDENTURE, dated as of
October 21, 2003 (this “Fourth Supplemental Indenture”), to an
Indenture, dated as of October 1, 1985, between BOISE CASCADE CORPORATION,
a corporation duly organized and existing under the laws of the State of
Delaware (the “Company”), and U.S. BANK TRUST NATIONAL ASSOCIATION (as
successor in interest to Morgan Guaranty Trust Company of New York, the “Trustee”).  Terms used not otherwise defined in Exhibit A
hereto or elsewhere herein have the meanings ascribed to them in the Indenture.

 

RECITALS

 

WHEREAS, the Company and the Trustee entered into an Indenture,
dated as of October 1, 1985, as amended by the First Supplemental
Indenture, dated as of December 20, 1989, the Second Supplemental Indenture,
dated as of August 1, 1990 and the Third Supplemental Indenture, dated as of
December 5, 2001 (as so amended and supplemented, the “Indenture”);

 

WHEREAS, Section 901 of the Indenture provides that
the Indenture may be amended without the consent of any Holder to (i) add
to the covenants of the Company for the benefit of the Holders of all or any
series of Securities or surrender any right or power conferred in the Indenture
upon the Company, (ii) cure any ambiguity, to correct or supplement any
provision in the Indenture which may be inconsistent with any other provision
in the Indenture, or to make any other provisions with respect to matters or
questions arising under the Indenture, provided such action shall not adversely
affect the interests of the Holders of Securities of any series in any material
respect and (iii) establish the form or terms of Securities of any series
as permitted by Sections 201 and 301;

 

WHEREAS, pursuant to resolutions of the Board of
Directors of the Company adopted at a meeting duly called on December 14,
2001, the Company is authorized to issue up to $500,000,000 aggregate principal
amount of Securities in one or more series and, in accordance with such
resolutions, has authorized the issuance of the Notes;

 

WHEREAS, the Company has delivered to the Trustee an
Opinion of Counsel and an Officers’ Certificate pursuant to Section 102 of the
Indenture to the effect that all conditions precedent provided for in the
Indenture to the Trustee’s execution and delivery of this Fourth Supplemental
Indenture have been complied with;

 

NOW, THEREFORE, the Company and the Trustee agree as
follows:

 

ARTICLE I

 

AMENDMENTS

 

Section 1.1             Amendment as to All Securities.  Section 401(b) of the Indenture is
amended as to all Securities by (i) deleting the word “and” from the end
of clause (3) thereof, (ii) replacing the word “or” with the word
“and” at the end of clause (4) thereof and (iii) adding the paragraph
below after clause (4) thereof:

 

 

“(5)         the
Company has delivered to the Trustee an Opinion of Counsel of a
nationally-recognized independent tax counsel to the effect that Holders of the
Securities of such series will not recognize income, gain or loss for Federal
income tax purposes as a result of such deposit and the satisfaction, discharge
and defeasance contemplated by this paragraph (b) of this Section 401
and will be subject to Federal income tax in the same amounts and in the same
manner and at the same times as would have been the case if such deposit and
defeasance had not occurred; or”

 

Section 1.2             Amendment as to the Notes.  Section 901 of the Indenture is amended
as to the Notes only by replacing paragraph (5) thereof with the paragraph
below:

 

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

 

ARTICLE II

GENERAL TERMS AND CONDITIONS OF THE
NOTES

 

Section 2.1             Designation, Principal Amount
and Authorized Denomination.  There
is hereby authorized a series of Securities designated the 6.50% Senior Notes
due 2010 (the “2010 Notes”) and a series of Securities designated the
7.00% Senior Notes due 2013 (the “2013 Notes” and, together with the
2010 Notes, the “Notes”).  The
2010 Notes are limited in aggregate principal amount to $300,000,000 and the
2013 Notes are limited in aggregate principal amount to $200,000,000.  The denominations in which the Notes shall
be issuable are $1,000 and integral multiples thereof.

 

Section 2.2             Maturity.  The Stated Maturity for the 2010 Notes will
be November 1, 2010.  The Stated
Maturity for the 2013 Notes will be November 1, 2013.

 

Section 2.3             Interest.  The provisions related to interest set forth
in the forms of Notes in Exhibit B-1 and Exhibit B-2 shall be
applicable to the 2010 Notes and 2013 Notes, respectively.

 

Section 2.4             Book-Entry Form.  The Notes shall be issued in fully
registered certificated form without interest coupons, to be registered in the
name of a nominee of The Depository Trust Company or its nominee and will be in
the form of a global note set forth in Exhibit B-1 hereto in the case of
the 2010 Notes and in the form of a global note set forth in Exhibit B-2
hereto in the case of the 2013 Notes.

 

Section 2.5             CUSIP Numbers.  The Company may from time to time obtain
CUSIP numbers for the Notes and, if so, the Trustee shall use CUSIP numbers in
notices as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness of such numbers either as
printed on the Notes or as contained in any notice and that reliance may be
placed only on the other identification numbers printed on the Notes,

 

2

 

and no action shall be affected by any defect in or omission of such
numbers.  The Company shall promptly
notify the Trustee of any change in the CUSIP numbers.

 

Section 2.6             Security Registrar and Paying
Agent.  The Company initially
appoints the Trustee as the Security Registrar and Paying Agent for the Notes.

 

ARTICLE III

REDEMPTION OF THE NOTES

 

Section 3.1             Notices to Trustee.  If the Company elects to redeem Notes
pursuant to the optional redemption provisions of Section 3.7 hereof, it
must furnish to the Trustee, at least 30 days but not more than 60 days before
a redemption date, an Officers’ Certificate setting forth:

 

(i)            the clause of this
Indenture pursuant to which the redemption shall occur;

 

(ii)           the redemption
date;

 

(iii)          the principal
amount of Notes to be redeemed; and

 

(iv)          the redemption
price.

 

Section 3.2             Selection of Notes to Be
Redeemed or Purchased.  If less than
all of the Notes are to be redeemed or purchased in an offer to purchase at any
time, the Trustee will select Notes for redemption or purchase as follows:

 

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

 

(ii)           if the Notes are
not listed on any national securities exchange, on a pro rata basis, by lot or by
such method as the Trustee shall deem fair and appropriate.

 

In the event of partial redemption or purchase by lot,
the particular Notes to be redeemed or purchased will be selected, unless
otherwise provided herein, not less than 30 nor more than 60 days prior to the
redemption or purchase date by the Trustee from the outstanding Notes not
previously called for redemption or purchase.

 

The Trustee will promptly notify the Company in
writing of the Notes selected for redemption or purchase and, in the case of
any Note selected for partial redemption or purchase, the principal amount
thereof to be redeemed or purchased. 
Notes and portions of Notes selected will be in amounts of $1,000 or
whole multiples of $1,000; except that if all of the Notes of a Holder are to
be redeemed or purchased, the entire outstanding amount of Notes held by such
Holder, even if not a multiple of $1,000, shall be redeemed or purchased.  Except as provided in the preceding
sentence, provisions of this Indenture that apply to Notes called for
redemption or purchase also apply to portions of Notes called for redemption or
purchase.

 

3

 

Section 3.3             Notice of Redemption.  Subject to the provisions of Section 4.3
hereof, at least 30 days but not more than 60 days before a redemption date,
the Company will mail or cause to be mailed, by first class mail, a notice of
redemption to each Holder whose Notes are to be redeemed at its registered
address, except that redemption notices may be mailed more than 60 days prior to
a redemption date if the notice is issued in connection with a defeasance of
the Notes or a satisfaction and discharge of the Indenture pursuant to Article
IV of the Indenture.

 

The notice will identify the Notes to be redeemed and
will state:

 

(i)            the redemption
date;

 

(ii)           the redemption
price;

 

(iii)          if any Note is
being redeemed in part, the portion of the principal amount of such Note to be
redeemed and that, after the redemption date upon surrender of such Note, a new
Note or Notes in principal amount equal to the unredeemed portion will be
issued upon cancellation of the original Note;

 

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

 

(v)           that Notes called
for redemption must be surrendered to the Paying Agent to collect the
redemption price;

 

(vi)          that, unless the
Company defaults in making such redemption payment, interest on Notes called
for redemption ceases to accrue on and after the redemption date;

 

(vii)         the paragraph of the
Notes and/or Section of this Indenture pursuant to which the Notes called for
redemption are being redeemed; and

 

(viii)        that no
representation is made as to the correctness or accuracy of the CUSIP number,
if any, listed in such notice or printed on the Notes.

 

At the Company’s request, the Trustee will give the
notice of redemption in the Company’s name and at its expense; provided, however,
that the Company has delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers’ Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as
provided in the preceding paragraph.

 

Section 3.4             Effect of Notice of Redemption.  Once notice of redemption is mailed in
accordance with Section 3.3 hereof, Notes called for redemption become
irrevocably due and payable on the redemption date at the redemption
price.  A notice of redemption may not
be conditional.

 

Section 3.5             Deposit of Redemption or
Purchase Price.  One Business Day
prior to the redemption or purchase date, the Company will deposit with the Trustee
or with the Paying Agent money sufficient to pay the redemption or purchase
price of and accrued interest on all Notes to be redeemed or purchased on that
date.  The Trustee or the Paying Agent
will

 

4

 

promptly return to the Company any money deposited with the Trustee or
the Paying Agent by the Company in excess of the amounts necessary to pay the
redemption or purchase price of, and accrued interest and Special Interest, if
any, on, all Notes to be redeemed or purchased.

 

If the Company complies with the provisions of the
preceding paragraph, on and after the redemption or purchase date, interest
will cease to accrue on the Notes or the portions of Notes called for
redemption or purchase.  If a Note is
redeemed or purchased on or after an interest record date but on or prior to
the related interest payment date, then any accrued and unpaid interest shall
be paid to the Person in whose name such Note was registered at the close of
business on such record date.  If any
Note called for redemption or purchase is not so paid upon surrender for
redemption or purchase because of the failure of the Company to comply with the
preceding paragraph, interest shall be paid on the unpaid principal, from the
redemption or purchase date until such principal is paid, and to the extent
lawful on any interest not paid on such unpaid principal, in each case at the
rate provided in the Notes and in Section 2.1 hereof.

 

Section 3.6             Notes Redeemed or Purchased in
Part.  Upon surrender of a Note that
is redeemed or purchased in part, the Company will issue and, upon receipt of
an Authentication Order, the Trustee will authenticate for the Holder at the
expense of the Company a new Note equal in principal amount to the unredeemed
or unpurchased portion of the Note surrendered.

 

Section 3.7             Optional Redemption.  The provisions related to optional
redemption set forth in the forms of Notes attached hereto as Exhibit B-1
and Exhibit B-2 shall be applicable to the 2010 Notes and 2013 Notes,
respectively.

 

Section 3.8             Mandatory Redemption.  The Company is not required to make
mandatory redemption or sinking fund payments with respect to the Notes.

 

ARTICLE IV

COVENANTS APPLICABLE TO THE NOTES

 

Section 4.1             Applicability of Covenants.  The Company agrees with each Holder of the
2010 Notes and the 2013 Notes for so long as any 2010 Notes and 2013 Notes,
respectively, are outstanding as to the covenants contained in this
Article IV.  The covenants in this
Article IV shall apply to the Notes and supersede Sections 801, 1004,
1005 and 1008 of the Indenture with respect to the Notes; provided, however,
that if on any date following the date hereof the 2010 Notes or the 2013 Notes
have an Investment Grade Rating from two or more Rating Agencies and no Default
or Event of Default has occurred and is continuing (a “Fall Away Event”),
then, beginning on that day and continuing at all times thereafter regardless
of any subsequent changes in the rating of those Notes, this Article IV,
except for the covenant contained in the last paragraph of Section 4.5 and
the provision in Section 4.15 allowing the waiver of such covenant, will
cease to be applicable to such series of Notes and, instead, the provisions
contained in Sections 801, 1004, 1005 and 1008 of the Indenture will
apply.

 

Section 4.2             Repurchase at the Option of
Holders Upon Change of Control.  If
a Change of Control occurs at any time prior to a Fall Away Event, unless the
Company has

 

5

 

exercised its right to redeem the Notes, each Holder of Notes will have
the right to require the Company to repurchase all or any part (equal to $1,000
or an integral multiple of $1,000) of that Holder’s Notes pursuant to a Change
of Control offer (“Change of Control Offer”) on the terms set forth
herein for a repurchase price in cash equal to 101% of the aggregate principal
amount of Notes repurchased plus accrued and unpaid interest on the Notes
repurchased, to the date of repurchase (“Change of Control Payment”).
Within 30 days following any Change of Control, the Company will mail a notice
to each Holder describing the transaction or transactions that constitute the
Change of Control and stating:

 

(1)           that
the Change of Control Offer is being made pursuant to this Section and that all
Notes tendered will be accepted for payment;

 

(2)           the
purchase price and the purchase date, which shall be no earlier than 30 days
and no later than 60 days from the date such notice is mailed (the “Change
of Control Payment Date”);

 

(3)           that
any Note not tendered will continue to accrue interest;

 

(4)           that,
unless the Company defaults in the payment of the Change of Control Payment,
all Notes accepted for payment pursuant to the Change of Control Offer will
cease to accrue interest after the Change of Control Payment Date;

 

(5)           that
Holders electing to have any Notes purchased pursuant to a Change of Control
Offer will be required to surrender the Notes, with the form entitled “Option
of Holder to Elect Purchase” attached to the Notes completed, to the Paying
Agent at the address specified in the notice prior to the close of business on
the third Business Day preceding the Change of Control Payment Date;

 

(6)           that
Holders will be entitled to withdraw their election if the Paying Agent
receives, not later than the close of business on the second Business Day
preceding the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of Notes delivered for purchase, and a statement that such Holder is
withdrawing his election to have the Notes purchased; and

 

(7)           that
Holders whose Notes are being purchased only in part will be issued new Notes
equal in principal amount to the unpurchased portion of the Notes surrendered,
which unpurchased portion must be equal to $1,000 in principal amount or an
integral multiple thereof.

 

The Company will comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent those laws and regulations are applicable in
connection with the repurchase of the Notes as a result of a Change of Control.
To the extent that the provisions of any securities laws or regulations
conflict with the Change of Control provisions hereof, the Company will comply
with the applicable securities laws and regulations and will not be deemed to
have breached its obligations under the Change of Control provisions hereof by
virtue of such conflict.

 

6

 

On the Change of Control Payment Date, the Company
will, to the extent lawful:

 

(1)           accept
for payment all Notes or portions of Notes properly tendered pursuant to the
Change of Control Offer;

 

(2)           deposit
with the paying agent an amount equal to the aggregate purchase price in
respect of all Notes or portions of Notes properly tendered; and

 

(3)           deliver
or cause to be delivered to the Trustee the Notes properly accepted together
with an Officers’ Certificate stating the aggregate principal amount of Notes
being purchased by the Company.

 

The Paying Agent will promptly mail to each Holder of
Notes properly tendered the purchase price for such Notes, and the Trustee will
promptly authenticate and mail (or cause to be transferred by book-entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided
that each new note will be in a principal amount of $1,000 or an integral
multiple of $1,000.

 

The Company will publicly announce the results of the
Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date.

 

Prior to a Fall Away Event, the provisions described
above that require the Company to make a Change of Control Offer following a
Change of Control will be applicable whether or not any other provisions hereof
are applicable.

 

The Company will not be required to make a Change of
Control Offer upon a Change of Control if a third party makes the Change of
Control Offer in the manner, at the times and otherwise in compliance with the
requirements set forth herein applicable to a Change of Control Offer made by
the Company and purchases all Notes properly tendered and not withdrawn under
the Change of Control Offer.

 

Section 4.3             Repurchase at the Option of
Holders Upon Asset Sales.  The
Company will not, and will not permit any of its Restricted Subsidiaries to,
consummate an Asset Sale unless:

 

(1)           the
Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of the Asset Sale at least equal to the fair market
value, as determined in good faith by the Company’s Board of Directors, or by
the Company’s Chief Executive Officer if less than or equal to
$25.0 million, of the assets or Equity Interests issued or sold or otherwise
disposed of; and

 

(2)           at
least 75% of the consideration received in the Asset Sale by the Company or
such Restricted Subsidiary is in the form of cash or Replacement Assets, or a
combination of both. For purposes of this provision, each of the following will
be deemed to be cash:

 

(a)           any
liabilities, as shown on the Company’s most recent consolidated balance sheet,
of the Company or any Restricted Subsidiary that are

 

7

 

assumed by the transferee of any such assets pursuant
to an agreement that releases the Company or such Restricted Subsidiary from
further liability or with respect to which the transferee has granted a full
and complete indemnity to the Company or such Restricted Subsidiary;

 

(b)           any
securities, notes or other obligations
received by the Company or any such
Restricted Subsidiary from such transferee that are converted by the
Company or such Restricted Subsidiary into cash, to the extent of the cash
received in that conversion, within 180 days after receipt; and

 

(c)           Cash
Equivalents.

 

Within 365 days after the receipt of any Net Proceeds
from an Asset Sale, the Company or any Restricted Subsidiary may apply those
Net Proceeds:

 

(1)           to
repay Indebtedness and other Obligations under any Credit Facility;

 

(2)           to
repay (or repurchase) any secured Indebtedness;

 

(3)           to
repay (or repurchase) any Indebtedness of a Restricted Subsidiary;

 

(4)           to
repay (or repurchase) any Indebtedness with a final Stated Maturity that is
prior to the final Stated Maturity of the Notes;

 

(5)           to
acquire all or substantially all of the assets of, or a majority of the Voting
Stock of, another Permitted Business (including by means of a merger,
consolidation or other business combination permitted hereunder);

 

(6)           to
make a capital expenditure;

 

(7)           to
acquire other long-term assets that are used or useful in a Permitted Business;
or

 

(8)           to
fund working capital requirements associated with the termination of a
Receivables Program.

 

Pending
the final application of any Net Proceeds, the Company and any Restricted
Subsidiary may temporarily reduce revolving credit borrowings or otherwise
invest the Net Proceeds in any manner that is not prohibited hereby.  For purposes of this paragraph, expenditures
on the foregoing items shall be deemed to be made first from applied Net
Proceeds and then from other cash.

 

Any Net Proceeds from Asset Sales that are not applied
or invested as provided in the preceding paragraph will constitute “Excess
Proceeds.” When the aggregate amount of Excess Proceeds exceeds $25.0
million, the Company will, within 30 days, make an offer (an “Asset Sale
Offer”) to all Holders of Notes, and, at the Company’s option, to all
holders of other Indebtedness that is pari
passu with the Notes containing provisions similar to those set forth
herein with respect to offers to purchase or redeem with the proceeds of sales
of assets, to

 

8

 

purchase the maximum principal amount of Notes and such other pari passu Indebtedness that may be
purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer
will be equal to 100% of the principal amount of the Notes being repurchased
plus accrued and unpaid interest to the date of purchase, and will be payable in
cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer,
the Company may use those Excess Proceeds for any purpose not otherwise
prohibited hereby. If the aggregate principal amount of Notes and other pari passu Indebtedness tendered into
such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee will
select the Notes and such other pari
passu Indebtedness to be purchased on a pro rata basis. Upon completion
of (1) each Asset Sale Offer and (2) a Permitted Spin-Off Transaction,
the amount of Excess Proceeds will be reset at zero.

 

The Company will comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent those laws and regulations are applicable in
connection with each repurchase of Notes pursuant to an Asset Sale offer. To
the extent that the provisions of any securities laws or regulations conflict
with the Asset Sale provisions hereof, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under the Asset Sale provisions hereof by virtue of
such conflict.

 

In the event that, pursuant to this Section, the
Company is required to commence an Asset Sale Offer, it shall follow the
procedures specified below.

 

The Asset Sale Offer shall be made to all Holders of
Notes, and at the Company’s option, to all holders of other Indebtedness that
is pari
passu with the Notes.  The
Asset Sale Offer will remain open for a period of at least 20 Business Days
following its commencement and not more than 30 Business Days, except to the
extent that a longer period is required by applicable law (the “Offer Period”).  No later than three Business Days after the
termination of the Offer Period (the “Purchase Date”), the Company shall
apply all Excess Proceeds (the “Offer
Amount”) to the purchase of Notes and such other pari passu
Indebtedness (on a pro rata basis, if applicable) or, if less than the Offer
Amount has been tendered, all Notes and other Indebtedness tendered in response
to the Asset Sale Offer.  Payment for
any Notes so purchased will be made in the same manner as interest payments are
made.

 

If the Purchase Date is on or after an interest record
date and on or before the related interest payment date, any accrued and unpaid
interest will be paid to the Person in whose name a Note is registered at the
close of business on such record date, and no additional interest will be
payable to Holders whose Notes are accepted for purchase pursuant to the Asset
Sale Offer.

 

Upon the commencement of an Asset Sale Offer, the
Company will send, by first class mail, a notice to the Trustee and each of the
Holders, with a copy to the Trustee. 
The notice will contain all instructions and materials necessary to
enable such Holders to tender Notes pursuant to the Asset Sale Offer.  The notice, which will govern the terms of
the Asset Sale Offer, will state:

 

(1)           that
the Asset Sale Offer is being made pursuant to this Section and the length of
time the Asset Sale Offer will remain open;

 

9

 

(2)           the
Offer Amount, the purchase price and the Purchase Date;

 

(3)           that
any Note not tendered or accepted for payment will continue to accrue interest;

 

(4)           that,
unless the Company defaults in making such payment, any Note accepted for
payment pursuant to the Asset Sale Offer will cease to accrue interest after
the Purchase Date;

 

(5)           that
Holders electing to have a Note purchased pursuant to an Asset Sale Offer may
elect to have Notes purchased in integral multiples of $1,000 only;

 

(6)           that
Holders electing to have a Note purchased pursuant to any Asset Sale Offer will
be required to surrender the Note, with the form entitled “Option of Holder to
Elect Purchase” attached to the Note completed, or transfer by book-entry
transfer, to the Company, a Depositary, if appointed by the Company, or a
Paying Agent at the address specified in the notice at least three days before
the Purchase Date;

 

(7)           that
Holders will be entitled to withdraw their election if the Company, the
Depositary or the Paying Agent, as the case may be, receives, not later than
the expiration of the Offer Period, a telegram, telex, facsimile transmission
or letter setting forth the name of the Holder, the principal amount of the
Note the Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased;

 

(8)           that,
if the aggregate principal amount of Notes and other pari passu Indebtedness
surrendered by Holders exceeds the Offer Amount, the Trustee will select the
Notes and other pari passu Indebtedness to be purchased on a pro rata
basis based on the principal amount of Notes and such other pari passu
Indebtedness surrendered (with such adjustments as may be deemed appropriate by
the Trustee so that only Notes in denominations of $1,000, or integral
multiples thereof, will be purchased); and

 

(9)           that
Holders whose Notes were purchased only in part will be issued new Notes equal
in principal amount to the unpurchased portion of the Notes surrendered (or
transferred by book-entry transfer).

 

On or before the Purchase Date, the Company shall, to
the extent lawful, accept for payment, on a pro rata basis to the extent necessary,
the Offer Amount of Notes or portions thereof tendered pursuant to the Asset
Sale Offer, or if less than the Offer Amount has been tendered, all Notes
tendered, and shall deliver to the Trustee an Officers’ Certificate stating
that such Notes or portions thereof were accepted for payment by the Company in
accordance with the terms of this Section. 
The Company, the Depositary or the Paying Agent, as the case may be,
shall promptly (but in any case not later than five days after the Purchase Date)
mail or deliver to each tendering Holder an amount equal to the purchase price
of the Notes tendered by such Holder and accepted by the Company for purchase,
and the Company shall promptly issue a new Note, and the Trustee, upon written
request from the Company, will authenticate and mail or deliver such new Note
to such Holder, in a principal amount equal to any unpurchased portion of the
Note surrendered.  Any Note not so
accepted shall be promptly mailed or delivered by the

 

10

 

Company to the Holder thereof. 
The Company will publicly announce the results of the Asset Sale Offer
on the Purchase Date.

 

Other than as specifically provided in this Section,
any purchase pursuant to this Section shall be made pursuant to the provisions
of Sections 3.1 through 3.6 hereof.

 

Section 4.4             Restricted Payments.  The Company will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly:

 

(1)           declare
or pay any dividend or make any other payment or distribution on account of the
Company’s Equity Interests (including, without limitation, any payment in
connection with any merger or consolidation involving the Company) or to the
direct or indirect holders of the Company’s Equity Interests in their capacity
as such (other than dividends or distributions payable in Equity Interests
(other than Disqualified Stock) of the Company;

 

(2)           purchase,
redeem or otherwise acquire or retire for value (including, without limitation,
in connection with any merger or consolidation involving the Company) any
Equity Interests of the Company;

 

(3)           make
any payment on or with respect to, or purchase, redeem, defease or otherwise
acquire or retire for value any Indebtedness that is subordinated to the Notes,
except a payment of interest or principal at the Stated Maturity thereof (other
than (x) intercompany Indebtedness permitted under clause (7) of the
second paragraph of Section 4.5 hereof and (y) the purchase,
repurchase or other acquisition of subordinated Indebtedness purchased in
anticipation of satisfying a payment of principal at the Stated Maturity
thereof, in each case within one year of such Stated Maturity); or

 

(4)           make
any Restricted Investment (all such payments and other actions set forth in
these clauses (1) through (4) above being collectively referred to as
“Restricted Payments”);

 

unless,
at the time of and after giving effect to such Restricted Payment:

 

(1)           no
Default or Event of Default has occurred and is continuing;

 

(2)           the
Company could incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in Section 4.5 hereof; and

 

(3)           such
Restricted Payment, together with the aggregate amount of all other Restricted
Payments made by the Company and its Restricted Subsidiaries after October 1,
2003 (excluding Restricted Payments permitted by clauses (2), (3), (4),
(5), (6), (7), (8), (9) and (10) of the next succeeding paragraph), is less
than the sum, without duplication, of:

 

(a)           50%
of the Consolidated Net Income of the Company for the period (taken as one
accounting period) beginning October 1, 2003 to the end of the Company’s
most recently ended fiscal quarter for which internal financial

 

11

 

statements are available at the time of such
Restricted Payment (or, if such Consolidated Net Income for such period is a
deficit, less 100% of such deficit), provided
that for the purposes of this clause (a), in the event of a Permitted Spin-Off
Transaction, Consolidated Net Income shall thereafter be calculated on a pro
forma basis, as if such Permitted Spin-Off Transaction had been consummated on
October 1, 2003, plus

 

(b)           100% of the aggregate net cash proceeds received by
the Company since October 1, 2003 (i) as a contribution to its common
equity capital or from the issue or sale of Equity Interests of the Company
(other than Disqualified Stock) or (ii) from the issue or sale of
convertible or exchangeable Disqualified Stock or convertible or exchangeable
debt securities of the Company upon conversion into or exchange for such Equity
Interests (other than Equity Interests (or Disqualified Stock or debt
securities) sold to a Subsidiary of the Company), plus

 

(c)           100% of the fair market value as of the date of
issuance of any Equity Interests (other than Disqualified Stock) issued by the
Company as consideration for the purchase by the Company or any of its
Restricted Subsidiaries of all or substantially all of the assets of, or a
majority of the Voting Stock of, another Permitted Business (including by means
of a merger, consolidation or other business combination permitted hereunder),
other than Equity Interests issued by the Company in connection with its
acquisition of OfficeMax, plus

 

(d)           to the extent that any Restricted Investment that
was made after October 1, 2003 is sold for cash or otherwise liquidated or
repaid for cash, the lesser of (i) the cash return of capital with respect
to such Restricted Investment (less the cost of disposition, if any) and
(ii) the initial amount of such Restricted Investment, plus

 

(e)           to
the extent that any Unrestricted Subsidiary of the Company is redesignated as a
Restricted Subsidiary after October 1, 2003, the lesser of (i) the
fair market value of the Company’s Investment in such Subsidiary as of the date
of such redesignation or (ii) such fair market value as of the date on
which such Subsidiary was originally designated as an Unrestricted Subsidiary.

 

The preceding provisions of this Section will not
prohibit:

 

(1)           the
payment of any dividend within 60 days after the date of declaration of the
dividend, if at the date of declaration the dividend payment would have
complied with the provisions hereof;

 

(2)           any
Restricted Payments required to complete the acquisition of OfficeMax or a
Permitted Spin-Off Transaction;

 

(3)           the
redemption, repurchase, retirement, defeasance or other acquisition of any
subordinated Indebtedness of the Company or any Restricted Subsidiary or of any

 

12

 

Equity Interests of the Company in exchange for, or
out of the net cash proceeds of the substantially concurrent sale (other than
to a Restricted Subsidiary of the Company) of, Equity Interests of the Company
(other than Disqualified Stock); provided
that the amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement, defeasance or other acquisition will be
excluded from clause (3)(b) of the preceding paragraph;

 

(4)           the
defeasance, redemption, repurchase or other acquisition of subordinated Indebtedness
of the Company or any Restricted Subsidiary with the net cash proceeds from an
incurrence of Permitted Refinancing Indebtedness;

 

(5)           so
long as no Default or Event of Default shall have occurred and be continuing,
the repurchase, redemption or other acquisition or retirement for value of any
Equity Interests of the Company or any Restricted Subsidiary of the Company
from employees, former employees, directors or former directors of the Company
or any of its Restricted Subsidiaries or their authorized representatives upon
the death, disability or termination of the employment of such employees or
former employees or termination of the term of such director or former
director; provided that the
aggregate price paid for all such repurchased, redeemed, acquired or retired
Equity Interests may not exceed $5.0 million in any twelve-month period; provided further that such amount in
any calendar year may be increased by an amount not to exceed the cash proceeds
of key man life insurance policies received by the Company and its Restricted
Subsidiaries after October 1, 2003 less
the amount of any Restricted Payments previously made pursuant to this proviso;

 

(6)           the
repurchase, redemption or other acquisition or retirement for value of the
Company’s Series D Preferred Stock held by the trustee for the Company’s 1989
Employee Stock Ownership Plan;

 

(7)           repurchases
of Equity Interests deemed to occur upon (i) the exercise of stock options if
such Equity Interests represent a portion of the exercise price thereof and
(ii) the withholding of a portion of the Equity Interests granted or awarded to
an employee to pay taxes associated therewith;

 

(8)           the
declaration and payment of dividends to holders of any class or series of
Disqualified Stock of the Company issued in accordance with Section 4.5 hereof
to the extent such dividends are included in the definition of Fixed Charges;

 

(9)           so
long as no Default or Event of Default shall have occurred and be continuing,
the declaration and payment of dividends to holders of the Company’s common
stock, provided that any such
dividends declared and paid pursuant to this clause (9) shall not exceed
$20.0 million in any fiscal quarter; or

 

(10)         so
long as no Default or Event of Default shall have occurred and be continuing, other
Restricted Payments in an aggregate amount, when taken together with all other
Restricted Payments made pursuant to this clause (10), not to exceed
$30.0 million.

 

13

 

The amount of all Restricted Payments (other than
cash) will be the fair market value on the date of the Restricted Payment of
the asset(s) or securities proposed to be transferred or issued by the Company
or such Restricted Subsidiary, as the case may be, pursuant to the Restricted
Payment. The fair market value of any assets or securities that are required to
be valued by this covenant will be determined by the Board of Directors whose
resolution with respect thereto will be final and binding and will be delivered
to the Trustee.

 

Section 4.5             Incurrence of Indebtedness and
Issuance of Preferred Stock.  The
Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect
to (collectively, “incur”) any Indebtedness (including Acquired Debt),
and the Company will not issue any Disqualified Stock and will not permit any
of its Restricted Subsidiaries to issue any shares of preferred stock; provided,
however, that the Company may incur Indebtedness (including Acquired
Debt) or issue Disqualified Stock or permit its Restricted Subsidiaries to
issue shares of preferred stock if the Fixed Charge Coverage Ratio for the
Company’s most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which such
additional Indebtedness is incurred or such Disqualified Stock or preferred
stock is issued would have been at least 2.0 to 1 determined on a pro forma
basis (including a pro forma application of the net proceeds therefrom), as if
the additional Indebtedness had been incurred or the preferred stock or
Disqualified Stock had been issued, as the case may be, at the beginning of
such four-quarter period.

 

The first paragraph of this Section will not prohibit
the incurrence of any of the following items of Indebtedness, Disqualified
Stock or preferred stock, as applicable (collectively, “Permitted Debt”):

 

(1)           the
incurrence by the Company and the Restricted Subsidiaries of Indebtedness and
letters of credit under Credit Facilities in an aggregate principal amount at
any one time outstanding under this clause (1) (with letters of credit
being deemed to have a principal amount equal to the maximum potential
liability of the Company and the Restricted Subsidiaries thereunder) not to
exceed the greater of:

 

(a)           the
Designated Facilities Amount; or

 

(2)           the
Borrowing Base as of the date of such incurrence;

 

(2)           the
incurrence by the Company and its Restricted Subsidiaries of the Existing
Indebtedness;

 

(3)           the
incurrence by the Company of Indebtedness represented by the Notes to be issued
on the date hereof;

 

(4)           the
incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness
represented by Capital Lease Obligations, mortgage financings or purchase money
obligations, in each case, incurred for the purpose of financing all or any
part of the purchase price or cost of construction or improvement of property
(real or personal), plant or equipment (whether through the direct purchase of
assets or through the purchase

 

14

 

of the Capital Stock of any Person owning such assets)
used in the business of the Company or such Restricted Subsidiary, in an
aggregate principal amount at any time outstanding, including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (4), not to exceed the greater of
(i) $75.0 million or (ii) 3.0% of the Consolidated Net Tangible
Assets of the Company and its Restricted Subsidiaries;

 

(5)           the
incurrence by the Company or any of its Restricted Subsidiaries of Permitted
Refinancing Indebtedness in exchange for, or the net proceeds of which are used
to refund, refinance or replace Indebtedness (other than intercompany
Indebtedness) that was permitted hereby to be incurred under the first
paragraph of this Section or clause (2), (3), (4), (5), (12), (13), (16),
(17) or (19) of this paragraph;

 

(6)           the
incurrence by the Company or any of its Restricted Subsidiaries of obligations
with respect to letters of credit securing obligations entered into in the
ordinary course of business to the extent such letters of credit are not drawn
upon or, if drawn upon, such drawing is reimbursed within five Business Days
following receipt of a demand for reimbursement;

 

(7)           the
incurrence by the Company or any of its Restricted Subsidiaries of intercompany
Indebtedness between or among the Company and any of its Restricted
Subsidiaries; provided, however, that:

 

(a)           if
the Company is the obligor on such Indebtedness and such Indebtedness is held
by a Restricted Subsidiary, such Indebtedness must be expressly subordinated to
the prior payment in full in cash of all Obligations with respect to the notes;
and

 

(b)           (i) any
subsequent issuance or transfer of Equity Interests that results in any such
Indebtedness being held by a Person other than the Company or a Restricted
Subsidiary of the Company and (ii) any sale or other transfer of any such
Indebtedness to a Person that is not either the Company or a Restricted
Subsidiary of the Company will be deemed, in each case, to constitute an
incurrence of such Indebtedness by the Company or such Restricted Subsidiary,
as the case may be, that was not permitted by this clause (7);

 

(8)           the
issuance of shares of preferred stock by a Restricted Subsidiary to the Company
or another Restricted Subsidiary; provided
that any subsequent issuance or transfer of any Capital Stock or any other
event which, in either case, results in any such Restricted Subsidiary ceasing
to be a Restricted Subsidiary or any other subsequent transfer of any such
shares of preferred stock (except to the Company or another Restricted Subsidiary)
shall be deemed in each case to be an issuance of such shares of preferred
stock that was not permitted by this clause (8);

 

(9)           the
incurrence by the Company or any of its Restricted Subsidiaries of:

 

(a)           Hedging
Obligations incurred in the ordinary course of business and not for speculative
purposes;

 

15

 

(b)           Indebtedness
in respect of performance, surety or appeal bonds provided in the ordinary
course of business; and

 

(c)           Indebtedness
arising from agreements providing for indemnification, adjustment of purchase
price or similar obligations of the Company or any of its Restricted
Subsidiaries incurred in connection with the disposition of any business,
assets or Subsidiary of the Company in an aggregate amount not to exceed the
gross proceeds actually received by the Company or any Restricted Subsidiary in
connection with such disposition;

 

(10)         the
guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness
of the Company or a Restricted Subsidiary of the Company that was permitted to
be incurred by another provision of this Section, provided that, in the case of
a Restricted Subsidiary (other than the guarantee by Boise Cascade Office
Products Corporation or OfficeMax, Inc. of Indebtedness and letters of credit
under Credit Facilities), the Notes are guaranteed equally and ratably with
such Indebtedness;

 

(11)         the
incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness
represented by letters of credit for the account of the Company or such
Restricted Subsidiary, as the case may be, in order to provide security for
workers’ compensation claims, environmental remediation or other environmental
matters or payment obligations in connection with self-insurance or similar
requirements, in each case to the extent arising in the ordinary course of
business;

 

(12)         the
incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness
represented by industrial revenue bonds incurred to finance the construction or
improvement of their respective operations in an aggregate principal amount at
any time outstanding pursuant to this clause (12), including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace Indebtedness
incurred pursuant to this clause (12), not to exceed the greater of
(i) $50.0 million or (ii) 2.0% of the Consolidated Net Tangible
Assets of the Company and its Restricted Subsidiaries;

 

(13)         the
incurrence by any Receivables Subsidiary of Indebtedness pursuant to a Receivables
Program; provided, however, that the aggregate
principal amount of Indebtedness incurred pursuant to this clause (13) at
any one time outstanding does not exceed the Designated Receivables Amount;

 

(14)         the
incurrence by the Company or a Restricted Subsidiary of Indebtedness to the
extent the net proceeds thereof are promptly deposited to defease all
outstanding Notes as described in Section 401 of the Indenture;

 

(15)         the
incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness
arising from the honoring by a bank or other financial institution of a check,
draft or similar institution inadvertently drawn against insufficient funds in
the ordinary course of business;

 

(16)         the
incurrence by any Restricted Subsidiary of Indebtedness in an aggregate
principal amount at any time outstanding, including all Permitted Refinancing

 

16

 

Indebtedness incurred to refund, refinance or replace
any Indebtedness incurred pursuant to this clause (16), not to exceed the
excess of (i) $300.0 million over (ii) the principal amount then
outstanding of the 7.05% Notes due May 15, 2005 of Boise Cascade Office
Products Corporation and Permitted Refinancing Indebtedness incurred to refund,
refinance or replace such notes;

 

(17)         Indebtedness
of OfficeMax existing at the time of the Company’s acquisition of OfficeMax;

 

(18)         the
remarketing of the preferred securities that are part of the 7.50% Adjustable
Conversion-rate Equity Security Units of the Company and Boise Cascade Trust I
pursuant to the terms of such securities; and

 

(19)         the
incurrence by the Company of additional Indebtedness or the issuance of
Disqualified Stock by the Company at any time outstanding, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (19), not to exceed $150.0
million.

 

For purposes of determining compliance with this
Section:

 

(1)           in
the event that an item of proposed Indebtedness meets the criteria of more than
one of the categories of Permitted Debt described in clause (1) through
(19) above, or is entitled to be incurred pursuant to the first paragraph of
this Section, the Company will be permitted to classify such item of Indebtedness
on the date of its incurrence, or, subject to clause (2) below, later
reclassify all or a portion of such item of Indebtedness, in any manner that
complies with this Section;

 

(2)           Indebtedness
under Credit Facilities outstanding on the date hereof will be deemed to have
been incurred on such date in reliance on the exception provided by clause
(1) of the definition of Permitted Debt and Indebtedness under a
Receivables Program outstanding on the date hereof will be deemed to have been
incurred on such date in reliance on the exception provided by clause (13) of
the definition of Permitted Debt, and the Company will not be permitted to
reclassify any portion of such Indebtedness thereafter;

 

(3)           the
outstanding principal amount of any particular Indebtedness shall be counted
only once and any obligations arising under any guarantee, Lien, letter of
credit or similar instrument supporting such Indebtedness shall not be double
counted;

 

(4)           the
accrual of interest, the accretion or amortization of original issue discount,
the payment of interest on any Indebtedness in the form of additional
Indebtedness with the same terms, and the payment of dividends on Disqualified
Stock in the form of additional shares of the same class of Disqualified Stock
will not be deemed to be an incurrence of Indebtedness or an issuance of
Disqualified Stock for purposes of this Section; provided, in each such case, that the amount thereof is included
in Fixed Charges of the Company as accrued; and

 

17

 

(5)           the
maximum amount of Indebtedness that the Company or a Restricted Subsidiary may
incur pursuant to this Section will not be deemed to be exceeded, with respect
to any outstanding Indebtedness, due solely to the result of fluctuations in
the exchange rates of currencies.

 

After a Fall Away Event, no Restricted Subsidiary
shall, directly or indirectly, create, incur, issue, assume, guarantee or
otherwise become directly or indirectly liable, contingently or otherwise, with
respect to any Indebtedness (including Acquired Debt) unless it Guarantees the
Notes; provided, however, that a Restricted Subsidiary may incur
Indebtedness (including Acquired Debt) in an aggregate principal amount at any
time outstanding not to exceed 5.0% of the Consolidated Net Tangible Assets of
the Company and its Restricted Subsidiaries.

 

Section 4.6             Liens.  The Company will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly create, incur,
assume or suffer to exist any Lien securing Indebtedness, Attributable Debt or
trade payables (other than Permitted Liens) on any asset now owned or hereafter
acquired, unless all payments due hereunder and the Notes are secured on an
equal and ratable basis with (or prior to) the obligations so secured until
such time as such obligations are no longer secured by a Lien.

 

Section 4.7             Dividend and Other Payment
Restrictions Affecting Restricted Subsidiaries.  The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:

 

(1)           pay
dividends or make any other distributions on its Capital Stock to the Company
or any of its Restricted Subsidiaries;

 

(2)           make
loans or advances to the Company or any of its Restricted Subsidiaries; or

 

(3)           transfer
any of its properties or assets to the Company or any of its Restricted
Subsidiaries.

 

However, the preceding restrictions will not apply to
encumbrances or restrictions existing under or by reason of:

 

(1)           agreements
in effect on the date hereof and any amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings of
those agreements and any new agreements, provided
that the encumbrances or restrictions contained in any such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements, refinancings or new agreements, taken as a whole, are not materially
more restrictive than the encumbrances or restrictions contained in agreements
in place on the date hereof;

 

(2)           the
Indenture and the Notes;

 

(3)           any
applicable law, rule, regulation or order;

 

18

 

(4)           any
instrument governing Indebtedness or Capital Stock of a Person acquired by the
Company or any of its Restricted Subsidiaries as in effect at the time of such
acquisition (except to the extent such Indebtedness or Capital Stock was
incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the properties
or assets of any Person, other than the Person or the property or assets of the
Person so acquired, and any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings of those
instruments, provided that the
encumbrances or restrictions contained in any such amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings, taken as a whole, are not materially more restrictive than the
encumbrances or restrictions contained in instruments in effect on the date of
acquisition;

 

(5)           customary
non-assignment provisions in leases or other agreements entered into in the
ordinary course of business and consistent with past practices;

 

(6)           purchase
money obligations for property acquired in the ordinary course of business that
impose restrictions on that property of the nature described in clause (3)
of the preceding paragraph;

 

(7)           any
agreement for the sale or other disposition (including a Permitted Spin-Off
Transaction) of a Restricted Subsidiary or the assets of a Restricted
Subsidiary that restricts distributions by that Restricted Subsidiary pending
its sale or other disposition (including a Permitted Spin-Off Transaction);

 

(8)           Permitted
Refinancing Indebtedness, provided
that the restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness, taken as a whole, are not materially more restrictive
than those contained in the agreements governing the Indebtedness being
refinanced;

 

(9)           Liens
securing Indebtedness otherwise permitted to be incurred under the provisions
of Section 4.6 or Section 4.11 hereof that limit the right of the
debtor to dispose of the assets subject to such Liens;

 

(10)         provisions
with respect to the disposition or distribution of assets or property in joint
venture agreements, asset sale agreements, stock sale agreements and other
similar agreements entered into in the ordinary course of business;

 

(11)         restrictions
on cash or other deposits or net worth imposed by customers or lessors under
contracts or leases entered into in the ordinary course of business; and

 

(12)         with
respect to a Receivables Subsidiary, encumbrances and restrictions that are
imposed pursuant to a Receivables Program of such Receivables Subsidiary; provided that such encumbrances and
restrictions are customarily required by the institutional sponsor or arranger
or are necessary for customary “non-consolidation” or “true sale” opinions at
the time of entering into such Receivables Program in similar types of
documents relating to the purchase of similar receivables in connection with
the financing thereof.

 

19

 

Section 4.8             Merger, Consolidation or Sale of
Assets.  No consolidation or merger
of the Company with or into any other corporation and no conveyance, transfer
or lease of its and its Restricted Subsidiaries’ properties substantially as an
entirety to another corporation may be made unless:

 

(1)           the
surviving corporation or acquiring Person shall be a corporation organized and
existing under the laws of the United States of America, any state thereof, or
the District of Columbia and shall expressly assume the payment of principal of
and any premium and interest on the Notes and the performance of covenants
herein;

 

(2)           immediately
after giving effect to such transaction, no Event of Default, and no event which
after notice or lapse of time, or both, would become an Event of Default, shall
have happened and be continuing;

 

(3)           the
Company has delivered the required Officers’ Certificate and Opinion of Counsel
to the Trustee; and

 

(4)           the
Company or the Person formed by or surviving any such consolidation or merger
(if other than the Company), or to which such sale, assignment, transfer,
conveyance or other disposition has been made, will, on the date of such
transaction after giving pro forma effect thereto and to any related financing
transactions as if the same had occurred at the beginning of the applicable
four-quarter period, be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 4.5 hereof;

 

Notwithstanding the foregoing clause (4), if:

 

(a)           any
Restricted Subsidiary consolidates with, merges into or transfers all or part
of its properties and assets to the Company or to any other Restricted
Subsidiary of the Company, or

 

(b)           the
Company merges with an Affiliate incorporated in the United States primarily
for the purpose of reincorporating the Company in another jurisdiction,

 

then
no violation of this Section will be deemed to have occurred, as long as the
requirements of the foregoing clauses (1), (2) and (3) are satisfied.

 

Except as provided in the foregoing clause (1), this
Section will not apply to a sale, assignment, transfer, conveyance or other
disposition of assets between or among the Company and its Restricted
Subsidiaries or to a Permitted Spin-Off Transaction or to any sale, assignment,
transfer, conveyance or other disposition of assets between or among the
Company and any of its Subsidiaries required in connection with a Permitted
Spin-Off Transaction.

 

The provisions of Section 802 of the Indenture
shall apply to any transaction permitted by this Section 4.8 as if such
transaction had taken place in accordance with Section 801 of the
Indenture.

 

20

 

Section 4.9             Transactions with Affiliates.  The Company will not, and will not permit
any of its Restricted Subsidiaries to, make any payment to, or sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or
purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate (each, an “Affiliate Transaction”),
unless:

 

(1)           the
Affiliate Transaction is on terms, when taken as a whole, that are no less
favorable to the Company or the relevant Restricted Subsidiary than those that
would have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary with an unrelated Person; and

 

(2)           The
Company delivers to the Trustee:

 

(a)           with
respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $10.0 million,
a resolution of the Board of Directors set forth in an Officers’ Certificate
certifying that such Affiliate Transaction complies with this Section and that
such Affiliate Transaction has been approved by a majority of the disinterested
members of the Board of Directors; and

 

(b)           with
respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $25.0 million,
an opinion as to the fairness to the Company of such Affiliate Transaction from
a financial point of view issued by an accounting, appraisal or investment
banking firm of national standing.

 

Notwithstanding anything to the contrary in this
Section, the following items will not be deemed to be Affiliate Transactions:

 

(1)           any
employment, compensation, benefit or indemnification agreement or arrangement
(and any payments or other transactions pursuant thereto) entered into by the
Company or any of its Restricted Subsidiaries in the ordinary course of
business with an officer, employee or director and any transactions pursuant to
stock option plans, stock ownership plans and employee benefit plans or
arrangements;

 

(2)           transactions
between or among the Company and/or its Restricted Subsidiaries (including any
Person that becomes a Restricted Subsidiary as a result of any such
transaction);

 

(3)           transactions
with a Person that is an Affiliate of the Company solely because the Company
owns an Equity Interest in, or controls, such Person;

 

(4)           payment
of fees to directors who are not otherwise employees of the Company;

 

(5)           sales
of Equity Interests (other than Disqualified Stock) to Affiliates of the
Company;

 

21

 

(6)           Restricted
Payments that are permitted by the provisions of Section 4.4 hereof;

 

(7)           loans
or advances to employees or consultants in the ordinary course of business of
the Company or its Restricted Subsidiaries;

 

(8)           transactions
between a Receivables Subsidiary and any Person in which the Receivables
Subsidiary has an Investment or any other transactions in connection with a
Receivables Program of the Company or a Restricted Subsidiary;

 

(9)           a
Permitted Spin-Off Transaction and actions taken and agreements entered into
between or among the Company and its Subsidiaries required to complete a
Permitted Spin-Off Transaction;

 

(10)         transactions
pursuant to or contemplated by any agreement of the Company or any Restricted
Subsidiary as in effect as of the date hereof or any amendment thereto or any
replacement agreement so long as any such amendment or replacement agreement,
taken as a whole, is not materially more disadvantageous to the Holders than
the original agreement as in effect on the date hereof; and

 

(11)         the
provision of administrative services by the Company to any Unrestricted
Subsidiary, so long as it does not result in an Investment in such Subsidiary.

 

Section 4.10           Designation of Restricted and
Unrestricted Subsidiaries.  The
Board of Directors of the Company may designate any Restricted Subsidiary to be
an Unrestricted Subsidiary if that designation would not cause a Default. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, the
aggregate fair market value of all outstanding Investments owned by the Company
and its Restricted Subsidiaries in the Subsidiary properly designated will be
deemed to be an Investment made as of the time of the designation and will
reduce the amount available for Restricted Payments under the first paragraph
of Section 4.4 or Permitted Investments, as determined by the Company. That
designation will only be permitted if the Investment would be permitted at that
time and if the Restricted Subsidiary otherwise meets the definition of an
Unrestricted Subsidiary. The Board of Directors may redesignate any
Unrestricted Subsidiary to be a Restricted Subsidiary if the redesignation
would not cause a Default. 
Notwithstanding the foregoing, the Company’s Chief Executive Officer may
designate any Restricted Subsidiary to be an Unrestricted Subsidiary, or vice
versa, if the Company’s Investment in such Subsidiary is $5.0 million or
less and the redesignation would not cause a Default.

 

Section 4.11           Sale and Leaseback Transactions.  The Company will not, and will not permit
any of its Restricted Subsidiaries to, enter into any Sale and Leaseback
Transaction; provided that the Company or any Restricted Subsidiary may enter
into a Sale and Leaseback Transaction if:

 

(1)           the
Company or that Restricted Subsidiary, as applicable, could have
(a) incurred Indebtedness in an amount equal to the Attributable Debt
relating to such Sale and Leaseback Transaction under the Fixed Charge Coverage
Ratio test in the first

 

22

 

paragraph of Section 4.5 hereof and (b) incurred
a Lien to secure such Indebtedness pursuant to Section 4.6 hereof;

 

(2)           the
gross cash proceeds of that Sale and Leaseback Transaction are at least equal
to the fair market value, as determined in good faith by the Board of
Directors, or the Company’s Chief Executive Officer if less than or equal to
$25.0 million, and set forth in an Officers’ Certificate delivered to the
Trustee, of the property that is the subject of that Sale and Leaseback
Transaction; and

 

(3)           the
transfer of assets in that Sale and Leaseback Transaction is permitted by, and
the Company applies the proceeds of such transaction in compliance with,
Section 4.3 hereof.

 

Section 4.12           Business Activities.  The Company will not, and will not permit
any Restricted Subsidiary to, engage in any business other than a Permitted
Business, except to such extent as would not be material to the Company and its
Restricted Subsidiaries taken as a whole.

 

Section 4.13           Payments for Consent.  The Company will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly, pay or cause to
be paid any consideration to or for the benefit of any Holder of Notes for or
as an inducement to any consent, waiver or amendment of any of the terms or
provisions hereof or the Notes unless such consideration is offered to be paid
and is paid to all Holders of the Notes, pro rata based on the principal amount
of the Notes held by such Holders, that consent, waive or agree to amend in the
time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.

 

Section 4.14           Reports.  Whether or not required by the SEC, so long
as any notes are outstanding, the Company will furnish to the Trustee, within
the time periods specified in the SEC’s rules and regulations:

 

(1)           all
quarterly and annual financial information that would be required to be
contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were
required to file such Forms, including a “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” and, with respect to the
annual information only, a report on the annual financial statements by the
Company’s certified independent accountants; and

 

(2)           all
current reports that would be required to be filed with the SEC on
Form 8-K if the Company were required to file such reports.

 

Section 4.15           Waiver of Certain Covenants.  The Company may omit in any particular
instance to comply with any term, provision or condition set forth in Sections
1002, 1003, 1006 and 1007 of the Indenture and this Article IV with
respect to either series of the Notes, if before the time for such compliance
the Holders of at least a majority in principal amount of such series of Notes
shall, by Act of such Holders, either waive such compliance in such instance or
generally waive compliance with such term, provision or condition, but no such
waiver shall extend to or affect such term, provision or condition except to
the extent so expressly waived, and, until such waiver shall become effective,
the obligations of the Company

 

23

 

and the duties of the Trustee in respect of
any such term, provision or condition shall remain in full force and effect.

 

ARTICLE V

EVENTS OF DEFAULT WITH RESPECT TO THE
NOTES

 

Section 5.1             Applicability of Events of
Default.  Sections 5.2 and 5.3
hereof will apply to the Notes and supersede Section 501 and the first two
paragraphs of Section 502 of the Indenture; provided, however,
that after a Fall Away Event with respect to either series of Notes, beginning
on that day and continuing at all times thereafter regardless of any subsequent
changes in the rating of those Notes, Sections 5.2 and 5.3 hereof will
cease be applicable to such series of Notes and, instead, Section 501 and
the provisions of the first two paragraphs of Section 502 of the Indenture
will apply.

 

Section 5.2             Events of Default.  With respect to each series of Notes, each
of the following is an “Event of Default”:

 

(1)           default
for 30 days in the payment when due of interest on such Notes;

 

(2)           default
in payment when due of the principal of or premium, if any, on such Notes;

 

(3)           failure
by the Company or any of its Restricted Subsidiaries to comply with the
provisions described under Section 4.2 or Section 4.6 hereof;

 

(4)           failure
by the Company or any of its Restricted Subsidiaries for 60 days after notice
from the Trustee or the Holders of at least 25% in aggregate principal amount
of either series of the Notes outstanding to comply with any of the other
agreements in the Indenture as supplemented by this Fourth Supplemental
Indenture;

 

(5)           default
under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any Indebtedness for money borrowed
by the Company or any of its Significant Subsidiaries (or the payment of which
is guaranteed by the Company or any of its Significant Subsidiaries) whether
such Indebtedness or guarantee now exists, or is created after the date hereof,
if that default:

 

(a)           is
caused by a failure to pay principal of, or interest or premium, if any, on
such Indebtedness after the expiration of the grace period provided in such
Indebtedness on the date of such default (a “Payment Default”); or

 

(b)           results
in the acceleration of such Indebtedness prior to its express maturity,

 

and, in each case, the
principal amount of any such Indebtedness, together with the principal amount
of any other such Indebtedness under which there has been a Payment Default or
the maturity of which has been so accelerated, aggregates $5.0 million or more

 

24

 

and has not been
discharged in full or such acceleration rescinded or annulled within 10 days of
such Payment Default or acceleration;

 

(6)           failure
by the Company or any of its Significant Subsidiaries to pay final,
non-appealable judgments aggregating in excess of $25.0 million, which
judgments are not paid, discharged or stayed for a period of 60 days; and

 

(7)           (i)
the entry of a decree or order by a court having jurisdiction in the premises
adjudging the Company or any of its Significant Subsidiaries as bankrupt or insolvent,
or approving as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company or any of its
Significant Subsidiaries under the Federal Bankruptcy Act or any other
applicable federal or state law, or appointing a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the Company or
any of its Significant Subsidiaries or of any substantial part of its or any of
its Significant Subsidiaries’ properties, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days; or (ii) the
institution by the Company or any of its Significant Subsidiaries of
proceedings to be adjudicated as bankrupt or insolvent, or the consent by it to
the institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization or
relief under the Federal Bankruptcy Act or any other applicable federal or
state law, or the consent by it to the filing of any such petition or the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Company or any of its Significant Subsidiaries
or of any substantial part of its or any of its Significant Subsidiaries’
properties, or the making by it or any of its Significant Subsidiaries of any
assignment for the benefit of creditors, or the admission by it or any of its
Significant Subsidiaries in writing of the inability to pay its or any of its
Significant Subsidiaries’ debts generally as they become due and its or any of
its Significant Subsidiaries’ willingness to be adjudicated a bankrupt, or the
taking of corporate action by the Company or any of its Significant
Subsidiaries in furtherance of any such action.

 

Section 5.3             Acceleration of Maturity;
Remedies.  In the case of an Event
of Default described in clause (7) of Section 5.2, all outstanding Notes
will become due and payable immediately without further action or notice. If
any other Event of Default occurs and is continuing, the Trustee or the Holders
of at least 25% in principal amount of the then outstanding Notes of the
applicable series by a notice in writing to the Company (and to the Trustee if
given by Holders) may declare that series of Notes to be due and payable
immediately.

 

ARTICLE VI

MISCELLANEOUS

 

Section 6.1             Effectiveness.  This Fourth Supplemental Indenture will
become effective upon its execution and delivery.

 

Section 6.2             Successors and Assigns.  All of the covenants, promises, stipulations
and agreements of the Company contained in the Indenture, as supplemented and

 

25

 

amended by this Fourth Supplemental Indenture, will bind the Company
and its successors and assigns and will inure to the benefit of the Trustee and
its successors and assigns.

 

Section 6.3             Further Assurances.  The Company will, at its own cost and
expense, execute and deliver any documents or agreements, and take any other
actions, which the Trustee or its counsel may from time to time reasonably
request in order to assure the Trustee of the benefits of the rights granted to
the Trustee under the Indenture, as supplemented and amended by this Fourth Supplemental
Indenture.

 

Section 6.4             Effect of Recitals.  The recitals in this Fourth Supplemental
Indenture are made by the Company and not by the Trustee, and the Trustee shall
not be responsible for the validity or sufficiency hereof.

 

Section 6.5             Ratification of Indenture.  The Indenture as supplemented by this Fourth
Supplemental Indenture is in all respects ratified and confirmed, and this
Fourth Supplemental Indenture shall be deemed part of the Indenture in the
manner and to the extent herein and therein provided.

 

Section 6.6             Governing Law.  THIS FOURTH SUPPLEMENTAL INDENTURE AND EACH
NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAWS.

 

Section 6.7             Counterparts.  This Fourth Supplemental Indenture may be
executed in any number of separate counterparts each of which shall be an
original; but such separate counterparts shall together constitute but one and
the same instrument.

 

[SIGNATURE PAGE FOLLOWS]

 

26

 

IN WITNESS WHEREOF, the parties hereto have caused
this Fourth Supplemental Indenture to be duly executed by their respective
officers thereunto duly authorized, on the date first above written.

 

	
   

  	
  BOISE
  CASCADE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  U.S.
  BANK TRUST NATIONAL

  ASSOCIATION, as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

27

 

Exhibit
A

DEFINITIONS

 

The following definitions shall apply, and shall
supersede any identical terms defined in the Indenture, only with respect to
the Notes issued under this Fourth Supplemental Indenture.  The definitions in the Indenture shall
continue to apply unmodified to Securities of other series issued under the Indenture.

 

“2010 Notes”
is defined in Section 2.1.

 

“2013 Notes”
is defined in Section 2.1.

 

“Acquired Debt”
means, with respect to any specified Person:

 

(1)           Indebtedness
of any other Person existing at the time such other Person is merged with or
into or became a Subsidiary of such specified Person, whether or not such
Indebtedness is incurred in connection with, or in contemplation of, such other
Person merging with or into, or becoming a Subsidiary of, such specified
Person; and

 

(2)           Indebtedness
secured by a Lien encumbering any asset acquired by such specified Person,

 

but
excluding Indebtedness of such other Person that is extinguished, retired or
repaid concurrently with such other Person becoming a Restricted Subsidiary of,
or at the time it is merged into or consolidates with, such specified Person.

 

“Adjusted Treasury Rate”
means, with respect to any redemption date, the rate per annum equal to the
semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
assuming a price for the Comparable Treasury Issue (expressed as a percentage
of its principal amount) equal to the Comparable Treasury Price for such
redemption date.

 

“Affiliate”
of any specified Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such specified Person. For purposes of this definition, “control,” as used with
respect to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by agreement or
otherwise; provided that
beneficial ownership of 10% or more of the Voting Stock of a Person will be
deemed to be control. For purposes of this definition, the terms “controlling,”
“controlled by” and “under common control with” have correlative meanings.
Notwithstanding the foregoing, no Person (other than the Company or any
Subsidiary of the Company) in whom a Receivables Subsidiary makes an Investment
in connection with a Receivables Program shall be deemed to be an Affiliate of
the Company or any of its Subsidiaries solely by reason of such Investment.

 

“Affiliate Transaction”
is defined in Section 4.9.

 

A-1

 

“Asset Sale”
means:

 

(1)           the
sale, lease, conveyance or other disposition of any assets or rights; provided that the sale, conveyance or
other disposition of all or substantially all of the assets of the Company and
its Restricted Subsidiaries taken as a whole will be governed by the provisions
described in Section 4.2 and/or the provisions in Section 3.8 and not
by the provisions of Section 4.2; and

 

(2)           the
issuance of Equity Interests by any of the Company’s Restricted Subsidiaries.

 

Notwithstanding the preceding, none of the following
items will be deemed to be an Asset Sale:

 

(1)           any
single transaction or series of related transactions that involves Equity
Interests or assets having a fair market value of less than $10.0 million;

 

(2)           a
transfer of assets between or among the Company and one or more of its
Restricted Subsidiaries (including any Person that becomes a Restricted
Subsidiary in connection with such transaction);

 

(3)           an
issuance of Equity Interests by a Restricted Subsidiary to the Company or to
another Restricted Subsidiary;

 

(4)           the
sale or lease of equipment, inventory or accounts receivable in the ordinary
course of business;

 

(5)           any
sale or other disposition of Receivables and Related Assets pursuant to or in
connection with a Receivables Program;

 

(6)           a
Permitted Spin-Off Transaction and any sale, lease, conveyance or other
disposition of any assets or rights required to complete a Permitted Spin-Off
Transaction;

 

(7)           sales
of assets received by the Company or any Restricted Subsidiary upon the
foreclosure on a Lien;

 

(8)           the
lease, assignment or sublease of any real or personal property in the ordinary
course of business;

 

(9)           any
sale, lease or other disposition in the ordinary course of business of
obsolete, worn out or damaged equipment no longer being used by the Company or
its Restricted Subsidiaries;

 

(10)         any
sale or disposition deemed to occur in connection with creating or granting any
Permitted Lien;

 

(11)         the
sale or other disposition of cash or Cash Equivalents; and

 

(12)         a
Restricted Payment or Permitted Investment that is permitted by
Section 4.4.

 

A-2

 

“Asset Sale Offer”
is defined in Section 4.3.

 

“Attributable Debt”
in respect of a Sale and Leaseback Transaction means, at the time of
determination, the present value of the obligation of the lessee for net rental
payments during the remaining term of the lease included in such Sale and
Leaseback Transaction including any period for which such lease has been
extended or may, at the option of the lessor,
be extended. Such present value shall be calculated using a discount rate equal
to the rate of interest implicit in such lease, determined in accordance with
GAAP.

 

“Beneficial Owner”
has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the
Exchange Act, except that in calculating
the beneficial ownership of any particular “person” (as that term is used in
Section 13(d)(3) of the Exchange Act), such “person” will be deemed to
have beneficial ownership of all securities that such “person” has the right to
acquire by conversion or exercise of other securities, whether such right is
currently exercisable or is exercisable only upon the occurrence of a
subsequent condition. The terms “Beneficially Owns” and “Beneficially Owned”
have a corresponding meaning.

 

“Board of Directors” means:

 

(1)           with
respect to a corporation, the board of directors of the corporation or, except
in the context of the definitions of “Change of Control” and “Continuing
Directors,” any committee thereof;

 

(2)           with
respect to a partnership, the Board of Directors of the general partner of the
partnership; and

 

(3)           with
respect to any other Person, the board or committee of such Person serving a
similar function.

 

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

 

(1)           85%
of the face amount of all accounts receivable owned and not pledged by the
Company and its Restricted Subsidiaries as of the end of the most recent fiscal
quarter preceding such date that were not more than 180 days past due; plus

 

(2)           50%
of the book value of all inventory owned by the Company and its Restricted
Subsidiaries as of the end of the most recent fiscal quarter preceding such
date; minus

 

(3)           the
aggregate amount of trade payables of the Company and its Restricted
Subsidiaries outstanding as of the end of the most recent fiscal quarter
preceding such date, all calculated on a consolidated basis in accordance with
GAAP,

 

provided that in the event of a Permitted
Spin-Off Transaction, when calculating the Borrowing Base as of the end of the
most recent fiscal quarter preceding such Permitted Spin-Off Transaction, the
Borrowing Base shall be determined on a pro forma basis, as if the Permitted
Spin-Off Transaction had been consummated at the beginning of such fiscal
quarter.

 

A-3

 

“Business Day”
means each day other than a Saturday, a Sunday or a day on which commercial
banking institutions are authorized
or required by law to close in New York City.

 

“Capital Lease
Obligation” means, at the time any determination is to be made, the
amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a
balance sheet in accordance with GAAP.

 

“Capital Stock” means:

 

(1)           in
the case of a corporation, corporate stock;

 

(2)           in
the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock;

 

(3)           in
the case of a partnership or limited liability company, partnership or
membership interests (whether general or limited); and

 

(4)           any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person,

 

but
excluding any debt securities convertible into such equity securities.

 

“Cash Equivalents” means:

 

(1)           United
States dollars;

 

(2)           securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality of the United States government (provided that the full faith and
credit of the United States is pledged in support of those securities) having
maturities of not more than six months from the date of acquisition;

 

(3)           certificates
of deposit and eurodollar time deposits with maturities of six months or less
from the date of acquisition, bankers’ acceptances with maturities not
exceeding six months and overnight bank deposits, in each case, with any
domestic commercial bank having capital and surplus in excess of $500.0
million;

 

(4)           repurchase
obligations with a term of not more than seven days for underlying securities
of the types described in clauses (2) and (3) above entered into with
any financial institution meeting the qualifications specified in clause
(3) above;

 

(5)           commercial
paper having the highest rating obtainable from Moody’s or S&P and in each
case maturing within six months after the date of acquisition; and

 

(6)           money
market funds at least 95% of the assets of which constitute Cash Equivalents of
the kinds described in clauses (1) through (5) of this definition.

 

A-4

 

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

 

(1)           the
direct or indirect sale, transfer, conveyance or other disposition (other than
by way of merger or consolidation), in one or a series of related transactions,
of all or substantially all of the properties or assets of the Company and its
Restricted Subsidiaries, taken as a whole, to any “person” (as that term is
used in Section 13(d)(3) of the Exchange Act), other than a sale,
transfer, conveyance or other disposition of assets that occurs as part of a
Permitted Spin-Off Transaction;

 

(2)           the
adoption of a plan relating to the liquidation or dissolution of the Company;

 

(3)           the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any “person” (as that term is used
in Section 13(d)(3) of the Exchange Act), becomes the Beneficial Owner,
directly or indirectly, of more than 50% of the Voting Stock of the Company,
measured by voting power rather than number of shares; or

 

(4)           the
first day on which a majority of the members of the Board of Directors of the
Company are not Continuing Directors.

 

Notwithstanding the foregoing, a transaction effected
to create a holding company of the Company will not be deemed to involve a
Change of Control if (1) pursuant to such transaction the Company becomes a
Wholly-Owned Subsidiary of such holding company and (2) the holders of the
Voting Stock of such holding company immediately following such transaction are
the same as the holders of Voting Stock of the Company immediately prior to
such transaction.

 

“Change of Control Offer”
is defined in Section 4.2.

 

“Change of Control
Payment” is defined in Section 4.2.

 

“Change of Control
Payment Date” is defined in Section 4.2.

 

“Chief Executive
Officer’s Certificate” means a certificate signed by the Chief
Executive Officer of the Company, and delivered to the Trustee.

 

“Company” is defined in the Preamble.

 

“Comparable Treasury
Issue” means the U.S. Treasury security selected by the Quotation
Agent as having a maturity comparable to the remaining term of the Notes being
redeemed that would be utilized, at the time of selection and in accordance
with customary financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining term of those Notes.

 

“Comparable Treasury
Price” means, with respect to any redemption date:

 

A-5

 

(1)           the
average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated “Composite 3:30 p.m. Quotations for U.S.
Government Securities”; or

 

(2)           if
such release (or any successor release) is not published or does not contain
such prices on such Business Day, (a) the average of the Reference
Treasury Dealer Quotations for such redemption date, after excluding the
highest and lowest of such Reference Treasury Dealer Quotations, or (b) if
the Quotation Agent obtains fewer than three such Reference Treasury Dealer
Quotations, the average of all such Quotations.

 

“Consolidated Cash Flow”
means, with respect to any specified Person for any period, the Consolidated
Net Income of such Person for such period plus:

 

(1)           an
amount equal to any non-routine loss plus any net loss realized by such Person
or any of its Restricted Subsidiaries in connection with an Asset Sale, to the
extent such losses were deducted in computing such Consolidated Net Income; plus

 

(2)           provision
for taxes based on income or profits of such Person and its Restricted
Subsidiaries for such period, to the extent that such provision for taxes was
deducted in computing such Consolidated Net Income; plus

 

(3)           Consolidated
Interest Expense, to the extent that any such expense was deducted in computing
such Consolidated Net Income; plus

 

(4)           depreciation,
depletion, amortization (including amortization of goodwill and other
intangibles but excluding amortization of prepaid cash expenses that were paid
in a prior period) and other non-cash expenses or charges (excluding any such
non-cash expense to the extent that it represents an accrual of or reserve for
cash expenses in any future period or amortization of a prepaid cash expense
that was paid in a prior period) of such Person and its Restricted Subsidiaries
for such period to the extent that such depreciation, amortization and other
non-cash expenses or charges were deducted in computing such Consolidated Net
Income; plus

 

(5)           any
unusual or nonrecurring charges or expenses, including any nonrecurring charges
or expenses incurred within six months of a Permitted Spin-Off Transaction as a
result of such Permitted Spin-Off Transaction to the extent that such charges
or expenses were deducted in computing such Consolidated Net Income; minus

 

(6)           an
amount equal to any non-routine gain plus any net gain realized by such Person
or any of its Restricted Subsidiaries in connection with an Asset Sale, to the
extent such gain was added in computing such Consolidated Net Income; minus

 

(7)           non-cash
items increasing such Consolidated Net Income for such period, other than the
accrual of revenue in the ordinary course of business,

 

A-6

 

in each
case, on a consolidated basis and determined in accordance with GAAP.

 

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

 

(1)           interest
expense attributable to Capital Lease Obligations and imputed interest with
respect to Attributable Debt;

 

(2)           amortization
of debt discount;

 

(3)           capitalized
interest;

 

(4)           non-cash
interest expense;

 

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

 

(6)           net
costs associated with interest rate swap, cap or collar agreements and other
agreements designed to protect such Person against fluctuations in interest
rates;

 

(7)           the
interest component of any deferred payment obligations; and

 

(8)           any
premiums, fees, discounts, expenses and losses on the sale of Receivables and
Related Assets (and any amortization thereof) payable in connection with a
Receivables Program,

 

(in
each case as determined on a consolidated basis in conformity with GAAP), and
less, to the extent included in such total interest expense, (a) the
amortization during such period of capitalized financing costs associated with
a Permitted Spin-Off Transaction and (b) the amortization during such
period of other capitalized financing costs; provided, however,
that the aggregate amount of amortization relating to any such other
capitalized financing costs deducted in calculating Consolidated Interest
Expense shall not exceed 5% of the aggregate amount of the financing giving
rise to such capitalized financing costs.

 

“Consolidated Net Income”
means, with respect to any specified Person for any period, the aggregate of
the Net Income of such Person and its Restricted Subsidiaries for such period,
on a consolidated basis, determined in accordance with GAAP; provided that:

 

(1)           the
Net Income (or loss) of any Person that is not a Restricted Subsidiary or that
is accounted for by the equity method of accounting will be included only to
the extent of the amount of dividends or distributions paid in cash (or to the
extent converted into cash) to or by the specified Person or a Restricted
Subsidiary of the Person;

 

(2)           the
Net Income of any Restricted Subsidiary will be excluded to the extent that the
declaration or payment of dividends or similar distributions by that Restricted

 

A-7

 

Subsidiary of that Net Income is not at the date of
determination permitted without any prior governmental approval (that has not
been obtained) or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or its
stockholders, except to the extent that such Net Income is actually paid to
such Person or one of its Restricted Subsidiaries through dividends, loans or
otherwise;

 

(3)           the
cumulative effect of a change in accounting principles will be excluded;

 

(4)           any
non-cash goodwill impairment charges incurred subsequent to the date hereof
resulting from the application of SFAS No. 142 will be excluded;

 

(5)           any
non-cash charges incurred subsequent to the date hereof relating to the
underfunded portion of any pension plans will be excluded;

 

(6)           any
non-cash charges incurred subsequent to the date hereof resulting from the
application of SFAS No. 123 and APB 25 will be excluded;

 

(7)           the
Net Income of any Unrestricted Subsidiary will be included to the extent distributed
or otherwise paid in cash (or to the extent converted into cash) to the
specified Person or one of its Restricted Subsidiaries; and

 

(8)           any
restructuring charges in connection with the Company’s acquisition of OfficeMax
will be excluded.

 

“Consolidated Net
Tangible Assets” means the aggregate amount of assets (less
applicable reserves and other properly deductible items) after deducting
therefrom (1) all liabilities other than deferred income taxes, Funded
Debt and shareholders’ equity, (2) any item representing investments in
Unrestricted Subsidiaries and (3) all goodwill, trade names, trademarks,
patents, organization expenses and other like intangibles, all as set forth on
the most recent balance sheet of the Company and its consolidated Restricted
Subsidiaries and computed in accordance with GAAP.

 

“Continuing Directors”
means, as of any date of determination, any member of the Board of Directors of
the Company who:

 

(1)           was
a member of such Board of Directors on the date hereof; or

 

(2)           was
nominated for election or elected to such Board of Directors with the approval
of a majority of the Continuing Directors who were members of such Board at the
time of such nomination or election.

 

“Credit Agreement”
means the Credit Agreement, dated as of March 28, 2002, among the Company,
the financial institutions named therein and JPMorgan Chase Bank as
Administrative Agent, as such agreement may be amended, restated, refunded,
renewed, replaced or refinanced (including increasing the amount borrowed thereunder)
in whole or in part from time to time.

 

A-8

 

“Credit Facilities”
means one or more debt facilities (including, without limitation, the Credit
Agreement) or commercial paper facilities, in each case with banks or other
institutional lenders providing for revolving credit loans, term loans or
letters of credit, in each case, as amended, restated, refunded, renewed,
replaced or refinanced (including increasing the amount borrowed thereunder) in
whole or in part from time to time. 
Credit Facilities do not include any arrangement which constitutes a
Receivables Program.

 

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

 

“Designated Facilities
Amount” means, with respect to any Person:

 

(1)           prior
to a Permitted Spin-Off Transaction, $850.0 million, less the aggregate amount of all Net Proceeds of Asset Sales
required to be applied pursuant to the terms of one or more Credit Facilities
by the Company or any of its Restricted Subsidiaries since the date hereof to
repay any term Indebtedness under any such Credit Facility or to repay
revolving credit Indebtedness under any such Credit Facility and to
correspondingly reduce commitments thereunder; and

 

(2)           following
a Permitted Spin-Off Transaction, the greater of:

 

(a)           the
product of (x) $850.0 million, less
the aggregate amount of all Net Proceeds of Asset Sales required to be applied
pursuant to the terms of one or more Credit Facilities by the Company or any of
its Restricted Subsidiaries from the date hereof through the date of the
Permitted Spin-Off Transaction to repay any term Indebtedness under any such
Credit Facility or to repay revolving credit Indebtedness under any such Credit
Facility and to correspondingly reduce commitments thereunder, and (y) a
fraction:

 

(i)            the
numerator of which is the Consolidated Cash Flow of such Person for its most
recently ended four fiscal quarters for which internal financial statements are
available immediately preceding the date on which the Permitted Spin-Off
Transaction occurred, determined on a pro forma basis, as if the Permitted
Spin-Off Transaction had been consummated at the beginning of such four-quarter
period, including, on a pro forma basis, the Consolidated Cash Flow of any
entity acquired during such four-quarter period, and

 

(ii)           the
denominator of which is the Consolidated Cash Flow of the Company for its most
recently ended four full fiscal quarters for which internal financial statements
are available immediately preceding the date on which the Permitted Spin-Off
Transaction occurred, including, on a pro forma basis, the Consolidated Cash
Flow of any entity acquired during such four-quarter period, and

 

less
the aggregate amount of all Net Proceeds of Asset Sales required to be applied
pursuant to the terms of one or more Credit Facilities by the Company or any of
its Restricted Subsidiaries since the date of the Permitted Spin-Off 

 

A-9

 

Transaction to repay any
term Indebtedness under any such Credit Facility or to repay revolving credit
Indebtedness under any such Credit Facility and to correspondingly reduce
commitments thereunder; and

 

(b)           the
aggregate amount available for borrowing or otherwise committed as of the date
of such Permitted Spin-Off Transaction under all Credit Facilities of such
Person entered into in connection with such Permitted Spin-Off Transaction less the aggregate amount of all Net
Proceeds of Asset Sales required to be applied pursuant to the terms of one or
more Credit Facilities of such Person since the date of the Permitted Spin-Off
Transaction to repay any term Indebtedness under any such Credit Facility or to
repay revolving credit Indebtedness under any such Credit Facility and to
correspondingly reduce commitments thereunder.

 

“Designated Receivables
Amount” means, with respect to any Person:

 

(1)           prior
to a Permitted Spin-Off Transaction, $500.0 million; and

 

(2)           following
a Permitted Spin-Off Transaction, the product of $500.0 million and a fraction:

 

(a)           the
numerator of which is the average daily balance of receivables eligible for
pledging or sale under a Receivables Program held by such Person during its
most recently ended four fiscal quarters for which internal financial
statements are available immediately preceding the date on which the Permitted
Spin-Off Transaction occurred, determined on a pro forma basis, as if the
Permitted Spin-Off Transaction had been consummated at the beginning of such
four-quarter period, and

 

(b)           the
denominator of which is the average daily balance of receivables eligible for
pledging or sale under a Receivables Program held by the Company during its
most recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date on which the Permitted
Spin-Off Transaction occurred.

 

“Disqualified Stock”
means any Capital Stock that, by its terms (or by the terms of any security
into which it is convertible, or for which it is exchangeable, in each case at
the option of the holder of the Capital Stock), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder of the
Capital Stock, in whole or in part, on or prior to the date that is 91 days
after the date on which the notes mature. Notwithstanding the preceding
sentence, any Capital Stock that would constitute Disqualified Stock solely
because the holders of the Capital Stock have the right to require the Company
to repurchase such Capital Stock upon the occurrence of a Change of Control or
an Asset Sale will not constitute Disqualified Stock if the terms of such
Capital Stock provide that the Company may not repurchase or redeem any such
Capital Stock pursuant to such provisions unless such repurchase or redemption
complies with Section 4.4.

 

A-10

 

“Domestic Restricted
Subsidiary” means any Restricted Subsidiary of the Company formed
under the laws of the United States or any state of the United States or the
District of Columbia.

 

“Equity Interests”
means Capital Stock and all warrants, options or other rights to acquire
Capital Stock (but excluding any debt security that is convertible into, or
exchangeable for, Capital Stock).

 

“Equity Offering”
means any primary private or public offering of Equity Interests of the Company
(other than Disqualified Stock) to Persons who are not Affiliates of the
Company other than (1) public offerings with respect to the Company’s
common stock registered on Form S-8 and (2) issuances upon exercise of
options by employees of the Company or any of its Restricted Subsidiaries.

 

“Event of Default”
is defined in Section 5.2.

 

“Excess Proceeds”
is defined in Section 4.3.

 

“Existing Indebtedness”
means any Indebtedness of the Company and its Restricted Subsidiaries in
existence on the date hereof, other than the 7.05% Notes due May 15, 2003
of Boise Cascade Office Products Corporation, until such amounts are repaid.

 

“Fall Away Event”
is defined in Section 4.1.

 

“Fixed Charges”
means, with respect to any specified Person for any period, the sum, without
duplication, of:

 

(1)           the
Consolidated Interest Expense of such Person and its Restricted Subsidiaries
for such period; plus

 

(2)           any
interest expense on Indebtedness of any Person other than such Person or any of
its Restricted Subsidiaries that is Guaranteed by such Person or one of its
Restricted Subsidiaries or secured by a Lien on assets of such Person or one of
its Restricted Subsidiaries, whether or not such Guarantee or Lien is called
upon, but only to the extent of the Guarantee or Lien on such Indebtedness; plus

 

(3)           all
dividends, whether paid or accrued and whether or not in cash, on any series of
preferred stock of such Person or any of its Restricted Subsidiaries, other
than dividends on Equity Interests payable solely in Equity Interests of the
Company (other than Disqualified Stock) or to the Company or a Restricted
Subsidiary of the Company.

 

“Fixed Charge Coverage
Ratio” means, with respect to any specified Person for any
four-quarter period, the ratio of the Consolidated Cash Flow of such Person and
its Restricted Subsidiaries for such period to the Fixed Charges of such Person
and its Restricted Subsidiaries for such period. In the event that the
specified Person or any of its Restricted Subsidiaries incurs, assumes,
Guarantees, repays, repurchases or redeems any Indebtedness (other than
ordinary working capital borrowings) or issues, repurchases or redeems
preferred stock subsequent to the commencement of the period for which the
Fixed Charge Coverage Ratio

 

A-11

 

is being calculated and on or prior to the date on
which the event for which the calculation of the Fixed Charge Coverage Ratio is
made (the “Calculation Date”), then the Fixed Charge Coverage Ratio will
be calculated giving pro forma effect to such incurrence, assumption,
Guarantee, repayment, repurchase or redemption of Indebtedness, or such
issuance, repurchase or redemption of preferred stock, and the use of the
proceeds therefrom as if the same had occurred at the beginning of the
applicable four-quarter reference period.

 

In addition, for purposes of calculating the Fixed
Charge Coverage Ratio:

 

(1)           acquisitions
or dispositions that have been
made by the specified Person or any of its Restricted Subsidiaries, including
through the Permitted Spin-Off Transaction or mergers or consolidations and
including any related financing transactions, during the four-quarter reference
period or subsequent to such reference period and on or prior to the
Calculation Date (including any acquisitions or dispositions made during such
reference period or subsequent to such reference period and on or prior to the
Calculation Date by any Person that became a Restricted Subsidiary or was
merged with and into the specified Person or any of its Restricted Subsidiaries
on or prior to such Calculation Date) will be given pro forma effect as if they
had occurred on the first day of the four-quarter reference period and
Consolidated Cash Flow for such reference period will be calculated on a pro
forma basis in accordance with Regulation S-X under the Securities Act;

 

(2)           interest
on Capital Lease Obligations and Attributable Debt shall be deemed to accrue at
an interest rate reasonably determined by a responsible financial or accounting
officer of the Company to be the rate of interest implicit in such Capital
Lease Obligation or Attributable Debt in accordance with GAAP;

 

(3)           the
consolidated interest expense attributable to interest on (a) any Indebtedness
computed on a pro forma basis that was not outstanding during the period for
which the computation is being made but which bears, at the option of such
Person, a fixed or floating rate of interest, shall be computed by applying, at
the option of such Person, either the fixed or floating rate and
(b) borrowings under a revolving credit facility computed on a pro forma
basis shall be computed based upon the average daily balance of such borrowings
during the applicable period;

 

(4)           the
interest rate on any Indebtedness that bears a floating rate of interest shall
be calculated as if the weighted average interest rate that would have been
applicable to such Indebtedness over the latest 12-month period ending on the
last calendar month immediately prior to the Calculation Date had been the
applicable rate on such Indebtedness for the entire reference period (taking
into account any Hedging Obligation designed to protect such Person or any of
its Restricted Subsidiaries against fluctuations in interest rates (including
any agreement that exchanges a fixed rate interest obligation for a floating
rate interest obligation) applicable to such Indebtedness if such Hedging
Obligation has a remaining term in excess of 12 months);

 

(5)           the
Consolidated Cash Flow attributable to discontinued operations, as determined
in accordance with GAAP, will be excluded; and

 

A-12

 

(6)           the
Fixed Charges attributable to discontinued operations, as determined in
accordance with GAAP, will be excluded, but only to the extent that the
obligations giving rise to such Fixed Charges will not be obligations of the
specified Person or any of its Restricted Subsidiaries following the
Calculation Date.

 

“Fourth Supplemental Indenture” is defined in
the Preamble.

 

“Funded Debt”
means (1) all indebtedness for money borrowed having a maturity of more
than 12 months from the date as of which the determination is made or
having a maturity of 12 months or less but by its terms being renewable or
extendable beyond 12 months from such date at the option of the borrower
and (2) rental obligations payable more than 12 months from such date
under leases which are capitalized in accordance with GAAP (such rental
obligations to be included as Funded Debt at the amount so capitalized and to
be included for the purposes of the definition of Consolidated Net Tangible
Assets both as an asset and as Funded Debt at the amount so capitalized).

 

“GAAP” means
generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
have been approved by a significant segment of the accounting profession, which
are in effect on the date hereof.

 

“Guarantee”
means a guarantee other than by endorsement of negotiable instruments for
collection in the ordinary course of business, direct or indirect, in any
manner including, without limitation, by way of a pledge of assets or through
letters of credit or reimbursement agreements in respect thereof, of all or any
part of any Indebtedness.

 

“Hedging Obligations”
means, with respect to any specified Person, the obligations of such Person
under:

 

(1)           currency
exchange, interest rate or commodity swap agreements, currency exchange,
interest rate or commodity cap agreements and currency exchange, interest rate
or commodity collar agreements; and

 

(2)           other
agreements or arrangements designed to protect such Person against fluctuations
in currency exchange, interest rates or commodity prices.

 

“incur” is
defined in Section 4.5.

 

“Indebtedness”
means, with respect to any specified Person, any indebtedness of such Person,
whether or not contingent and without duplication:

 

(1)           in
respect of borrowed money;

 

(2)           evidenced
by bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof);

 

(3)           in
respect of bankers’ acceptances;

 

A-13

 

(4)           representing
Capital Lease Obligations;

 

(5)           representing
the balance deferred and unpaid of the purchase price of any property, except
any such balance that constitutes an accrued expense or trade payable, or
similar obligations to trade creditors; or

 

(6)           representing
any Hedging Obligations,

 

if and
to the extent any of the preceding items (other than letters of credit and
Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
“Indebtedness” includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any indebtedness of any other Person.

 

The amount of any Indebtedness outstanding as of any
date will be:

 

(1)           the
accreted value of the Indebtedness, in the case of any Indebtedness issued with
original issue discount; and

 

(2)           the
principal amount of the Indebtedness, in the case of any other Indebtedness.

 

Notwithstanding the foregoing, “Indebtedness” shall
not include (A) advance payments by customers in the ordinary course of
business for services or products to be provided or delivered in the future or
(B) deferred taxes.

 

“Indenture” is defined in the Recitals.

 

“Investment Grade Rating”
means a rating of Baa3 or better by Moody’s (or its equivalent under any
successor rating categories of Moody’s), BBB- or better by S&P (or its
equivalent under any successor rating categories of S&P) or the equivalent
investment grade credit rating from any other Rating Agency.

 

“Investments”
means, with respect to any Person, all direct or indirect investments by such
Person in other Persons (including Affiliates) in the forms of loans (including
Guarantees of other obligations), advances or capital contributions (excluding
commission, travel and similar advances to officers and employees made in the
ordinary course of business), purchases or other acquisitions for value of
Indebtedness, Equity Interests or other securities, together with all items
that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP. If the Company or any Restricted Subsidiary of the
Company sells or otherwise disposes of any Equity Interests of any direct or
indirect Restricted Subsidiary of the Company such that, after giving effect to
any such sale or disposition, such Person is no longer a Restricted Subsidiary
of the Company, the Company will be deemed to have made an Investment on the
date of any such sale or disposition equal to the fair market value of the
Company’s Investments in such Restricted Subsidiary that were not sold or
disposed of in an amount determined as provided in the final paragraph of
Section 4.4. “Investments” shall

 

A-14

 

exclude extensions of trade credit by the Company or
any of its Restricted Subsidiaries in the ordinary course of business.

 

“Lien” means,
with respect to any asset, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect of such asset, whether or not
filed, recorded or otherwise perfected under applicable law, including any
conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give a security interest in
and any filing of or agreement to give any financing statement under the
Uniform Commercial Code (or equivalent statutes) of any jurisdiction, provided that in no event shall an
operating lease be deemed to constitute a Lien.

 

“Moody’s”
means Moody’s Investors Service, Inc. and its successors.

 

“Net Income”
means, with respect to any specified Person, the net income (loss) of such
Person, determined in accordance with GAAP and before any reduction in respect
of preferred stock dividends, excluding, however:

 

(1)           any
gain or loss, together with any related provision for taxes on such gain (but
not loss), realized in connection with: (a) any Asset Sale; or
(b) the disposition of any securities by such Person or any of its
Restricted Subsidiaries or the extinguishment of any Indebtedness of such
Person or any of its Restricted Subsidiaries; and

 

(2)           any
extraordinary gain or loss, together with any related provision for taxes on
such extraordinary gain (but not loss).

 

“Net Proceeds”
means the aggregate cash proceeds received by the Company or any of its
Restricted Subsidiaries in respect of any Asset Sale (including, without
limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of (1) costs
relating to such Asset Sale, including, without limitation, legal, accounting
and investment banking fees, and sales commissions, and any relocation expenses
incurred as a result of the Asset Sale, and taxes paid or payable as a result
of the Asset Sale, in each case, after taking into account any available tax
credits or deductions and any tax sharing arrangements, (2) amounts
required to be applied to the repayment of Indebtedness, other than Indebtedness
under a Credit Facility, secured by a Lien on the asset or assets that were the
subject of such Asset Sale, (3) any reserve for adjustment in respect of
the sale price of such asset or assets established in accordance with GAAP
against any liabilities associated with the asset disposed of in such
transaction and retained by the Company or any of its Restricted Subsidiaries
after such sale or other disposition thereof, including, without limitation,
pension and other post-employment benefit liabilities and liabilities related
to environmental matters or against any indemnification obligations associated
with such transaction and (4) all distributions or other payments made to
minority interest holders required in connection with the Asset Sale.

 

“Non-Recourse Debt”
means Indebtedness:

 

(1)           as
to which neither the Company nor any of its Restricted Subsidiaries
(a) provides credit support of any kind (including any undertaking,
agreement or instrument that would constitute Indebtedness), (b) is
directly or indirectly liable as a guarantor or otherwise or
(c) constitutes the lender; and

 

A-15

 

(2)           no
default with respect to which (including any rights that the holders of the
Indebtedness may have to take enforcement action against an Unrestricted
Subsidiary) would permit upon notice, lapse of time or both any holder of
any other Indebtedness (other than the notes) of the Company or any of its
Restricted Subsidiaries to declare a default on such other Indebtedness or
cause the payment of such other Indebtedness of the Company or any of its
Restricted Subsidiaries to be accelerated or payable prior to its stated
maturity.

 

“Notes” is defined
in Section 2.1.

 

“Obligations”
means any principal, interest, penalties, fees, taxes, costs, indemnifications,
reimbursements, damages and other liabilities payable under the documentation
governing, securing or relating to any Indebtedness, whether or not a claim in
respect thereof has been asserted.

 

“Offer Amount” is
defined in Section 4.3.

 

“Offer Period” is
defined in Section 4.3.

 

“OfficeMax” means OfficeMax, Inc., an Ohio
corporation.

 

“Payment Default”
is defined in Section 5.2.

 

“Permitted Business”
means any business conducted by the Company and its Restricted Subsidiaries on
the date hereof, any reasonable extension thereof, and any additional business
reasonably related, incidental, ancillary or complementary thereto.

 

“Permitted Debt”
is defined in Section 4.5.

 

“Permitted Investments” means:

 

(1)           any
Investment in the Company or in a Restricted Subsidiary of the Company;

 

(2)           any
Investment in Cash Equivalents;

 

(3)           any
Investment by the Company or any Restricted Subsidiary of the Company in a
Person, if as a result of such Investment:

 

(a)           such
Person becomes a Restricted Subsidiary of the Company; or

 

(b)           such
Person is merged, consolidated or amalgamated with or into, or transfers or
conveys substantially all of its assets to, or is liquidated into, the Company
or a Restricted Subsidiary of the Company;

 

(4)           any
Investment made as a result of the receipt of non-cash consideration from an
Asset Sale that was made pursuant to and in compliance with Section 4.3;

 

A-16

 

(5)           any
acquisition of assets solely in exchange for the issuance of Equity Interests
(other than Disqualified Stock) of the Company;

 

(6)           any
Investments received in compromise of obligations of trade creditors or
customers that were incurred in the ordinary course of business, including
pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of any trade creditor or customer;

 

(7)           Hedging
Obligations;

 

(8)           Investments
constituting loans, advances or extensions of credit to employees, officers and
directors made in the ordinary course of business;

 

(9)           Investments
in existence on the date hereof and an Investment in any Person to the extent
such Investment replaces or refinances an Investment in such Person existing on
the date hereof in an amount not exceeding the amount of the Investment being
replaced or refinanced; provided, however, that the new
Investment is on terms and conditions no less favorable to the Company than the
Investment being renewed or replaced;

 

(10)         an
Investment in a trust, limited liability company, special purpose entity or
other similar entity in connection with a Receivables Program; provided, however, that the only assets transferred to such
trust, limited liability company, special purpose entity or other similar
entity consist of Receivables and Related Assets of such Receivables
Subsidiary;

 

(11)         Investments
in any of the Notes;

 

(12)         Guarantees
of Indebtedness of the Company or any of its Restricted Subsidiaries issued in
accordance with Section 4.5;

 

(13)         Investments
in Permitted Joint Ventures having an aggregate market value (measured on the
date such investment was made and without giving effect to subsequent changes
in value), when taken together with all other Investments made and still in
Permitted Joint Ventures pursuant to this clause (13) since the date
hereof, not to exceed 3.0% of the Consolidated Net Tangible Assets of the
Company and its Restricted Subsidiaries; and

 

(14)         other
Investments in any Person having an aggregate fair market value (measured on
the date each such Investment was made and without giving effect to subsequent
changes in value), when taken together with all other Investments made pursuant
to this clause (14) since the date hereof, not to exceed $50.0 million.

 

“Permitted Joint Ventures” means, with respect
to any Person, any corporation, partnership, limited liability company or other
business entity (1) of which at least 20%, but not more than 50%, of the
total voting power of shares of Capital 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 such Person or one or more

 

A-17

 

of the Restricted Subsidiaries (other than a
Receivables Subsidiary) of that Person and (2) which engages only in a
Permitted Business.

 

“Permitted Liens” means:

 

(1)           Liens
on inventory or receivables of the Company and its Restricted Subsidiaries and
liens on Equity Interests of Restricted Subsidiaries, in each case securing
Indebtedness and other Obligations under Credit Facilities that were permitted
to be incurred by clause (1) of the second paragraph of Section 4.5;

 

(2)           Liens
in favor of the Company or a Restricted Subsidiary;

 

(3)           Liens
on property of a Person existing at the time such Person is merged with or into
or consolidated with the Company or any Restricted Subsidiary of the Company; provided that such Liens were in
existence prior to the contemplation of such merger or consolidation and do not
extend to any assets other than those of the Person merged into or consolidated
with the Company or the Restricted Subsidiary;

 

(4)           Liens
on assets existing at the time of acquisition of the assets by the Company or
any Restricted Subsidiary of the Company, provided that such Liens were in existence prior to the
contemplation of such acquisition;

 

(5)           Liens
to secure the performance of statutory obligations, surety or appeal bonds,
performance bonds or other obligations of a like nature incurred in the
ordinary course of business;

 

(6)           Liens
to secure Indebtedness (including Capital Lease Obligations) permitted by
clause (4) of the second paragraph of Section 4.5 covering only the
assets acquired with such Indebtedness;

 

(7)           Liens
existing on the date hereof;

 

(8)           Liens
for taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate proceedings
promptly instituted and diligently concluded, provided that any reserve or other appropriate provision as is
required in conformity with GAAP has been made therefor;

 

(9)           Liens
on Receivables and Related Assets to reflect sales of receivables pursuant to a
Receivables Program permitted by clause (13) of the second paragraph of Section 4.5
covering only the sold Receivables and Related Assets;

 

(10)         Liens
in favor of issuers of tender, bid, surety, appeal or performance bonds or
letters of credit or bankers’ acceptances issued pursuant to the request of and
for the account of the Company or any Restricted Subsidiary in the ordinary
course of its business; provided, however, that such letters
of credit do not support Indebtedness;

 

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

 

A-18

 

(12)         Liens
incurred in the ordinary course of business of the Company or any Restricted
Subsidiary of the Company with respect to obligations that do not exceed $5.0
million at any one time outstanding;

 

(13)         Liens
securing Permitted Refinancing Indebtedness incurred to refinance Indebtedness
that was previously so secured, provided
that any such Lien is limited to all or part of the same property or assets
(plus assets or property affixed or appurtenant thereto or proceeds in respect
thereof) that secured (or, under the written arrangements under which the
original Lien arose, could secure) the Indebtedness being refinanced or is in
respect of property that is the security for a Permitted Lien;

 

(14)         Liens
securing Hedging Obligations so long as such Hedging Obligations are permitted
to be incurred hereunder;

 

(15)         Liens
incurred in connection with a Sale and Leaseback Transaction with respect to
Attributable Debt that does not exceed 10.0% of the Consolidated Net Tangible
Assets of the Company and the Restricted Subsidiaries; and

 

(16)         Liens
on assets of Unrestricted Subsidiaries that secure Non-Recourse Debt of
Unrestricted Subsidiaries.

 

“Permitted Refinancing
Indebtedness” means any Indebtedness of the Company or any of its
Restricted Subsidiaries issued in exchange for, or the net proceeds of which
are used to extend, refinance, renew, replace, defease or refund, other
Indebtedness of the Company or any of its Restricted Subsidiaries (other than
intercompany Indebtedness); provided
that:

 

(1)          
the principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount (or accreted
value, if applicable) of the Indebtedness extended, refinanced, renewed,
replaced, defeased or refunded (plus all accrued interest on the Indebtedness
and the amount of all expenses and premiums incurred in connection therewith);

 

(2)           such
Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and has a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of, the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded, except for the
refinancing or refunding of industrial revenue bonds so long as such
refinancing or refunding bonds have a Weighted Average Life to Maturity greater
than the maturity of the Notes;

 

(3)           if
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded is subordinated in right of payment to the Notes, such Permitted
Refinancing Indebtedness is subordinated in right of payment to the Notes on
terms at least as favorable to the Holders of Notes as those contained in the
documentation governing the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; and

 

A-19

 

(4)           such
Indebtedness is incurred either by the Company or by the Restricted Subsidiary
that is the obligor on the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded.

 

“Permitted Spin-Off
Transaction” means a spin-off, split-up, split-off or other
transaction involving the dividend, distribution or transfer by the Company of
all or some portion of one or more business units, as such unit or units are
reported in the Company’s audited financial statements on the date hereof (the
entity comprising such segment after giving effect to the dividend or
distribution, “Newco”), provided
that each of the following two conditions have been met:

 

(1)           Newco
shall have completed a registered exchange offer in which it shall have offered
to the Holders of each series of Notes the opportunity to exchange all or at
least $150.0 million principal amount of their Notes, pro rated between
the 2010 Notes and the 2013 Notes based on their principal amounts outstanding,
for Spin-Off Notes, which offer shall have remained open for at least 20
business days; provided, further, that:

 

(a)           Newco
will, on the date of such Permitted Spin-Off Transaction after giving pro forma
effect thereto and to all related transactions (including, without limitation,
the incurrence by Newco of any Indebtedness (including the assumption by Newco
of any Indebtedness of the Company or any of its subsidiaries) and the
disposition by Newco of any assets) as if the same had occurred at the
beginning of the applicable four-quarter period, be permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in the first paragraph of Section 4.5;

 

(b)           each
of the Rating Agencies shall have given the applicable Spin-Off Notes a rating
that is equal to or better than such Rating Agency’s highest rating of the
Notes being exchanged for such Spin-Off Notes during the one-year period
immediately prior to the consummation of the Permitted Spin-Off Transaction (it
being understood that the ratings of the Spin-Off Notes shall take into account
all transactions relating to the Permitted Spin-Off Transaction, including,
without limitation, the incurrence by Newco of any Indebtedness (including the
assumption by Newco of any Indebtedness of the Company or any of its
Subsidiaries) and the disposition by Newco of any assets);

 

(c)           immediately
after such transaction, no Default or Event of Default exists; and

 

(d)           Newco
assumes all obligations of the Company under the Notes and the Indenture as
supplemented by this Fourth Supplemental Indenture pursuant to agreements
reasonably satisfactory to the Trustee, whereupon the Company’s obligation in
respect of the Notes exchanged for such Spin-Off Notes shall be fully satisfied
and discharged; and

 

A-20

 

(2)           the
Company shall have completed a cash tender offer for the Notes in which it
shall have offered to purchase the Notes from the Holders on the terms set
forth herein for a purchase price in cash equal to 100% of the aggregate
principal amount of Notes repurchased plus accrued and unpaid interest on the
Notes repurchased, to the date of purchase, which offer shall have remained
open for at least 20 business days.

 

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

 

“Principal Property”
means (a) any mill, converting plant, manufacturing plant or other
facility owned by the Company and/or one or more Restricted Subsidiaries and
located within the continental United States of America having a gross book
value (including related land and improvements thereon and all machinery and
equipment included therein without deduction of any depreciation reserves) in
excess of 3.0% of the Consolidated Net Tangible Assets of the Company and its
Restricted Subsidiaries and (b) Timberlands, in each case other than
(i) any property which in the opinion of the Board of Directors of the
Company is not of material importance to the total business conducted by the Company
as an entirety or (ii) any portion of a particular property which is
similarly found not to be of material importance to the use or operation of
such property or (iii) any minerals or mineral rights.

 

“Purchase Date” is
defined in Section 4.3.

 

“Quotation Agent”
means the Reference Treasury Dealer appointed by the Trustee to act as the
Quotation Agent after consultation with the Company.

 

“Rating Agency”
means a nationally recognized statistical rating organization within the
meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act.

 

“Realty Subsidiary”
means a Subsidiary of the Company engaged primarily in the development and sale
or financing of real property.

 

“Receivables and Related
Assets” means accounts receivable, instruments, chattel paper,
obligations, general intangibles and other similar assets, including interests
in merchandise or goods, the sale or lease of which give rise to the foregoing,
related contractual rights, guarantees, insurance proceeds, collections, other
related assets and proceeds of all the foregoing.

 

“Receivables Program”
means, with respect to any Person, any accounts receivable securitization
program pursuant to which such Person pledges, sells or otherwise transfers or
encumbers its accounts receivable, including a trust, limited liability
company, special purpose entity or other similar entity.

 

“Receivables Subsidiary”
means a Wholly-Owned Subsidiary of the Company or a Restricted Subsidiary of
the Company (or another Person in which the Company or any Restricted
Subsidiary of the Company makes an Investment and to which the Company or any
Restricted Subsidiary of the Company transfers Receivables and Related Assets)
which engages in no activities other than in connection with the financing of
Receivables and Related Assets

 

A-21

 

and which is designated by the Board of Directors of
the Company as a Receivables Subsidiary. 
Loving Creek Funding Corporation, a Delaware corporation, is a
Receivables Subsidiary of the Company on the date hereof.

 

“Reference Treasury
Dealer” means Goldman, Sachs & Co. and its successor; provided, however, that if Goldman,
Sachs & Co. or its successor shall cease to be a primary U.S. Government
securities dealer in New York City (a “Primary Treasury Dealer”), the
Company shall substitute therefor another Primary Treasury Dealer.

 

“Reference Treasury
Dealer Quotations” means, with respect to any redemption date, the
average, as determined by the Trustee, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Trustee by the Reference Treasury
Dealer at 3:00 pm, New York City time, on the third business day preceding such
redemption date.

 

“Replacement Assets”
means (1) long-term assets that will be used or useful in a Permitted
Business, (2) substantially all of the assets of another Permitted
Business, or (3) a majority of the Voting Stock of any Person engaged in a
Permitted Business that will become on the date of acquisition thereof a
Restricted Subsidiary as a result of such acquisition.

 

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

 

“Restricted Payments”
is defined in Section 4.4.

 

“Restricted Subsidiary”
of a Person means any Subsidiary of the referenced Person that is not an
Unrestricted Subsidiary; provided, however, that after a Fall
Away Event, a Restricted Subsidiary of the Company means only a Restricted
Subsidiary (1) substantially all the property of which is located, or
substantially all the business of which is carried on, within the present 50
States of the United States of America and (2) which owns a Principal
Property, but does not include a Realty Subsidiary.

 

“Sale and Leaseback
Transaction” means any arrangement with any Person providing for the
leasing by the Company or any Restricted Subsidiary of any properties or assets
of the Company and/or such Restricted Subsidiary (except for leases between the
Company and any Restricted Subsidiary, between any Restricted Subsidiary and
the Company or between Restricted Subsidiaries), which properties or assets
have been or are to be sold or transferred by the Company or such Subsidiary to
such Person with the intention of taking back a lease of such properties or
assets.

 

“S&P”
means Standard & Poor’s Ratings Service, a division of The McGraw Hill
Companies, and its successors.

 

“Significant Subsidiary”
means any Subsidiary other than an Unrestricted Subsidiary that would be a
“significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.

 

A-22

 

“Spin-Off Notes”
means two series of notes to be offered in a registered exchange offer by Newco
on terms and with covenants that are identical to those included herein (as
applicable), with such variations from the Notes and the Indenture as
supplemented by this Fourth Supplemental Indenture as the Trustee and Newco
shall have mutually agreed.

 

“Stated Maturity”
means, with respect to any installment of interest or principal on any series
of Indebtedness, the date on which the payment of interest or principal was
scheduled to be paid (including with respect to sinking fund obligations) in
the original documentation governing such Indebtedness, and will not include
any contingent obligations to repay, redeem or repurchase any such interest or
principal prior to the date originally scheduled for the payment thereof.

 

“Subsidiary”
means, with respect to any specified Person:

 

(1)           any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees of the corporation, association or other business entity 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); and

 

(2)           any
partnership (a) the sole general partner or the managing general partner
of which is such Person or a Subsidiary of such Person or (b) the only
general partners of which are that Person or one or more Subsidiaries of that
Person (or any combination thereof).

 

“Timberlands”
means any real property owned by the Company and/or one or more Restricted
Subsidiaries and located within the continental United States of America which
directly provides a material portion of the fiber required to operate any mill,
converting plant, manufacturing plant or other facility included in
subsection (a) of the definition of Principal Property and which contains
standing timber which is (or upon completion of a growth cycle then in process
is expected to become) of a commercial quantity and of merchantable quality,
excluding, however, any such real property which at the time of determination
is held primarily for development or sale, and not primarily for the production
of any lumber or other timber products.

 

“Total Assets”
means, with respect to any specified Person at any date, without duplication,
the total consolidated assets of that Person and its Subsidiaries, as
determined in accordance with GAAP.

 

“Trustee” means the Person named as the
“Trustee” in the Preamble hereof until a successor Trustee shall have become
such pursuant to the applicable provisions of the Indenture, and thereafter
“Trustee” shall mean such successor Trustee.

 

“Unrestricted Subsidiary”
means each Subsidiary of the Company that is designated by the Board of
Directors, or the Company’s Chief Executive Officer if the Company’s Investment
in such Subsidiary is $5.0 million or less, as an Unrestricted Subsidiary

 

A-23

 

pursuant to a resolution of the Board of Directors or a Chief Executive
Officer’s Certificate, but only to the extent that each such Subsidiary:

 

(1)           has
no Indebtedness other than Non-Recourse Debt;

 

(2)           is
not party to any agreement, contract, arrangement or understanding with the
Company or any Restricted Subsidiary of the Company unless the terms of any
such agreement, contract, arrangement or understanding are no less favorable to
the Company or such Restricted Subsidiary than those that might be obtained at
the time from Persons who are not Affiliates of the Company, unless any such
agreement, contract, arrangement or understanding is otherwise permitted by
Section 4.9;

 

(3)           is
a Person with respect to which neither the Company nor any of its Restricted
Subsidiaries has any direct or indirect obligation (a) to subscribe for
additional Equity Interests or (b) to maintain or preserve such Person’s
financial condition or to cause such Person to achieve any specified levels of
operating results; and

 

(4)           has
not guaranteed or otherwise directly or indirectly provided credit support for
any Indebtedness of the Company or any of its Restricted Subsidiaries.

 

Any designation of a Subsidiary of the Company as an
Unrestricted Subsidiary will be evidenced to the Trustee by filing with the
Trustee a certified copy of the Board Resolution or Chief Executive Officer’s
Certificate giving effect to such designation and an Officers’ Certificate
certifying that such designation complied with the preceding conditions and was
permitted by Section 4.4. If, at any time, any Unrestricted Subsidiary
would fail to meet the preceding requirements as an Unrestricted Subsidiary, it
will thereafter cease to be an Unrestricted Subsidiary for purposes hereof and
any Indebtedness of such Subsidiary will be deemed to be incurred by a
Restricted Subsidiary of the Company as of such date and, if such Indebtedness
is not permitted to be incurred as of such date under the covenant set forth in
Section 4.5, the Company will be in default of such covenant. The Board of
Directors may at any time designate any Unrestricted Subsidiary to be a
Restricted Subsidiary, and the Company’s Chief Executive Officer may at any
time designate any Unrestricted Subsidiary to be a Restricted Subsidiary if the
Company’s Investment in such Subsidiary is $5.0 million or less; provided that such designation will
be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the
Company of any outstanding Indebtedness of such Unrestricted Subsidiary and
such designation will only be permitted if (1) such Indebtedness is
permitted under Section 4.5, calculated on a pro forma basis as if such
designation had occurred at the beginning of the four-quarter reference period;
and (2) no Default or Event of Default would be in existence following
such designation.  Cuban Electric
Company, a Florida corporation, is an Unrestricted Subsidiary of the Company on
the date hereof and will continue to be one for so long as the Notes remain
outstanding.

 

“Voting Stock”
of any Person as of any date means the Capital Stock of such Person that is at
the time entitled to vote in the election of the Board of Directors of such
Person.

 

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

 

A-24

 

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

 

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

 

“Wholly-Owned Subsidiary”
of any specified Person means a Subsidiary of such Person all of the
outstanding Capital Stock or other ownership interests of which (other than
directors’ qualifying shares) will at the time be owned by such Person and/or
by one or more Wholly-Owned Subsidiaries of such Person.

 

A-25

 

Exhibit
B-1

 

FORM OF 2010 NOTE

 

THIS SECURITY IS A GLOBAL SECURITY
WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED
IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY.  UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR
IN PART FOR SECURITIES IN DEFINITIVE FORM IN ACCORDANCE WITH THE PROVISIONS OF
THE INDENTURE AND THE TERMS OF THE SECURITIES, TRANSFERS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO NOMINEES OF
DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF
PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE
REVERSE HEREOF.

 

UNLESS THIS CERTIFICATE IS PRESENTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (55 WATER STREET, NEW YORK, NEW YORK),
TO BOISE CASCADE CORPORATION, OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.

 

B-1-1

 

No.
2003-1

 

	
  CUSIP No. 097383 AV 5

  	
   

  	
  $300,000,000

  
	
  ISIN No. US097383AV55

  	
   

  	
   

  

 

BOISE CASCADE CORPORATION

 

6.50% SENIOR NOTE DUE 2010

 

BOISE CASCADE CORPORATION, a Delaware corporation (the
“Company”, which term includes any successor corporation under the
Indenture referred to on the reverse side of this Note), for value received,
hereby promises to pay to Cede & Co., or registered assigns, the principal
sum of Three Hundred Million Dollars ($300,000,000) at the office or agency of
the Company maintained for such purpose in New York, New York (on the date
hereof, the principal Corporate Trust Office of the Trustee in the Borough of
Manhattan in the City of New York) or, at the option of the Holder, at the
office or agency of the Company in Boise, Idaho, so long as the Company shall
maintain an office in Boise for such purpose, on November 1, 2010, and to pay
interest on said principal sum semi-annually in arrears on May 1 and November 1
of each year (each such date an “Interest Payment Date”) commencing May
1, 2004, at said office or agency (except as provided below), at the rate of
6.50% per annum through and including November 1, 2010, and on any overdue
principal and (without duplication and to the extent that payment of such
interest is enforceable under applicable law) on any overdue installment of
interest until payment of said principal sum. 
The amount of interest payable on any Interest Payment Date or otherwise
shall be computed on the basis of a 360-day year consisting of twelve 30-day
months.  In the event that any date on
which interest is payable on this Note is not a Business Day, then payment of
interest payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date.  The interest installment so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the person in whose name this Note is
registered at the close of business on the regular record date for such
interest installment, which shall be the close of business on the next
preceding April 15 or October 15, respectively, whether or not a Business
Day.  Any such interest installment not
punctually paid or duly provided for shall forthwith cease to be payable to the
registered Holders on such regular record date and may be paid to the Person in
whose name this Note is registered at the close of business on a special record
date to be fixed by the Trustee for the payment of such defaulted interest,
notice whereof shall be given to the registered Holders of this Note not less
than 10 days prior to such special record date, or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice as
may be required by such exchange all as more fully provided in the
Indenture.  The principal of and the
interest on this Note shall be payable at the office or agency of the Trustee
maintained for that purpose in any coin or currency of the United States of
America that at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be
made at the option of the

 

B-1-2

 

Company by check mailed to the registered Holder at such address as
shall appear in the Register or by wire transfer to an account appropriately
designated by the Holder entitled thereto.

 

This Note shall not be entitled to any benefit under
the within mentioned Indenture, be valid or become obligatory for any purpose,
until the Certificate of Authentication hereon shall have been executed by the
Trustee.

 

The provisions of this Note are continued on the
reverse side hereof and such continued provisions shall for all purposes have
the same effect as though fully set forth at this place.

 

B-1-3

 

IN WITNESS WHEREOF, the Company has caused this
instrument to be executed.

 

Dated:  October 21, 2003

 

	
   

  	
  BOISE
  CASCADE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  Attest

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This Note is one of the Securities of the series
designated therein referred to in the within-mentioned Indenture.

 

Dated:  October 21, 2003

 

	
   

  	
  U.S.
  BANK TRUST NATIONAL

  ASSOCIATION, as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

B-1-4

 

(REVERSE OF NOTE)

 

This Note (this Note and the other Securities of this
series, collectively, the “Notes”) is one of a duly authorized series of
debt securities (“Securities”) issued under and pursuant to an
Indenture, dated as of October 1, 1985, between the Company and U.S. Bank Trust
National Association (as successor in interest to Morgan Guaranty Trust Company
of New York), as amended and supplemented by the First Supplemental Indenture,
dated as of December 20, 1989, the Second Supplemental Indenture, dated as
of August 1, 1990, the Third Supplemental Indenture, dated as of December 5,
2001, and the Fourth Supplemental Indenture, dated as of October 21, 2003 (as
so amended and supplemented, the “Indenture”), to which Indenture and
all indentures supplemental thereto reference is hereby made for a description
of the rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Company and the Holders of the Notes.  By the terms of the Indenture, Securities
are issuable in series that may vary as to amount, date of maturity, rate of
interest and in other respects as provided in the Indenture.  This series of Securities is limited in
aggregate principal amount to $300,000,000.

 

The Notes are not entitled to the benefit of any
sinking fund.

 

In case an Event of Default, as defined in the
Indenture, shall have occurred and be continuing, the principal of all of the
Notes may be declared, and upon such declaration shall become, due and payable,
in the manner, with the effect and subject to the conditions provided in the
Indenture.

 

The Notes will be redeemable, in whole or in part, at
the option of the Company at any time at a redemption price (the “Redemption
Price”) equal to the greater of (i) 100% of the principal amount of
such Notes to be redeemed and (ii) as determined by the Quotation Agent,
the sum of the present values of the remaining scheduled payments of principal
and interest thereon (excluding any interest accrued and unpaid to the
redemption date) discounted to the redemption date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Adjusted
Treasury Rate plus 50 basis points (determined on the third Business Day
preceding the redemption date), plus, in each case, accrued and unpaid interest
thereon to the redemption date.

 

“Adjusted Treasury Rate” means, with respect to
any redemption date, the rate per annum equal to the semi-annual equivalent
yield to maturity of the Comparable Treasury Issue, assuming a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such redemption date.

 

“Comparable Treasury Issue” means the U.S.
Treasury security selected by the Quotation Agent as having a maturity
comparable to the remaining term of the Notes being redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of those Notes.

 

“Comparable Treasury Price”
means, with respect to any redemption date:

 

B-1-5

 

(1)           the
average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated “Composite 3:30 p.m. Quotations for U.S.
Government Securities”; or

 

(2)           if
such release (or any successor release) is not published or does not contain
such prices on such Business Day, (a) the average of the Reference
Treasury Dealer Quotations for such redemption date, after excluding the
highest and lowest of such Reference Treasury Dealer Quotations, or (b) if
the Quotation Agent obtains fewer than three such Reference Treasury Dealer
Quotations, the average of all such Quotations.

 

“Quotation Agent” means the Reference Treasury
Dealer appointed by the Trustee to act as the Quotation Agent after
consultation with the Company.

 

“Reference Treasury Dealer” means Goldman,
Sachs & Co. and its successor; provided, however, that if
Goldman, Sachs & Co. or its successor shall cease to be a primary U.S.
Government securities dealer in New York City (a “Primary Treasury Dealer”),
the Company shall substitute therefore another Primary Treasury Dealer.

 

“Reference Treasury
Dealer Quotations” means, with respect to any redemption date, the
average, as determined by the Trustee, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Trustee by the Reference Treasury
Dealer at 3:00 pm, New York City time, on the third Business Day preceding such
redemption date.

 

Additionally, at any time prior to November 1,
2006, the Company may at its option on any one or more occasions redeem up to
35% of the aggregate principal amount of the Notes at a redemption price equal
to 106.50% of the principal amount, plus accrued and unpaid interest to the
redemption date, with the net cash proceeds of one or more Equity Offerings; provided that:

 

(1)           at
least 65% of the aggregate principal amount of the Notes issued on the date of
the Fourth Supplemental Indenture remains outstanding immediately after the
occurrence of such redemption (excluding Notes held by the Company and its
Subsidiaries); and

 

(2)           the
redemption occurs within 120 days of the date of the closing of such Equity
Offering.

 

“Equity Offering”
means any primary private or public offering of Equity Interests of the Company
(other than Disqualified Stock) to Persons who are not Affiliates of Boise
other than (1) public offerings with respect to the Company’s common stock
registered on Form S-8 and (2) issuances upon exercise of options by
employees of the Company or any of its Restricted Subsidiaries.

 

B-1-6

 

The Company shall give notice of any optional
redemption to Holders at their addresses, as shown in the Security Register,
not more than 60 nor less than 30 days prior to the redemption date.  The notice of redemption will specify, among
other items, the Redemption Price and the principal amount of the Notes held by
such Holder to be redeemed.

 

The Company shall give notice to the Trustee of any
proposed redemption date at least 30 days but not more than 60 days prior to
such redemption date (or such shorter period as is satisfactory to the
Trustee), which notice shall include the aggregate principal amount of Notes to
be redeemed on such redemption date.  If
less than all the Notes are to be redeemed, the Trustee shall select which
Notes are to be redeemed in the manner described in the Indenture.

 

The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Notes and of
the Securities of each other series to be affected under the Indenture at any
time by the Company and the Trustee with the consent of the Holders of 66 and
two-thirds percent in aggregate principal amount of the Securities at the time
Outstanding of each series to be affected. 
The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the Notes, or in some
cases of any one or more series of Securities, to waive compliance by the
Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. 
Any such consent or waiver by the Holder of this Note shall be
conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued in exchange herefor or in lieu hereof, whether or
not any notation of such consent or waiver is made upon this Note.

 

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

 

As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Note is registrable in the
Security Register, upon surrender of this Note for registration of transfer at
the office or agency of the Company in any Place of Payment duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company, the Trustee and the Security Registrar duly executed by, the Holder
hereof or its attorney duly authorized in writing, and thereupon one or more
new Notes of this series, of authorized denominations and for the same
aggregate principal amount and series will be issued to the designated transferee
or transferees.

 

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

 

The Company, the Trustee, any Paying Agent, the
Security Registrar and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trust, any Paying Agent, the Security Registrar or any such agent shall be
affected by notice to the contrary.

 

B-1-7

 

In the event of the merger or consolidation of the
obligor on the Notes into, or of the transfer of its assets substantially as an
entirety to, a successor corporation, such successor corporation shall assume
payment of the Notes and performance of every covenant of the Indenture on the
part of the predecessor corporation to be performed, and shall be substituted
for the predecessor corporation under the Indenture; and in the event of any
such transfer, such predecessor corporation shall be discharged from its
obligations and covenants under the Indenture and the Notes and may be
dissolved and liquidated all as more fully set forth in the Indenture.

 

No recourse shall be had for the payment of the
principal of or the interest on this Note, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture,
against any incorporator, shareholder, officer or director, past, present or
future, as such, of the Company or of any predecessor or successor corporation,
whether by virtue of any constitution, statute or rule of law, or by the enforcement
of any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issuance hereof,
expressly waived and released.

 

The Company must report periodically to the Trustee on
compliance with the covenants in the Indenture.

 

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

 

Notwithstanding the foregoing, this Note may not be
transferred except as a whole by the Depositary to its nominee or by its
nominee to the Depositary or another nominee. 
If (i) the Depositary is at any time unwilling or unable to continue as
Depositary or if at any time it ceases to be a clearing agency registered under
the Securities Exchange Act of 1934, as amended, (ii) an Event of Default has
occurred with regard to the Notes represented by this Note and has not been
cured or waived, or (iii) the Company at any time and in its sole discretion
determines not to have the Notes represented by this global Note, the Company
may issue notes in definitive form in exchange for this Note.  In any such instance, an owner of a
beneficial interest in the Notes will be entitled to physical delivery in
definitive form of notes represented by this Note, equal in principal amount to
such beneficial interest and to have such Notes registered in its name.  Subject to the foregoing, this global Note
is not exchangeable, except for a global Note or Notes of the same aggregate
denomination to be registered in the Depositary’s or its nominee’s name.

 

The Company has initially appointed the Trustee as
Securities Registrar and Paying Agent with respect to the Notes.

 

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

 

B-1-8

 

This Note shall be governed by and construed in
accordance with the laws of the State of New York, without regard to its
principles of conflicts of laws.

 

B-1-9

 

ASSIGNMENT

 

FOR
VALUE RECEIVED, the undersigned assigns and transfers this Note to:

 

 

 

(Insert assignee’s social security or tax
identification number)

 

 

 

(Insert address and zip code of assignee)

 

agent to
transfer this Note on the books of the Security Registrar.  The agent may substitute another to act for
him or her.

 

	
  Dated:

  	
  Signature:

  

 

Signature
Guarantee:

(Sign exactly as your name appears on the other side of this Note)

 

Signatures
must be guaranteed by an “eligible guarantor institution” meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program (“STAMP”)
or such other “signature guarantee program” as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.

 

B-1-10

 

OPTION OF HOLDER TO ELECT
PURCHASE

 

If you
want to elect to have this Note purchased by the Company pursuant to Section
4.2 or 4.3 of the Indenture, check the appropriate box below:

 

o Section 4.2        o Section 4.3

 

If you
want to elect to have only part of the Note purchased by the Company pursuant
to Section 4.2 or Section 4.3 of the Indenture, state the amount you elect to
have purchased:

 

$                   

 

	
  Date: 

  	
   

  	
   

  
	
   

  
	
   

  	
  Your Signature:

  	
   

  
	
   

  	
  (Sign exactly as your name appears on the
  face of this Note)

  
	
   

  	
   

  
	
   

  	
  Tax Identification No.:

  	
   

  
	
   

  
	
  Signature Guarantee*:

  	
   

  	
   

  
								

 

 

*              Participant in a
recognized Signature Guarantee Medallion Program (or other signature guarantor
acceptable to the Trustee).

 

B-1-11

 

Exhibit
B-2

 

FORM OF 2013 NOTE

 

THIS SECURITY IS A GLOBAL SECURITY WITHIN
THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY.  UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN DEFINITIVE FORM IN ACCORDANCE WITH THE PROVISIONS OF THE
INDENTURE AND THE TERMS OF THE SECURITIES, TRANSFERS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO NOMINEES OF DTC OR TO
A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

 

UNLESS THIS CERTIFICATE IS PRESENTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (55 WATER STREET, NEW YORK, NEW YORK),
TO BOISE CASCADE CORPORATION, OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.

 

B-2-1

 

No.
2003-2

 

	
  CUSIP No. 097383 AW 3

  	
   

  	
  $200,000,000

  
	
  ISIN No. US097383AW39

  	
   

  	
   

  

 

BOISE CASCADE CORPORATION

 

7.00% SENIOR NOTE DUE 2013

 

BOISE CASCADE CORPORATION, a Delaware corporation (the
“Company”, which term includes any successor corporation under the
Indenture referred to on the reverse side of this Note), for value received,
hereby promises to pay to Cede & Co., or registered assigns, the principal
sum of Two Hundred Million Dollars ($200,000,000) at the office or agency of
the Company maintained for such purpose in New York, New York (on the date
hereof, the principal Corporate Trust Office of the Trustee in the Borough of
Manhattan in the City of New York) or, at the option of the Holder, at the
office or agency of the Company in Boise, Idaho, so long as the Company shall
maintain an office in Boise for such purpose, on November 1, 2013, and to pay
interest on said principal sum semi-annually in arrears on May 1 and November 1
of each year (each such date an “Interest Payment Date”) commencing May
1, 2004, at said office or agency (except as provided below), at the rate of
7.00% per annum through and including November 1, 2013, and on any overdue
principal and (without duplication and to the extent that payment of such
interest is enforceable under applicable law) on any overdue installment of
interest until payment of said principal sum. 
The amount of interest payable on any Interest Payment Date or otherwise
shall be computed on the basis of a 360-day year consisting of twelve 30-day
months.  In the event that any date on
which interest is payable on this Note is not a Business Day, then payment of
interest payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date.  The interest installment so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the person in whose name this Note is
registered at the close of business on the regular record date for such
interest installment, which shall be the close of business on the next
preceding April 15 or October 15, respectively, whether or not a Business
Day.  Any such interest installment not
punctually paid or duly provided for shall forthwith cease to be payable to the
registered Holders on such regular record date and may be paid to the Person in
whose name this Note is registered at the close of business on a special record
date to be fixed by the Trustee for the payment of such defaulted interest,
notice whereof shall be given to the registered Holders of this Note not less
than 10 days prior to such special record date, or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice as
may be required by such exchange all as more fully provided in the Indenture.  The principal of and the interest on this
Note shall be payable at the office or agency of the Trustee maintained for
that purpose in any coin or currency of the United States of America that at
the time of payment is legal tender for payment of public and private debts; provided,
however, that payment of interest may be made at the option of the

 

B-2-2

 

Company by check mailed to the registered Holder at such address as
shall appear in the Register or by wire transfer to an account appropriately
designated by the Holder entitled thereto.

 

This Note shall not be entitled to any benefit under
the within mentioned Indenture, be valid or become obligatory for any purpose,
until the Certificate of Authentication hereon shall have been executed by the
Trustee.

 

The provisions of this Note are continued on the
reverse side hereof and such continued provisions shall for all purposes have
the same effect as though fully set forth at this place.

 

B-2-3

 

 

IN WITNESS WHEREOF, the Company has caused this
instrument to be executed.

 

Dated:  October 21, 2003

 

	
   

  	
  BOISE
  CASCADE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  Attest

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This Note is one of the Securities of the series
designated therein referred to in the within-mentioned Indenture.

 

Dated:  October 21, 2003

 

	
   

  	
  U.S.
  BANK TRUST NATIONAL 

  ASSOCIATION, as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

B-2-4

 

(REVERSE OF NOTE)

 

This Note (this Note and the other Securities of this
series, collectively, the “Notes”) is one of a duly authorized series of
debt securities (“Securities”) issued under and pursuant to an
Indenture, dated as of October 1, 1985, between the Company and U.S. Bank Trust
National Association (as successor in interest to Morgan Guaranty Trust Company
of New York), as amended and supplemented by the First Supplemental Indenture,
dated as of December 20, 1989, the Second Supplemental Indenture, dated as
of August 1, 1990, the Third Supplemental Indenture, dated as of December 5,
2001 and the Fourth Supplemental Indenture, dated as of October 21, 2003 (as so
amended and supplemented, the “Indenture”), to which Indenture and all
indentures supplemental thereto reference is hereby made for a description of
the rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Company and the Holders of the Notes.  By the terms of the Indenture, Securities
are issuable in series that may vary as to amount, date of maturity, rate of
interest and in other respects as provided in the Indenture.  This series of Securities is limited in
aggregate principal amount to $200,000,000.

 

The Notes are not entitled to the benefit of any
sinking fund.

 

In case an Event of Default, as defined in the
Indenture, shall have occurred and be continuing, the principal of all of the
Notes may be declared, and upon such declaration shall become, due and payable,
in the manner, with the effect and subject to the conditions provided in the
Indenture.

 

The Notes will be redeemable, in whole or in part, at
the option of the Company at any time at a redemption price (the “Redemption
Price”) equal to the greater of (i) 100% of the principal amount of
such Notes to be redeemed and (ii) as determined by the Quotation Agent,
the sum of the present values of the remaining scheduled payments of principal
and interest thereon (excluding any interest accrued and unpaid to the
redemption date) discounted to the redemption date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Adjusted
Treasury Rate plus 50 basis points (determined on the third Business Day
preceding the redemption date), plus, in each case, accrued and unpaid interest
thereon to the redemption date.

 

“Adjusted Treasury Rate” means, with respect to
any redemption date, the rate per annum equal to the semi-annual equivalent
yield to maturity of the Comparable Treasury Issue, assuming a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such redemption date.

 

“Comparable Treasury Issue” means the U.S.
Treasury security selected by the Quotation Agent as having a maturity
comparable to the remaining term of the Notes being redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of those Notes.

 

“Comparable Treasury
Price” means, with respect to any redemption date:

 

B-2-5

 

(1)           the
average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated “Composite 3:30 p.m. Quotations for U.S.
Government Securities”; or

 

(2)           if
such release (or any successor release) is not published or does not contain
such prices on such Business Day, (a) the average of the Reference
Treasury Dealer Quotations for such redemption date, after excluding the
highest and lowest of such Reference Treasury Dealer Quotations, or (b) if
the Quotation Agent obtains fewer than three such Reference Treasury Dealer
Quotations, the average of all such Quotations.

 

“Quotation Agent” means the Reference Treasury
Dealer appointed by the Trustee to act as the Quotation Agent after
consultation with the Company.

 

“Reference Treasury Dealer” means Goldman,
Sachs & Co. and its successor; provided, however, that if
Goldman, Sachs & Co. or its successor shall cease to be a primary U.S.
Government securities dealer in New York City (a “Primary Treasury Dealer”),
the Company shall substitute therefore another Primary Treasury Dealer.

 

“Reference Treasury
Dealer Quotations” means, with respect to any redemption date, the
average, as determined by the Trustee, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Trustee by the Reference Treasury
Dealer at 3

:00 pm, New York time, on the third Business Day
preceding such redemption date.

 

Additionally, at any time prior to November 1,
2006, the Company may at its option on any one or more occasions redeem up to
35% of the aggregate principal amount of the Notes at a redemption price equal
to 107.00% of the principal amount, plus accrued and unpaid interest to the
redemption date, with the net cash proceeds of one or more Equity Offerings; provided that:

 

(1)           at
least 65% of the aggregate principal amount of the Notes issued on the date of
the Fourth Supplemental Indenture remains outstanding immediately after the
occurrence of such redemption (excluding Notes held by the Company and its
Subsidiaries); and

 

(2)           the
redemption occurs within 120 days of the date of the closing of such Equity
Offering.

 

“Equity Offering”
means any primary private or public offering of Equity Interests of the Company
(other than Disqualified Stock) to Persons who are not Affiliates of Boise
other than (1) public offerings with respect to the Company’s common stock
registered on Form S-8 and (2) issuances upon exercise of options by
employees of the Company or any of its Restricted Subsidiaries.

 

B-2-6

 

On or after November 1, 2008, the Company may
redeem all or a part of the Notes upon not less than 30 nor more than 60 days’
prior notice, at the redemption prices (expressed as percentages of principal
amount) set forth below plus accrued and unpaid interest on the Notes to be
redeemed, to the applicable redemption date, if redeemed during the
twelve-month period beginning on November 1 of the years indicated below:

 

	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2008

  	
   

  	
  103.500

  	
  %

  
	
  2009

  	
   

  	
  102.333

  	
  %

  
	
  2010

  	
   

  	
  101.167

  	
  %

  
	
  2011 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

The Company shall give notice of any optional
redemption to Holders at their addresses, as shown in the Security Register,
not more than 60 nor less than 30 days prior to the redemption date.  The notice of redemption will specify, among
other items, the Redemption Price and the principal amount of the Notes held by
such Holder to be redeemed.

 

The Company shall give notice to the Trustee of any
proposed redemption date at least 30 days but not more than 60 days prior to
such redemption date (or such shorter period as is satisfactory to the
Trustee), which notice shall include the aggregate principal amount of Notes to
be redeemed on such redemption date.  If
less than all the Notes are to be redeemed, the Trustee shall select which
Notes are to be redeemed in the manner described in the Indenture.

 

The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Notes and of
the Securities of each other series to be affected under the Indenture at any
time by the Company and the Trustee with the consent of the Holders of 66 and
two-thirds percent in aggregate principal amount of the Securities at the time
Outstanding of each series to be affected. 
The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the Notes, or in some
cases of any one or more series of Securities, to waive compliance by the
Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. 
Any such consent or waiver by the Holder of this Note shall be
conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued in exchange herefor or in lieu hereof, whether or
not any notation of such consent or waiver is made upon this Note.

 

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

 

As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Note is registrable in the
Security Register, upon surrender of this Note for registration of transfer at
the office or agency of the Company in any Place of Payment duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company, the Trustee and the Security Registrar duly executed by, the Holder
hereof or its attorney duly authorized in writing, and thereupon one or more
new Notes of this series, of

 

B-2-7

 

authorized denominations and for the same aggregate principal amount
and series will be issued to the designated transferee or transferees.

 

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

 

The Company, the Trustee, any Paying Agent, the
Security Registrar and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trust, any Paying Agent, the Security Registrar or any such agent shall be
affected by notice to the contrary.

 

In the event of the merger or consolidation of the
obligor on the Notes into, or of the transfer of its assets substantially as an
entirety to, a successor corporation, such successor corporation shall assume
payment of the Notes and performance of every covenant of the Indenture on the
part of the predecessor corporation to be performed, and shall be substituted
for the predecessor corporation under the Indenture; and in the event of any
such transfer, such predecessor corporation shall be discharged from its
obligations and covenants under the Indenture and the Notes and may be
dissolved and liquidated all as more fully set forth in the Indenture.

 

No recourse shall be had for the payment of the
principal of or the interest on this Note, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture,
against any incorporator, shareholder, officer or director, past, present or
future, as such, of the Company or of any predecessor or successor corporation,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the
issuance hereof, expressly waived and released.

 

The Company must report periodically to the Trustee on
compliance with the covenants in the Indenture.

 

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

 

Notwithstanding the foregoing, this Note may not be
transferred except as a whole by the Depositary to its nominee or by its
nominee to the Depositary or another nominee. 
If (i) the Depositary is at any time unwilling or unable to continue as
Depositary or if at any time it ceases to be a clearing agency registered under
the Securities Exchange Act of 1934, as amended, (ii) an Event of Default has
occurred with regard to the Notes represented by this Note and has not been
cured or waived, or (iii) the Company at any time and in its sole discretion
determines not to have the Notes represented by this global Note, the Company
may issue notes in definitive form in exchange for this Note.  In any such instance, an owner of a
beneficial

 

B-2-8

 

interest in the Notes will be entitled to physical delivery in
definitive form of notes represented by this Note, equal in principal amount to
such beneficial interest and to have such Notes registered in its name.  Subject to the foregoing, this global Note
is not exchangeable, except for a global Note or Notes of the same aggregate
denomination to be registered in the Depositary’s or its nominee’s name.

 

The Company has initially appointed the Trustee as
Securities Registrar and Paying Agent with respect to the Notes.

 

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

 

This Note shall be governed by and construed in
accordance with the laws of the State of New York, without regard to its
principles of conflicts of laws.

 

B-2-9

 

ASSIGNMENT

 

FOR
VALUE RECEIVED, the undersigned assigns and transfers this Note to:

 

 

 

 

(Insert assignee’s social security or tax
identification number)

 

 

 

 

(Insert address and zip code of assignee)

 

agent
to transfer this Note on the books of the Security Registrar.  The agent may substitute another to act for
him or her.

 

	
  Dated:

  	
  Signature:

  

 

Signature
Guarantee:

(Sign exactly as your name appears on the other side of this Note)

 

Signatures
must be guaranteed by an “eligible guarantor institution” meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program (“STAMP”)
or such other “signature guarantee program” as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.

 

B-2-10

 

OPTION OF HOLDER TO ELECT
PURCHASE

 

If you
want to elect to have this Note purchased by the Company pursuant to Section
4.2 or 4.3 of the Indenture, check the appropriate box below:

 

o Section 4.2        o Section 4.3

 

If you
want to elect to have only part of the Note purchased by the Company pursuant
to Section 4.2 or Section 4.3 of the Indenture, state the amount you elect to
have purchased:

 

$               

 

	
  Date:  

  	
   

  	
   

  
	
   

  
	
   

  	
  Your Signature:

  	
   

  
	
   

  	
  (Sign exactly as your name appears on the
  face of this Note)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Tax Identification No.:

  	
   

  
	
   

  	
   

  
	
  Signature Guarantee*: 

  	
   

  	
   

  
								

 

*              Participant in a
recognized Signature Guarantee Medallion Program (or other signature guarantor
acceptable to the Trustee).

 

B-2-11EXHIBIT 10.1

                                    AGREEMENT

         THIS AGREEMENT (the "Agreement"), made and executed as of the 22nd day
of September, 2003, by and between DISTRIBUTION MANAGEMENT SERVICES, INC., a
Florida corporation, located at 11601 Biscayne Boulevard, Suite 201, Miami,
Florida 33181, (hereinafter referred to as "DISTRIBUTION" or "First Party"),
JORDAN KLEIN, SR., JORDAN KLEIN, JR. , and MAKO PRODUCTS, INC., of 10197 S.E.
144th Place, Summerfield, Florida 34491, (hereinafter collectively referred to
as "Second Parties or KLEIN").

WITNESSETH:

                                    RECITALS

         WHEREAS, the First Party desires to purchase from the Second Parties a
certain asset owned and created by the Second Parties (the "Asset") and the
Second Parties desire to sell the Asset to the First Party; and

         WHEREAS, the Second Parties are desirous of exercising their skills and
expertise in connection with the manufacture, use, distribution, rental and sale
of said product on behalf of the First Party; and

         WHEREAS, to acquire the Asset and the expertise of the Second Parties
in the manufacturing of the product DISTRIBUTION will issue shares of its
authorized restricted common stock, together with other consideration, to the
Second Parties, subject to the terms and conditions hereinafter set forth.

         NOW, THEREFORE, in consideration of the premises and the mutual
promises, warranties, covenants and agreements made in this Agreement, the
receipt and sufficiency of which the parties acknowledge, THE PARTIES HAVE
AGREED AS FOLLOWS:

                                        1

<PAGE>

                                    ARTICLE I

                                   DEFINITIONS
                                   -----------

         As used in this Agreement, the following terms shall have the following
meanings:

1.1 "Ancillary Agreements" shall mean the agreements if any, entered into in
connection with the transactions described herein.

1.2 "DISTRIBUTION Stock" shall mean the ($.001) par value shares of restricted
common stock of DISTRIBUTION issued to the Second Parties.

1.3 "Closing" shall mean the completion of the transaction described by this
Agreement, to be consummated on the Closing Date.

1.4 "Closing Date" shall mean the date at which this Agreement is executed by
all parties.

1.5 "Schedule" or Exhibit" unless otherwise indicated, shall mean a Schedule or
Exhibit attached to this Agreement and incorporated into this Agreement by such
reference.

1.6 "Financial Statements" shall mean the audited balance sheet and income
statement of DISTRIBUTION as of May 31, 2003.

1.7 "Knowledge" shall mean actual knowledge or such knowledge that a reasonable
person in such circumstances would have reason to know.

1.8 The "Asset" is sometimes described as "the Product" or "Mako Head".

                                        2

<PAGE>

                                   ARTICLE II

                 REPRESENTATIONS AND WARRANTIES OF DISTRIBUTION
                 ----------------------------------------------

         First Party represents and warrants to Second Parties that:

         2. 1 Corporate Organization. DISTRIBUTION is a Florida corporation,
organized on January 25, 1995, which files reports on a quarterly and annual
basis with the U.S. Securities and Exchange Commission ("SEC"). DISTRIBUTION's
common stock trades on the over-the-counter Electronic Bulletin Board under the
symbol "DMGS". A copy of its Form 10-KSB for the fiscal year ended May 31, 2003
, filed with the SEC has previously been provided to the Second Parties.

         2.2 Authorization. DISTRIBUTION has all necessary power, capacity and
authority (corporate and otherwise) to enter into this Agreement and the other
agreements contemplated herein and to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement and the consummation of
the transactions described herein have been duly authorized by all necessary
corporate action on the part of DISTRIBUTION.

         2.3 Broker and Finders. No finder, broker, agent or other intermediary
has acted on behalf of either party or is entitled to a commission or finder's
fee in connection with the negotiation or consummation of this Agreement.

         2.4 Governmental Approvals and Filings. First Party is not required to
obtain any consent, approval or authorization of, or to make any declaration or
filing with, any governmental authority for the valid execution and delivery of
this Agreement or any Ancillary Agreements to which it may be a party, the
performance of its obligations hereunder and thereunder or the consummation of
the transaction described herein.

                                        3
<PAGE>

         2.5 Taxes. There are no audits or investigations, local, state or
Federal, concerning or related to First Party which are pending or threatened,
nor are there any required taxes, fees, assessments, or governmental charges of
any type which are due and/or are unpaid.

         2.6 Compliance with Law - Licenses. First Party conducts its business
in compliance, in all material respects, with all applicable laws, governmental
regulations and judicial and administrative decisions and no notice or warning
asserting the lack of such compliance has been received. All licenses or permits
issued by any governmental authority which are necessary for the operation of
the business of First Party have been obtained and are currently in full force
and effect.

         2.7 Properties. First Party has good title to all of its assets and
properties of every kind, nature and description, tangible or intangible,
wherever located, free and clear of all pledges, liens, security interests,
encumbrances and restrictions of any nature excepting such obligations as are
described in DISTRIBUTION'S filings with the SEC, none of which shall impair the
value of the Asset.

         2.8 Litigation. There is one suit filed by the First Party against the
former operator of the recycling center and to the knowledge of First Party
nothing threatened against First Party involving any property, including without
limitation, any claim proceeding, or litigation for the purpose of challenging,
enjoining or preventing the execution and delivery of this Agreement to which
First Party is a party, the performance of the respective terms and conditions
hereof or thereof or the consummation of the respective transactions described
herein.

                                        4

<PAGE>

                                   ARTICLE III

                     REPRESENTATIONS AND WARRANTIES OF KLEIN
                     ---------------------------------------

         3.1 The Second Parties jointly and severally represent that they are
the owners of a certain mechanical device known as the "Mako Head".

         3.2 It is represented by Second Parties that they have good and valid
title to the "Mako Head" and same is free and clear of all mortgages, pledges,
liens, security interests, encumbrances and restrictions of any nature
whatsoever and to the best of their knowledge, that there are no impairments as
to the value of the Asset. The Second Parties further represent and warrant that
they have full authority to assign, transfer and convey all right, title and
interest in and to the Asset in accordance with the provisions of this
Agreement. Simultaneously with the execution of this Agreement, the said Second
Parties shall execute such documents as are necessary to appropriately convey,
transfer, and set over unto DISTRIBUTION all right, title and interest in and to
the Asset.

         3.3 That the said Second Parties represent that they shall cause to be
manufactured the "Mako Head" to be distributed and marketed in selected market
places.

         3.4 That the said Second Parties shall be in charge of manufacturing,
marketing and distribution of all products related to the "Mako Head".

                                   ARTICLE IV

                                  CONSIDERATION
                                  -------------

         4.1 The Securities. Upon the terms and subject to the conditions set
forth in this Agreement, at the Closing:

             a. The Second Parties shall transfer to DISTRIBUTION all
proprietary rights and interests, of every kind, nature and description, in one
hundred (100%) percent of the capital

                                        5

<PAGE>

stock of "Mako Products, Inc.", together with all rights, interest and claims of
every kind, nature and description, in that certain product known as the "Mako
Head". The said Mako Products, Inc., shall be maintained as a wholly owned
subsidiary of DISTRIBUTION, because of the nature of the transactions between
Mako Products, Inc., and various other entities.

             b. DISTRIBUTION shall cause to be issued to the Second Parties
certificates for shares of DISTRIBUTION Stock in the aggregate amount of Five
Hundred Fifty Thousand (550,000) shares, same shall be issued as follows:

                  (i) Two Hundred Thousand (200,000) Shares shall be issued to
each JORDAN KLEIN, SR. and JORDAN KLEIN, JR., in consideration of One Hundred
(100%) Percent of the shares of MAKO PRODUCTS, INC.

                  (ii) One Hundred Fifty Thousand (1 50,000) Shares to JORDAN
KLEIN, SR., in consideration of the name "MAKO" as a product trademark.

                  Said shares shall be free and clear of all liens, security
interests, encumbrances, pledges, charges, claims, voting trusts and
restrictions of any nature whatsoever, other than restrictions on
transferability arising under Federal and state securities laws.

         4.2 Other Consideration. In addition to the DISTRIBUTION Stock to be
issued to the Second Parties as herein above set forth, Mako Products, Inc.,
shall pay over to the said Second Parties from its gross income derived from the
rental, sale, distribution, manufacturing or any income arising by virtue of the
"Mako Head", the following percentages:

             a. TOM SMITH shall receive five (5%) percent of such gross income
accruing to Mako Products, Inc.

             b. STEVE WATERFORD shall receive five (5%) percent of the gross
income

                                        6

<PAGE>

accruing to Mako Products, Inc.

             c. JORDAN KLEIN, SR., shall receive ten (10%) percent of the gross
income accruing to Mako Products, Inc.

             d. JORDAN KLEIN, JR., shall receive ten (10%) percent of the gross
income accruing to Mako Products, Inc.

             e. JORDAN KLEIN, SR., shall receive twenty (20%) percent of any
gross income received for the use of the name "Mako".

             f. In addition to all of the foregoing, JORDAN KLEIN, SR., shall
receive Eighty Thousand ($80,000.00) Dollars from the gross income received by
Mako Products, Inc., within the first (1st) year of the operation. In the event
that sufficient income is not generated from that source, then DISTRIBUTION
shall make arrangements for compensation to JORDAN KLEIN, SR., of that amount on
or before one (1) year from date of closing.

                                    ARTICLE V

                               BOARD OF DIRECTORS
                               ------------------

         5.1 All parties recognize that the Second Parties are members of the
Board of Directors of First Parties; nevertheless, the transaction has been as
an arms length transaction between the parties.

                                   ARTICLE VI

                                 INDEMNIFICATION
                                 ---------------

         6.1 Indemnity. Each party agrees to hold harmless and indemnify the
other, its directors, officers, employees, representatives, agents, successors,
consultants and assigns from and against any claim, loss, damage, liability,
expense or cost of any kind or amount whatsoever (including,

                                        7

<PAGE>

without limitation, reasonable attorney' s fees and expenses), which results
from or arises out of any breach of or default under any representation,
warranty, covenant or agreement made by either party in this Agreement, in any
Schedule or Exhibit to this Agreement, in any Ancillary Agreement or in any
certificate or other agreement or document furnished or to be furnished by or on
behalf of either party, in connection with the respective transactions described
herein.

                                   ARTICLE VII

                                OTHER CONDITIONS
                                ----------------

         7.1 Conditions. Notwithstanding anything to the contrary contained in
this Agreement, the following conditions have been met prior to Closing:

             a. Each party has conducted a due diligence investigation with
regard to the transaction and each has entered into this Agreement with full
understanding of the facts and issues.

             b. That the representations and warranties of each have been
and are true as of the date of the Closing and are certified as true.

             c. That all documents, including this Agreement and all Ancillary
Agreements contemplated hereby are acceptable to each party.

             d That all Ancillary Agreements and other documents contemplated
hereunder have been executed by all persons or entities whose execution of such
documents is required.

                                  ARTICLE VIII

                                  MISCELLANEOUS
                                  -------------

         8.1 Entire Agreement. This Agreement, the Ancillary Agreements, the
Schedules and Exhibits hereto and thereto, and all documents contemplated hereby
and thereby embody the entire agreement and understanding of the parties hereto
with respect to the subject matter hereof and

                                        8

<PAGE>

thereof, and supersede all prior and contemporaneous agreements and
understanding relative to said subject matter.

         8.2 Binding Effect; Assignment. This Agreement and the various rights
and obligations arising hereunder shall inure to the benefit of and be binding
upon the parties, their successors and permitted assigns. Neither this Agreement
nor any of the rights, interests or obligations hereunder shall be transferred
or assigned (by operation of law or otherwise) by the Second Parties hereto
without the prior written consent of the FIRST Party.

         8.3 No Third Party Beneficiaries. Nothing in this Agreement, expressed
or implied, is intended or shall be construed to confer upon or give to any
person, firm, corporation or legal entity, other than the parties hereto, any
rights, remedies or other benefits under or by reason of this Agreement.

         8.4 Applicable Law; Forum Selection. This Agreement shall be governed
by, construed and enforced in accordance with the laws of the State of Florida,
without giving effect to principles of conflicts of laws. The parties hereto
expressly submit themselves to, and agree that all actions arising out of this
Agreement shall occur solely in the venue and jurisdiction of the state and
federal courts encompassing Miami-Dade County, Florida.

         8.5 Actions to Enforce Agreement. If any party hereto shall fail to
perform any covenant or condition hereof or shall otherwise be in material
breach of this Agreement, such party shall pay to the non-defaulting party their
reasonable attorneys' fees and costs incurred as a result of their efforts to
enforce this Agreement (whether or not litigation is commenced, at trial and
appellate levels).

         8.6 Notices. Any and all notices required or permitted to be given
under this Agreement shall be in writing and shall be deemed to have been duly
given when delivered by hand or five (5)

                                        9

<PAGE>

days after deposited in the United States mail, by registered or certified mail,
return receipt requested, postage prepaid, as follows:

         To DISTRIBUTION:                   11601 Biscayne Blvd., Suite 201
                                            Miami, Florida 33181

         To KLEIN:                          10197 SE 144th Place
                                            Summerfield, Florida 34491

or such other address as any party may from time to time give written notice of
to the other parties.

         8.7 Severability. The invalidity of any one or more of the words,
phrases, sentences, clauses or sections contained in this Agreement shall not
affect the enforceability of the remaining portions of this Agreement or any
part hereof, all of which are inserted conditionally on their being valid in
law. If any one or more of the words, phrases, sentences, clauses or sections
contained in this Agreement shall be declared invalid by any court of competent
jurisdiction, then, in such event, this Agreement shall be construed as if such
invalid word or words, phrase or phrases, sentence or sentences, clause or
clauses, or section or sections had not been inserted.

         8.8 No Waivers. The waiver by any party of a breach or violation of any
provision of this Agreement by any other party shall not operate nor be
construed as a waiver of any subsequent breach or violation, nor as a waiver by
any other party of such breach or violation, nor as a waiver by any other party
of any subsequent breach or violation. The waiver by any party to exercise any
right or remedy he may possess shall not operate nor be construed as a bar to
the exercise of such right or remedy party upon the occurrence of any subsequent
breach or violation, nor as a bar to the exercise of any right or remedy by any
other party.

         8.9 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of any or all of the provisions hereof.

                                       10

<PAGE>

         8.10 Counterparts. This Agreement may be executed in any number of
counterparts and by the separate parties in separate counterparts, each of which
shall be deemed to constitute an original and all of which shall be deemed to
constitute the one and the same instrument.

         8.11 Rule of Construction That Ambiguities Are to be Construed Against
the Drafter Not Applicable. The parties to the Agreement acknowledge that they
have each carefully read and reviewed the Agreement with their respective
counsel, and therefore agree the rule of construction that ambiguities shall be
construed against the drafter of the document shall not be applicable.

         8.12 Further Assurances. The parties hereto, with reasonable diligence;
shall do all such things and provide all such reasonable assurance as maybe
required to consummate the transactions described herein and each party hereto
shall provide such further documents or instruments required by any other party
hereto as may be reasonably necessary or desirable to effect the purpose of this
Agreement and to carry out its provisions.

         8.13. Remedies. Nothing contained in the Agreement is intended to or
shall be construed to limit the remedies which any party hereto may have against
the other parties hereto in the event of a default by such party with respect to
their obligations hereunder or in the event of a breach by such party or such
representation, warranty or agreement made in or pursuant to this Agreement, it
being intended that any and all remedies shall be cumulative and non-exclusive.

         IN WITNESS WHEREOF the parties have set their hands and seals the day
and year first above written.

DISTRIBUTION MANAGEMENT                             MAKO PRODUCTS, INC.
SERVICES, INC.
A Florida corporation                               By: /s/ Jordan Klein, Sr.
                                                        ---------------------
                                                        Jordan Klein, Sr.
By: /s/ Leo Greenfield
    ------------------
    Leo Greenfield, President                       By: /s/ Jordan Klein, Jr.
                                                        ---------------------
                                                        Jordan Klein, Jr.

                                       11

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