Document:

Exhibit
10.18

 

FIRST
AMENDMENT TO LOAN AND SECURITY AGREEMENT AND CONSENT

 

THIS FIRST AMENDMENT TO
LOAN AND SECURITY AGREEMENT AND CONSENT (this “Amendment”), dated as of
October 26, 2004, is entered into by and among the financial institutions
signatory hereto (each a “Lender” and collectively the “Lenders”),
Congress Financial Corporation, a Delaware corporation (“Congress”), as
administrative and collateral agent for the Lenders and for the Bank Product
Providers (in such capacity, “Administrative and Collateral Agent”) and
Congress and Goldman Sachs Credit Partners, L.P., a Bermuda limited partnership
(“GSCP”), as co-lead arrangers for the credit facility (in such
capacities, each a “Co-Lead Arranger” and collectively the “Co-Lead
Arrangers”) and as co-syndication agents for the credit facility (in such
capacities, each a “Co-Syndication Agent” and collectively the “Co-Syndication
Agents”), Bank of America, N.A., Wells Fargo Foothill, LLC, and JPMorgan
Chase Bank as documentation agents (in such capacities, each a “Documentation
Agent” and collectively the “Documentation Agents”) and BlueLinx
Corporation, a Georgia corporation (“Borrower”).

 

RECITALS

 

A.          Borrower,
Administrative and Collateral Agent, the Co-Lead Arrangers, the Co-Syndication
Agents, the Documentation Agents and the Lenders have previously entered into
that certain Loan and Security Agreement dated May 7, 2004 (the “Loan
Agreement”), pursuant to which the Lenders have made certain loans and
financial accommodations available to Borrower. Terms used herein without
definition shall have the meanings ascribed to them in the Loan Agreement.

 

B.           Parent
is making an initial public offering of its common stock pursuant to that
certain Registration Statement on Form S-l (Registration No. 333-118750) filed
with the Securities and Exchange Commission on September 2, 2004, and all
amendments thereto (the “IPO”).

 

C.           Borrower, Administrative and Collateral
Agent, the Co-Lead Arrangers, the Co-Syndication Agents, the Documentation
Agents and the Lenders now wish to amend the Loan Agreement and consent to
certain events on the terms and conditions set forth herein.

 

D.           Borrower
is entering into this Amendment with the understanding and agreement that,
except as specifically provided herein, none of Administrative and Collateral
Agent’s, either Co-Lead Arranger’s, either Co-Syndication Agent’s, cither
Documentation Agent’s or any Lender’s rights or remedies as set forth in the
Loan Agreement is being waived or modified by the terms of this Amendment.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:

 

 

1.             Amendments to Loan Agreement. Upon the consummation of the IPO, upon
Parent making a capital contribution to Borrower in an amount of at least One
Hundred Million Dollars ($100,000,000), and upon prepayment of the Indebtedness
of Borrower under the Term Loan Agreement in accordance with Section 2 of this
Amendment:

 

(a)           The following is hereby added to the Loan Agreement as Section 1.2.1:

 

“ ‘Acquisition’
shall mean (a) any Stock Acquisition, or (b) any Asset Acquisition.”

 

(b)          The following is hereby added to the Loan Agreement as Section 1.8.1:

 

“ ‘Asset Acquisition’
shall mean the purchase or other acquisition by Borrower of all or
substantially all of the assets of any other Person engaged in substantially
the same or a related business as Borrower.”

 

(c)           The following is hereby added to the Loan Agreement as Section 1.80.1:

 

“ ‘Modified Adjusted
Excess Availability’ shall mean the amount, as determined by Administrative
and Collateral Agent, calculated at any time, equal to: (a) Excess Availability
minus (b) the sum of: (i) the aggregate amount of outstanding and unpaid
trade payables and other obligations of Borrower which are more than thirty
(30) days past due as of the end of the month most recently ended, plus (ii)
the amount of checks issued by Borrower to pay trade payables and other
obligations which are more than thirty (30) days past due as of the end of the
month most recently ended.”

 

(d)          The following is hereby added to the Loan Agreement as Section 1.93.1:

 

“ ‘Permitted
Acquisitions’ shall mean any Acquisition so long as: (a) Modified Adjusted
Excess Availability at all times for the thirty (30) day period prior to the
closing date for such Acquisition, and on the closing date for such Acquisition
after giving effect to such proposed Acquisition, shall be equal to or greater
than $70,000,000; (b) no Default or Event of Default has occurred and is
continuing or would result from the consummation of the proposed Acquisition;
(c) both before and after giving effect to such proposed Acquisition, Borrower’s
Fixed Charge Coverage Ratio, on a consolidated basis, shall not be less than
1.1 to 1.0; (d) Borrower shall have provided Administrative and Collateral
Agent with written notice of the proposed Acquisition not less than ten (10)
Business Days prior to the anticipated closing date of the subject Acquisition;
(e) Administrative and Collateral Agent, for the ratable benefit of the Lenders
and the Bank Product Providers, shall be granted a first priority security
interest (subject to the security interests, mortgages, pledges, liens, charges
and other encumbrances otherwise permitted under Section 9.8 hereof) in all
assets (including any Capital Stock) acquired by Borrower and all assets
(including any Capital Stock) owned by any Person acquired by Borrower as part
of such Acquisition and the Borrower shall, and shall cause any applicable
Subsidiary to, execute any documents and take all actions that may be required
under applicable law or that Administrative and

 

2

 

Collateral Agent may
reasonably request, in order to grant, preserve, protect and perfect such
security interest, all in form and substance satisfactory to Administrative and
Collateral Agent; and (f) in the case of a Stock Acquisition, in Administrative
and Collateral Agent’s election, either (i) Borrower shall cause the acquired
Person to execute a general continuing secured guaranty in favor of
Administrative and Collateral Agent, for itself and the ratable benefit of the
Lenders and the Bank Product Providers, in form and substance satisfactory to
Administrative and Collateral Agent; or (ii) the acquired Person shall become a
borrower subject to the terms hereunder and subject to such acquired Person and
Borrower executing such documentation requested by Administrative Agent in its
reasonable discretion.”

 

(e)           The following is hereby added to the Loan Agreement as Section 1.131.1

 

“ ‘Stock Acquisition’
shall mean the purchase or other acquisition by Borrower of all or
substantially all of the Capital Stock of any other Person engaged in
substantially the same or a related business as Borrower.”

 

(f)           Section 1.91 of the Loan Agreement is hereby amended and restated to
read in its entirety as follows:

 

“ ‘Parent’ shall
mean BlueLinx Holding Inc., a Delaware corporation, as successor in interest by
merger to ADP Distribution Holdings Inc., a Georgia corporation.”

 

(g)          Section 1.23 of the Loan Agreement is hereby amended and restated to
read in its entirety as follows:

 

“ ‘Change of Control’
shall mean (a) the liquidation or dissolution of Borrower or the adoption of a
plan by the stockholders of Borrower relating to the dissolution or liquidation
of Borrower; (b) the failure of the Permitted Holders to, directly or
indirectly, own and control at least thirty percent (30%) of the Voting Stock
of Borrower if either: (i) any other Person and/or one or more of its
Affiliates, collectively, own or control more of the Voting Stock of Borrower
than the Permitted Holders; or (ii) any other Person and/or one or more of its
Affiliates, collectively, own or control more than twenty percent (20%) of the
Voting Stock of Borrower; (c) the failure of the Permitted Holders to, directly
or indirectly, own and control at least thirty percent (30%) of the Capital
Stock of Borrower if either: (i) any other Person and/or one or more of its
Affiliates, collectively, own or control more of the Capital Stock of Borrower
than the Permitted Holders; or (ii) any other Person and/or one or more of its
Affiliates, collectively, own or control more than twenty percent (20%) of the
Capital Stock of Borrower; or (d) the failure of Borrower to own one hundred
percent (100%) of the Capital Stock of each of its Subsidiaries that is an
Obligor or is otherwise party to any of the Financing Agreements.”

 

(h)           Section 1.69(b) of the Loan Agreement is hereby amended and restated to
read in its entirety as follows:

 

3

 

“(b)         So
long as no Event of Default has occurred and is continuing, beginning with the
first Interest Period commencing after Administrative and Collateral Agent’s
timely receipt of Borrower’s financial statements required to be delivered
pursuant to this Agreement for the second full fiscal quarter elapsing after
the date of this Agreement, and for each Interest Period commencing after
delivery of Borrower’s financial statements required to be delivered pursuant
to this Agreement for each fiscal quarter thereafter, effective on the first
day of such Interest Period, the Interest Rate will be adjusted to be: (i) as
to Prime Rate Loans, a per annum rate equal to the Prime Rate plus the
“Applicable Prime Rate Margin” set forth below based on either (A) Borrower’s
Adjusted EBITDA as of the end of such fiscal quarter when determined as of a fiscal
quarter ending prior to the date that is 12 fiscal months after the Closing
Date or (B) Borrower’s EBITDA as of the end of such fiscal quarter when
determined as of a fiscal quarter ending after the date that is 12 fiscal
months after the Closing Date; and (ii) as to Eurodollar Rate Loans, a per
annum rate equal to the Adjusted Eurodollar Rate (based on the Eurodollar Rate
applicable for the Interest Period selected by Borrower as in effect three (3)
Business Days after the date of receipt by Administrative and Collateral Agent
of the request of Borrower for such Eurodollar Rate Loans in accordance with
the terms hereof, whether such rate is higher or lower than any rate previously
quoted to Borrower) plus the “Applicable Eurodollar Rate Margin” set forth
below based on either (A) Borrower’s Adjusted EBITDA as of the end of such
fiscal quarter if determined as of a fiscal quarter ending prior to the date
that is 12 fiscal months after the Closing Date or (B) Borrower’s EBITDA as of
the end of such fiscal quarter for the prior 12 month period then ended if
determined as of a fiscal quarter ending after the date that is 12 fiscal
months after the Closing Date; provided, however, in each case,
if the Borrower has not delivered the financial statements required to be
delivered to Administrative and Collateral Agent hereunder within the time
frames specified herein, without limiting any other provision of this
Agreement, until such financial statements are delivered to Administrative and
Collateral Agent in accordance with this Agreement, the Interest Rate shall be
calculated using the highest Applicable Prime Rate Margin or the highest
Applicable Eurodollar Rate Margin, as applicable, set forth below:

 

	
   

  	
   

  	
  Applicable

  	
   

  	
  Applicable

  	
   

  
	
  EBITDA

  	
   

  	
  Prime Rate Margin

  	
   

  	
  Eurodollar Rate Margin

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than
  $160,000,000

  	
   

  	
  0.25

  	
   

  	
  1.75

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than
  $130,000,000 but equal to or less than $160,000,000

  	
   

  	
  0.50

  	
   

  	
  2.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than
  $100,000,000 but equal to or less than $130,000,000

  	
   

  	
  0.75

  	
   

  	
  2.25

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than
  $70,000,000 but equal to or less than $100,000,000

  	
   

  	
  1.00

  	
   

  	
  2.50

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equal to or less
  than $70,000,000

  	
   

  	
  1.25

  	
   

  	
  2.75

  	
  ”

  

 

4

 

 

(i)            Clause (a) of Section 9.2 of the Loan
Agreement is hereby amended and restated to read in its entirety as follows:

 

“(a)         gives Administrative and Collateral Agent thirty (30) days prior
written notice from Borrower of the intended opening of any such new location
(or ten (10) days prior written notice of the intended opening if such new
location is acquired in connection with a Permitted Acquisition) and”

 

(j)            Section 9.6(c) of the Loan Agreement is
hereby amended and restated to read in its entirety as follows:

 

“(c)         Borrower shall promptly after the sending or filing thereof furnish or
cause to be furnished to Administrative and Collateral Agent copies of all
reports which Borrower or Parent sends to its stockholders generally and copies
of all reports and registration statements which Borrower or Parent files with
the Securities and Exchange Commission, any national securities exchange or the
National Association of Securities Dealers, Inc.”

 

(k)           Sections 9.7(b)(ii) and (iii) of the Loan Agreement are hereby amended
and restated to read in their entirety as follows:

 

“(ii)         the disposition of worn-out or obsolete Equipment so long as (A) any
proceeds are deposited to the Blocked Account or, so long as the Term Loan
Intercreditor Agreement is in effect, a deposit or investment account that
constitutes Term Loan Priority Collateral, and (B) such sales do not involve
Equipment having an aggregate fair market value in excess of Twenty Million
Dollars ($20,000,000) for all such Equipment disposed of in any fiscal year of
Borrower; provided, however, if such sales of Equipment in any
fiscal year involve Equipment having an aggregate fair market value of less
than $20,000,000 (such difference referred to herein as an “Unused Equipment
Sale Allowance”), up to $10,000,000 of such Unused Equipment Sale Allowance
may be sold in the succeeding fiscal year;

 

5

 

(iii)          the disposition of assets other than Accounts, Inventory or worn-out or
obsolete Equipment so long as (A) any proceeds are deposited to the Blocked
Account or, so long as the Term Loan Intercreditor Agreement is in effect, a
deposit or investment account that constitutes Term Loan Priority Collateral,
and (B) such sales do not involve assets having an aggregate fair market value
in excess of Twenty Million Dollars ($20,000,000) for all such assets disposed
of in any fiscal year of Borrower; and”

 

(l)            The following is hereby added to the Loan
Agreement as Section 9.7(b)(v):

 

“(v)         the sale and leaseback of Equipment so long as (A) any proceeds are
deposited to the Blocked Account or, so long as the Term Loan Intercreditor
Agreement is in effect, a deposit or investment account that constitutes Term
Loan Priority Collateral, and (B) such sale and leaseback transactions do not
involve Equipment having an aggregate fair market value in excess of Ten
Million Dollars ($10,000,000) for all such Equipment sold and leased in such
transactions in any fiscal year of Borrower;”

 

(m)          Sections 9.9(b) and (c) of the Loan Agreement are hereby amended and
restated to read in their entirety as follows:

 

“(b)         purchase money Indebtedness (including Capital Leases) arising after
the date hereof to the extent secured by purchase money security interests in
Equipment (including Capital Leases) not to exceed Twenty Million Dollars
($20,000,000) in the aggregate at any time outstanding so long as such security
interests do not apply to any property of Borrower or any Subsidiary of
Borrower other than the Equipment so acquired, and the Indebtedness secured
thereby does not exceed the cost of the Equipment so acquired;

 

(c)           purchase money mortgages on Real Property not to exceed Thirty-Five
Million Dollars ($35,000,000) in the aggregate at any time outstanding so long
as such mortgages do not apply to any property of Borrower or any Subsidiary of
Borrower other than the Real Property so acquired, and the Indebtedness secured
thereby does not exceed the cost of the Real Property so acquired;”

 

(n)           Section 9.9(j) of the Loan Agreement is hereby amended and restated to
read in its entirety as follows:

 

“(j)          to the extent subject to the intercompany subordination agreement
described in Section 4.1(1) and otherwise permitted under Section 9.10 hereof
(i) Indebtedness of Borrower or its Subsidiaries to any other Subsidiary or
Borrower, (ii) Indebtedness of a Subsidiary of Borrower to Borrower, or (iii)
Indebtedness of Borrower to Parent;”

 

(o)           Section 9.9(o) of the Loan Agreement is hereby amended and restated to
read in its entirety as follows:

 

6

 

“(o)         unsecured Indebtedness of Borrower to any third person arising after
the date hereof in an amount at any one time outstanding not to exceed
Twenty-Five Million Dollars ($25,000,000) in the aggregate for all such
Indebtedness to all such third persons; provided, that, (i)
Borrower may only make regularly scheduled payments of principal and interest
in respect of such Indebtedness in accordance with the terms of the agreement
or instrument evidencing or giving rise to such Indebtedness, (ii) Borrower
shall not, directly or indirectly, (A) without the prior written consent of
Administrative and Collateral Agent, amend, modify, alter or change the terms
of such Indebtedness in a manner materially more adverse to the Lenders or so
as to make the terms thereof materially more burdensome or restrictive to
Borrower, in each case, than the terms thereof in effect prior to such
amendment, modification, alteration or change, or (B) redeem, retire, defease,
purchase or otherwise acquire such Indebtedness, or set aside or otherwise
deposit or invest any sums for such purpose, and (iii) Borrower shall furnish
to Administrative and Collateral Agent all material notices or demands in
connection with such Indebtedness either received by Borrower or on its behalf,
promptly after the receipt thereof, or sent by Borrower or on its behalf,
concurrently with the sending thereof, as the case may be; and”

 

(p)           The following is hereby added to the Loan Agreement as Section 9.9(p):

 

“(p)         unsecured Indebtedness of Borrower to sellers incurred as part of the
purchase price in connection with any Permitted Acquisitions not to exceed
Twenty-Five Million Dollars ($25,000,000) in the aggregate at any one time
outstanding, so long as such Indebtedness is subordinated to the Obligations
under terms and conditions reasonably satisfactory to Administrative and
Collateral Agent.”

 

(q)           The following is hereby added to the Loan Agreement as Section 9.10(i):

 

“(i)          investments made by Borrower in connection with a Permitted
Acquisitions; provided, however, in the case of a Permitted
Acquisition which is an Asset Acquisition, the assets acquired by Borrower
shall not be included in the calculation of the Borrowing Base until the
Administrative and Collateral Agent shall have had the opportunity to perform a
field examination and appraisal through its examiners or through
representatives that it may retain in order to determine the eligibility of
such assets for inclusion in the calculation of the Borrowing Base.”

 

(r)            Section 9.11(e) of the Loan Agreement is
hereby amended and restated to read in its entirety as follows:

 

“(e)         commencing at the conclusion of Borrower’s fiscal year ending 2004,
Borrower may pay dividends to Parent in an aggregate amount not to exceed the
sum of (x) 50% of Borrower’s cumulative Net Income earned since the Closing
Date; (y) 50% of the first $100,000,000 of capital contributions made by Parent
to Borrower after October 26, 2004; and (z) 100% of each capital contribution
made by Parent to Borrower after such first $100,000,000 of capital contributions;
so

 

7

 

long as: (i) Borrower does
not pay dividends to Parent in excess of Twenty-Five Million Dollars
($25,000,000) in the aggregate in any fiscal year of Borrower; (ii) no Default
or Event of Default exists at the time of any such dividend or would occur
after giving effect thereto; (iii) both immediately before and after giving
effect to any such dividend, Modified Adjusted Excess Availability is at least
$70,000,000; and (iv) prior to the making of any such dividend, Administrative
and Collateral Agent shall have received Borrower’s unaudited internally
prepared financial statements for the fiscal quarter immediately preceding the
date of such dividend, accompanied by a certificate of Borrower’s chief
financial officer as to Borrower’s compliance with the terms of this Section
9.11(e) together with such supporting documentation therefor as Administrative
and Collateral Agent may reasonably request.”

 

2.             Consent
to Prepayment of Indebtedness of Borrower under the Term Loan Agreement. Notwithstanding Section 9.9(g)(ix)
of the Loan Agreement, Lenders hereby consent to the prepayment in full of the
Indebtedness of Borrower under the Term Loan Agreement so long as such
prepayment is made with the proceeds of the IPO through a capital contribution
from Parent to Borrower otherwise permitted under the Loan Agreement.

 

3.             Consent
to Amendment of Affiliate Lease. Notwithstanding Section 9.12(a) of the Loan Agreement, Lenders hereby
consent to the amending of the Affiliate Lease pursuant to that certain Amended
and Restated Master Lease Agreement, dated on or about the date hereof, a copy
of which is attached hereto as Exhibit A.

 

4.             Effectiveness
of this Amendment.
Administrative and Collateral Agent must have received the following items, in
form and content acceptable to Administrative and Collateral Agent, before this
Amendment, and the consents provided for herein are effective.

 

(a)          Amendment. This Amendment fully executed in a sufficient number of counterparts
for distribution to all parties.

 

(b)          Amendment Fee. For the benefit of Administrative and
Collateral Agent, a non-refundable amendment fee in the amount of Fifty-Five
Thousand Dollars ($55,000), which fee is fully earned as of and due and payable
on the date hereof.

 

(c)          Accommodation Fee. For the ratable benefit of the Lenders, a
non-refundable accommodation fee in the amount of Nine Hundred Forty-Five
Thousand Dollars ($945,000), which fee is fully earned as of and due and
payable on the date hereof.

 

(d)          Representations and Warranties. The representations and warranties set
forth herein and in the Loan Agreement must be true and correct.

 

(e)          Mortgage Agreements. Mortgagee agreements for any premises
owned by Parent and leased to Borrower, in form and substance reasonably
satisfactory to Administrative and Collateral Agent, executed and delivered by
Column Financial, Inc., a Delaware corporation, as the new mortgagee for such
premises.

 

8

 

(f)            No Default. No event has occurred and is continuing
that constitutes an Event of Default.

 

(g)           Other Required Documentation. All other documents and legal matters in
connection with the transactions contemplated by this Amendment shall have been
delivered or executed or recorded and shall be in form and substance reasonably
satisfactory to Administrative and Collateral Agent.

 

5.             Representations and Warranties. Borrower represents and warrants as
follows:

 

(a)          Authority. Borrower has the requisite corporate power and authority to execute
and deliver this Amendment, and to perform its obligations hereunder and under
the Financing Agreements (as amended or modified hereby) to which it is a
party. The execution, delivery and performance by Borrower of this Amendment
have been duly approved by all necessary corporate action and no other
corporate proceedings are necessary to consummate such transactions.

 

(b)          Enforceability. This Amendment has been duly executed and
delivered by Borrower. This Amendment and each Financing Agreement (as amended
or modified hereby) is the legal, valid and binding obligation of Borrower,
enforceable against Borrower in accordance with its terms, and is in full force
and effect.

 

(c)          Representations and Warranties. The representations and warranties
contained in each Financing Agreement (other than any such representations or
warranties that, by their terms, are specifically made as of a date other than
the date hereof) are correct on and as of the date hereof as though made on and
as of the date hereof.

 

(d)          Due Execution. The execution, delivery and performance
of this Amendment are within the power of Borrower, have been duly authorized
by all necessary corporate action, have received all necessary governmental
approval, if any, and do not contravene any law or any contractual restrictions
binding on Borrower.

 

(e)          No Default. No event has occurred and is continuing
that constitutes an Event of Default.

 

6.            Choice
of Law. The validity of
this Amendment, its construction, interpretation and enforcement, the rights of
the parties hereunder, shall be determined under, governed by, and construed in
accordance with the internal laws of the State of New York governing contracts
only to be performed in that State.

 

7.            Counterparts. This Amendment may be executed in any
number of counterparts and by different parties and separate counterparts, each
of which when so executed and delivered, shall be deemed an original, and all
of which, when taken together, shall constitute one and the same instrument.
Delivery of an executed counterpart of a signature page to this Amendment by
telefacsimile or a substantially similar electronic transmission shall have the
same force and effect as the delivery of an original executed counterpart of
this Amendment. Any party delivering an executed counterpart of this Amendment
by telefacsimile or a substantially similar electronic transmission shall also
deliver an original executed counterpart,

 

9

 

but the failure to do so shall not affect
the validity, enforceability or binding effect of such agreement.

 

8.            Reference
to and Effect on the Financing Agreements.

 

(a)          Upon and after the effectiveness of this Amendment, each reference in
the Loan Agreement to “this Agreement”, “hereunder”, “hereof” or words of like
import referring to the Loan Agreement, and each reference in the other
Financing Agreements to “the Loan Agreement”, “thereof” or words of like import
referring to the Loan Agreement, shall mean and be a reference to the Loan
Agreement as modified and amended hereby.

 

(b)          Except as specifically amended above, the Loan Agreement and all other
Financing Agreements, are and shall continue to be in full force and effect and
are hereby in all respects ratified and confirmed and shall constitute the
legal, valid, binding and enforceable obligations of Borrower to Administrative
and Collateral Agent, the Co-Lead Arrangers, the Co-Syndication Agents, the
Documentation Agents and the Lenders.

 

(c)          The execution, delivery and effectiveness of this Amendment shall not,
except as expressly provided herein, operate as a waiver of any right, power or
remedy of Administrative and Collateral Agent, either Co-Lead Arranger, either
Co-Syndication Agent, either Documentation Agent or any Lender under any of the
Financing Agreements, nor constitute a waiver of any provision of any of the
Financing Agreements.

 

(d)          To the extent that any terms and conditions in any of the Financing
Agreements shall contradict or be in conflict with any terms or conditions of
the Loan Agreement, after giving effect to this Amendment, such terms and
conditions are hereby deemed modified or amended accordingly to reflect the
terms and conditions of the Loan Agreement as modified or amended hereby.

 

9.            Ratification. Borrower hereby restates, ratifies and
reaffirms each and every term and condition set forth in the Loan Agreement, as
amended hereby, and the Financing Agreements effective as of the date hereof.

 

10.           Estoppel. To induce Lenders to enter into this Amendment and to continue to
make advances to Borrower under the Loan Agreement, Borrower hereby
acknowledges and agrees that, as of the date hereof, there exists no right of
offset, defense, counterclaim or objection in favor of Borrower as against
Administrative and Collateral Agent, either Co-Lead Arranger, either
Co-Syndication Agent, either Documentation Agent or any Lender with respect to
the Obligations.

 

11.           JURY TRIAL WAIVER.      BORROWER,
EACH AGENT AND EACH LENDER HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS AMENDMENT, THE
LOAN AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR (ii) IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO
IN RESPECT OF THIS AMENDMENT, THE LOAN AGREEMENT OR ANY OF THE OTHER FINANCING
AGREEMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER
NOW

 

10

 

EXISTING OR HEREAFTER ARISING, AND WHETHER
IN CONTRACT, TORT, EQUITY OR OTHERWISE. BORROWER, EACH AGENT AND EACH LENDER
HEREBY AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY
FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AMENDMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.

 

12.          Integration. This Amendment, together with the other
Financing Agreements, incorporates all negotiations of the parties hereto with
respect to the subject matter hereof and is the final expression and agreement
of the parties hereto with respect to the subject matter hereof.

 

13.          Severability. In case any provision in this Amendment
shall be invalid, illegal or unenforceable, such provision shall be severable
from the remainder of this Amendment and the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

 

[Remainder
of Page Left Intentionally Blank]

 

11

 

IN WITNESS WHEREOF, the parties have entered into this Amendment as of
the date first above written.

 

 

BORROWER

 

BLUELINX CORPORATION

 

 

	
  By:

  	
  /s/ David J. Morris

  	
   

  
	
  Name:

  	
  David J. Morris

  	
   

  
	
  Title:

  	
    Vice President

  	
   

  
					

 

 

AGENTS

 

CONGRESS FINANCIAL CORPORATION, 

as Administrative and Collateral Agent,
Co-Lead 

Arranger and Co-Syndication Agent

 

 

	
  By:

  	
  /s/ James O'Connell

  	
   

  
	
  Name:

  	
  James O'Connell

  	
   

  
	
  Title:

  	
    AVP

  	
   

  
					

 

 

GOLDMAN SACHS CREDIT PARTNERS,

L.P.,

as Co-Lead Arranger and Co-Syndication

Agent

 

 

	
  By:

  	
  /s/ Stephen King

  	
   

  
	
  Name:

  	
  Stephen King

  	
   

  
	
  Title:

  	
    Authorized Signatory

  	
   

  
					

 

 

DOCUMENTATION AGENTS

 

BANK OF AMERICA, N.A.,

as a Documentation Agent

 

 

	
  By:

  	
  /s/ Jang S. Kim

  	
   

  
	
  Name:

  	
  JANG S. KIM

  	
   

  
	
  Title:

  	
    VP

  	
   

  
					

 

 

WELLS FARGO FOOTHILL, LLC,

as a Documentation Agent

 

 

	
  By:

  	
  /s/ Juan Barrera

  	
   

  
	
  Name:

  	
  Juan Barrera

  	
   

  
	
  Title:

  	
    Vice
  President

  	
   

  
					

 

 

JPMORGAN CHASE BANK,

as a Documentation Agent

 

 

	
  By:

  	
  /s/ James M. Dailey

  	
   

  
	
  Name:

  	
  James M. Dailey

  	
   

  
	
  Title:

  	
    Vice
  President

  	
   

  
					

 

 

LENDERS

 

CONGRESS FINANCIAL CORPORATION

 

 

	
  By:

  	
  /s/ James O’Connell

  	
   

  
	
  Name:

  	
  JAMES O’CONNELL

  	
   

  
	
  Title:

  	
    AVP

  	
   

  
					

 

 

BANK OF AMERICA, N.A.

 

 

	
  By:

  	
  /s/ Jang S. Kim

  	
   

  
	
  Name:

  	
  Jang S. Kim

  	
   

  
	
  Title:

  	
    VP

  	
   

  
					

 

 

WELLS FARGO FOOTHILL, LLC

 

 

	
  By:

  	
  /s/ Juan Barrera

  	
   

  
	
  Name:

  	
  Juan Barrera

  	
   

  
	
  Title:

  	
    Vice
  Presient

  	
   

  
					

 

 

GENERAL ELECTRIC CAPITAL

CORPORATION

 

 

	
  By:

  	
  /s/ Scott J. Lorimer

  	
   

  
	
  Name:

  	
  Scott J. Lorimer

  	
   

  
	
  Title:

  	
    ITS
  Duly Authorized Signatory

  	
   

  
					

 

 

GMAC COMMERCIAL FINANCE LLC

 

 

	
  By:

  	
  /s/ Robert J. Brandow

  	
   

  
	
  Name:

  	
  Robert J. Brandow

  	
   

  
	
  Title:

  	
    Director

  	
   

  
					

 

 

ING CAPITAL LLC

 

 

	
  By:

  	
       /s/
  William C.
  Beddingfield

  	
   

  
	
  Name:

  	
  William C.
  Beddingfield

  	
   

  
	
  Title:

  	
     Managing Director

  	
   

  
					

 

 

THE CIT GROUP/BUSINESS CREDIT, INC.

 

 

	
  By:

  	
       /s/
  Anthony Lavinio

  	
   

  
	
  Name:

  	
  Anthony Lavinio

  	
   

  
	
  Title:

  	
     Vice President

  	
   

  
					

 

 

JPMORGAN CHASE BANK

 

 

	
  By:

  	
       /s/
  James M. Dailey

  	
   

  
	
  Name:

  	
  James M. Dailey

  	
   

  
	
  Title:

  	
     Vice PresidentASIA PROPERTIES, INC.

                                STOCK OPTION PLAN

1.     GRANT  OF  AWARDS  GENERALLY

     In  accordance  with  the  provisions  hereinafter  set forth in this stock
option  plan,  the  name of which is the ASIA PROPERTIES, INC. STOCK OPTION PLAN
(the  "Plan"),  the  Board  of  Directors  (the  "Board")  or,  the Compensation
Committee  (the  "Committee") of ASIA PROPERTIES, INC. (the "Company") is hereby
authorized  to issue from time to time on the Corporation's behalf to any one or
more  Eligible  Persons, as hereinafter defined, Awards to acquire shares of the
Company's  $0.001  par  value  common  stock  (the  "Stock").

2.     TYPE  OF  AWARDS

(a)     The Board and the Committee are authorized under this Plan to enter into
any  type  of  arrangement  with a Participant that is not inconsistent with the
provisions  of  this  Plan and that, by its terms, involves or might involve the
issuance of (i) shares of  Stock, or (ii) a Derivative Security (as such term is
defined  in Rule 16a-1 promulgated under the Securities Exchange Act of 1934, as
amended  (the  "Exchange  Act"),  as such Rule may be amended from time to time)
with an exercise or conversion privilege at a price related to the Stock or with
a  value  derived  from  the  value of the Stock.  The entering into of any such
arrangement  is  referred  to  herein  as  the  "grant"  of  an  "Award".

(b)     Awards  are  not  restricted  to any specified form or structure and may
include,  without limitation, sales or bonuses of stock, restricted stock, stock
options  (including  options  which  meet the requirements of Section 422 of the
Internal  Revenue Code of 1986, as amended (the "Code"), Incentive Stock Options
("ISOs")  and  options  which  are not ISOs, Non-qualified Stock Options (NSOs),
reload  stock  options in accordance with Paragraph 8 herein ("Reload Options"),
stock  purchase  warrants, other rights to acquire stock, securities convertible
into  or  redeemable  for  stock,  stock  appreciation  rights,  limited  stock
appreciation  rights,  phantom stock, dividend equivalents, performance units or
performance shares, and an Award may consist of one such security or benefit, or
two  or  more  of  them  in  tandem  or  in  the  alternative.

(c)     Stock  and  Derivative Securities may be issued pursuant to an Award for
any lawful consideration as determined by the Board or the Committee, including,
without  limitation,  services  rendered  by  the  recipient  of  such  Award.

3.     AMOUNT  OF  STOCK

     The  aggregate number of shares of Stock which may be purchased pursuant to
the  exercise  of Awards shall be 1,000,000 shares of Stock. Of this amount, the
Board  or  the Committee shall have the power and authority to designate whether
any options so issued shall be ISOs or NSOs, subject to the restrictions on ISOs
contained elsewhere herein. If an Award ceases to be exercisable, in whole or in
part,  the shares of Stock underlying such option shall continue to be available
under this Plan. Further, if shares of Stock are delivered to the Corporation as
payment  for shares of Stock purchased by the exercise of an Award granted under
this  Plan,  such  shares  of  Stock shall also be available under this Plan. If
there  is  any  change  in  the  number  of  shares  of  Stock on account of the
declaration  of  stock dividends, recapitalization resulting in stock split-ups,
or  combinations  or  exchanges  of shares of Stock, or otherwise, the number of
shares  of  Stock available for purchase upon the exercise of Awards, the shares
of  Stock  subject to any Award and the exercise price of any outstanding Awards
shall  be appropriately adjusted by the Board or the Stock Option Committee. The
Board or the Stock Option Committee shall give notice of any adjustments to each
Eligible  Person granted an Award under this Plan, and such adjustments shall be
effective  and  binding  on  all  Eligible  Persons.  If  because of one or more
recapitalizations,  reorganizations  or  other  corporate events, the holders of
outstanding  Stock  receive  something  other  than  shares  of Stock then, upon
exercise  of  an  Award,  the Eligible Person will receive what the holder would
have  owned  if  the holder had exercised the Award immediately before the first
such  corporate  event  and  not  disposed  of anything the holder received as a
result  of  the  corporate  event.

4.     ELIGIBLE  PERSONS

(a)     With  respect  to  ISOs, an Eligible Person means any individual who has
been  employed  by the Corporation or by any subsidiary of the Corporation for a
continuous  period  of  at  least  thirty  (30)  days.

(b)     With  respect to all other forms of Awards, an Eligible Person means (i)
any  individual who has been employed by the Corporation or by any subsidiary of
the  Corporation, for a continuous period of at least thirty (30) days, (ii) any
director  of  the  Corporation  or  any  subsidiary of the Corporation (iii) any
member  of  the  Corporations  advisory  board  or  of  any of the Corporation's
subsidiary(ies),  or (iv) any consultant of the Corporation or by any subsidiary
of  the  Corporation.

5.     GRANT  OF  AWARDS

     The Board or the Committee has the right to issue the Awards established by
this  Plan  to  Eligible  Persons.  The  Board or the Committee shall follow the
procedures  prescribed for it elsewhere in this Plan. A grant of Awards shall be
set  forth  in a writing signed the Board or by a majority of the members of the
Committee.  The  writing shall identify whether the Award being granted includes
ISOs  and  shall set forth the terms which govern the Awards. The terms shall be
determined  by  the  Board or the Committee, and may include, among other terms,
the  number  of shares of Stock that may be acquired pursuant to the exercise of
the  Awards, when the Awards may be exercised, the period for which the Award is
granted and the expiration date, the effect on the Awards if the Eligible Person
terminates  employment,  and  whether  the Eligible Person may deliver shares of
Stock  to  pay  for  the  shares of Stock to be purchased by the exercise of the
Award.  However, no term shall be set forth in the writing which is inconsistent
with any of the terms of this Plan. The terms of an Award granted to an Eligible
Person may differ from the terms of an Award granted to another Eligible Person,
and  may differ from the terms of an earlier Option granted to the same Eligible
Person.

6.     EXERCISE  PRICE

     The  exercise  price  per  share  shall  be  determined by the Board or the
Committee  at  the  time any Award is granted, and shall be not less than (i) in
the case of an ISO, the fair market value, (ii) in the case of an ISO granted to
a ten percent or greater stockholder, shall be determined by the Board, or (iii)
in the case of all other Awards, not less than 90% of the fair market value (but
in no event less than the par value) of one share of Stock on the date the Award
is  granted,  as  determined by the Board or the Committee. Fair market value as
used  herein  shall  be:

(a)     If  shares  of  Stock shall be traded on an exchange or over-the-counter
market,  the  closing  price  or  the  closing  bid  price of such Stock on such
exchange or over-the-counter market on which such shares shall be traded on that
date,  or  if such exchange or over-the-counter market is closed or if no shares
shall  have traded on such date, on the last preceding date on which such shares
shall  have  traded,  or  such  other  value  as  determined by the Board or the
Committee.

(b)     If  shares  of  Stock  shall  not  be  traded  on  an  exchange  or
over-the-counter  market, the value as determined by the Board or the Committee.

7.     PAYMENT  OF  EXERCISE  PRICE

     Except  as  otherwise provided below, payment of the exercise price for the
number  of  shares  of Stock being purchased pursuant to any Award shall be made
(i)  in  cash,  by  certified  check,  or  bank  draft,  (ii)  by  tender to the
Corporation  of  shares  of Stock owned by the holder of the Award having a Fair
Market  Value  (as  determined  by  the  Corporation  without  regard  to  any
restrictions on transferability applicable to such stock by reason of federal or
state securities laws or agreements with an underwriter for the Corporation) not
less  than the exercise price, (iii) by the assignment of the proceeds of a sale
or  loan  with  respect  to  some  or  all of the shares being acquired upon the
exercise  of  the  Award, (iv) by the holder of the Award's promissory note in a
form  approved by the Board or the Committee, (v) by such other consideration as
may  be  approved  by the Board or the Committee from time to time to the extent
permitted  by  applicable law, or (vi) by any combination thereof.  The Board or
the  Committee  may  at  any  time  or  from  time to time, by adoption of or by
amendment  to  the  standard forms of Awards described in Section 7, or by other
means,  grant  Awards  which  do  not  permit  all  of  the  foregoing  forms of
consideration  to  be  used  in payment of the exercise price or which otherwise
restrict  one  or  more  forms  of  consideration.

      (b)     Notwithstanding  the  foregoing,  an Award may not be exercised by
tender  to the Corporation of shares of Stock to the extent such tender of Stock
would  constitute  a  violation  of  the  provisions  of  any law, regulation or
agreement  restricting  the  redemption  of  the  Corporation's  stock.  Unless
otherwise  provided by the Board or the Committee, an Award may not be exercised
by  tender  to the Corporation of shares of Stock unless such shares either have
been  owned  by  the  holder  for more than six (6) months or were not acquired,
directly  or  indirectly,  from  the  Corporation.

     (c)     The  Corporation  reserves, at any and all times, the right, in the
Corporation's  sole and absolute discretion, to establish, decline to approve or
terminate  any  program  or  procedures  for  the  exercise  of  Awards.

      (d)     No  promissory note shall be permitted if the exercise of an Award
using  a  promissory  note  would  be  a  violation  of  any law.  Any permitted
promissory  note  shall  be  on  such  terms  as  the  Board  or Committee shall
determine.  The  Board  and  the Committee shall have the authority to permit or
require the Award holder to secure any promissory note used to exercise an Award
with  the  shares of Stock acquired upon the exercise of the Award or with other
collateral  acceptable to the Board or the Committee.  Unless otherwise provided
by  the Board or the Committee, if the Corporation at any time is subject to the
regulations  promulgated by the Board of Governors of the Federal Reserve System
or any other governmental entity affecting the extension of credit in connection
with  the  Corporation's  securities, any promissory note shall comply with such
applicable  regulations, and the Award holder shall pay the unpaid principal and
accrued  interest if any, to the extent necessary to comply with such applicable
regulations.

(d)     The  Corporation shall have the right, but not the obligation, to deduct
from  the  shares of Stock issuable upon the exercise of any Award Option, or to
accept  from  the  Award holder the tender of, a number of whole shares of Stock
having  a  Fair  Market Value, as determined by the Corporation, equal to all or
any part of the federal, state, local and foreign taxes, if any, required by law
     to  be withheld by the Corporation with respect to such Award or the shares
acquired  upon  the exercise thereof.  Alternatively or in addition, in its sole
discretion,  the  Corporation  shall have the right to require the Award holder,
through  payroll withholding, cash payment or otherwise, including by means of a
Cashless  Exercise,  to  make  adequate  provision  for any such tax withholding
obligations  of  the  Corporation  arising  in connection with the Awards or the
shares  of Stock acquired upon the exercise thereof.  The Corporation shall have
no  obligation  to  deliver share of Stock or to release shares of Stock from an
escrow established pursuant to the Award until the Corporation's tax withholding
obligations  have  been  satisfied  by  the  Award  holder.

(e)     To  the  extent  that  an  Option  is  exercisable,  Options  may  be
exercised  in full at one time or in part from time to time,  by giving  written
     notice,  signed  by  the  person  or persons  exercising the Option, to the
Company,  stating  the  number  of  shares  with  respect  to which  the  Option
is  being  exercised, accompanied by payment in full for such shares as provided
in  Section  7  hereof.  No exercise of an Option may be made for fewer than 100
full  shares  of  Common  Stock  unless  such  exercise  is  made for the entire
fractional amount of a share remaining to be purchased  pursuant to such Option.
Upon  such  exercise,  delivery  of  a  certificate  for paid-up, non-assessable
shares  shall  be  made  by the Company to the person or persons  exercising the
Option  within  20  business  days  after receipt of such notice by the Company.

8.     GRANT  OF  RELOAD  OPTIONS

     In  granting stock options under this Plan, the Board or the Committee may,
but  shall  not  be  obligated  to,  include  a Reload Option provision therein,
subject  to  the  provisions  set forth in Paragraphs 20 and 21 herein. A Reload
Option provision provides that if the Eligible Person pays the exercise price of
shares  of  Stock  to  be  purchased  by the exercise of an Award (the "Original
Option")  by  delivering to the Corporation shares of Stock already owned by the
Eligible  Person  (the  "Tendered  Shares"), the Eligible Person shall receive a
Reload  Option  which shall be a new Option to purchase shares of Stock equal in
number  to  the  tendered  shares.  The  terms  of  any  Reload  Option shall be
determined  by the Board or the Committee consistent with the provisions of this
Plan.

9.     COMMITTEE

     The  Committee  may  be appointed from time to time by the Board. The Board
may  from  time to time remove members from or add members to the Committee. The
Committee  shall  be  constituted  so  as  to  permit  the Plan to comply in all
respects  with  the  provisions set forth in Paragraph 20 herein. The members of
the  Committee may elect one to its members as its chairman. The Committee shall
hold  its  meetings  at  such time and places as its chairman shall determine. A
majority  of the Committee's members present in person shall constitute a quorum
for  the  transaction  of  business. All determinations of the Committee will be
made  by  the  majority vote of the members constituting the quorum. The members
may participate in a meeting of the Committee by conference telephone or similar
communications  equipment  by  means  of  which all members participating in the
meeting  can  hear  each  other.  Participation in a meeting in that manner will
constitute  presence  in  person  at  the meeting. Any decision or determination
reduced  to writing and signed by all members of the Committee will be effective
as  if  it had been made by a majority vote of all members of the Committee at a
meeting  which  is  duly  called  and  held.

10.     ADMINISTRATION  OF  PLAN

     In  addition  to granting Awards and to exercising the authority granted to
it  elsewhere in this Plan, the Board or the Committee is granted the full right
and authority to interpret and construe the provisions of this Plan, promulgate,
amend  and  rescind  rules  and procedures relating to the implementation of the
Plan  and  to  make  all  other  determinations  necessary  or advisable for the
administration  of  the  Plan,  consistent,  however,  with  the  intent  of the
Corporation  that Awards granted or awarded pursuant to the Plan comply with the
provisions  of  Paragraph 20 and 21 herein. All determinations made by the Board
or the Committee shall be final, binding and conclusive on all persons including
the  Eligible  Person, the Corporation and its stockholders, employees, officers
and  directors  and consultants. No member of the Board or the Committee will be
liable  for  any  act  or omission in connection with the administration of this
Plan  unless  it  is  attributable  to  that  member's  willful  misconduct.

11.     PROVISIONS  APPLICABLE  TO  ISOs

     The  following  provisions  shall apply to all ISOs granted by the Board or
the  Committee  and shall be incorporated by reference into any writing granting
an  ISO:

(a)     An  ISO  may  only  be  granted within ten (10) years from September 30,
1998,  the  date  that  this  Plan  was  originally  adopted  by  the  Board.

(b)     An  ISO may not be exercised after the expiration of ten (10) years from
the  date  the  ISO  is  granted.

(c)     The option price may not be less than the fair market value of the Stock
at  the  time  the  ISO  is  granted.

(d)     An  ISO is not transferable by the Eligible Person to whom it is granted
except  by  will,  or  the  laws of descent and distribution, and is exercisable
during  his  or  her  lifetime  only  by  the  Eligible  Person.

(e)     If  the  Eligible Person receiving the ISO owns at the time of the grant
stock  possessing more than ten (10%) percent of the total combined voting power
of  all  classes  of  stock  of  the  employer  corporation  or of its parent or
subsidiary corporation (as those terms are defined in the Code), then the option
price  shall be at least 100% of the fair market value of the Stock, and the ISO
shall  not  be  exercisable after the expiration of five (5) years from the date
the  ISO  is  granted.

(g)     This Plan was adopted by the Corporation on September 30, 1998 by virtue
of  its  approval  by  the  Board.

12.     DETERMINATION  OF  FAIR  MARKET  VALUE

     In  granting  ISOs under this Plan, the Board or the Committee shall make a
good faith determination as to the fair market value of the Stock at the time of
granting  the  ISO  in  accordance  with  the  provisions  of  Section  6 above.

13.     RESTRICTIONS  ON  ISSUANCE  OF  STOCK

     The Corporation shall not be obligated to sell or issue any shares of Stock
pursuant  to the exercise of an Award unless the Stock with respect to which the
Award  is  being exercised is at that time effectively registered or exempt from
registration  under  the  Securities  Act  of  1933,  as  amended, and any other
applicable  laws,  rules  and  regulations.  The  Corporation  may condition the
exercise  of  an  Award  granted  in  accordance  herewith upon receipt from the
Eligible  Person,  or  any  other purchaser thereof, of a written representation
that  at  the  time  of such exercise it is his or her then present intention to
acquire  the  shares of Stock for investment and not with a view to, or for sale
in  connection  with,  any  distribution  thereof; except that, in the case of a
legal  representative  of an Eligible Person, "distribution" shall be defined to
exclude  distribution  by  will  or  under the laws of descent and distribution.
Prior  to  issuing any shares of Stock pursuant to the exercise of an Award, the
Corporation  shall  take  such  steps  as  it  deems  necessary  to  satisfy any
withholding  tax  obligations  imposed  upon  it  by  any  level  of government.

14.     EXERCISE  IN  THE  EVENT  OF  DEATH  OF  TERMINATION  OR  EMPLOYMENT

(a)     If an Award holder shall die (i) while an employee of the Corporation or
a Subsidiary or within three months after termination of his employment with the
Corporation  or  a  Subsidiary  because  of  his  disability,  or  retirement or
otherwise,  his  Awards  may  be  exercised, to the extent that the Award holder
shall  have  been entitled to do so on the date of his death or such termination
of  employment  by  the person or persons to whom the Award holder's right under
the  Award  pass by will or applicable law, or if no such person has such right,
by  his  executors  or administrators, at any time, or from time to time. In the
event  of  termination  of  employment because of his death while an employee or
because of disability, his Awards may be exercised not later than the expiration
date  specified  in  Paragraph  5  or  one  year after the Award holder's death,
whichever  date is earlier, or in the event of termination of employment because
of  retirement  or  otherwise,  not  later than the expiration date specified in
Paragraph 5 hereof or one year after the Award holder's death, whichever date is
earlier.

(b)     If an Award holder's employment by the Corporation or a Subsidiary shall
terminate  because  of  his disability and such Award holder has not died within
the  following  three  months, he may exercise his Awards, to the extent that he
shall  have  been  entitled  to  do  so  at  the  date of the termination of his
employment, at any time, or from time to time, but not later than the expiration
date  specified  in  Paragraph  5  hereof  or  one  year  after  termination  of
employment,  whichever  date  is  earlier.

(c)     If  an  Award  holder's  employment  shall  terminate  by  reason of his
retirement in accordance with the terms of the Corporation's retirement plans or
with  the  consent  of the Board or the Committee or involuntarily other than by
termination  for  cause, and such Award holder had not died within the following
three  months,  he  may  exercise  his  Award  to  the extent he shall have been
entitled  to do so at the date of the termination of his employment, at any time
and  from  time  to  time,  but  not later than the expiration date specified in
Paragraph  5  hereof.

(d)     If  an Award holder's employment shall terminate for cause, all right to
exercise  his  Awards  shall  terminate  at  the  date  of  such  termination of
employment.

15.     CORPORATE  EVENTS

     In the event of the proposed dissolution or liquidation of the Corporation,
a  proposed sale of all or substantially all of the assets of the Corporation, a
merger  or  tender  for  the  Corporation's  shares  of  Stock, the Board or the
Committee  shall declare that each Award granted under this Plan shall terminate
as  of  a date to be fixed by the Board; provided that not less than thirty (30)
days  written notice of the date so fixed shall be given to each Eligible Person
holding an Award, and each such Eligible Person shall have the right, during the
period  of thirty (30) days preceding such termination, to exercise his Award as
to  all  or any part of the shares of Stock covered thereby, including shares of
Stock  as  to  which  such Award would not otherwise be exercisable. Nothing set
forth  herein  shall  extend the term set for purchasing the shares of Stock set
forth  in  the  Award.

16.     NO  GUARANTEE  OF  EMPLOYMENT

     Nothing  in  this Plan or in any writing granting an Award will confer upon
any Eligible Person the right to continue in the employ of the Eligible Person's
employer,  or  will  interfere  with  or  restrict  in  any way the right of the
Eligible Person's employer to discharge such Eligible Person at any time for any
reason  whatsoever,  with  or  without  cause.

17.     NONTRANSFERABILITY

     No Award granted under the Plan shall be transferable other than by will or
by  the  laws  of  descent  and  distribution.  During the lifetime of the Award
holder,  an  Award shall be exercisable only by him, or by his guardian or legal
representative.

18.     NO  RIGHTS  AS  STOCKHOLDER

     No  Award holder shall have any rights as a stockholder with respect to any
shares  subject  to  his  Award  prior  to  the  date  of  issuance  to him of a
certificate  or  certificates  for  such  shares.

19.     AMENDMENT  AND  DISCONTINUANCE  OF  PLAN

     The Board may amend, suspend or discontinue this Plan at any time. However,
no  such  action  may  prejudice the rights of any Eligible Person who has prior
thereto  been granted Awards under this Plan. Further, no amendment to this Plan
which  has  the effect of (a) increasing the aggregate number of shares of Stock
subject to this Plan (except for adjustments pursuant to Paragraph 3 herein), or
(b) changing the definition of Eligible Person under this Plan, may be effective
unless  and until approval of the stockholders of the Corporation is obtained in
the same manner as approval of this Plan is required. The Board is authorized to
seek  the  approval  of  the Corporation's stockholders for any other changes it
proposes  to  make  to this Plan which require such approval, however, the Board
may  modify  the  Plan  as  necessary, to effectuate the intent of the Plan as a
result  of  any  changes  in the tax, accounting or securities laws treatment of
Eligible  Persons  and  the  Plan,  subject  to the provisions set forth in this
Paragraph  19,  and  Paragraphs  20  and  21.

20.     COMPLIANCE  WITH  RULE  16B-3

     This  Plan  is  intended  to  comply in all respects with Rule 16b-3 ("Rule
16b-3") promulgated by the Securities and Exchange Commission under the Exchange
Act,  with respect to participants who are subject to Section 16 of the Exchange
Act,  and  any  provision(s)  herein that is/are contrary to Rule 16b-3 shall be
deemed  null  and  void to the extent appropriate by either the Committee or the
Board.

21.     COMPLIANCE  WITH  CODE

     The  aspects of this Plan dealing with ISOs are intended to comply in every
respect with Section 422 of the Code and the regulations promulgated thereunder.
in the event any future statute or regulation shall modify the existing stature,
the  aspects  of  this  Plan on ISOs shall be deemed to incorporate by reference
such  modification.  Any  stock  option  agreement  relating  to any ISO granted
pursuant  to  this  Plan  outstanding  and unexercised at the time any modifying
statute  or  regulation becomes effective shall also be deemed to incorporate by
reference  such modification and no notice of such modification need to be given
to  optionee.

     If  any  provision  of  the  aspects  of  this  Plan  dealing  with ISOs is
determined  to  disqualify  the  shares purchasable pursuant to the ISOs granted
under  this  Plan  from  the special tax treatment provided by Code Section 422,
such provision shall be deemed null and void and to incorporate by reference the
modification  required  to  qualify  the  shares  for  said  tax  treatment.

22.     COMPLIANCE  WITH  OTHER  LAWS  AND  REGULATIONS

     The  Plan, the grant and  exercise of Awards thereunder, and the obligation
of the Corporation to sell and deliver Stock under such Awards, shall be subject
to  all  applicable  federal  and state laws, rules, and regulations and to such
approvals  by  any government or regulatory agency as may be required. Moreover,
no  option  may  be  exercised  if its exercise or the receipt of Stock pursuant
thereto  would  be  contrary  to  applicable  laws.

23.     DISPOSITION  OF  SHARES

     In the event any share of Stock acquired by an exercise of an Award granted
under  the  Plan  shall  be  transferable  other  than by will or by the laws of
descent  and distribution within two years of the date such Award was granted or
within  one year after the transfer of such Stock pursuant to such exercise, the
Award  holder  shall  give  prompt  written  notice  thereof to the Board or the
Committee.

24.     NAME

     The  Plan  shall be known as the "ASIA PROPERTIES, INC. Stock Option Plan."

25.     NOTICES

     Any notice hereunder shall be in writing and sent by certified mail, return
receipt  requested  or  by  facsimile  transmission  (with electronic or written
confirmation  of receipt) and when addressed to the Corporation or to the Option
Committee  shall  be  sent  to  it  at  its office at 114 Magnolia Street, Suite
400-115,  Bellingham,  WA  98225  subject  to  the  right  of  either  party  to
designate  at any time hereafter in writing some other address, facsimile number
or  person  to  whose  attention  such  notice  shall  be  sent.

26.     HEADINGS

     The  headings  preceding  the text of Sections and subparagraphs hereof are
inserted solely for convenience of reference, and shall not constitute a part of
this  Plan  nor  shall  they  affect  its  meaning,  construction  or  effect.

27.     EFFECTIVE  DATE

     The  Plan,  was adopted by the Board on September 30, 1998. This date shall
be  the  effective  date  of  the  Plan.

ASIA  PROPERTIES,  INC.

By:  /s/ Daniel McKinney
        Daniel  Mckinney,  President  and  Director

By:
        Director

By:
        Director

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