Document:

Exhibit 10.9

 

PAYMENT AND THE EXERCISE OF REMEDIES WITH RESPECT TO THIS GUARANTY WILL
BE SUBJECT TO THE TERMS AND PROVISIONS SET FORTH IN THE SUBORDINATION
PROVISIONS SET FORTH IN SECTION 8 HEREIN, AND PAYMENT WITH RESPECT TO THIS
GUARANTY IS SUBORDINATE IN RIGHT OF PAYMENT TO SENIOR DEBT (AS DEFINED BELOW).

 

SUBORDINATED GUARANTY

 

This SUBORDINATED GUARANTY
(as amended, restated, supplemented or otherwise modified from time to time,
this “Guaranty”), dated as of February 22, 2008, is made by the
persons listed on the signature pages hereof under the caption “Subsidiary
Guarantors” and the Additional Guarantors (as defined in Section 16(b))
(such persons so listed and the Additional Guarantors being, collectively, the “Guarantors”
and, individually, each a “Guarantor”) in favor of the Holder (as
defined below).

 

PRELIMINARY STATEMENT.
Aldabra 2 Acquisition Corp., a Delaware corporation (to be renamed as Boise
Inc.) (the “Borrower”), has issued and delivered a Promissory Note,
dated the date hereof (as amended, restated, supplemented or otherwise modified
from time to time, the “Note”) in favor of Boise Cascade, L.L.C., a
Delaware limited liability company (“BC LLC”; BC LLC, together with its
registered assigns or transferees, collectively, the “Holder”).  Capitalized terms used, but not otherwise
defined, herein shall have the meanings given to such terms in the Note.  Each Guarantor will derive substantial direct
and indirect benefits from the transactions contemplated by the Note.  It is a requirement of the Note that each
Guarantor shall have executed and delivered this Guaranty.

 

NOW, THEREFORE, in
consideration of the premises and in order to induce BC LLC to accept the Note,
each Guarantor, jointly and severally with each other Guarantor, hereby agrees
as follows:

 

1.             Guaranty of Obligations.  Subject to the provisions of Section 2
of this Guaranty, Guarantors jointly and severally hereby irrevocably and
unconditionally guarantee to Holder the due and punctual payment in full of all
obligations of every nature of the Borrower under the Note, whether for
principal, interest (including interest which, but for the filing of a petition
in bankruptcy with respect to the Borrower would have accrued thereon, whether
or not a claim is allowed against the Borrower for such interest in the related
bankruptcy proceeding), fees, expenses, indemnification or otherwise, in each
case when the same shall become due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including amounts
that would become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, 11 U.S.C. § 362(a)) (collectively, the “Guaranteed
Obligations”).

 

2.             Contribution by Guarantors.  All Guarantors desire to allocate among
themselves (collectively, the “Contributing Guarantors”), in a fair and
equitable manner, their obligations arising under this Guaranty.  Accordingly, in the event any payment or
distribution is made on any date by a Guarantor (a “Funding Guarantor”)
under this Guaranty such that its Aggregate Payments exceeds its Fair Share as
of such date, such Funding Guarantor shall be entitled to a contribution from
each of the other Contributing Guarantors in an amount sufficient to cause each
Contributing Guarantor’s Aggregate Payments to equal its Fair Share as of such
date.  “Fair Share” means, with
respect to a Contributing Guarantor as of any date of determination, an amount
equal to (a) the ratio of (i) the Fair Share Contribution Amount with
respect to such Contributing Guarantor to (ii) the aggregate of the Fair
Share Contribution Amounts with respect to all Contributing Guarantors
multiplied by (b) the aggregate amount paid or distributed on or before
such date by all Funding Guarantors under this Guaranty in respect of the

 

 

obligations
Guaranteed.  “Fair Share Contribution
Amount” means, with respect to a Contributing Guarantor as of any date of
determination, the maximum aggregate amount of the obligations of such
Contributing Guarantor under this Guaranty that would not render its
obligations hereunder or thereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States
Code (together with any successor statutes, the “Bankruptcy Code”) or
any comparable applicable provisions of state law; provided, that solely
for purposes of calculating the “Fair Share Contribution Amount” with respect
to any Contributing Guarantor for purposes of this Section 2, any assets
or liabilities of such Contributing Guarantor arising by virtue of any rights
to subrogation, reimbursement or indemnification or any rights to or
obligations of contribution hereunder shall not be considered as assets or
liabilities of such Contributing Guarantor. 
“Aggregate Payments” means, with respect to a Contributing
Guarantor as of any date of determination, an amount equal to (1) the
aggregate amount of all payments and distributions made on or before such date
by such Contributing Guarantor in respect of this Guaranty (including in
respect of this Section 2), minus (2) the aggregate amount of
all payments received on or before such date by such Contributing Guarantor
from the other Contributing Guarantors as contributions under this Section 2.  The amounts payable as contributions
hereunder shall be determined as of the date on which the related payment or
distribution is made by the applicable Funding Guarantor.  The allocation among Contributing Guarantors
of their obligations as set forth in this Section 2 shall not be construed
in any way to limit the liability of any Contributing Guarantor hereunder.  Each Guarantor is a third party beneficiary
to the contribution agreement set forth in this Section 2.

 

3.             Payment by Guarantors.  Subject to Section 2, Guarantors hereby
jointly and severally agree, in furtherance of the foregoing and not in
limitation of any other right which Holder may have at law or in equity against
any Guarantor by virtue hereof, that upon the failure of Borrower to pay any of
the Guaranteed Obligations when and as the same shall become due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code,  Guarantors will upon demand pay, or cause to
be paid, in cash, to Holder, an amount equal to the sum of the unpaid principal
amount of all Guaranteed Obligations then due as aforesaid, accrued and unpaid
interest on such Guaranteed Obligations (including interest which, but for
Borrower’s becoming the subject of a case under the Bankruptcy Code, would have
accrued on such Guaranteed Obligations, whether or not a claim is allowed
against Borrower for such interest in the related bankruptcy case) and all
other Guaranteed Obligations then owed to Holder as aforesaid.

 

4.             Liability of Guarantors Absolute.  Each Guarantor agrees that its obligations
hereunder are irrevocable, absolute, independent and unconditional and shall
not be affected by any circumstance which constitutes a legal or equitable
discharge of a guarantor or surety other than payment in full of the Guaranteed
Obligations (other than contingent obligations for which no claim has been
made).  In furtherance of the foregoing
and without limiting the generality thereof, each Guarantor agrees as follows:

 

(a)          this Guaranty is a guaranty of payment
when due and not of collectability;

 

(b)          this Guaranty is a primary obligation
of each Guarantor and not merely a contract of surety;

 

(c)   Holder may enforce this Guaranty upon the
occurrence of an Event of Default notwithstanding the existence of any dispute
between Borrower and Holder with respect to the existence of such Event of
Default;

 

(d)          the obligations of each Guarantor
hereunder are independent of the obligations of Borrower and the obligations of
any other guarantor (including any other Guarantor) of the obligations of
Borrower, and a separate action or actions may be brought and prosecuted
against such Guarantor 

 

2

 

whether
or not any action is brought against Borrower or any of such other guarantors
and whether or not Borrower is joined in any such action or actions;

 

(e)          payment by any Guarantor of a portion,
but not all, of the Guaranteed Obligations shall in no way limit, affect,
modify or abridge any Guarantor’s liability for any portion of the Guaranteed
Obligations which has not been paid; without limiting the generality of the
foregoing, if Holder is awarded a judgment in any suit brought to enforce any
Guarantor’s covenant to pay a portion of the Guaranteed Obligations, such
judgment shall not be deemed to release such Guarantor from its covenant to pay
the portion of the Guaranteed Obligations that is not the subject of such suit,
and such judgment shall not, except to the extent satisfied by such Guarantor,
limit, affect, modify or abridge any other Guarantor’s liability hereunder in
respect of the Guaranteed Obligations;

 

(f)           Holder, upon such terms as it deems
appropriate, without notice or demand and without affecting the validity or
enforceability hereof or giving rise to any reduction, limitation, impairment,
discharge or termination of any Guarantor’s liability hereunder, from time to
time may (i) renew, extend, accelerate, increase the rate of interest on,
or otherwise change the time, place, manner or terms of payment of the
Guaranteed Obligations; (ii) settle, compromise, release or discharge, or
accept or refuse any offer of performance with respect to, or substitutions
for, the Guaranteed Obligations or any agreement relating thereto and/or
subordinate the payment of the same to the payment of any other obligations; (iii) request
and accept other guaranties of the Guaranteed Obligations and take and hold
security for the payment hereof or the Guaranteed Obligations; (iv) release,
surrender, exchange, substitute, compromise, settle, rescind, waive, alter,
subordinate or modify, with or without consideration, any security for payment
of the Guaranteed Obligations, any other guaranties of the Guaranteed
Obligations, or any other obligation of any Person (including any other
Guarantor) with respect to the Guaranteed Obligations; (v) enforce and
apply any security now or hereafter held by or for the benefit of Holder in
respect hereof or the Guaranteed Obligations and direct the order or manner of
sale thereof, or exercise any other right or remedy that Holder may have
against any such security, in each case as Holder in its discretion may
determine consistent herewith and with any applicable security agreement,
including foreclosure on any such security pursuant to one or more judicial or
nonjudicial sales, whether or not every aspect of any such sale is commercially
reasonable, and even though such action operates to impair or extinguish any
right of reimbursement or subrogation or other right or remedy of any Guarantor
against Borrower or any security for the Guaranteed Obligations; and (vi) exercise
any other rights available to it under the Note or any related documents
(collectively, the “Note Documents”); and

 

(g)          this Guaranty and the obligations of
Guarantors hereunder shall be valid and enforceable and shall not be subject to
any reduction, limitation, impairment, discharge or termination for any reason
(other than payment in full of the Guaranteed Obligations (other than
contingent obligations for which no claim has been made)), including the
occurrence of any of the following, whether or not any Guarantor shall have had
notice or knowledge of any of them: (i) any failure or omission to assert
or enforce or agreement or election not to assert or enforce, or the stay or
enjoining, by order of court, by operation of law or otherwise, of the exercise
or enforcement of, any claim or demand or any right, power or remedy (whether
arising under the Note Documents, at law, in equity or otherwise) with respect
to the Guaranteed Obligations or any agreement relating thereto, or with
respect to any other guaranty of or security for the payment of the Guaranteed
Obligations; (ii) any rescission, waiver, amendment or modification of, or
any consent to departure from, any of the terms or provisions (including
provisions relating to events of default) hereof, of any of the Note Documents
or any agreement or instrument executed pursuant thereto, or of any other
guaranty or security for the Guaranteed Obligations, in each case whether or
not in accordance with the terms hereof or of the Note Documents or any
agreement relating to such other guaranty or security; (iii) the
Guaranteed Obligations, or any agreement relating thereto, at any time being
found to be illegal, invalid or unenforceable in any respect; (iv) the
application of payments received from any source (other than payments received
pursuant to the Note Documents or 

 

3

 

from
the proceeds of any security for the Guaranteed Obligations, except to the
extent such security also serves as collateral for indebtedness other than the
Guaranteed Obligations) to the payment of indebtedness other than the Guaranteed
Obligations, even though Holder might have elected to apply such payment to any
part or all of the Guaranteed Obligations; (v) Holder’s consent to the
change, reorganization or termination of the corporate structure or existence
of Parent Sub or any of its Subsidiaries and to any corresponding restructuring
of the Guaranteed Obligations; (vi) any failure to perfect or continue
perfection of a security interest in any collateral which secures any of the
Guaranteed Obligations; (vii) any defenses (other than payment in full of
the Guaranteed Obligations (other than contingent obligations for which no
claim has been made)), set offs or counterclaims which Borrower may allege or
assert against Holder in respect of the Guaranteed Obligations, including failure
of consideration, breach of warranty, payment, statute of frauds, statute of
limitations, accord and satisfaction and usury; and (viii) any other act
or thing or omission, or delay to do any other act or thing, which may or might
in any manner or to any extent vary the risk of any Guarantor as an obligor in
respect of the Guaranteed Obligations.

 

5.             Waivers by Guarantors.  Each Guarantor hereby waives, to the extent
permitted by applicable law, for the benefit of Holder: (a) any right to
require Holder, as a condition of payment or performance by such Guarantor, to (i) proceed
against Borrower, any other guarantor (including any other Guarantor) of the
Guaranteed Obligations or any other Person, (ii) proceed against or
exhaust any security held from Borrower, any such other guarantor or any other
Person, (iii) proceed against or have resort to any balance of any deposit
account or credit on the books of Holder in favor of Borrower or any other
Person, or (iv) pursue any other remedy in the power of Holder whatsoever;
(b) any defense arising by reason of the incapacity, lack of authority or
any disability or other defense of Borrower or any other Guarantor including
any defense based on or arising out of the lack of validity or the
unenforceability of the Guaranteed Obligations or any agreement or instrument
relating thereto or by reason of the cessation of the liability of Borrower or
any other Guarantor from any cause other than payment in full of the Guaranteed
Obligations (other than contingent obligations for which no claim has been
made); (c) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount nor
in other respects more burdensome than that of the principal; (d) any
defense based upon Holder’s errors or omissions in the administration of the
Guaranteed Obligations, except behavior which amounts to gross negligence, bad
faith or willful misconduct; (e) (i) any principles or provisions of
law, statutory or otherwise, which are or might be in conflict with the terms
hereof and any legal or equitable discharge of such Guarantor’s obligations
hereunder, (ii) the benefit of any statute of limitations affecting such
Guarantor’s liability hereunder or the enforcement hereof, (iii) any
rights to set offs, recoupments and counterclaims, and (iv) promptness,
diligence and any requirement that Holder protect, secure, perfect or insure
any security interest or lien or any property subject thereto; (f) notices,
demands, presentments, protests, notices of protest, notices of dishonor and
notices of any action or inaction, including acceptance hereof, notices of
default hereunder or under any agreement or instrument related thereto, notices
of any renewal, extension or modification of the Guaranteed Obligations or any
agreement related thereto, notices of any extension of credit to Borrower and
notices of any of the matters referred to in Section 4 and any right to
consent to any thereof; and (g) any defenses or benefits that may be
derived from or afforded by law which limit the liability of or exonerate
guarantors or sureties, or which may conflict with the terms hereof.

 

6.             Guarantors’ Rights of Subrogation, Contribution, etc.  Until the Guaranteed Obligations (other than
contingent obligations for which no claim has been made) shall have been paid
in full, each Guarantor hereby waives, to the extent permitted by applicable
law, its right to enforce any claim, right or remedy, direct or indirect, that
such Guarantor now has or may hereafter have against Borrower or any other
Guarantor or any of its assets in connection with this Guaranty or the
performance by such Guarantor of its obligations hereunder, in each case
whether such claim, right or remedy arises in equity, under contract, by statute,
under common law or otherwise and including (a) any right of subrogation, 

 

4

 

reimbursement
or indemnification that such Guarantor now has or may hereafter have against
Borrower with respect to the Guaranteed Obligations, (b) any right to
enforce, or to participate in, any claim, right or remedy that Holder now has
or may hereafter have against Borrower, and (c) any benefit of, and any
right to participate in, any collateral or security now or hereafter held by
Holder.  In addition, until the
Guaranteed Obligations (other than contingent obligations for which no claim
has been made) shall have been paid in full, each Guarantor shall withhold
exercise of any right of contribution such Guarantor may have against any other
guarantor (including any other Guarantor) of the Guaranteed Obligations,
including any such right of contribution as contemplated by Section 2.  Each Guarantor further agrees that, to the
extent the waiver or agreement to withhold the exercise of its rights of
subrogation, reimbursement, indemnification and contribution as set forth
herein is found by a court of competent jurisdiction to be void or voidable for
any reason, any rights of subrogation, reimbursement or indemnification such
Guarantor may have against Borrower or against any collateral or security, and
any rights of contribution such Guarantor may have against any such other
guarantor, shall be junior and subordinate to any rights Holder may have
against Borrower, to all right, title and interest Holder may have in any such
collateral or security, and to any right Holder may have against such other
guarantor.  If any amount shall be paid
to any Guarantor on account of any such subrogation, reimbursement,
indemnification or contribution rights at any time when all Guaranteed
Obligations (other than contingent obligations for which no claim has been
made) shall not have been paid in full, such amount shall be held in trust for
Holder and shall forthwith be paid over to Holder to be credited and applied
against the Guaranteed Obligations, whether matured or unmatured, in accordance
with the terms hereof.

 

7.             Subordination of Other Obligations.  Any Indebtedness of Borrower or any Guarantor
now or hereafter held by any Guarantor (the “Obligee Guarantor”) is
hereby subordinated in right of payment to the Guaranteed Obligations, and any
such Indebtedness collected or received by the Obligee Guarantor after an Event
of Default has occurred and is continuing shall be held in trust for Holder and
shall forthwith be paid over to Holder to be credited and applied against the
Guaranteed Obligations but without affecting, impairing or limiting in any
manner the liability of the Obligee Guarantor under any other provision hereof.

 

8.             Subordination to Senior Debt.

 

(a)          Holder, by accepting this Guaranty,
agrees that this Guaranty and the obligations of each Guarantor hereunder shall
be subordinated in right of payment to all Senior Debt to the extent and in the
manner provided in this Section 8.  “Senior
Debt” means all principal of, premium (if any), interest (including
interest which, but for the filing of a petition in bankruptcy with respect to
the Borrower would have accrued thereon, whether or not a claim is allowed
against the Borrower for such interest in the related bankruptcy proceeding)
on, and any and all other fees, expense reimbursement obligations, and other
amounts due pursuant to the terms of (i) the 1st Lien Loan Agreement and
the “Credit Documents” (as such term or any similar term is defined in the 1st
Lien Loan Agreement) (collectively, the “1st Lien Loan Documents”) and (ii) the
2nd Lien Loan Agreement and the “Credit Documents” (as such term or any similar
term is defined in the 2nd Lien Loan Agreement) (collectively, the “2nd Lien
Loan Documents” and, together with the 1st Lien Loan Documents, the “Senior
Loan Documents”), together with all obligations in respect of “Hedge
Agreements” and “Treasury Services Agreements” (as defined in the 1st Lien Loan
Agreement).

 

(b)          In the event that (i) any
voluntary or involuntary case or proceeding under the Bankruptcy Code with
respect to any Guarantor, (ii) any other voluntary or involuntary
insolvency, reorganization or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding
with respect to any Guarantor or with respect to a material portion of their
respective assets; (iii) any liquidation, dissolution, reorganization or
winding up of any Guarantor whether voluntary or involuntary and whether or not
involving insolvency or bankruptcy (other than as permitted 

 

5

 

under
Section 6.8 of the 1st Lien Loan Agreement or Section 6.8 of the 2nd
Lien Loan Agreement); or (iii) any assignment for the benefit of creditors
or any other marshalling of assets and liabilities of any Guarantor (each, an “Insolvency
Event”) occurs, then:

 

(i)          except with respect to Reorganized Subordinated Securities,
the holders of Senior Debt shall be entitled to receive payment in full on all
Senior Debt before Holder is entitled to receive any payment on account of
principal, interest, fees, charges or other amounts due (or past due) upon or
in respect of this Guaranty, and the holders of Senior Debt shall be entitled to
receive for application in payment thereof any payment or distribution of any
kind or character, whether in cash, property or securities or by set off or
otherwise, which may be payable or deliverable in any such proceedings in
respect of this Guaranty; and

 

(ii)         except with respect to Reorganized Subordinated Securities,
any payment or distribution of assets of Borrower, of any kind or character,
whether in cash, property or securities, to which Holder would be entitled
except for the provisions of this Section 3(b) shall be paid or
delivered by the applicable Guarantor directly to the holders of Senior Debt or
their duly appointed agents for application of payment according to the
priorities of such Senior Debt and ratably among the holders of any class of
Senior Debt, for application in payment thereof until all Senior Debt shall
have been paid in full.

 

When
used herein, “Reorganized Subordinated Securities” means any debt or
equity securities of any Guarantor or any other Person that are distributed to
Holder in respect of the obligations under this Guaranty pursuant to a
confirmed plan of reorganization or liquidation or adjustment; provided
that (i) any such securities are subordinated to the Senior Debt (or any
debt securities issued in substitution of all or any portion of the Senior
Debt) to at least the same extent and in the same manner as the obligations of
the Guarantors under this Guaranty are subordinated to the Senior Debt pursuant
to this Section 8 and (ii) any such debt securities do not have the
benefit of any obligation of any Person (whether as issuer, guarantor or
otherwise) unless the Senior Debt has at least the same benefit of the
obligation of such Person and the obligations of such Person to Holder are
subordinated to the same extent and in the same manner as the obligations of
the Guarantors.

 

(c)          In any proceedings with respect to any
Insolvency Event, the holders of Senior Debt are authorized:

 

(i)          to accept and execute receipts for any payment or
distribution made with respect to this Guaranty and to apply such payment or
distribution to the payment of the Senior Debt; and

 

(ii)         to take any action and to execute any instruments necessary
to effectuate the foregoing, either in the name of the holders of Senior Debt
or in the name of Holder as the attorney in fact of Holder.

 

(d)          Unless the requisite holders of Senior
Debt otherwise consent, no payment of principal, interest, fees, charges or
other amounts due (or past due) shall be made upon or in respect of this
Guaranty until the Senior Debt shall have been paid in full.  Guarantors shall notify Holder in writing of
the occurrence of a Blockage Event on or prior to the date on which any payment
is due, but that failure to do so shall not affect or impair the subordination
provisions hereof.  The existence of a
Blockage Event shall not render any amount otherwise due and payable hereunder
not due and payable.

 

(e)          The administrative agent under the 1st
Lien Loan Agreement (together with its successors and permitted assigns, the “First
Lien Administrative Agent”) and the administrative agent 

 

6

 

under
the 2nd Lien Loan Agreement (together with its successors and permitted
assigns, the “2nd Lien Administrative Agent”) shall be third party
beneficiaries of this Section 8 and no amendment or modification of the
terms of Section 8 of this Guaranty shall be effective against the First
Lien Administrative Agent, the 2nd Lien Administrative Agent or any Person who
was a holder of Senior Debt prior to or at the time of such amendment or
modification unless the 1st Lien Administrative Agent (if any Senior Debt or
commitment to extend Senior Debt in respect of the 1st Lien Loan Agreement and
the “Credit Documents” (as such term or any similar term is defined in the 1st
Lien Loan Agreement) is then outstanding) and the 2nd Lien Administrative Agent
(if any Senior Debt in respect of the 2nd Lien Loan Agreement and the “Credit
Documents” (as such term or any similar term is defined in the 2nd Lien Loan Agreement
is then outstanding) so consents.

 

(f)           Subject to Section 15 of this
Guaranty,

 

(i)          the holders of Senior Debt may, at any time, in their
discretion, renew, amend, extend or otherwise modify the terms and provisions
of Senior Debt so held or exercise any of their rights under the Senior Debt
including, without limitation, the waiver of defaults thereunder and the
amendment of any of the terms or provisions thereof (or any notice evidencing
or creating the same), all without notice to or assent from Holder; and

 

(ii)         no compromise, alteration, amendment, renewal or other
change of, or waiver, consent or other action in respect of any liability or
obligation under or in respect of, any terms, covenants or conditions of the
Senior Debt (or any instrument evidencing or creating the same), whether or not
such compromise, alteration, amendment, renewal, change, waiver, consent or
other action is in accordance with the provisions of the Senior Debt (or any
instrument evidencing or creating the same), shall in any way alter or affect
any of the subordination provisions of this Guaranty.

 

(g)          If, notwithstanding the provisions of Section 8
of this Guaranty, any payment or distribution of any character (whether in
cash, securities or other property other than Reorganized Subordinated
Securities) shall be received by Holder in contravention of this Section 8
and before all the Senior Debt shall have been paid in full, such payment or
distribution shall be held in trust for the benefit of, and shall be immediately
paid over or delivered or transferred to, the holders of Senior Debt or their
duly appointed agents for application of payment according to the priorities of
such Senior Debt and ratably among the holders of any class of Senior Debt.  Any such payments received by Holder and
delivered to the holders of the Senior Debt shall be deemed not to be a payment
on this Guaranty for any reason whatsoever and the indebtedness under this
Guaranty shall remain as if such erroneous payment had never been paid by Borrower
or received by Holder.  In the event of
the failure of any holder of this Guaranty to endorse or assign any such
payment or distribution, each holder of any Senior Debt is hereby irrevocably
authorized to endorse or assign the same.

 

(h)          No present or future holder of Senior
Debt shall be prejudiced in its right to enforce the provisions of this Section 8
by any act or failure to act on the part of any Guarantor.

 

(i)           If there shall have occurred and be
continuing or there would exist as a result of such a payment or distribution
any event of default under any of the terms of any agreement relating to, or
instrument evidencing, any Senior Debt, which (whether with or without notice,
lapse of time or both) would permit the holder of such Senior Debt to accelerate
all or any portion of such Senior Debt (each, a “Blockage Event”) and
following notification thereof to Holder from Borrower, any Guarantor or an
authorized representative of the holders of Senior Debt, Holder shall not take
or continue any action, or exercise or continue to exercise any rights,
remedies or powers under the terms of this Guaranty, or exercise or continue to
exercise any other right or remedy at law or equity that such holder might 

 

7

 

otherwise
possess, to collect any amount due and payable in respect of this Guaranty,
including, without limitation, demand for payment under this Guaranty, the
commencement of any foreclosure on any lien or security interest, the filing of
any petition in bankruptcy or the taking advantage of any other insolvency law
of any jurisdiction, unless and until the earliest of (x) the Senior Debt
shall have been fully and finally paid, (y) no Blockage Event then exists
and is continuing or (z) 365 days after the Maturity Date (the “Standstill
Period”).  Notwithstanding the
foregoing, Holder shall be entitled to:

 

(i) accelerate the
obligations under this Guaranty if all Senior Debt has been accelerated, provided,
that if the acceleration of all Senior Debt is rescinded, Holder shall be
deemed to have automatically rescinded its acceleration of the obligations
under this Guaranty;

 

(ii)         file a claim or statement of interest with respect to the
obligations under this Guaranty; provided that an Insolvency Event has occurred
with respect to a Guarantor;

 

(iii)        file any necessary responsive or defensive pleadings in
opposition to any motion, claim, adversary proceeding or other pleading made by
any person objecting to or otherwise seeking the disallowance of the claims of
Holder, in each case in accordance with the terms of this Section 8;

 

(iv)        file any pleadings, objections, motions or agreements which
assert rights or interests available to unsecured creditors of the Guarantors
arising in connection with any Insolvency Event or applicable non-bankruptcy
law, in each case not inconsistent with the terms of this Section 8;

 

(v)         vote on any plan of reorganization, file any proof of claim,
make other filings and make any arguments and motions that are, in each case,
in accordance with the terms of this Section 8, with respect to the
obligations under this Section 8; and

 

(vi)        exercise any of its rights or remedies with respect to the
Collateral after the termination of the Standstill Period.

 

(j)           If any payment or distribution to
which any holder of this Guaranty would otherwise have been entitled but for
the provisions of this Section 3 shall have been applied, pursuant to the
provisions of this Section 3, to the payment of Senior Debt, then and in
such case and to such extent, Holder, following payment in full of the Senior
Debt, shall be subrogated to and entitled to receive any and all further
payments or distributions applicable to Senior Debt.

 

(k)          Holder agrees not to initiate or
prosecute or encourage any other Person to initiate or prosecute any claim,
action or other proceeding (i) challenging the enforceability of the claim
of any holder of Senior Debt, (ii) challenging the enforceability of any
liens or security interests in assets securing any Senior Debt, (iii) asserting
any claims which any Guarantor may hold with respect to any holder of Senior
Debt or (iv) asserting that the obligations under this Guaranty and the
Senior Debt should be the same voting class in any Insolvency Event proceeding.

 

(l)           The provisions of this Section 8
are solely for the purpose of defining the relative rights of the holders of
Senior Debt, on the one hand, and Holder on the other, against Borrower and its
assets, and nothing herein is intended to or shall impair, as between Borrower
and Holder, the obligations under this Guaranty which are absolute and
unconditional, to pay to the holder the Guaranteed Obligations as and when they
become due and payable in accordance with the terms of the Note, or is intended
to or will affect the relative rights of Holder and creditors of any Guarantor
other than the holders of the Senior Debt, nor, except as provided in this Section 8,
will anything herein or therein 

 

8

 

prevent
Holder from exercising all remedies otherwise permitted by applicable law upon
default under this Guaranty subject to the rights, if any, under this Section 8
of the holders of Senior Debt in respect of cash, property or securities of any
Guarantor received upon the exercise of any such remedy and subject to this Section 8.

 

9.             Continuing Guaranty.  This Guaranty is a continuing guaranty and
shall remain in effect until all of the Guaranteed Obligations (other than
contingent obligations for which no claim has been made) shall have been paid
in full.  Each Guarantor hereby
irrevocably waives any right to revoke this Guaranty as to future transactions
giving rise to any Guaranteed Obligations.

 

10.           Authority of Guarantors or Borrower.  It is not necessary for Holder to inquire into
the capacity or powers of any Guarantor or Borrower or the officers, directors
or any agents acting or purporting to act on behalf of any of them.

 

11.           Financial Condition of Borrower.  Any extension of credit may be made to
Borrower or continued from time to time without notice to or authorization from
any Guarantor regardless of the financial or other condition of Borrower at the
time of any such grant or continuation. 
Holder shall not have any obligation to disclose or discuss with any
Guarantor its assessment, or any Guarantor’s assessment, of the financial
condition of Borrower.  Each Guarantor
has adequate means to obtain information from Borrower on a continuing basis
concerning the financial condition of Borrower and its ability to perform its
obligations under the Note Documents, and each Guarantor assumes the
responsibility for being and keeping informed of the financial condition of
Borrower and of all circumstances bearing upon the risk of nonpayment of the
Guaranteed Obligations.  Each Guarantor
hereby waives and relinquishes any duty on the part of Holder to disclose any
matter, fact or thing relating to the business, operations or conditions of
Borrower now known or hereafter known by Holder.

 

12.           Bankruptcy, etc.

 

                (a)           So
long as any Guaranteed Obligations remain outstanding, no Guarantor shall,
without the prior written consent of Holder, commence or join with any other
Person in commencing any bankruptcy, reorganization or insolvency case or
proceeding of or against Borrower or any other Guarantor.  The obligations of Guarantors hereunder shall
not be reduced, limited, impaired, discharged, deferred, suspended or
terminated by any case or proceeding, voluntary or involuntary, involving the
bankruptcy, insolvency, receivership, reorganization, liquidation or
arrangement of Borrower or any other Guarantor or by any defense which Borrower
or any other Guarantor may have by reason of the order, decree or decision of
any court or administrative body resulting from any such proceeding.

 

                (b)           Each
Guarantor acknowledges and agrees that any interest on any portion of the
Guaranteed Obligations which accrues after the commencement of any case or
proceeding referred to in clause (a) above (or, if interest on any portion
of the Guaranteed Obligations ceases to accrue by operation of law by reason of
the commencement of such case or proceeding, such interest as would have
accrued on such portion of the Guaranteed Obligations if such case or
proceeding had not been commenced) shall be included in the Guaranteed
Obligations because it is the intention of Guarantors and Holder that the
Guaranteed Obligations which are guaranteed by Guarantors pursuant hereto
should be determined without regard to any rule of law or order which may
relieve Borrower of any portion of such Guaranteed Obligations.  Guarantors will permit any trustee in
bankruptcy, receiver, debtor in possession, assignee for the benefit of
creditors or similar Person to pay Holder, or allow the claim of Holder in
respect of, any such interest accruing after the date on which such case or
proceeding is commenced.

 

                (c)           In
the event that all or any portion of the Guaranteed Obligations are paid by
Borrower, the obligations of Guarantors hereunder shall continue and remain in
full force and effect or be 

 

9

 

reinstated,
as the case may be, in the event that all or any part of such payment(s) are
rescinded or recovered directly or indirectly from Holder as a preference,
fraudulent transfer or otherwise, and any such payments which are so rescinded
or recovered shall constitute Guaranteed Obligations for all purposes
hereunder.

 

13.           Discharge of Guaranty Upon Sale of Guarantor.  If all of the Equity Securities of any
Guarantor or any of its successors in interest hereunder shall be sold or
otherwise disposed of (including by merger or consolidation) in accordance with
the terms and conditions of the Loan Documents (as in effect on the date
hereof) and all guarantee obligations of such Guarantor or successor in
interest, as the case may be, hereunder shall automatically be discharged and
released without any further action by Holder or any other Person effective as
of the time of such sale of such Equity Securities (including by merger or
consolidation) if the guarantee obligations of such Guarantor under all of the
Loan Documents are released at such time.

 

14.           Payments Free and Clear of Taxes, Etc.  Any and all payments by or on account of any
obligation of any Guarantor hereunder or under any other Loan Document shall be
made by wire transfer of immediately available funds free and clear of, and
without deduction or withholding, for any taxes or any other matter.

 

15.           Covenants.

 

                (a)           Each
Guarantor covenants and agrees that, so long as any part of the Guaranteed
Obligations shall remain unpaid, such Guarantor will perform and observe, and
cause each of its Subsidiaries to perform and observe, all of the then
applicable terms, covenants and agreements set forth in the Note on its or
their part to be performed or observed or that the Borrower has agreed to cause
such Guarantor or such subsidiaries to perform or observe.

 

                (b)           The
1st Lien Loan Documents and the 2nd Lien Loan Documents may be amended,
restated, supplemented or otherwise modified in accordance with their terms and
the Indebtedness under each of the 1st Lien Loan Documents and the 2nd Lien
Loan Documents may be Refinanced, in each case, without notice to or the
consent of Holder, all without affecting the subordination or other provisions
of this Guaranty; provided, however, that any such amendment,
restatement, supplement, modification or Refinancing shall not, without the
consent of Holder, other than by operation of Section 8 hereof, prohibit
the Guarantors from paying to Holder (or distributing funds to Borrower to pay
to Holder) all amounts due in respect of the Note on the scheduled maturity of
the Note.

 

16.           Amendments, Guaranty Supplements, Etc.

 

                                (a)           No amendment or waiver of any
provision of this Guaranty and no consent to any departure by any Guarantor
therefrom shall in any event be effective unless the same shall be in writing
and signed by the Holder and, in the case of an amendment, the Guarantors, and
then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.

 

                                (b)           The Note requires that certain
Subsidiaries created or acquired after the date hereof become Guarantors under
this Guaranty (so long as any such Subsidiary is or would otherwise become a
Credit Party).  Upon the execution
and delivery by any person of a guaranty supplement in substantially the form
of Exhibit A hereto (each, a “Guaranty Supplement”), (i) such
person shall be referred to as an “Additional Guarantor” and shall
become and be a Guarantor hereunder, and each reference in this Guaranty to a “Guarantor”
shall also mean and be a reference to such Additional Guarantor, and each
reference in any other Loan Document to a “Subsidiary Guarantor” shall
also mean and be a reference to such Additional Guarantor, and (ii) each
reference herein to “this Guaranty”,

 

10

 

“hereunder”, “hereof” or words of like import
referring to this Guaranty, and each reference in any other Loan Document to
the “Subsidiary Guaranty”, “thereunder”, “thereof” or words of like import
referring to this Guaranty, shall mean and be a reference to this Guaranty as
supplemented by such Guaranty Supplement.

 

                17.           Notices, Etc.  All notices,
demands or other communications to be given or delivered under or by reason of
the provisions of this Guaranty shall be given in the manner provided for in,
and shall be effective in accordance with the terms of, the Note and shall be
given to any Guarantor, addressed to it in care of Borrower at Borrower’s address
pursuant to the terms of the Note.

 

                18.           No Waiver; Remedies.  No failure on the part of Holder to exercise,
and no delay by Holder in exercising, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power
or privilege.  The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.

 

                19.           Right of Set-off.  Upon the occurrence of any Event of Default,
but subject to the subordination provisions in Section 8, Holder and each
of its affiliates is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and apply any and all funds at
any time held and other obligations at any time owing by Holder or such
affiliate to or for the credit or the account of any Guarantor against any and
all of the obligations of such Guarantor under this Guaranty now or hereafter
existing under the Note Documents, irrespective of whether Holder shall have
made any demand under this Guaranty or any other Note Document and although such
obligations may be unmatured or contingent. 
Holder agrees promptly to notify such Guarantor after any such set-off
and application; provided, however, that the failure to give such
notice shall not affect the validity of such set-off and application.  The rights of Holder and each of its
affiliates under this Section 19 are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that Holder
and such affiliates may have.

 

                20.           Assignments of the Note.  Holder may, without the consent of any
Guarantor, assign or otherwise transfer all or any portion of the Note and its
rights and obligations thereunder and, effective upon any such assignment or
transfer, all of the rights of the Holder under this Guaranty shall, with
respect to the portion of the Note so assigned or transferred (but not with
respect to the portion of the Note retained by such Holder), automatically and
without further action on the part of any party hereto be assigned to such
subsequent holder.  After any such
assignment or transfer, all references to “Holder” hereunder shall be deemed
references (i) with respect to the portion of the Note retained by the
Holder in such assignment or transfer, to the Holder as of immediately prior to
such assignment or transfer and (ii) with respect to the portion of the
Note assigned or transferred by the Holder in such assignment or transfer, to
the assignee or transferee in such assignment or transfer.  This Section 20 shall be construed
broadly such that indirect assignees or transferees of the original Holder of
the Note shall also be assigned   the
rights of a Holder under this Guaranty with respect to the portion of the Note
so transferred or assigned.  At any time,
upon the written request of a Holder, each Guarantor shall execute and deliver
to a Holder a guaranty in substantially the form of this Guaranty, with respect
to the portion of the Note so held by such Guarantor; provided that
failure to execute and deliver such Guaranty shall in no way limit or extinguish
the rights of such subsequent Holder under this Guaranty.  No Guarantor shall have the right to assign
its rights hereunder or any interest herein without the prior written consent
of Holder.

 

                21.           Governing Law.  All issues and questions concerning the
construction, validity, enforcement and interpretation of this Guaranty shall
be governed by, and construed in accordance with, the laws of the State of
Delaware, without giving effect to any choice of law or conflict of law rules or

 

11

 

provisions (whether of the State of Delaware or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware. 
In furtherance of the foregoing, the internal law of the State of
Delaware shall control the interpretation and construction of this Guaranty,
even though under that jurisdiction’s choice of law or conflict of law
analysis, the substantive law of some other jurisdiction would ordinarily
apply.

 

                22.           Jury Trial Waiver.  EACH OF THE PARTIES HERETO WAIVES ANY RIGHT
IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS GUARANTY OR ANY OTHER NOTE
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN
STATEMENT OR ACTION OF ANY PARTY HERETO.

 

                23.           Execution in Counterparts.  This Guaranty and each amendment, waiver and
consent with respect hereto may be executed in any number of counterparts and
by different parties thereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement. 
Delivery of an executed counterpart of a signature page to this
Guaranty by telecopier or electronic transmission (in pdf format) shall be
effective as delivery of an original executed counterpart of this Guaranty.

 

                24.           Costs of Collection.  The Guarantors agree to pay all costs and expenses,
including, without limitation, reasonable attorneys’ fees and disbursements,
costs of collection and court costs, incurred or paid by any Holder and/or any
of its Affiliates in connection with this Guaranty.

 

* * * * * * * *

 

12

IN WITNESS WHEREOF, each
Guarantor has caused this Guaranty to be duly executed and delivered by its
officer thereunto duly authorized as of the date first above written.

	
   

  	
   

  	
   

  
	
   

  	
  “Subsidiary Guarantors”:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Aldabra Sub LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:  Aldabra Holding Sub LLC,
  its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jason G. Weiss

  
	
   

  	
  Name:

  	
  Jason G. Weiss

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Boise Paper Holdings, L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Karen E. Gowland

  
	
   

  	
  Name:

  	
  Karen E. Gowland

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Aldabra Holding Sub LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jason G. Weiss

  
	
   

  	
  Name:

  	
  Jason G. Weiss

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Boise White Paper, L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Karen E. Gowland

  
	
   

  	
  Name:

  	
  Karen E. Gowland

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Boise Packaging & Newsprint, L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Karen E. Gowland

  
	
   

  	
  Name:

  	
  Karen E. Gowland

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Boise Cascade Transportation Holdings Corp.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Karen E. Gowland

  
	
   

  	
  Name:

  	
  Karen E. Gowland

  
	
   

  	
  Title:

  	
  Vice President  

  
						

 

	
   

  	
  Boise White Paper Sales Corp.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Karen E. Gowland

  
	
   

  	
  Name:

  	
  Karen E. Gowland

  
	
   

  	
  Title:

  	
  Vice President  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Boise White Paper Holdings Corp.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Karen E. Gowland

  
	
   

  	
  Name:

  	
  Karen E. Gowland

  
	
   

  	
  Title:

  	
  Vice President  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  International Falls Power Company

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Karen E. Gowland

  
	
   

  	
  Name:

  	
  Karen E. Gowland

  
	
   

  	
  Title:

  	
  Vice President  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Minnesota, Dakota & Western Railway Company

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Karen E. Gowland

  
	
   

  	
  Name:

  	
  Karen E. Gowland

  
	
   

  	
  Title:

  	
  Vice President  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Bemis Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Karen E. Gowland

  
	
   

  	
  Name:

  	
  Karen E. Gowland

  
	
   

  	
  Title:

  	
  Vice President  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BC China Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Karen E. Gowland

  
	
   

  	
  Name:

  	
  Karen E. Gowland

  
	
   

  	
  Title:

  	
  Vice President  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  B C T, INC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Karen E. Gowland

  
	
   

  	
  Name:

  	
  Karen E. Gowland

  
	
   

  	
  Title:

  	
  Vice President  

  
				

 

 

Continuation
of Signature Page to Subsidiary Guaranty

 

 

A-2

 

Exhibit A

To The

Subordinated Guaranty

 

FORM OF SUBSIDIARY GUARANTY SUPPLEMENT

 

                  
    ,

 

Boise Paper Holdings, L.L.C.

1111 West Jefferson Street, Suite 200

Boise, Idaho  83702-5388

Attention:  Chief Financial Officer

 

 

Boise Inc.

Promissory Note dated February 22,
2008 (the “Note”)

 

Ladies
and Gentlemen:

 

We refer to (i) the Note and (ii) the
Subordinated Guaranty of [Name of Original
Guarantor(s)] referred to therein (such Guaranty, as in effect on
the date hereof and as it may hereafter be amended, supplemented or otherwise
modified from time to time, together with this Guaranty Supplement, being the “Guaranty”).  The capitalized terms defined in the Guaranty
or in the Note and not otherwise defined herein are used herein as therein
defined.

 

Section 1.  Guaranty.  Subject to the provisions of Section 2
of the Guaranty, the undersigned jointly and severally together with all other
Guarantors hereby irrevocably and unconditionally guarantee to Holder the due
and punctual payment in full of the Guaranteed Obligations.

 

Section 2.  Obligations Under the Guaranty.  The undersigned hereby agrees, as of the date
first above written, to be bound as a Guarantor by all of the terms and
conditions of the Guaranty to the same extent as each of the other Guarantors
thereunder.  The undersigned further
agrees, as of the date first above written, that each reference in the Guaranty
to an “Additional Guarantor” or
a “Guarantor” shall also mean
and be a reference to the undersigned, and each reference in any other Note
Document to a “Credit Party”
shall also mean and be a reference to the undersigned.

 

Section 3.  Delivery by Telecopier.  Delivery of an executed counterpart of a
signature page to this Guaranty Supplement by telecopier or electronic
transmission (in pdf format) shall be effective as delivery of an original
executed counterpart of this Guaranty Supplement.

 

Section 4.  Governing Law; Jury Trial Waiver.  All issues and questions concerning the
construction, validity, enforcement and interpretation of this Guaranty
Supplement shall be governed by, and construed in accordance with, the laws of
the State of Delaware, without giving effect to any choice of law or conflict
of law rules or provisions (whether of the State of Delaware or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Delaware.  In
furtherance of the foregoing, the internal law of the State of Delaware shall
control the interpretation and construction of this Guaranty Supplement, even
though under that jurisdiction’s choice of law or conflict of law analysis, the
substantive law of some other jurisdiction would ordinarily apply.  EACH OF THE PARTIES HERETO WAIVES ANY RIGHT
IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF

 

A-3

 

ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR
IN CONNECTION WITH THIS GUARANTY SUPPLEMENT, THE GUARANTY OR ANY OTHER NOTE
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN
STATEMENT OR ACTION OF ANY PARTY HERETO.

 

	
   

  	
  Very truly yours,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [NAME OF ADDITIONAL GUARANTOR]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
					

 

 

A-4Ex 10.1

Exhibit 10.1

AMENDED AND RESTATED LOAN AGREEMENT

Wachovia Bank, National Association

301 South Tryon Street

Charlotte, North Carolina  28202

(Hereinafter referred to as "Bank")

Think Partnership Inc., a Nevada corporation

15550 Lightwave Drive, 3rd Floor

Clearwater, Florida  37760

(Hereinafter referred to as "Borrower")

This Loan Agreement (as amended, restated, supplemented or modified from time to time, the “Agreement”) is entered into as of February 27, 2008 (the “Closing Date”) between Bank and Borrower.  This Agreement is an amendment and restatement of that certain Loan Agreement dated as of January 19, 2006 between Bank and Borrower (as amended, restated, supplemented or modified prior to the date hereof, the “Existing Loan Agreement”).  

This Agreement applies to the loan or loans (individually and collectively, the "Loan") evidenced by the Amended and Restated Revolving Credit Promissory Note, as of the date hereof (as amended, restated, supplemented or modified from time to time, the “Revolving Credit Note”) and the Amended and Restated Term Promissory Note, as of the date hereof (as amended, restated, supplemented or modified from time to time, the “Term Note”; collectively with the Revolving Credit Note, the "Note"), the standby letters of credit issued hereunder (each, a "Letter of Credit" and collectively, the "Letters of Credit") and all Loan Documents.  The terms "Loan Documents" and "Obligations," as used in this Agreement, are defined in the Note.  All capitalized terms used and not defined herein shall have the meanings assigned thereto in the other Loan Documents.  All terms that are used but not otherwise defined in any of the Loan Documents shall have the definitions provided in the Uniform Commercial Code.

Relying upon the covenants, agreements, representations and warranties contained in this Agreement, Bank is willing to extend credit to Borrower upon the terms and subject to the conditions set forth herein, and Bank and Borrower agree as follows:

LETTERS OF CREDIT.  Upon the request of Borrower, Bank shall issue standby Letters of Credit; provided, that Bank shall have no obligation to issue any Letter of Credit if, after giving effect to such issuance, the aggregate principal balance outstanding under the Revolving Credit Note, plus the aggregate undrawn and unexpired amount of the then outstanding Letters of Credit, plus the aggregate amount of unreimbursed drawings under all Letters of Credit at any one time exceeds the Maximum Availability under the Revolving Credit Note, and further provided, no standby Letter of Credit shall have an expiration date beyond February 27, 2011 (the “Maturity Date”).  Bank's obligation to issue Letters of Credit shall terminate if Borrower is in default (however denominated) under the Note or the other Loan Documents, or in any case, if not sooner terminated, on the Maturity Date.  All existing Letters of Credit under the Existing Loan Agreement shall be deemed to have been issued pursuant hereto, and from and after the date hereof shall be subject to and governed by the terms and conditions hereof.

LETTER OF CREDIT FEES.  Borrower shall pay to Bank, at such times as Bank shall require, Bank's standard fees in connection with Letters of Credit, as in effect from time to time,  including an additional fee equal to the Interest Rate (as defined in the Revolving Credit Note) per annum on the face amount of each standby Letter of Credit, payable annually, in advance, for so long as such Letter of Credit is outstanding.

REPRESENTATIONS.  Borrower represents on the date hereof and on the date of any Advance (as defined in the Note) that:  Accurate Information.  All information furnished to Bank was, at the time furnished, complete and correct in all material respects.  Any such information relating to Borrower's and its Subsidiaries’ financial condition accurately reflects Borrower's and its subsidiaries’ financial condition as of the date(s) thereof, (including all contingent liabilities of every type), and Borrower further represents that its financial condition has not changed materially or adversely since the date(s) of such documents.  Authorization; Non-Contravention.  The execution, 

delivery and performance by Borrower and Guarantors of this Agreement and other Loan Documents to which it is a party are within its power, have been duly authorized as may be required and, if necessary, by making appropriate filings with any governmental agency or unit and are the legal, binding, valid and enforceable obligations of Borrower and Guarantors; and do not (i) contravene, or constitute (with or without the giving of notice or lapse of time or both) a violation of any provision of applicable law, a violation of the organizational documents of Borrower or Guarantors, or a default under any agreement, judgment, injunction, order, decree or other instrument binding upon or affecting Borrower or Guarantors, (ii) result in the creation or imposition of any lien (other than the lien(s) created by the Loan Documents) on any of Borrower's assets or Guarantor’s assets, or (iii) give cause for the acceleration of any obligations of Borrower or any of it subsidiaries to any other creditor.  Asset Ownership.  Borrower and Guarantors have good and marketable title to all of the properties and assets reflected on the balance sheets and financial statements supplied to Bank by Borrower, and all such properties and assets are free and clear of mortgages, security deeds, pledges, liens, charges, and all other encumbrances, except: (a) liens for taxes, assessments and other governmental charges or levies (excluding any lien imposed pursuant to any of the provisions of ERISA) not yet due or as to which the period of grace (not to exceed thirty (30) days), if any, related thereto has not expired or which are being contested in good faith and by appropriate proceedings if adequate reserves are maintained to the extent required by GAAP, (b) liens existing on any property or asset prior to the acquisition thereof by Borrower or any Guarantor (as defined in the guaranty agreement of even date herewith by and among the domestic subsidiaries of Borrower and Bank, the

"

Guaranty Agreement

"

) or existing on any property or asset of any entity that becomes a Guarantor after the date of consummation of such acquisition prior to the time such entity becomes a Guarantor, (c) liens in favor of Bank and (d) as otherwise disclosed to Bank by Borrower in writing and approved by Bank (collectively, "Permitted Liens").  Discharge of Liens and Taxes.  Borrower and Guarantors have duly filed, paid and/or discharged all taxes or other claims that may become a lien on any of its property or assets, except to the extent that such items are being appropriately contested in good faith and an adequate reserve for the payment thereof is being maintained.  Sufficiency of Capital.  On and as of the Closing Date and after giving effect to all indebtedness being incurred or assumed and liens created by the Loan Agreement in connection therewith and on and as of the date of each Advance and after giving effect thereto (a) the sum of the assets, at a fair valuation on a going concern basis, of Borrower and its subsidiaries taken as a whole will exceed its debts; (b) Borrower and its subsidiaries taken as a whole has not incurred and does not intend to incur, and does not believe it will incur, debts beyond its ability to pay as these debts mature; and (c) Borrower and its subsidiaries taken as a whole will have sufficient capital with which to conduct its business.  Compliance with Laws.  Borrower represents that Borrower and any subsidiary and affiliate of Borrower and any Guarantor are in compliance in all respects with all federal, state and local laws, rules and regulations applicable to its properties, operations, business, and finances, including, without limitation, any federal or state laws relating to liquor (including 18 U.S.C. § 3617, et seq.) or narcotics (including 21 U.S.C. § 801, et seq.) and/or any commercial crimes; all applicable federal, state and local laws and regulations intended to protect the environment; and the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), if applicable.  None of Borrower, or any subsidiary or affiliate of Borrower or any Guarantor is a Sanctioned Person or has any of its assets in a Sanctioned Country or does business in or with, or derives any of its operating income from investments in or transactions with, Sanctioned Persons or Sanctioned Countries in violation of economic sanctions administered by OFAC.  The proceeds from the Loan will not be used to fund any operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Country. “OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control. “Sanctioned Country” means a country subject to a sanctions program identified on the list maintained by OFAC and available at http://www.treas.gov/offices/enforcement/ofac/programs/index.shtml, or as otherwise published from time to time. “Sanctioned Person” means (i) a person named on the list of Specially Designated Nationals or Blocked Persons maintained by OFAC available at http://www.treas.gov/offices/enforcement/ofac/sdn/index.shtml, or as otherwise published from time to time, or (ii) (A) an agency of the government of a Sanctioned Country, (B) an organization controlled by a Sanctioned Country, or (C) a person resident in a Sanctioned Country, to the extent subject to a sanctions program administered by OFAC.  Organization and Authority.  Each corporation, partnership or limited liability company of Borrower and it subsidiaries, as applicable, is duly created, validly existing and in good standing under the laws of the state of its organization, and has all powers, governmental licenses, authorizations, consents and approvals required to operate its business as now conducted.  Each corporation, partnership or limited liability company of Borrower and its subsidiaries, as applicable, is duly qualified, licensed and in good standing in each jurisdiction where qualification or licensing is required by the nature of its business or the character and location of its property, business or customers, except to the extent that failure to qualify or be licensed, as the case may be, in the aggregate, would have a material adverse effect on the business, financial position, results of operations, properties or prospects of Borrower and Guarantors.  No Litigation.  Except as set forth on Schedule 1 hereto, there are no pending or threatened suits, claims or demands against Borrower and 

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Guarantors that have not been disclosed to Bank by Borrower in writing, and approved by Bank.  Financial Condition of Borrower.  The financial statements which Borrower has submitted to Bank to induce it to make the Loan are correct and complete, and fairly present the financial condition of the Borrower and its subsidiaries on the dates thereof and the results of its operations for the periods then ended.  No Default.  Borrower and Guarantors are not in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any agreement or instrument to which each is a party, except for defaults that would not normally be expected to have a material adverse effect on Borrower’s financial condition or results of operations.  To Borrower's knowledge, no default has occurred under any Permitted Liens.   ERISA.  Each employee pension benefit plan, as defined in ERISA, maintained by Borrower meets, as of the date hereof, the minimum funding standards of ERISA and all applicable regulations thereto and requirements thereof, and of the Internal Revenue Code of 1986, as amended.  No "Prohibited Transaction" or "Reportable Event" (as both terms are defined by ERISA) has occurred with respect to any such plan.

AFFIRMATIVE COVENANTS.  Borrower agrees that from the date hereof and until final payment in full of the Obligations, unless Bank shall otherwise consent in writing, Borrower will, and will cause each Guarantor to:  Access to Books and Records.  Allow Bank, or its agents, during normal business hours, access to the books, records and such other documents of Borrower and the Guarantors as Bank shall reasonably require, and allow Bank to inspect, audit and examine the same and to make extracts therefrom and to make copies.  Such access and inspection after the occurrence and during the continuance of a Default (as defined in the Note) at Borrower’s own reasonable cost and expense.   Business Continuity.  Conduct its business in substantially the same manner as such business is now and has previously been conducted, subject to the provisions set forth in the Negative Covenants subparagraph entitled "Permitted Acquisitions".  Certificate of Full Compliance.  Deliver to Bank, with the financial statements required herein, a certification by Borrower's Chief Financial Officer that Borrower and Guarantors are in full compliance with the Loan Documents.  Compliance with Other Agreements.  Comply with all terms and conditions contained in this Agreement, and any other Loan Documents, and swap agreements, if applicable, as defined in the 11 U.S.C. § 101, as in effect from time to time.  Estoppel Certificate.  Furnish, within 15 days after request by Bank, a written statement duly acknowledged of the amount due under the Loan and identifying each outstanding Letter of Credit, if any, and whether offsets or defenses exist against the Obligations.  Insurance.  Maintain adequate insurance coverage with respect to its properties and business against loss or damage of the kinds and in the amounts customarily insured against by companies of established reputation engaged in the same or similar businesses including, without limitation, commercial general liability insurance, workers compensation insurance, and business interruption insurance.  Maintain Properties.  Maintain, preserve and keep its property in good repair, working order and condition, making all replacements, additions and improvements thereto necessary for the proper conduct of its business, unless prohibited by the Loan Documents.  Notice of Default and Other Notices.  (a) Notice of Default.  Furnish to Bank immediately upon becoming aware of the existence of any condition or event which constitutes a Default (as defined in the Loan Documents) or any event which, upon the giving of notice or lapse of time or both, may become a Default, written notice specifying the nature and period of existence thereof and the actions which Borrower and the Guarantors are taking or propose to take with respect thereto.  (b) Other Notices.  Promptly notify Bank in writing of (i) any material adverse change in Borrower’s or any of the Guarantors’ financial condition or its business; (ii) any default under any material agreement, contract or other instrument to which it is a party or by which any of its properties are bound, or any acceleration of the maturity of any indebtedness owing by Borrower or any of the Guarantors; (iii) any material adverse claim against or affecting Borrower or any of the Guarantors or any part of their respective properties; (iv) the commencement of, and any material determination in, any litigation with any third party or any proceeding before any governmental agency or unit affecting Borrower or any of the Guarantors; (v) at least 30 days prior thereto, any change in Borrower's or any of the Guarantors’ names or address as shown above; and (vi) any change in Borrower's or any of the Guarantors’ structure.  Other Financial Information.  Deliver promptly such other information regarding the operation, business affairs, and financial condition of Borrower and the Guarantors which Bank may reasonably request.  Payment of Debts.  Pay and discharge when due, and before subject to penalty or further charge, and otherwise satisfy before maturity or delinquency, all obligations, debts, taxes, and liabilities of whatever nature or amount, except those which Borrower or the Guarantors in good faith dispute.  Reports and Proxies.  Deliver to Bank, promptly, a copy of all financial statements, reports, notices, and proxy statements, sent by Borrower to stockholders, and all regular or periodic reports required to be filed by Borrower with any governmental agency or authority.  Additional Subsidiaries.  Within forty-five (45) days after the creation or acquisition of (i) any domestic subsidiary (any such subsidiary, a “New Domestic Subsidiary”) of Borrower or Guarantor (including in connection with any Permitted Acquisition), cause to be executed and delivered to Bank (A) a duly executed joinder agreement in form and substance reasonably satisfactory to Bank joining such New 

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Domestic Subsidiary to the Guaranty Agreement and the Security Agreement (together with updated schedules thereto), (B) favorable legal opinions covering such matters consistent with opinions for this Agreement and addressed to Bank in form and substance reasonably satisfactory to Bank with respect to such joinder agreement, (C) original stock or other certificates and stock or other transfer powers evidencing the ownership interests of Borrower or such Guarantor, as applicable, in such Domestic Subsidiary, and (D) any other documents and certificates as may be reasonably requested by Bank and (ii) any first-tier foreign subsidiary (any such subsidiary, a “New Foreign Subsidiary”) of Borrower or Guarantor (including in connection with any Permitted Acquisition), cause the Borrower or the applicable Guarantor to deliver to Bank (A) any Loan Documents pledging sixty-five percent (65%) of the total outstanding capital stock (or other ownership interest) of such New Foreign Subsidiary and a consent thereto executed by such New Foreign Subsidiary (including, without limitation, if applicable, original stock certificates (or the equivalent thereof pursuant to the applicable laws and practices of any relevant foreign jurisdiction) evidencing the capital stock (or other ownership interest) of such New Foreign Subsidiary, together with an appropriate undated stock power for each certificate duly executed in blank by the registered owner thereof) and (B) any other documents and certificates as may be reasonably requested by Bank.

Ownership of Guarantors.  Borrower shall own and shall maintain ownership of 100% of the capital stock, voting interests and ownership interests in each of the Guarantors.  Swap Agreements.  Execute swap agreements with Bank (or another counterparty reasonably satisfactory to Bank) with respect to the floating interest rate exposure under the Term Note with a duration of at least to the Maturity Date and an aggregate notional principal amount no less than $5,000,000 (such that Borrower shall receive amounts necessary to pay the interest expense due under the Loan (exclusive of default interest or other adjustments set forth in the Loan Documents)), all in form and substance reasonably satisfactory to the Bank.

NEGATIVE COVENANTS.  Borrower agrees that from the date hereof and until final payment in full of the Obligations, unless Bank shall otherwise consent in writing, Borrower will not, and will not permit any Guarantor to:   Change in Fiscal Year.  Change its fiscal year.  Change of Control.  Make or suffer a change in the Borrower’s or any Guarantor’s board of directors, such that the members of the Borrower’s or the applicable Guarantor’s board of directors as of the date of this Agreement fail to constitute a majority of the members of the board; provided that any individual becoming a member of the applicable board of directors who is nominated by the applicable board of directors shall be treated as if he or she were a member of the board as of the date of this Agreement. Encumbrances.  Create, assume, or permit to exist any mortgage, security deed, deed of trust, pledge, lien, charge or other encumbrance on any of its assets, whether now owned or hereafter acquired, other than: (i) security interests required by the Loan Documents; (ii) liens for taxes contested in good faith; (iii) liens accruing by law for employee benefits; (iv) Permitted Liens or (v) acquired indebtedness to the extent permitted in the Financial Covenants subparagraph entitled "Limitation on Debt".  Guarantees.  Guarantee or otherwise become responsible for obligations of any other person or entity.  Permitted Acquisitions.  Purchase, own, invest in or otherwise acquire, directly or indirectly, any capital stock, interests in any partnership or joint venture except for investments by Borrower or any Guarantor in the form of acquisitions of all or substantially all of the business or a line of business (whether by the acquisition of capital stock, assets or any combination thereof) of any other person if each such acquisition meets all of the following requirements (such acquisitions being, “Permitted Acquisitions”): (a) the person to be acquired shall be in an electronic commerce line of business; (b) evidence of approval of the acquisition by the acquiree’s board of directors or equivalent governing body or a copy of the opinion of counsel delivered by legal counsel to the acquiree in connection with the acquisition which evidences such approval shall be delivered to Bank at the time the documents referred to in the Affirmative Covenants subparagraph entitled "Additional Subsidiaries" are required to be delivered; (c) a description of the acquisition shall have been delivered to Bank prior to the consummation of the acquisition; (d) Borrower or such Guarantor, as applicable, shall be the surviving person and no change of control under this Agreement shall have been effected thereby; (e) Borrower shall have demonstrated to Bank pro forma compliance (as of the date of the proposed acquisition and after giving effect thereto and any Advances made or to be made in connection therewith) with each covenant contained in this Agreement; provided that each of the financial covenants set forth below shall be recomputed as of the last day of the most recently ended fiscal quarter of Borrower as if such acquisition had occurred on the first day of such Calculation Period (as defined below); (f) Borrower shall have delivered to Bank such documents set forth in the Affirmative Covenants subparagraph entitled "Additional Subsidiaries" within the period of time set forth therein; (g) Borrower shall have delivered to Bank an updated Schedule 1 to the Security Agreement prior to the consummation of the acquisition; (h) the person to be acquired shall: (A) demonstrate positive EBITDA for the most recent twelve (12) month period then ended, both prior to the acquisition and after giving effect thereto, by providing Bank copies of the most recent financial statements and projections, all in form and substance reasonably 

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satisfactory to Bank or (B) be approved by Bank prior to the consummation of such acquisition; and (i) Borrower shall provide such other documents and other information as may be reasonably requested by Bank in connection with the proposed acquisition.  Other Investments.  Purchase any stock, securities, or evidence of indebtedness of any other person or entity except: (a) investments in direct obligations of the United States Government and certificates of deposit of United States commercial banks having a tier 1 capital ratio of not less than 6%, and, then in an amount not exceeding 10% of the issuing bank's unimpaired capital and surplus; (b) investments by Borrower or any Guarantor in: (A) its domestic subsidiaries in existence on the date hereof or (B) any of its domestic subsidiaries that are formed or acquired after the date hereof, so long as Borrower complies with the Affirmative Covenants subparagraph entitled "Additional Subsidiaries"; (c) Permitted Acquisitions; (d) accounts receivable of Borrower or its subsidiaries arising in the ordinary course of business in connection with the compromise or collection thereof; (e) swap agreements permitted under the Affirmative Covenants subparagraph entitled “Swap Agreements”; (f) investments by Borrower or any Guarantor in (i) its foreign subsidiaries in existence on the date hereof or (ii) any of its foreign subsidiaries that are formed or acquired after the date hereof, so long as (x) Borrower complies with the Affirmative Convenants subparagraph entitled “Additional Subsdiaries” and (y) Bank is notified and consents prior to any investment in any such additional foreign subsdiaries.  Default on Other Contracts or Obligations.  Default on any material contract with or obligation when due to a third party or default in the performance of any obligation to a third party incurred for money borrowed.  Judgment Entered.  Other than as permitted under the definition of “Permitted Liens,” permit the entry of any monetary judgment or the assessment against, the filing of any tax lien against, or the issuance of any writ of garnishment or attachment against any property of or debts due Borrower and its subsidiaries.  Prepayment of Other Debt.  Retire any long-term debt entered into prior to the date of this Agreement at a date in advance of its legal obligation to do so; provided that Borrower and any Guarantor may make earn-out and deferred payments in connection with Permitted Acquisitions.  

ANNUAL FINANCIAL STATEMENTS.  Borrower shall deliver to Bank, as soon as available, but in any event within the period within which the Borrower is required to deliver its annual report on Form 10-K under the Securities Exchange Act of 1934 and the regulations promulgated by the U.S. Securities and Exchange Commission thereunder for each fiscal year, audited financial statements reflecting its operations during such fiscal year, including, without limitation, its audited consolidated and unaudited consolidating balance sheets and related statements of operations, stockholders’ equity and cash flows as of the end of and for the fiscal year then ended and prepared in accordance with GAAP, all such consolidated financial statements being certified by Borrower’s independent registered public accountants (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) and certified by Borrower’s Chief Financial Officer as presenting fairly in all material respects the financial condition and results of operations of Borrower in accordance with generally accepted accounting principles consistently applied.

PERIODIC FINANCIAL STATEMENTS.  As soon as available, but in any event within the period within which the Borrower is required to deliver its quarterly report on Form 10-Q under the Securities Exchange Act of 1934 and the regulations promulgated by the U.S. Securities and Exchange Commission thereunder for each of the first three fiscal quarters of Borrower, its consolidated and consolidating balance sheets of Borrower and related statements of operations, stockholders’ equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding date or period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by its Chief Financial Officer as presenting fairly in all material respects the financial condition and results of operations of Borrower in accordance with generally accepted accounting principles consistently applied, subject to normal year-end audit adjustments and the absence of footnotes.

COMPLIANCE CERTIFICATE.  Borrower agrees to deliver a Compliance Certificate (each a “Compliance Certificate”) to the Bank: (a) as soon as available but in any event within 45 days after the end of each fiscal quarter, (i) demonstrating pro forma compliance (including calculations) by the Borrower and the Guarantors with each covenant contained in the Financial Covenants paragraph, (ii) demonstrating compliance with and the calculations for the determination of the Maximum Availability in accordance with the Availability paragraph in the Revolving Credit Note and (iii) showing the calculations for the determination of the Applicable Margin in accordance with the Applicable Margin paragraph in the Revolving Credit Note and (b) at such other times as Bank shall reasonably request, in each case, in form and substance reasonably satisfactory to Bank.

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FINANCIAL COVENANTS.  Borrower agrees to the following provisions from the date hereof until final payment in full of the Obligations, unless Bank shall otherwise consent in writing, using the financial information for Borrower (for purposes of this paragraph, the term “Borrower” shall be deemed to mean “the Borrower and its subsidiaries (that are Guarantors) on a consolidated basis”): Total Debt to EBITDA Ratio.   Borrower shall, at all times, maintain a Total Debt to EBITDA Ratio of not more than 2.00 to 1.00.  This covenant shall be calculated quarterly, on a rolling four quarters basis

(the "Calculation Period"), and with respect to any subsidiary that was not a subsidiary of Borrower during the entirety of the Calculation Period and becomes a Guarantor (each, a "Partial Term Subsidiary"), shall include EBITDA generated by the Partial Term Subsidiary, including its predecessor entity (if any), during the entirety of the Calculation Period; provided that (i) Bank shall have received: (a) audited financial statements for such Partial Term Subsidiary for each fiscal quarter during the applicable Calculation Period, (b) audited financial statements as of the end of a prior fiscal year that include such Partial Term Subsidiary’s operations for the applicable Calculation Period or (c) unaudited financial statements reflecting such Partial Term Subsidiary’s operations for the applicable Calculation Period that: (i) are certified as true and accurate by the Borrower and (ii) have been reviewed and approved by Bank in its reasonable discretion.  "Total Debt to EBITDA Ratio" shall mean the sum of all Total Debt divided by EBITDA.  “EBITDA” shall mean the sum of earnings before interest, taxes, depreciation and amortization (including amortization of goodwill and other intangibles) minus any stock repurchases allowed during such Calculation Period under the Financial Covenants subparagraph entitled “Stock Repurchases”.  "Total Debt" shall mean, as applied to any person or entity, the sum of all indebtedness for borrowed money, (including, without limitation, capital lease obligations, subordinated debt (including debt subordinated to the Bank), and unreimbursed drawings under letters of credit), or any other monetary obligation evidenced by a note, bond, debenture or other agreement or similar instrument of that person or entity.  Deposit Relationship.  Borrower and its domestic subsidiaries shall maintain their primary depository account and cash management account with Bank.  Capital Expenditures.  Borrower and Guarantors shall not, during any fiscal year, expend on gross fixed assets (excluding the pro forma impact of Permitted Acquisitions consummated during such fiscal year, but including gross leases to be capitalized under generally accepted accounting principles and leasehold improvements) an amount exceeding $2,000,000.00 in the aggregate.  Fixed Charge Coverage Ratio.  Borrower shall, at all times, maintain a Fixed Charge Coverage Ratio of not less than 2.50 to 1.00.  This covenant shall be calculated quarterly for the preceding Calculation Period, and with respect to any Partial Term Subsidiary, shall include EBITDA generated by such Partial Term Subsidiary, including its predecessor entity (if any), during the entirety of the Calculation Period; provided that (i) Bank shall have received: (a) audited financial statements for such Partial Term Subsidiary for each fiscal quarter during the applicable Calculation Period, (b) audited financial statements as of the end of a prior fiscal year that include such Partial Term Subsidiary’s operations for the applicable Calculation Period or (c) unaudited financial statements reflecting such Partial Term Subsidiary’s operations for the applicable Calculation Period that: (i) are certified as true and accurate by the Borrower and (ii) have been reviewed and approved by Bank in its reasonable discretion. "Fixed Charge Coverage Ratio" shall mean the sum of net income from operations, depreciation and amortization minus all dividends, distributions, withdrawals, stock repurchases and non-cash income divided by the sum of all current maturities of long-term debt, capital lease obligations and un-financed capital expenditures, in each case, as calculated in accordance with GAAP.  Limitation on Debt.  Borrower and Guarantors shall not, directly or indirectly, create, incur, assume or become liable for any additional indebtedness, whether contingent or direct (other than warrants and employee stock options or employee buy-back programs of the Borrower and Guarantors existing as of the date hereof and disclosed in Borrower’s Form 10-Q filed for the period ended September 30, 2007): (A) if, giving effect to such additional debt on a pro forma basis causes the aggregate amount of Borrower's debt, excluding obligations to Bank, to exceed $5,000,000.00 or (B) unless approved by Bank prior to the creation, incurrence, assumption or becoming liable for any additional indebtedness.  Additional debt shall be on substantially the same or more favorable terms as the Loan Documents and be unsecured debt unless Bank shall otherwise consent in writing.  Dividends and Distributions.  Borrower shall not, during any fiscal year, declare or pay dividends or make other similar distributions to its shareholders in an amount in excess of 50.00% of its net income.  Said amount may be paid only after providing for the prior satisfaction of all accrued taxes and debt service.  In no event shall Borrower declare or pay a dividend or make any other similar distribution if there shall exist a Default or a condition which, upon the giving of notice or lapse of time or both, would become a Default under the Loan Documents.  Stock Repurchases.   Borrower shall not purchase, redeem, retire or otherwise acquire, directly or indirectly, any shares of capital stock of the Borrower (“Equity Repurchases”) in an amount in excess of 75% of Free Cash Flow for such trailing four quarter basis and, in any event, in an amount not to exceed $5,000,000 in the aggregate from the Closing Date to the Maturity Date.  “Free Cash Flow” shall mean the sum of net income, depreciation and amortization minus un-financed capital expenditures, all as calculated in accordance with GAAP.  In no event shall Borrower be permitted to make any Equity Repurchase hereunder if (i) there shall exist a Default 

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or a condition which, upon the giving of notice or lapse of time or both, would become a Default under the Loan Documents and (ii) Borrower shall not be in  pro forma compliance (as of the date of the proposed Equity Repurchase and after giving effect thereto and any Advances made or to be made in connection therewith) with each covenant contained in this Agreement; provided that each of the financial covenants set forth herein shall be recomputed as of the last day of the most recently ended fiscal quarter of Borrower as if such Equity Repurchase had occurred on the first day of such Calculation Period.  Calculation of EBITDA.  For the purposes of determining EBITDA for any Calculation Period during which a Permitted Acquisition is consummated, EBITDA shall be adjusted in a manner reasonably satisfactory to Bank to give effect to the consummation of such Permitted Acquisition on a pro forma basis in accordance with GAAP, as if such Permitted Acquisition occurred on the first day of such Calculation Period.   

CONDITIONS TO CLOSING.  The obligations of Bank to close this Agreement, make the loan and any advances and to issue any Letters of Credit pursuant to this Agreement on the date hereof are subject to the following conditions precedent:  Letter of Credit Documents.  Receipt by Bank of all documents required by Bank in connection with Letters of Credit, including without limitation, applications therefor, all in form satisfactory to Bank.  Operating Documents.  Receipt by Bank of copies of Borrower's and each Guarantor’s by-laws, partnership agreement, or operating agreement, certified as to completeness and accuracy by an appropriate officer, manager or partner of Borrower.  Charter Documents.  Receipt by Bank of copies of Borrower's and each Guarantor’s Articles of Incorporation or Organization, as appropriate for the legal entity, and all other charter documents of Borrower, all certified as to completeness and accuracy by an appropriate officer, manager or partner of Borrower.  Certificate of Good Standing.  Receipt by Bank of a certificate of the Secretary of State of the state of Borrower’s and each Guarantor’s incorporation or organization, as applicable, as to the good standing of Borrower and each Guarantor.  Certificate of Incumbency.  Receipt by Bank from Borrower and Guarantors of a certificate of an appropriate officer of Borrower and Guarantors as to the incumbency an signatures of the officers of Borrower and Guarantors executing the Loan Documents.  Borrowing Authorization.  Receipt by Bank of a borrowing resolution from Borrower and Guarantors authorizing Borrower and Guarantors to enter into the transactions contemplated herein.  Deposit Account.  Establishment by Borrower of a demand deposit account at Bank into which advance of the loan may be credited and from which monthly payments shall be automatically deducted in connection with the Loan.  Additional Documents.  Receipt by Bank of such additional supporting documents as Bank or its counsel may reasonably request.  Opinion of Counsel.  Receipt by Bank of a written opinion of the counsel of Borrower and Guarantors acceptable to Bank that includes confirmation of the following:  (a) The accuracy of the representations set forth in this Agreement in the Representations subparagraphs entitled "Authorization; Non-Contravention"; "Compliance with Laws", and "Organization and Authority".  (b) The Agreement and other Loan Documents have been duly executed and delivered by Borrower and constitute the legal, valid and binding obligations of Borrower, enforceable in accordance with their terms.  (c) No registration with, consent of, approval of, or other action by, any federal, state or other governmental authority or regulatory body is required by law in connection with the execution and delivery of this Agreement and the other Loan Documents, or the extension of credit under this Agreement or the other Loan Documents, or, if so required, such registration has been made, and such consent or approval given or such other appropriate action taken.  (d) The loan and the interest rate applicable to Letter of Credit reimbursement obligations are not usurious.  (e) The Loan Documents create the priority of lien on or security interest in the Collateral (as defined in the Loan Documents) that is contemplated by the Loan Documents.  Commitment Fee.  Receipt by Bank of a commitment fee equal to 0.30% times the face amount of the Note.  Swap Agreement.  Evidence that Borrower has entered into a swap agreement as required pursuant to the Affirmative Covenants subparagraph entitled “Swap Agreements”, in form and substance reasonably satisfactorily to Bank.  Closing Date Compliance Certificate.  Receipt by bank of a Closing Date Compliance Certificate, in form and substance reasonably satisfactory to Bank.

CONDITIONS TO ALL ADVANCES.  The obligations of Bank to make any loan and any advances and to issue any Letters of Credit pursuant to this Agreement are subject to the satisfaction  of the following conditions precedent on the relevant advance or issuance date: (a) The representations and warranties contained in this Agreement and in the other Loan Documents shall be true and correct on and as of such advance or issuance date with the same effect as if made on and as of such date; except for any representation and warranty made as of an earlier date, which representation and warranty shall remain true and correct as of such earlier date and (b) no Default shall have occurred and be continuing: (i) on the advance date with respect to such Loan or after giving effect to the Loans to be made on such date or (ii) on the issuance date with respect to such Letter of Credit or after giving effect to the issuance of such Letter of Credit on such date.

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COUNTERPARTS.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and shall be binding upon all parties, their successors and assigns, and all of which taken together shall constitute one and the same agreement.

AMENDMENT AND RESTATEMENT; NO NOVATION.  This Agreement constitutes an amendment and restatement of the Existing Loan Agreement effective from and after the Closing Date.  The execution and delivery of this Agreement shall not constitute a novation of any indebtedness or other obligations owing to Bank under the Existing Loan Agreement based on facts or events occurring or existing prior to the execution and delivery of this Agreement.  On the Closing Date, the credit facilities described in the Existing Loan Agreement shall be amended, supplemented, modified and restated in their entirety by the facilities described herein, and all loans and other obligations of Borrower outstanding as of such date under the Existing Loan Agreement shall be deemed to be loans and obligations outstanding under the corresponding facilities described herein.

[Signature Pages Follow]

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IN WITNESS WHEREOF, Borrower and Bank, on the day and year first written above, have caused this Agreement to be executed under seal.

					
	 
	 
	 
	BORROWER:

	 
	 
	 
	 

	[CORPORATE SEAL]

	 
	 
	THINK PARTNERSHIP INC.

	 
	 
	 
	 
	 

	 
	 
	By:

	/s/ Jody Brown

	 

	 
	 
	Name:

	Jody Brown

	 

	 
	 
	Title:

	Chief Financial Officer

	 

					
	 
	 
	 
	BANK:

	 
	 
	 
	 

	 
	 
	 
	WACHOVIA BANK, NATIONAL ASSOCIATION

	 
	 
	 
	 
	 

	 
	 
	By:

	/s/ C. Douglass Riddle

	 

	 
	 
	Name:

	C. Douglass Riddle

	 

	 
	 
	Title:

	Senior Vice President

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