Document:

Exhibit 10.5

 

AMENDMENT NO. 2 TO

PURCHASE AND SALE AGREEMENT

 

This
AMENDMENT NO. 2 TO PURCHASE AND SALE AGREEMENT (this “Amendment”), dated
February 22, 2008, is by and among Boise Cascade, L.L.C., a Delaware
limited liability company (“Seller”), Boise Paper Holdings, L.L.C., a
Delaware limited liability company (the “Company”), Boise Packaging &
Newsprint, L.L.C., a Delaware limited liability company (“Boise P&N”),
Boise White Paper, L.L.C., a Delaware limited liability company (“Boise
White Paper”), Boise Cascade Transportation Holdings Corp., a Delaware
corporation (“Boise Transportation”), Aldabra 2 Acquisition Corp., a
Delaware corporation (“Buyer”), and Aldabra Sub LLC, a Delaware limited
liability company and a wholly owned subsidiary of Buyer (“Buyer Sub”),
and amends that certain Purchase and Sale Agreement, dated September 7,
2007 (and as amended on or about October 18, 2007 by that certain
Amendment No. 1 to Purchase and Sale Agreement, and as may be further
amended, modified and/or supplemented from time to time, the “Purchase
Agreement”), by and among Seller, the Company, Boise P&N, Boise White
Paper, Boise Transportation, Buyer and Buyer Sub.  Any capitalized term used in this Amendment
which is not otherwise defined herein shall have the meaning assigned to such
term in the Purchase Agreement.

 

WHEREAS,
each of the undersigned parties wish to amend the Purchase Agreement as set
forth herein.

 

NOW,
THEREFORE, in consideration of the agreements herein contained, the parties
hereto agree to amend the Purchase Agreement as follows:

 

1.             Amendment to First Sentence of Section 8I(iii).  The
first sentence of Section 8I(iii) of the Purchase Agreement is
hereby deleted in its entirety and replaced with the following:

 

“Buyer and Seller shall
allocate the Estimated Closing Purchase Price in accordance with Section 1060
of the Code among the assets of Paper Group (including the capital stock and
other equity interests of the members of the Paper Group and their respective
Subsidiaries) based on an allocation delivered by Seller to Buyer as soon as
practicable after the Closing (but not later than 90 days thereafter) and
reasonably agreed upon by Buyer (the “Allocation”).”

 

2.             Acceptable Note Modifications.

 

(a)   The parties hereto acknowledge and agree that, as an accommodation to
Buyer and Buyer Sub and in order to facilitate their obtaining of the Debt
Financing, Seller has agreed to accept a form of Acceptable Note (the final
form of which is attached hereto as Exhibit 1 to this Amendment)
which contains terms which are less favorable to Seller than those contemplated
by Section 1F(ii).  In
addition, the parties hereto acknowledge and agree that the final form of the
Guaranty (as such term is defined in the Acceptable Note attached hereto as Exhibit 1)
is attached hereto as Exhibit 2.

 

(b)   In partial consideration of the accommodations by Seller described in Section 2(a) hereof,
the parties hereto acknowledge and agree that the last sentence of Section 1E(iv) is
hereby deleted in its entirety and replaced with the following:

 

“If the Estimated Closing
Purchase Price is greater than the Closing Purchase Price as finally determined
under this Section 1E (such excess, the “Excess Amount”),
the parties hereto acknowledge and agree that Seller’s obligation to pay the
Excess Amount to Buyer shall be satisfied by reducing (without duplication) in
accordance with the terms of the Acceptable Notes the aggregate unpaid
principal amount of the Acceptable Notes by an 

 

1

 

aggregate amount equal to the Excess Amount (with such reduction to be
deemed effective (as further described in the Acceptable Notes) as of the fifth
(5th) Business Day after the Closing Purchase Price becomes final and binding
on the parties hereto), and, in connection therewith, the payment of all
accrued and unpaid interest since the Closing Date on such unpaid principal
amount of the Acceptable Notes so reduced shall be waived; provided
that, in the event such reduction in aggregate principal amount of the Acceptable
Notes is less (in the aggregate) than the Excess Amount, then the amount by
which the Excess Amount exceeds such aggregate reduction in principal amount
(such excess amount, the “Residual Excess Amount”) shall be satisfied by
Seller causing to be delivered to Buyer for cancellation certificates for a
number of shares of Buyer Common Stock which, when multiplied by the Average
Trading Price, equals the Residual Excess Amount.  In the event that any certificates
representing shares of Buyer Common Stock delivered to Buyer pursuant to the
proviso of the preceding sentence represent shares of Buyer Common Stock in
excess of the number of shares to be surrendered for cancellation as payment in
respect of the Residual Excess Amount pursuant to the preceding sentence, then
as soon as possible (but in any event within two days) after such certificates
are surrendered to Buyer for partial cancellation, Buyer shall issue and
deliver to Seller or its designee(s) (as directed by Seller) a new
certificate or new certificates representing such excess number of shares of
Buyer Common Stock which were represented by the certificates surrendered to
Buyer in connection with such payment but which were not being surrendered for
payment.”

 

3.             Estimated
Buyer Closing Net Working Capital. 
For purposes of the Purchase Agreement and based solely on Buyer’s
estimate of Buyer Closing Net Working Capital, the parties agree that “Estimated
Buyer Closing Net Working Capital” shall be $389,330,670.67.

 

4.             Estimated
Company Closing Net Working Capital.
For purposes of the Purchase Agreement and based solely on Seller’s
estimate of Company Closing Net Working Capital, the parties agree that “Estimated Company Closing Net Working
Capital” shall be $329,000,000.

 

5.             Aldabra Holding Sub LLC. 
The parties hereto acknowledge and agree that Buyer, in order to
facilitate the Debt Financing, has formed, as a wholly-owned Subsidiary of
Buyer, Aldabra Holding Sub LLC, a Delaware limited liability company (“Aldabra
Holding Sub”), and transferred to Aldabra Holding Sub, 100% of the Buyer
Sub Common Units, resulting in Buyer Sub becoming a wholly-owned Subsidiary of
Aldabra Holding Sub.

 

6.             Section 8J(ii) of
the Seller Disclosure Letter.  The
parties hereto acknowledge and agree that Schedule 8J(ii) attached
to this Amendment shall be substituted for Section 8J(ii) of
the Seller Disclosure Letter.

 

7.             Acknowledgement
re Benefit Plan Assumption.  Without
limiting Buyer’s obligations under Section 8J of the Purchase
Agreement, the parties hereto acknowledge that, in lieu of directly adopting
and/or assuming certain welfare and retirement plans in accordance with the
terms of Section 8J of the Purchase Agreement, Buyer may cause the
Company at the Closing to adopt and/or assume any such plans which would
otherwise be required to be adopted and/or assumed by Buyer pursuant to Section 8J
of the Purchase Agreement.

 

8.             No Other
Amendments.  Except as otherwise
provided herein, the terms and conditions of the Purchase Agreement shall
remain unchanged and the Purchase Agreement shall be construed in a manner
consistent with this Amendment.

 

2

 

9.             Miscellaneous;
Counterparts; Effectiveness.  Section and
other headings are for reference purposes only and shall not affect the
interpretation or construction of this Amendment.  This Amendment may be executed in
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which taken together shall constitute but one and the
same instrument.  Delivery of an executed
counterpart of a signature page of this Amendment by facsimile
transmission or electronic pdf shall be effective as delivery of a manually
executed counterpart of this Amendment.  This Amendment is governed by the laws of the
State of Delaware.  The provisions of
this Amendment may not be amended without the prior written consent of each of
Seller and Buyer.  This Amendment is
binding on and shall inure to the benefit of the parties hereto and their
successors and permitted assigns.

 

*                              *                              *                              *                              *

 

3

 

IN WITNESS WHEREOF, the parties hereto
have caused this Amendment No. 2 to Purchase and Sale Agreement to be
executed by their respective officers hereunto duly authorized as of the day
and year first written above.

 

 

	
   

  	
  BOISE
  CASCADE, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Karen E. Gowland

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BOISE
  PAPER HOLDINGS, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Karen E. Gowland

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BOISE
  WHITE PAPER, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Karen E. Gowland

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BOISE
  PACKAGING & NEWSPRINT, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Karen E. Gowland

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BOISE
  CASCADE TRANSPORTATION HOLDINGS CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Karen E. Gowland

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  Vice
  President

  

 

4

 

	
   

  	
  ALDABRA
  2 ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Jason G. Weiss

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ALDABRA
  SUB LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Aldabra
  Holding Sub LLC, its sole member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Jason G. Weiss

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  Chief
  Executive Officer

  
					

 

 

5

Exhibit 1

 

 

Incorporated by reference to
Exhibit 10.1 filed herewith.

 

6

Exhibit 2

 

 

Incorporated by reference to
Exhibit 10.9 filed herewith.

 

7

 

Schedule 8J(ii)

 

Certain Excluded Employees

(from definition of Business Employee)

                                                                                                                                                8J(ii)

 

 

 

 

 

	
  Corporate
  Employees to Stay with WoodCo

  
	
   

  	
   

  	
  First

  	
   

  	
  Last

  	
   

  	
   

  	
   

  	
  Reporting to Organization

  
	
   

  	
   

  	
  Name

  	
   

  	
  Name

  	
   

  	
  Dept

  	
   

  	
  Corporate

  	
   

  	
  Wood

  	
   

  	
  BMD

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  Tom

  	
   

  	
  Martin

  	
   

  	
  Audit

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
  Kari

  	
   

  	
  Schweitzer

  	
   

  	
  Audit

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  Casey

  	
   

  	
  Prange

  	
   

  	
  Audit

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
  Gae

  	
   

  	
  Burton

  	
   

  	
  Corporate

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
  Tom

  	
   

  	
  Stephens

  	
   

  	
  Corporate

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  Tom

  	
   

  	
  Carlile

  	
   

  	
  Finance

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
  Sheila

  	
   

  	
  Frederickson

  	
   

  	
  Finance

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  Kelly

  	
   

  	
  Hibbs

  	
   

  	
  Finance

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
  Bernadette

  	
   

  	
  Madarieta

  	
   

  	
  Finance

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
  Adele

  	
   

  	
  Pepple

  	
   

  	
  Finance

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
  Jo

  	
   

  	
  Ramoin

  	
   

  	
  Finance

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
  Wayne

  	
   

  	
  Rancourt

  	
   

  	
  Finance

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  
	
  8

  	
   

  	
  Cherie

  	
   

  	
  Anderson

  	
   

  	
  Legal

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
   

  	
  Dave

  	
   

  	
  Gadda

  	
   

  	
  Legal

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  
	
  10

  	
   

  	
  Kathy

  	
   

  	
  Miller

  	
   

  	
  Legal

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  
	
  11

  	
   

  	
  Joe

  	
   

  	
  Munson

  	
   

  	
  Legal

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  
	
  12

  	
   

  	
  Terri

  	
   

  	
  Olson

  	
   

  	
  Legal

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  
	
  13

  	
   

  	
  Russell

  	
   

  	
  Strader

  	
   

  	
  Legal

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  
	
  14

  	
   

  	
  Fran

  	
   

  	
  Voulelis

  	
   

  	
  Legal

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  
	
  15

  	
   

  	
  Jill

  	
   

  	
  Twedt

  	
   

  	
  Legal

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  
	
  16

  	
   

  	
  John

  	
   

  	
  Sahlberg

  	
   

  	
  HR

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  Mary Lou

  	
   

  	
  Basler

  	
   

  	
  IT

  	
   

  	
   

  	
   

  	
  X

  	
   

  	
   

  
	
  2

  	
   

  	
  Colby

  	
   

  	
  Brown

  	
   

  	
  IT

  	
   

  	
   

  	
   

  	
  X

  	
   

  	
   

  
	
  3

  	
   

  	
  Darren

  	
   

  	
  Clark

  	
   

  	
  IT

  	
   

  	
   

  	
   

  	
  X

  	
   

  	
   

  
	
  4

  	
   

  	
  Cindy

  	
   

  	
  Cook

  	
   

  	
  IT

  	
   

  	
   

  	
   

  	
  X

  	
   

  	
   

  
	
  5

  	
   

  	
  Todd

  	
   

  	
  Cutler

  	
   

  	
  IT

  	
   

  	
   

  	
   

  	
  X

  	
   

  	
   

  
	
  6

  	
   

  	
  Ken

  	
   

  	
  Fawcett

  	
   

  	
  IT

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  X

  
	
  7

  	
   

  	
  Carolyn

  	
   

  	
  Flynn

  	
   

  	
  IT

  	
   

  	
   

  	
   

  	
  X

  	
   

  	
   

  
	
  8

  	
   

  	
  Patricia

  	
   

  	
  Goodell

  	
   

  	
  IT

  	
   

  	
   

  	
   

  	
  X

  	
   

  	
   

  
	
  9

  	
   

  	
  Randy

  	
   

  	
  Hall

  	
   

  	
  IT

  	
   

  	
   

  	
   

  	
  X

  	
   

  	
   

  
	
  10

  	
   

  	
  Kevin

  	
   

  	
  Harvey

  	
   

  	
  IT

  	
   

  	
   

  	
   

  	
  X

  	
   

  	
   

  
	
  11

  	
   

  	
  Steve

  	
   

  	
  Hulme

  	
   

  	
  IT

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  X

  
	
  12

  	
   

  	
  Derek

  	
   

  	
  Hysell

  	
   

  	
  IT

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  X

  
	
  13

  	
   

  	
  Bill

  	
   

  	
  Kerr

  	
   

  	
  IT

  	
   

  	
   

  	
   

  	
  X

  	
   

  	
   

  
	
  14

  	
   

  	
  Christine

  	
   

  	
  Montgomery

  	
   

  	
  IT

  	
   

  	
   

  	
   

  	
  X

  	
   

  	
   

  
	
  15

  	
   

  	
  Rick

  	
   

  	
  Mortensen

  	
   

  	
  IT

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  X

  
	
  16

  	
   

  	
  Dan

  	
   

  	
  Oliver

  	
   

  	
  IT

  	
   

  	
   

  	
   

  	
  X

  	
   

  	
   

  
	
  17

  	
   

  	
  Jim

  	
   

  	
  Pickett

  	
   

  	
  IT

  	
   

  	
   

  	
   

  	
  X

  	
   

  	
   

  
	
  18

  	
   

  	
  Jerry

  	
   

  	
  Poyser

  	
   

  	
  IT

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  X

  
	
  19

  	
   

  	
  Wayne

  	
   

  	
  Spjute

  	
   

  	
  IT

  	
   

  	
   

  	
   

  	
  X

  	
   

  	
   

  
	
  20

  	
   

  	
  Chuck

  	
   

  	
  Bromley

  	
   

  	
  Trans

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  X

  
	
  21

  	
   

  	
  Ernie

  	
   

  	
  Dunlap

  	
   

  	
  Trans

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  
	
  22

  	
   

  	
  Bob

  	
   

  	
  Powell

  	
   

  	
  Trans

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  
	
  23

  	
   

  	
  Vickie

  	
   

  	
  Miller

  	
   

  	
  Trans

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  
	
  24

  	
   

  	
  Jeff

  	
   

  	
  Jacobs

  	
   

  	
  Trans

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  
	
  25

  	
   

  	
  Barry

  	
   

  	
  Zamzow

  	
   

  	
  Procurement

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  
	
  26

  	
   

  	
  Jeff

  	
   

  	
  Nice

  	
   

  	
  LG Fiber
  Buyer

  	
   

  	
  X

  	
   

  	
   

  	
   

  	
   

  

 

 

8Exhibit 10.6

 

Execution Copy

 

 

 

LOAN AND
SECURITY AGREEMENT

 

Dated as of February 22, 2008

 

$350,000,000

 

among

 

BOISE
CASCADE, L.L.C.,

a Delaware limited
liability company,

 

BOISE
BUILDING SOLUTIONS DISTRIBUTION, L.L.C.,

a Delaware limited
liability company,

and

BOISE BUILDING SOLUTIONS
MANUFACTURING, L.L.C.,

a Delaware limited liability company,

as Borrowers,

 

CERTAIN
SUBSIDIARIES OF BORROWERS,

as Guarantors,

 

CERTAIN
FINANCIAL INSTITUTIONS,

as Lenders,

 

BANK OF
AMERICA, N.A.,

as Agent for Lenders

 

 

BANC
OF AMERICA SECURITIES LLC,

as

Sole Lead Arranger and Sole Book Manager

 

 

 

 

 

 

TABLE
OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1

  	
   

  	
  DEFINITIONS; RULES OF
  CONSTRUCTION

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.1.

  	
  Definitions

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.2.

  	
  Accounting Terms

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.3.

  	
  Uniform Commercial Code

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.4.

  	
  Certain Matters of Construction

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2

  	
   

  	
  CREDIT FACILITIES

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.1.

  	
  Revolver Commitment

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.2.

  	
  PP&E Addition to the Borrowing Base

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.3.

  	
  Letter of Credit Facility

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.4.

  	
  Increase in Revolving Credit Facility.

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3

  	
   

  	
  INTEREST, FEES AND CHARGES

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.1.

  	
  Interest

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.2.

  	
  Fees

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.3.

  	
  Computation of Interest, Fees, Yield Protection

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.4.

  	
  Reimbursement Obligations

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.5.

  	
  Illegality

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.6.

  	
  Inability to Determine Rates

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.7.

  	
  Increased Costs; Capital Adequacy

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.8.

  	
  Mitigation

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.9.

  	
  Funding Losses

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.10.

  	
  Maximum Interest

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4

  	
   

  	
  LOAN ADMINISTRATION

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.

  	
  Manner of Borrowing and Funding Revolver Loans

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.2.

  	
  Defaulting Lender

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.3.

  	
  Number and Amount of LIBOR Loans; Determination of
  Rate

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.4.

  	
  Borrower Agent

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.5.

  	
  One Obligation

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.6.

  	
  Effect of Termination

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5

  	
   

  	
  PAYMENTS

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.

  	
  General Payment Provisions

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.2.

  	
  Repayment of Revolver Loans

  	
   

  	
  46

  

 

i

 

	
  5.3.

  	
  [Reserved]

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.4.

  	
  Payment of Other Obligations

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.5.

  	
  Marshaling; Payments Set Aside

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.6.

  	
  Post-Default Allocation of Payments

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.7.

  	
  Application of Payments

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.8.

  	
  Loan Account; Account Stated

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.9.

  	
  Taxes

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.10.

  	
  Foreign Lenders

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.11.

  	
  Nature and Extent of Each Borrower’s Liability

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6

  	
   

  	
  CONDITIONS PRECEDENT

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.1.

  	
  Conditions Precedent to Initial Loans

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.2.

  	
  Conditions Precedent to All Credit Extensions

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.3.

  	
  Limited Waiver of Conditions Precedent

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7

  	
   

  	
  COLLATERAL

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.1.

  	
  Grant of Security Interest

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.2.

  	
  Lien on Deposit Accounts; Cash Collateral

  	
   

  	
  55

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.3.

  	
  [Reserved].

  	
   

  	
  55

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.4.

  	
  Other Collateral

  	
   

  	
  55

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.5.

  	
  No Assumption of Liability

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.6.

  	
  Filing Authorization

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.7.

  	
  Further Assurances

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.8.

  	
  No Further Actions

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.9.

  	
  Cooperation

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8

  	
   

  	
  COLLATERAL ADMINISTRATION

  	
   

  	
  57

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.1.

  	
  Borrowing Base Certificates

  	
   

  	
  57

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.2.

  	
  Administration of Accounts

  	
   

  	
  57

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.3.

  	
  Administration of Inventory

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.4.

  	
  Administration of Equipment

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.5.

  	
  Administration of Deposit Accounts

  	
   

  	
  59

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.6.

  	
  General Provisions

  	
   

  	
  59

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.7.

  	
  Power of Attorney

  	
   

  	
  61

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9

  	
   

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  	
  61

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.1.

  	
  General Representations and Warranties

  	
   

  	
  61

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.2.

  	
  Complete Disclosure

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10

  	
   

  	
  COVENANTS AND CONTINUING
  AGREEMENTS

  	
   

  	
  67

  

 

ii

 

	
  10.1.

  	
  Affirmative Covenants

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.2.

  	
  Negative Covenants

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.3.

  	
  Financial Covenants

  	
   

  	
  78

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11

  	
   

  	
  EVENTS OF DEFAULT; REMEDIES ON
  DEFAULT

  	
   

  	
  78

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.1.

  	
  Events of Default

  	
   

  	
  78

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.2.

  	
  Remedies upon Default

  	
   

  	
  80

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.3.

  	
  License

  	
   

  	
  80

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.4.

  	
  Setoff

  	
   

  	
  81

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.5.

  	
  Remedies Cumulative; No Waiver

  	
   

  	
  81

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 12

  	
   

  	
  AGENT

  	
   

  	
  81

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.1.

  	
  Appointment, Authority and Duties of Agent

  	
   

  	
  81

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.2.

  	
  Agreements Regarding Collateral and Field
  Examination Reports

  	
   

  	
  82

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.3.

  	
  Reliance By Agent

  	
   

  	
  83

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.4.

  	
  Action Upon Default

  	
   

  	
  83

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.5.

  	
  Ratable Sharing

  	
   

  	
  84

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.6.

  	
  Indemnification of Agent Indemnitees

  	
   

  	
  84

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.7.

  	
  Limitation on Responsibilities of Agent

  	
   

  	
  84

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.8.

  	
  Successor Agent and Co-Agents

  	
   

  	
  84

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.9.

  	
  Due Diligence and Non-Reliance

  	
   

  	
  85

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.10.

  	
  Replacement of Certain Lenders

  	
   

  	
  85

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.11.

  	
  Remittance of Payments and Collections

  	
   

  	
  86

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.12.

  	
  Agent in its Individual Capacity

  	
   

  	
  86

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.13.

  	
  Agent Titles

  	
   

  	
  86

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.14.

  	
  No Third Party Beneficiaries

  	
   

  	
  86

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 13

  	
   

  	
  BENEFIT OF AGREEMENT; ASSIGNMENTS
  AND PARTICIPATIONS

  	
   

  	
  87

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.1.

  	
  Successors and Assigns

  	
   

  	
  87

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.2.

  	
  Participations

  	
   

  	
  87

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.3.

  	
  Assignments

  	
   

  	
  87

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 14

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  88

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.1.

  	
  Consents, Amendments and Waivers

  	
   

  	
  88

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.2.

  	
  Indemnity

  	
   

  	
  89

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.3.

  	
  Notices and Communications

  	
   

  	
  89

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.4.

  	
  Performance of Obligors’ Obligations

  	
   

  	
  89

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.5.

  	
  Credit Inquiries

  	
   

  	
  90

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.6.

  	
  Severability

  	
   

  	
  90

  

 

iii

 

	
  14.7.

  	
  Cumulative Effect; Conflict of Terms

  	
   

  	
  90

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.8.

  	
  Counterparts

  	
   

  	
  90

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.9.

  	
  Entire Agreement

  	
   

  	
  90

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.10.

  	
  Relationship with Lenders

  	
   

  	
  90

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.11.

  	
  No Advisory or Fiduciary Responsibility

  	
   

  	
  90

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.12.

  	
  Confidentiality

  	
   

  	
  91

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.13.

  	
  Certifications Regarding Indenture

  	
   

  	
  91

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.14.

  	
  GOVERNING LAW

  	
   

  	
  92

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.15.

  	
  Consent to Forum; Arbitration

  	
   

  	
  92

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.16.

  	
  Waivers by Obligors

  	
   

  	
  93

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.17.

  	
  Patriot Act Notice

  	
   

  	
  93

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 15

  	
   

  	
  GUARANTY

  	
   

  	
  93

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.1.

  	
  Guaranty; Limitation of Liability

  	
   

  	
  93

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.2.

  	
  Guaranty Absolute

  	
   

  	
  94

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.3.

  	
  Waivers and Acknowledgments

  	
   

  	
  96

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.4.

  	
  Subrogation

  	
   

  	
  96

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.5.

  	
  Subordination

  	
   

  	
  97

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.6.

  	
  Continuing Guaranty; Assignments

  	
   

  	
  98

  
	
   

  	
   

  	
   

  	
   

  
	
  15.7

  	
  Limitations on Guarantors

  	
   

  	
  98

  

 

iv

 

LIST OF
EXHIBITS AND SCHEDULES

 

	
  Exhibit A

  	
  Revolver Note

  
	
  Exhibit B

  	
  Assignment and Acceptance

  
	
  Exhibit C

  	
  Assignment Notice

  
	
   

  	
   

  	
   

  
	
  Schedule 1.1

  	
   

  	
  Commitments of Lenders

  
	
  Schedule 1.2

  	
   

  	
  Pre-Closing Financial Information

  
	
  Schedule 1.3

  	
   

  	
  Material Contracts

  
	
  Schedule 1.4

  	
   

  	
  Pledged Foreign Subsidiaries

  
	
  Schedule 7.8

  	
   

  	
  Foreign Intellectual Property Filings

  
	
  Schedule 8.5

  	
   

  	
  Deposit Accounts

  
	
  Schedule 8.6.1

  	
   

  	
  Collateral Locations

  
	
  Schedule 9.1.4

  	
   

  	
  Names and Capital Structure

  
	
  Schedule 9.1.5

  	
   

  	
  Former Names and Companies

  
	
  Schedule 9.1.12

  	
   

  	
  Patents, Trademarks, Copyrights and Licenses

  
	
  Schedule 9.1.15

  	
   

  	
  Environmental Matters

  
	
  Schedule 9.1.16

  	
   

  	
  Restrictive Agreements

  
	
  Schedule 9.1.17

  	
   

  	
  Litigation

  
	
  Schedule 9.1.19

  	
   

  	
  Pension Plans

  
	
  Schedule 9.1.21

  	
   

  	
  Labor Contracts

  
	
  Schedule 9.1.9.

  	
   

  	
  Surety Obligations

  
	
  Schedule 10.2.1

  	
   

  	
  Existing Debt

  
	
  Schedule 10.2.2

  	
   

  	
  Existing Liens

  
	
  Schedule 10.2.8

  	
   

  	
  Restrictions on Payment of Certain Debt - from Paper Group Sale

  
	
  Schedule 10.2.17

  	
   

  	
  Existing Affiliate Transactions

  

 

v

 

LOAN AND
SECURITY AGREEMENT

 

THIS LOAN AND SECURITY AGREEMENT (this “Agreement”)
is dated as of February 22, 2008, among  BOISE
CASCADE, L.L.C., a
Delaware limited liability company (“Boise Cascade”), BOISE BUILDING SOLUTIONS DISTRIBUTION, L.L.C., a Delaware
limited liability company (“Boise Distribution”) and BOISE BUILDING SOLUTIONS MANUFACTURING, L.L.C.,
a Delaware limited liability company (“Boise Manufacturing”, and
together with Boise Cascade and Boise Distribution, collectively, “Borrowers”),  BOISE BUILDING SOLUTIONS
MANUFACTURING HOLDINGS CORP., a Delaware corporation (“Boise
Manufacturing Holding”), BC CHILE INVESTMENT
CORPORATION, a Delaware corporation (“BC Chile Investment”),
and BC BRAZIL INVESTMENT CORPORATION, a
Delaware corporation (“BC Brazil Investment”, and together with Boise
Manufacturing Holding and BC Chile Investment], collectively, “Initial
Guarantors”),  the financial
institutions party to this Agreement from time to time as lenders
(collectively, “Lenders”) and BANK OF
AMERICA, N.A., a national
banking association, as agent for Lenders (in such capacity, “Agent”).

 

RECITALS:

 

Borrowers
have requested that Lenders provide a credit facility to Borrowers to finance
their mutual and collective business enterprise to make Loans to the Borrowers
to, among other things, refinance the Existing Credit Agreement and existing
securitization facility.  Lenders are
willing to provide the credit facility on the terms and conditions set forth in
this Agreement.

 

NOW, THEREFORE, for valuable consideration
hereby acknowledged, the parties agree as follows:

 

	
  SECTION 1

  	
   

  	
  DEFINITIONS;
  RULES OF CONSTRUCTION

  
	
   

  	
   

  	
   

  
	
  1.1.

  	
   

  	
  Definitions. As used herein, the following
  terms have the meanings set forth below:

  

 

Account: as defined in the UCC, including all rights
to payment for goods sold or leased, or for services rendered.

 

Account Debtor: a Person who is obligated under an Account,
Chattel Paper or General Intangible.

 

Accounts Formula Amount: 85% of the Value of Eligible
Accounts.

 

Adjusted Net
Income: determined on a consolidated basis in
accordance with GAAP for any fiscal period of Boise Cascade and Subsidiaries,
net income (or loss), excluding (a) any gain (or loss) arising from
the sale of capital assets if either (i) such sale was not a sale made in
the Ordinary Course of Business or (ii) the gain (or loss) from such sale
is greater than $1,500,000; (b) income of any entity (other than a
Subsidiary) in which a Borrower has an ownership interest unless such income
has actually been received by a Borrower in the form of cash Distributions; (c) income
of any Subsidiary accrued prior to the date it became a Subsidiary; (d) income
of any Person, substantially all the assets of which have been acquired by a
Borrower, realized by such Person prior to the date of acquisition; (e) income
of any Person with which a Borrower has merged, consolidated or otherwise
combined, prior to the date of such transaction; (f) any unrealized
Statement of Financial Accounting Standards No. 133 non-cash gain or loss
in respect of any Hedging Agreement; (g) any non-cash gains or losses
attributable to the early extinguishment of debt; (h) non-recurring
non-cash gains or losses; (i) any non-cash goodwill impairment charges
resulting from the application of Statement of Financial Accounting Standards No. 142;
and (j) any non-cash compensation charge or expense, including any such
charge or expense arising from grants of stock options or restricted stock or
other equity-incentive programs for the benefit of officers, directors and
employees of Parent, the Borrowers or any Subsidiary.

 

 

Affiliate: with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.  “Control”
means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through
the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled”
have correlative meanings.  For the avoidance of doubt, the Paper Group
and its Subsidiaries are not Affiliates of Boise Cascade and its Subsidiaries.

 

Agent: as defined in the preamble of this
Agreement.

 

Agent Indemnitees: Agent and its officers, directors, employees,
Affiliates, agents and attorneys.

 

Agent Professionals: attorneys, accountants, appraisers,
auditors, business valuation experts, environmental engineers or consultants,
turnaround consultants, and other professionals and experts retained by Agent.

 

Allocable Amount: as defined in Section 5.11.3.

 

Amortization Equipment
Amount:  The product of (a) 85% of the Value of
Eligible Equipment on the PP&E Inclusion Date, times (b) 1/60.

 

Amortization Mortgage
Property Amount:  The product of (a) 65% of the Appraisal
Value of Mortgaged Property on the PP&E Inclusion Date, times (b) 1/96.

 

Anti-Terrorism Laws: any laws relating to terrorism or money
laundering, including the Patriot Act.

 

Applicable Law: all laws, rules, regulations, orders and
governmental guidelines applicable to the Person, conduct, transaction,
agreement or matter in question, including all applicable statutory law, common
law and equitable principles, and all provisions of constitutions, treaties,
statutes, rules, regulations, orders and decrees of Governmental Authorities
having jurisdiction over such Person.

 

Applicable Margin: with respect to any Type of Loan and the
Unused Fee, the margins set forth below, as determined by Average Availability
for the most recently ended Fiscal Quarter:

 

	
  Level

  	
   

  	
  Average Availability

  	
   

  	
  Base Rate Loans

  	
   

  	
  LIBOR

  Revolver Loans and

  Letters of Credit Fees

  	
   

  	
  Unused Line

  Fee

  
	
  I

  	
   

  	
  ≤ $75,000,000

  	
   

  	
  1.00 %

  	
   

  	
  2.50 %

  	
   

  	
  0.375 %

  
	
  II

  	
   

  	
  > $75,000,000 but ≤ $175,000,000

  	
   

  	
  0.75 %

  	
   

  	
  2.25 %

  	
   

  	
  0.425 %

  
	
  III

  	
   

  	
  > $175,000,000

  	
   

  	
  0.50 %

  	
   

  	
  2.00 %

  	
   

  	
  0.50 %

  

 

Until May 31, 2008, margins shall be
determined as if Level III were applicable. 
Thereafter, the margins shall be subject to increase or decrease upon
receipt by Agent pursuant to Section 10.1.2
of the financial statements and corresponding Compliance Certificate for the most recently ended Fiscal Quarter and determination by Agent of Average
Availability for such Fiscal Quarter, which change shall be effective on the
first day of the calendar month following receipt.  If, by the first day of a month, any
financial statements and Compliance Certificate due in the preceding month have
not been received, then the margins shall be determined as if Level I were
applicable, from such day until the first day of the calendar month following
actual receipt.

 

Appraisal
Value: the fair market value determined from the appraisals of Real Estate
required as part of the PP&E Inclusion Conditions in Section 2.2.

 

2

 

Appraised
Inventory: an appraisal of inventory conducted for the benefit of the Lenders at
the Agent’s request and otherwise reasonably satisfactory to the Agent.

 

Approved
Foreign Jurisdiction: (a) the United Kingdom and (b) each
other foreign jurisdiction approved by the Agent so long as the Accounts owing
from Account Debtors organized in or having their principal office or assets
located in such other foreign jurisdiction shall be subject to a letter of
credit, bond, insurance or other credit support acceptable to the Agent.

 

Approved Fund: any Person (other than a natural person)
that is engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in its ordinary course of
activities, and is administered or managed by a Lender, an entity that
administers or manages a Lender, or an Affiliate of either.

 

Asset Disposition: a sale, lease, license, consignment, transfer
or other disposition of Property of an Obligor, including a disposition of
Property in connection with a sale-leaseback transaction or synthetic lease.

 

Assignment and Acceptance: an assignment agreement between a Lender
and Eligible Assignee, in the form of Exhibit B.

 

Availability: (i) the Borrowing Base, plus (ii) unrestricted
cash deposited or held in a depositary account subject to a Deposit Control
Agreement and first priority Lien in favor of Agent, minus (iii) the
principal balance of all Revolver Loans.

 

Availability Reserve: the sum (without duplication) of (a) the
Inventory Reserve; (b) the Rent and Charges Reserve; (c) the LC Reserve; (d) the
Bank Product Reserve; (e) the Dilution Reserve; (f) all accrued
Royalties, whether or not then due and payable by a Borrower; (g) the
aggregate amount of liabilities secured by Liens upon Collateral that
are senior to Agent’s Liens (but imposition of any such reserve shall not waive
an Event of Default, if any, arising therefrom); and (h) such additional
reserves, in such amounts and with respect to such matters (including, without
limitation, with respect to unpaid liabilities owing by Borrowers to vendors
with respect to purchases of logs and timber and Collateral subject to a
Licensor’s Intellectual Property rights with respect to which the Borrowers
have not obtained a Lien Waiver), as Agent in its Credit Judgment  may elect to impose from time to
time.

 

Availability Threshold: (a) at any time other than during the
PP&E Inclusion Period, the greater of (i) $30,000,000 or (ii) 10%
of the Revolving Credit Facility, and (b) at any time during the PP&E
Inclusion Period, the greater of (i) $30,000,000, (ii) 10% of the
Revolving Credit Facility or (iii) 75% of the PP&E Formula Amount.

 

Average Availability: with respect to any period of time, the
average daily Availability during such period of time.

 

Bank of America: Bank of America, N.A., a national banking
association, and its successors and assigns.

 

Bank of America Indemnitees: Bank of America and its officers,
directors, employees, Affiliates, branches, agents and attorneys.

 

Bank Product: any of the following products, services or
facilities extended to any Borrower or Subsidiary by any Lender  or any of its Affiliates in reliance on such Lender’s
agreement to indemnify such Affiliate: (a) Cash Management Services; (b) products
under Hedging Agreements; (c) commercial credit card and merchant card
services; and (d) leases and other banking products or services as may be
requested by any Borrower or Subsidiary, other than Letters of Credit.

 

3

 

Bank Product Debt: Debt and other obligations of an Obligor
relating to Bank Products.

 

Bank Product
Reserve: the aggregate amount of reserves established
by Agent from time to time in its discretion in respect of Bank Product Debt.

 

Bankruptcy Code: Title 11 of the United States Code.

 

Base Rate: the rate of interest announced by Bank of
America from time to time as its prime rate. 
Such rate is a rate set by Bank of America based upon various
factors including its costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans, which
may be priced at, above or below such announced rate.  Any change in such rate announced by Bank of
America shall take effect at the opening of business on the day specified in
the public announcement of such change.

 

Base Rate Loan: any Loan that bears interest based on the
Base Rate.

 

Board of Governors: the Board of Governors of the Federal
Reserve System.

 

Boise Cascade: Boise Cascade, L.L.C., a Delaware limited
liability company.

 

Borrowed Money: with respect to any Obligor, without
duplication, its (a) Debt that (i) arises from the lending of money
by any Person to such Obligor, (ii) is evidenced by notes, drafts, bonds,
debentures, credit documents or similar instruments, (iii) accrues
interest or is a type upon which interest charges are customarily paid
(excluding trade payables owing in the Ordinary Course of Business), or (iv) was
issued or assumed as full or partial payment for Property; (b) Capital
Leases; (c) reimbursement obligations with respect to letters of credit;
and (d) guaranties of any Debt of the foregoing types owing by another
Person.

 

Borrower Agent: as defined in Section 4.4.

 

Borrowers: as defined in the preamble of this
Agreement.

 

Borrowing: a group of Loans of one Type that are made
on the same day or are converted into Loans of one Type on the same day.

 

Borrowing Base: on any date of determination an amount
equal to the lesser of (a) the aggregate amount of Revolver Commitments, minus the LC
Reserve; or (b) the sum of (i) the Accounts Formula Amount, plus
(ii) the Inventory Formula Amount, plus (iii) during the
PP&E Inclusion Period, the PP&E Formula Amount minus (iv) the
Availability Reserve.

 

Borrowing Base Certificate: a certificate, in form and substance
satisfactory to Agent, by which Borrowers certify calculation of the Borrowing
Base.

 

Business Day: any day other than a Saturday,
Sunday or other day on which commercial banks are authorized to close under the
laws of, or are in fact closed in New
York, and if such day relates to a LIBOR Loan, any such day on which
dealings in Dollar deposits are conducted between banks in the London interbank
Eurodollar market.

 

Capital Expenditures: all liabilities incurred, expenditures made
or payments due (whether or not made) by a Borrower or Subsidiary for the
acquisition of any fixed assets, or any improvements, replacements,
substitutions or additions thereto with a useful life of more than one year,
including the principal portion of Capital Leases, in each case calculated in
accordance with GAAP; provided that Capital Expenditures shall not
include (a) the purchase price paid in connection with a Permitted

 

4

 

Acquisition, (b) the non-cash consideration transferred or
disposed of in connection with capital expenditures made with Permitted
Operating Asset Swaps, (c) any additions to property, plant and equipment
and other capital expenditures made with (i) the proceeds of any issued
Equity to the extent that the proceeds and/or consideration therefrom are
utilized for capital expenditures within twelve months of the receipt of such
proceeds, (ii) the proceeds from any casualty insurance or condemnation or
eminent domain, to the extent that the proceeds therefrom are utilized for
capital expenditures within twelve months of the receipt of such proceeds, (iii) the
proceeds or consideration received from any sale, trade in or other disposition
of Equipment or Real Estate prior to the PP&E Inclusion Date or after the
termination of the PP&E Inclusion Period, to the extent that the proceeds
and/or consideration therefrom are utilized for capital expenditures within twelve
months of the receipt of such proceeds, or (d) any expenditures which are
contractually required to be, and have been, reimbursed to the Obligors in cash
by a third party (including landlords) during such period of calculation.

 

Capital Lease: any lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP.

 

Cash Collateral: cash, and any interest or other income
earned thereon, that is delivered to Agent to Cash Collateralize any
Obligations.

 

Cash Collateral Account: a demand deposit, money market or other
account established by Agent at such financial institution as Agent may select
in its discretion, which account shall be subject to Agent’s Liens for the
benefit of Secured Parties.

 

Cash Collateralize: the delivery of cash to Agent, as security for the
payment of Obligations, in an amount equal to (a) with respect to
LC Obligations, 105% of the aggregate LC Obligations, and (b) with respect to
any inchoate, contingent or other Obligations (including Obligations arising
under Bank Products), Agent’s good faith estimate of the amount due or to become due,
including all fees and other amounts relating to such Obligations.  “Cash Collateralization” has a
correlative meaning.

 

Cash Equivalents: (a) marketable obligations issued or
unconditionally guaranteed by, and backed by the full faith and credit of, the
United States government, maturing within 12 months of the date of acquisition;
(b) certificates of deposit, time deposits and bankers’ acceptances
maturing within 12 months of the date of acquisition, and overnight bank
deposits, in each case which are issued by a commercial bank organized under
the laws of the United States or any state or district thereof, rated A-1 (or
better) by S&P or P-1 (or better) by Moody’s at the time of acquisition,
and (unless issued by a Lender) not subject to offset rights; (c) repurchase
obligations with a term of not more than 30 days for underlying investments of
the types described in clauses (a) and (b) entered into with any bank
meeting the qualifications specified in clause (b); (d) commercial paper
rated A-1 (or better) by S&P or P-1 (or better) by Moody’s, and maturing
within nine months of the date of acquisition; and (e) shares of any money
market fund that has substantially all of its assets invested continuously in
the types of investments referred to above, has net assets of at least
$500,000,000.

 

Cash Management Services: any services provided from time to time by  Bank of America  or
any of its Affiliates to any Borrower or Subsidiary in connection with
operating, collections, payroll, trust, or other depository or disbursement
accounts, including automated clearinghouse, e-payable, electronic funds
transfer, wire transfer, controlled disbursement, overdraft, depository, information
reporting, lockbox and stop payment services.

 

CERCLA: the Comprehensive Environmental Response
Compensation and Liability Act (42 U.S.C. § 9601 et  seq.).

 

Change in Law: the occurrence, after the date hereof, of (a) the
adoption or taking effect of any law, rule, regulation or treaty; (b) any
change in any law, rule, regulation or treaty or in the

 

5

 

administration, interpretation or application
thereof by any Governmental Authority; or (c) the making or issuance of
any request, guideline or directive (whether or not having the force of law) by
any Governmental Authority.

 

Change of Control: an event or series of events by which:

 

(a)                                  at any time prior to an IPO, the failure by Principal Holder to own and
control, directly or indirectly, beneficially and of record, Equity Interests
of Boise Cascade representing at least a majority of the aggregate ordinary
voting power and issued and outstanding Equity Interests and aggregate equity
value represented by the issued and outstanding Equity Interests entitled to
vote for members of the board of directors or equivalent governing body of
Boise Cascade on a fully-diluted basis; or

 

(b)                                 at any time after any IPO, any Person or two or more Persons (other
than the Principal Holder) acting in concert shall have acquired by contract or
otherwise, or shall have entered into a contract or arrangement that, upon
consummation thereof, will result in its or their acquisition of the power to
exercise, directly or indirectly, a controlling influence over the management
or policies of Boise Cascade, or control, directly or indirectly, over the
Equity Interests of Boise Cascade entitled to vote for members of the board of
directors or equivalent governing body of Boise Cascade on a fully-diluted
basis (and taking into account all such Equity Interests that such Person or
Persons have the right to acquire pursuant to any option right) representing
35% or more of the combined voting power of such Equity Interests; or

 

(c)                                  a “change of control” or any comparable term under, and as defined in,
the Indenture shall have occurred; or

 

(d)                                 Boise Cascade shall cease at any time to own and control, directly or
indirectly, beneficially and of record, 100% of the Equity Interests each of
the other Borrowers (except as a result of a transaction permitted by Section 10.2.9).

 

Chattel Paper: as defined in Section 1.3.

 

Claims: all liabilities, obligations, losses,
damages, penalties, judgments, proceedings, interest, costs and expenses of any
kind (including remedial response costs, reasonable attorneys’ fees and
Extraordinary Expenses) at any time (including after Full Payment of the
Obligations, resignation or replacement of Agent, or replacement of any Lender)
incurred by or asserted against any Indemnitee in any way relating to (a) any
Loans, Letters of Credit, Loan Documents, or the use thereof or transactions
relating thereto, (b) any action taken or omitted to be taken by any
Indemnitee in connection with any Loan Documents, (c) the existence or
perfection of any Liens, or realization upon any Collateral, (d) exercise
of any rights or remedies under any Loan Documents or Applicable Law, or (e) failure
by any Obligor to perform or observe any terms of any Loan Document, in each
case including all costs and expenses relating to any investigation,
litigation, arbitration or other proceeding (including an Insolvency Proceeding
or appellate proceedings), whether or not the applicable Indemnitee is a party
thereto.

 

Closing Date: as defined in Section 6.1.

 

Closing Date Material
Adverse Effect: a
change, occurrence or development having occurred or become known to Agent
since September 30, 2007, that could reasonably be expected to have a
material adverse effect on the business, assets, properties, liabilities
(actual or contingent), operations, condition (financial or otherwise) of
Borrowers and Subsidiaries, taken as a whole, except any adverse effect related
to or resulting from (a) general business or economic conditions affecting
the industry in which the Borrowers or any Subsidiaries operate (including,
without limitation, the commercial and residential real estate industries), (b) national
or international political or social conditions, including the engagement by
the United States in hostilities or the escalation thereof, whether or not
pursuant to the declaration of a

 

6

 

national emergency or war, or the occurrence or the escalation of any
military or terrorist attack upon the United States, or any of its territories,
possessions, or diplomatic or consular offices or upon any military
installation, equipment or personnel of the United States, unless any of the
foregoing actions cause material physical harm to any of the assets or
properties of any Borrower or any Material Subsidiaries, (c) financial,
banking, capital or securities markets (including any disruption thereof and
any decline in the price of any security or any market index), (d) changes
in GAAP or, solely as a result of changes in GAAP, (e) changes in laws,
rules, regulations, orders, or other binding directives issued by any
governmental entity or (f) the taking of any action contemplated by the
Purchase and Sale Agreement or the announcement of the Purchase and Sale
Agreement or the transactions contemplated thereby, unless such action results
in a material change of the amount, form or timing of the proceeds payable to
Borrowers pursuant to that which is otherwise set forth on page 4 of the December 12,
2007 Boise Management Presentation, (except in the case of each of the
immediately preceding clause (a), (b), (c), (d) and (e), any such adverse
effect which has a materially disproportionate effect on the Borrowers and the
Subsidiaries, taken as a whole, relative to the effect on other companies
operating in the same industry).

 

Code: the Internal
Revenue Code of 1986, as amended.

 

Collateral: all Property
described in Section 7.1, all
Property described in any Security Documents as security for any Obligations,
and all other Property that now or hereafter secures (or is intended to secure)
any Obligations.

 

Commercial Tort Claim: as defined in
Section 1.3.

 

Commitment: for any Lender, the aggregate amount of such
Lender’s Revolver Commitment.

 

Commitment Termination Date: the earliest
to occur of (a) the Revolver Termination Date; (b) the date on which
Borrowers terminate the Revolver Commitments pursuant to Section 2.1.4; or (c) the date on
which the Revolver Commitments are terminated pursuant to Section 11.2.

 

Compliance Certificate: a
certificate, in form and substance satisfactory to Agent, by which Borrowers
certify compliance with Section 10.3
and calculate the applicable Level for the Applicable Margin.

 

Contingent Obligation: any
obligation of a Person arising from a guaranty, indemnity or other assurance of
payment or performance of any Debt, lease, dividend or other obligation (“primary
obligations”) of another obligor (“primary obligor”) in any manner,
whether directly or indirectly, including any obligation of such Person under
any (a) guaranty, endorsement, co-making or sale with recourse of an
obligation of a primary obligor; (b) obligation to make take-or-pay or
similar payments regardless of nonperformance by any other party to an
agreement; and (c) arrangement (i) to purchase any primary obligation
or security therefor, (ii) to supply funds for the purchase or payment of
any primary obligation, (iii) to maintain or assure working capital,
equity capital, net worth or solvency of the primary obligor, (iv) to
purchase Property or services for the purpose of assuring the ability of the
primary obligor to perform a primary obligation, or (v) otherwise to
assure or hold harmless the holder of any primary obligation against loss in
respect thereof.  The amount of any
Contingent Obligation shall be deemed to be the stated or determinable amount
of the primary obligation (or, if less, the maximum amount for which such
Person may be liable under the instrument evidencing the Contingent Obligation)
or, if not stated or determinable, the maximum reasonably anticipated liability
with respect thereto.

 

Contribution Agreement: the
Contribution Agreement, dated as of February 22, 2008, between Boise
Cascade and Boise Paper Holdings, L.L.C., a Delaware limited liability company.

 

Controlled Deposit Account:  (a) any
Deposit Account of an Obligor in existence on the Closing Date and identified
on Schedule 8.5 as a “Controlled
Deposit Account” and (b)(i) any Deposit Account

 

7

 

opened by an
Obligor following the Closing Date that at any time has a balance in excess of
$250,000 or (ii) any two or more Deposit Accounts opened by the Obligors
following the Closing Date that at any time have an aggregate balance in excess
of $500,000 (provided that in no event shall any Deposit Account used solely
for the purpose of making tax, payroll, or employee benefit payments be a “Controlled
Deposit Account”).

 

Controlled Securities Account:  any
Securities Account of an Obligor that at any time has a balance in excess of
$250,000 or (ii) any two or more Securities Accounts that at any time have
an aggregate balance in excess of $500,000, in each case other than any Securities
Account to the extent it holds only the cash and Cash Equivalents described in Section 6.1(o)(iii) or cash collateral posted on
the Closing Date with US Bank in connection with letters of credit in existence
on the Closing Date.

 

Copyrights: (a) all copyrights arising under the laws of
the United States, any other country, or union of countries, or any political
subdivision of any of the foregoing, whether registered or unregistered and
whether published or unpublished (including those listed on Schedule 9.1.12 hereto), all registrations
and recordings thereof, and all applications in connection therewith and rights
corresponding thereto throughout the world, including all registrations,
recordings and applications in the United States Copyright Office or any
similar office in a foreign jurisdiction, and (b) all other rights of any
kind whatsoever accruing thereunder or pertaining thereto including rights to
receivables and royalties from the exploitation thereof; provided, however,
that Copyrights does not include the Excluded Copyrights.

 

Copyright Security Agreement: each copyright security agreement pursuant
to which an Obligor grants to Agent, for the benefit of Secured Parties, a Lien
on such Obligor’s interests in its Copyrights, as security for the Obligations.

 

Credit Judgment: Agent’s reasonable credit judgment based upon its
consideration of any factor that it believes (a) could adversely affect
the quantity, quality, mix or value of the Collateral (including any Applicable
Law that may inhibit collection of Accounts), the enforceability or priority of
Agent’s Liens, or the amount that Agent and Lenders could receive in
liquidation of any Collateral; (b) suggests that any collateral report or
financial information delivered by any Obligor is incomplete, inaccurate or
misleading in any material respect; (c) materially increases the
likelihood of any Insolvency Proceeding involving an Obligor; or (d) results
in or could reasonably be expected to result in a Default or Event of
Default.  In exercising such judgment,
Agent may consider any factors that could reasonably be expected to increase
the credit risk of lending to Borrowers on the security of the Collateral.

 

CWA: the Clean
Water Act (33 U.S.C. §§ 1251 et  seq.).

 

Debt: as applied to
any Person, without duplication, (a) all items that would be included as
liabilities on a balance sheet in accordance with GAAP, including Capital
Leases, but excluding trade payables incurred and being paid in the Ordinary
Course of Business; (b) all Contingent Obligations where the primary
obligation associated therewith would otherwise constitute debt under this
definition; (c) all reimbursement obligations in connection with letters
of credit issued for the account of such Person; and (d) in the case of
any Obligor, the Obligations.  The Debt
of a Person shall include any recourse Debt of any partnership in which such
Person is a general partner or joint venturer.

 

Default: an event or
condition that, with the lapse of time or giving of notice, would constitute an
Event of Default.

 

Default Rate: for any
Obligation (including, to the extent permitted by law, interest not paid when
due), 2% plus the interest rate otherwise applicable thereto.

 

Deposit Account: as defined in
Section 1.3.

 

8

 

Deposit Account Control Agreements: the deposit account control agreements, in
form and substance reasonably acceptable to Agent, to be executed by each
institution maintaining a Controlled Deposit Account for an Obligor, in favor
of Agent, for the benefit of Secured Parties, as security for the Obligations.

 

Dilution Percent: the percent, determined for Borrowers’ most
recent twelve calendar months, equal to (a) bad debt write-downs or
write-offs, discounts, returns, promotions, credits, credit memos and other
dilutive items with respect to Accounts, divided  by (b) gross
sales.

 

Dilution Reserve:  A percentage of the value of Eligible Accounts, which percentage
shall be the Dilution
Percent minus 5% (but in any event not less than 0%).

 

Distribution: (a) any
declaration or payment of a distribution, interest or dividend on any Equity
Interest (other than payment-in-kind); any distribution, advance or repayment
of Debt to a holder of Equity Interests; or any purchase, redemption, or other
acquisition or retirement for value of any Equity Interest or (b) any
payment of management or similar fees to any holder of Equity Interests of
Boise Cascade or any Affiliate of such holder of Equity Interests.

 

Document: as defined in
Section 1.3.

 

Dollars: lawful money
of the United States.

 

Domestic Subsidiary: any
Subsidiary organized under the laws of the United States of America, any State
thereof or the District of Columbia.

 

Dominion Account: a special account established by Borrowers at
Bank of America or another bank acceptable to Agent, over which Agent has
exclusive control for withdrawal purposes and into which funds from Controlled
Deposit Accounts shall be swept following delivery by Agent of a Notice of
Exclusive Control.

 

EBITDA: determined on a consolidated
basis in accordance with GAAP for any fiscal period of Boise Cascade and
Subsidiaries, the sum of (a) Adjusted Net Income, plus (b) to
the extent deducted in the calculation of Adjusted Net Income:

 

(i)            all income tax expense of Boise
Cascade and Subsidiaries, on a consolidated basis;

 

(ii)           all interest expense of Boise Cascade
and Subsidiaries, on a consolidated basis;

 

(iii)          depreciation,
depletion and amortization expense of Boise Cascade and its Subsidiaries, on a
consolidated basis (in each case excluding amortization expense attributable to
a prepaid item that was paid in cash in a prior period);

 

(iv)          any
management fees paid to Principal Holder in such period, not to exceed
$1,000,000 for any consecutive four-quarter period;

 

(v)           any
non-recurring costs and expenses incurred in connection with the Paper Group
Disposition, including non-recurring costs and expenses incurred in connection
with the Revolver Facility and severance costs incurred within twelve months of
the Closing Date, in an aggregate amount for all periods not to exceed
$10,000,000;

 

(vi)          any
non-recurring costs and expenses related to any public or private offering of
Equity Interests of Parent or the Borrower to the extent that cash proceeds of
such offering exceed the costs and expenses of such offering; and

 

9

 

(vii)         payments
or charges in resulting from the delivery of Equity Interests of Boise, Inc.
to satisfy obligations of Boise Cascade under the Contingent Value Rights
Agreement entered into by Boise Cascade on the Closing Date (as in effect on
the Closing Date);

 

in each case for such period. 
Notwithstanding the foregoing, the provision for taxes based on the
income or profits of, and the depreciation, amortization and depletion and
non-cash charges of, a Subsidiary shall be added to Net Income to compute
EBITDA only to the extent (and in the same proportion, including by reason of
minority interests) that the net income or loss of such Subsidiary was included
in calculating Net Income for any purpose and, with respect to a Subsidiary
that is not an Obligor, only if a corresponding amount would be permitted at
the date of determination to be dividended to an Obligor by such Subsidiary
without prior approval (that has not been obtained), pursuant to the terms of
its charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to such Subsidiary
or its stockholders.

 

Solely for purposes of calculating the Fixed Charge Coverage Ratio, if
during any period (each, a “Reference Period”) (or, in the case of pro forma
calculations, during the period from the last day of such Reference Period to
and including the date as of which such calculation is made) the Borrowers or
any Subsidiary shall have made a Material Disposition or Material Acquisition,
their EBITDA for such Reference Period shall be calculated after giving pro
forma effect thereto as if such Material Disposition or Material Acquisition
occurred on the first day of such Reference Period; provided that such pro
forma calculations shall give effect to operating expense reductions and other
cost savings only to the extent that such reductions and savings would be permitted
to be reflected in a pro forma financial statement prepared in compliance with
Regulation S-X.  As used in this
definition, “Material Acquisition” means any Permitted Acquisition or series of
related Permitted Acquisitions that involves consideration (including any
non-cash consideration) with a fair market value in excess of $20,000,000; and “Material
Disposition” means any disposition of property or series of related
dispositions of property or assets (including the Equity Interests of a
Subsidiary) that involves consideration (including any non-cash consideration)
with a fair market value in excess of $20,000,000.

 

Eligible Account: an Account
owing to a Borrower that arises in the Ordinary Course of Business from the
sale of goods or
rendition of services, is
payable in Dollars and is deemed by Agent, in its Credit Judgment, to be an
Eligible Account; provided that (x) if Availability
immediately after giving effect thereto is not less than the Restricted Payment
Availability Threshold, the Agent shall not establish any criteria for
excluding Accounts from Eligible Accounts other than those set forth below
unless the Agent shall have given Boise Cascade at least five Business Days’
prior notice of the Agent’s intention to establish such criteria including an
explanation as to the reasons that the Agent has determined in its Credit
Judgment that such criteria are appropriate, and (y) if Availability
immediately after giving effect thereto is less than the Restricted Payment
Availability Threshold, the Agent shall endeavor to give Boise Cascade at
least five Business Days’ prior notice of the Agent’s intention to establish
any criteria for excluding Accounts from Eligible Accounts other than those set
forth below but the Agent shall have no obligation to deliver any such notice
if the Agent determines in its Credit Judgment that it is necessary or
appropriate to establish such criteria without delay; and provided, further,
that in no event shall the Agent have any liability to any Obligors or
otherwise for failure to deliver any notice described above.  Without limiting the foregoing, no Account
shall be an Eligible Account if (a) it is unpaid for more than 60 days
after the original due date, or more than 90 days after the original invoice
date; (b) 50% or more of the Accounts owing by the Account Debtor are not
Eligible Accounts under the foregoing clause; (c) when aggregated with all
Accounts owing by the Account Debtor, it exceeds (i) 10% of the
aggregate Eligible Accounts (not generated by Home Depot or Lowe’s) or (ii) 20%
of the aggregate Eligible Accounts generated by Home Depot or Lowe’s or, (d) it
does not conform with a covenant or representation herein; (e) it is owing
by a creditor or supplier, or is otherwise subject to a potential offset, counterclaim,
dispute, deduction, discount, recoupment, reserve, defense, chargeback, credit
or allowance (but ineligibility shall be limited to the amount thereof); (f) to
the knowledge of a Borrower, an Insolvency Proceeding has been commenced by or
against the Account Debtor; or the Account Debtor has failed, has suspended or
ceased

 

10

 

doing business, is liquidating, dissolving or winding up its affairs,
or is not Solvent; (g) the Account Debtor is organized or has its
principal offices or assets outside the United States, Canada, or an Approved
Foreign Jurisdiction (provided the aggregate amount of Accounts owing from
Account Debtors organized or having their principal office or assets in
Approved Foreign Jurisdictions shall not exceed 5% of the Eligible Accounts at
any time) except to the extent that such Account is secured or payable by a
letter of credit in form and substance satisfactory to the Agent; (h) it
is owing by a Government Authority, unless the Account Debtor is the United
States or any department, agency or instrumentality thereof and the Account has
been assigned to Agent in compliance with the Assignment of Claims Act; (i) it
is not subject to a duly perfected, first priority Lien in favor of Agent, or
is subject to any other Lien (other than Permitted Liens that (i) are
junior in priority to the Agent’s Liens or subject to Availability Reserves as
required by Agent and (ii) do not impair the ability of Agent to realize
on or obtain the full benefit of the Collateral); (j) the goods giving
rise to it have not been delivered to and accepted by the Account Debtor, the
services giving rise to it have not been accepted by the Account Debtor, or it
otherwise does not represent a final sale; (k) it is evidenced by Chattel
Paper or an Instrument of any kind, or has been reduced to judgment; (l) its
payment has been extended, the Account Debtor has made a partial payment, or it
arises from a sale on a

cash-on-delivery basis; (m) it arises from a sale to an
Affiliate, or from a sale on a bill-and-hold, guaranteed sale, sale-or-return,

sale-on-approval, consignment, or other repurchase or return basis;
(n) it represents a progress billing or retainage; (o) it includes a
billing for interest, fees or late charges, but ineligibility shall be limited
to the extent thereof; (p) it arises from a retail sale to a Person who is
purchasing for personal, family or household purposes; or (q) it is owing
by an Account Debtor which is located in a jurisdiction where Borrowers are
required to qualify to transact business or to file reports, unless the
applicable Borrower has so qualified or filed, except to the extent the failure
to so qualify could not reasonably be expected to have a material adverse
effect on the collectibility of such Account by Borrowers or Agent.  In calculating delinquent portions of
Accounts under clauses (a) and (b), credit balances more than 90 days old
will be excluded. 

 

Eligible Assignee: a Person that
is (a) a Lender, U.S.-based Affiliate of a Lender or Approved Fund; (b) any
other financial institution approved by Agent and Borrower Agent (which
approval by Borrower Agent shall not be unreasonably withheld or delayed, and
shall be deemed given if no objection is made within five Business Days after
notice of the proposed assignment), that is organized under the laws of the
United States or any state or district thereof, has total assets in excess of
$5,000,000,000, extends asset-based lending facilities in its ordinary course
of business and whose becoming an assignee would not constitute a prohibited
transaction under Section 4975 of the Code or any other Applicable Law; and (c) when
any Event of Default has occurred and is continuing, any Person acceptable to
Agent in its discretion

 

Eligible Equipment: means all
Equipment owned by a Borrower that Agent, in its Credit Judgment, deems to be
Eligible Equipment.  Without limiting the
foregoing, no Equipment shall constitute Eligible Equipment if it (a) is
not owned by a Borrower; (b) does not conform with the covenants and
representations herein; (c) is not subject to Agent’s duly perfected,
first priority Lien, and no other Lien (other than Permitted Liens that (i) are
junior in priority to the Agent’s Liens or subject to Availability Reserves as required
by Agent and (ii) do not impair the ability of the Agent to realize on or
obtain the full benefit of the Collateral); (d) is not in good repair and
normal operating conditions or which has not been maintained in accordance with
an appropriate maintenance program of a Borrower, including annual and
preventative maintenance and rebuilds; (e) is obsolete; or (f) is
located on leased premises, unless the lessor has delivered a Lien Waiver or is
subject to a Rent and Charges Reserve.

 

Eligible In-Transit
Inventory:
Inventory owned by a Borrower or payment for which is backed by documentary Letters of Credit issued to support Borrowers’ purchase of
such Inventory, that would be Eligible Inventory if it were
not subject to a Document and in transit from a domestic or foreign location to
a location of Obligor within the United States (excluding all Inventory that is
in transit between Borrowers), and that Agent, in its Credit Judgment, deems to
be Eligible In-Transit Inventory. 
Without limiting the foregoing, no Inventory shall be Eligible
In-Transit Inventory unless it (a) is insured in a

 

11

 

manner satisfactory to
Agent; (b) has been identified to the applicable sales contract and title
has passed to a Borrower; (c) is not sold by a vendor that has a right to
reclaim, divert shipment of, repossess, stop delivery, claim any reservation of
title or otherwise assert Lien rights against the Inventory, or with respect to
whom any Borrower is in default of any obligations; (d) is subject to
purchase orders and other sale documentation satisfactory to Agent; (e) is
shipped by a common carrier that is not affiliated with the vendor; and (f) in
the case of Inventory in transit from a foreign location, (A) shall be
subject a negotiable Document showing Agent (or, with the consent of Agent, the
applicable Borrower) as consignee, which Document is in the possession of Agent
or such other Person as Agent shall approve and (B) is being handled by a
customs broker, freight-forwarder or other handler that has delivered a Lien
Waiver.

 

Eligible Inventory: Inventory
owned by a Borrower or payment for which is backed by documentary Letters of Credit issued to support Borrowers’ purchase of
such Inventory that Agent, in its Credit Judgment, deems to be Eligible
Inventory.  Without limiting the
foregoing, no Inventory shall be Eligible Inventory unless it (a) is
finished goods, raw materials or work-in-process, and not packaging or shipping
materials, labels, samples, display items, bags, replacement parts or
manufacturing supplies; (b) is not subject to any deposit or down payment;
(c) is in new and saleable condition and is not damaged, defective,
shopworn or otherwise unfit for sale; (d) is not slow-  moving, obsolete or unmerchantable, and does
not constitute returned or repossessed goods; (e) meets all standards
imposed by any Governmental Authority, and does not constitute hazardous
materials under any Environmental Law; (f) conforms with the covenants and
representations herein; (g) is subject to Agent’s duly perfected, first
priority Lien, and no other Lien (other than Permitted Liens, provided
that such Liens (i) are junior in priority to the Agent’s Liens or subject
to Availability Reserves as required by Agent and (ii) do not impair the
ability of the Agent to realize on or obtain the full benefit of the
Collateral); (h) is within the continental United States or Canada, is not
in transit except between locations of Borrowers; (i) is not subject to
any warehouse receipt or negotiable Document; (j) is not subject to any License or
other arrangement that restricts in any material respect such Borrower’s or
Agent’s right to dispose of such Inventory; and (k) is not (i) located on leased
premises unless the lessor or such Person has delivered a Lien Waiver or an
appropriate Rent and Charges Reserve has been established or in the possession
of a warehouseman, processor, repairman, mechanic, shipper, freight forwarder,
reload center or other Person or (ii) consigned to any Person, unless with
respect to clauses (j) and to this clause (k)(ii), the Inventory
constitutes either Eligible Offsite Inventory or Eligible In-Transit Inventory. 

 

Eligible Offsite Inventory: any Inventory that would otherwise constitute Eligible Inventory
hereunder except for the fact that such Inventory is located offsite at
warehousemen, processors, repairmen, mechanics, reload centers or consignees in
the Ordinary Course of Business, provided the Agent has received acceptable
documentation of the amount and nature of such Inventory, a Lien Waiver or an
Availability Reserve reasonably satisfactory to Agent, is satisfied that
acceptable inventory controls exists at such locations, and all necessary UCC
filings, notices, and other actions have been taken to maintain the perfection
and priority of the Agent’s Lien on such Inventory.

 

Eligible Swap Assets:
in the case of a Permitted Operating Asset Swap, assets constituting
warehousing or distribution facilities (including any related equipment and
interests in real property associated therewith).

 

Enforcement Action: any action to enforce any Obligations or Loan
Documents or to realize upon any Collateral (whether by judicial action,
self-help, notification of Account Debtors, exercise of setoff or recoupment,
or otherwise).

 

Environmental Agreement: each agreement of Borrowers with respect to
any Real Estate subject to a Mortgage, pursuant to which Borrowers agree to
indemnify and hold harmless Agent and Lenders from liability under any
Environmental Laws.

 

12

 

Environmental Laws: all
Applicable Laws (including all programs, permits and guidance promulgated by
regulatory agencies having the force and effect of law), relating to protection
of public health from environmental hazards (but excluding occupational safety
and health, to the extent regulated by OSHA) or the protection or pollution of
the environment, including CERCLA, RCRA and CWA.

 

Environmental Notice: a notice (whether written or oral) from any
Governmental Authority or other Person of any possible noncompliance with,
investigation of a possible violation of, litigation relating to, or potential
fine or liability under any Environmental Law, or with respect to any
Environmental Release, environmental pollution or hazardous materials,
including any complaint, summons, citation, order, claim, demand or request for
correction, remediation or otherwise.

 

Environmental Release: a release as
defined in CERCLA or under any similar Environmental Law.

 

Equipment: as defined in
Section 1.3.

 

Equipment Security Agreement: the security agreement pursuant to which a
Borrower grants a Lien to the Agent, for the benefit of Secured Parties, on
such Borrower’s current and future owned Equipment as security for the
Obligations.

 

Equity Interest: the interest
of any (a) shareholder in a corporation; (b) partner in a partnership
(whether general, limited, limited liability or joint venture); (c) member
in a limited liability company; or (d) other Person having any other form
of equity security or ownership interest.

 

ERISA: the Employee
Retirement Income Security Act of 1974.

 

ERISA Affiliate: any trade or business
(whether or not incorporated) under common control with an Obligor within the
meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and
(o) of the Code for purposes of provisions relating to Section 412 of
the Code).

 

ERISA Event: (a) a Reportable
Event with respect to a Pension Plan; (b) a withdrawal by any Obligor or
ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA
during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of
ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by any Obligor or ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan
is in reorganization; (d) the filing of a notice of intent to terminate,
the treatment of a Plan amendment as a termination under Section 4041 or
4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a
Pension Plan or Multiemployer Plan; (e) the failure by any Obligor or
ERISA Affiliate to meet any funding obligations with respect to any Pension
Plan or Multiemployer Plan; (f) an event or condition which constitutes
grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or Multiemployer Plan;
or (g) the imposition of any liability under Title IV of ERISA, other than
for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon
any Obligor or ERISA Affiliate.

 

Event of Default: as defined in Section 11.

 

Excluded Assets: (a) any
lease, license, contract, property right or agreement to which any Obligor is a
party or any of such Obligor’s rights or interests thereunder if and only for
so long as the grant of a security interest therein under any Loan Document
shall constitute or result in a breach, termination or default or invalidity
under such lease, license, contract, property right, or agreement or would
violate any law, rule, or regulation applicable to or governing such lease,
license, contract, property right, or agreement (other than to the extent that
any such term, law, or regulation would be rendered ineffective pursuant to
Sections 9-406,

9-407, 9-408 or 9-409 of the UCC of any relevant jurisdiction or

 

13

 

any other applicable law); provided that such lease, license,
contract, property right or agreement shall be an Excluded Asset only to the
extent and for so long as the consequences specified above shall exist and
shall cease to be an Excluded Asset and shall become subject to the security
interest granted under the   Security
Documents, immediately and automatically, at such time as such consequences
shall no longer exist; (b) any interests in real property that constitutes
a leasehold of any Obligor; (c) any intellectual property if and to the
extent a grant of a security interest therein will result in the loss, voiding,
abandonment, cancellation or termination of any right, title or interest in or
to such intellectual property; provided, however, that such
intellectual property shall be an Excluded Asset only to the extent and for so
long as the circumstances specified above shall exist and shall cease to be an
Excluded Asset and shall become subject to the security interest granted under
the Security Documents, immediately and automatically, at such time as such
circumstances shall no longer exist; (d) the Excluded Copyrights; and (e) any
vehicles (whether powered or unpowered) subject to certificate of title
statutes.  Notwithstanding the foregoing,
Excluded Assets shall not affect and shall not exclude the Agent’s security
interest in any proceeds of any Excluded Assets. 

 

Excluded Copyrights: the copyright
registrations owned by Boise Cascade, L.L.C. as of the date hereof that are set
forth on Schedule 9.1.12(c).

 

Excluded Tax: with respect to Agent, any
Lender, Issuing Bank or any other recipient of a payment to be made by or on
account of any Obligation, (a) taxes imposed on or measured by its overall
net income (however denominated), and franchise taxes imposed on it (in lieu of
net income taxes), by the jurisdiction (or any political subdivision thereof)
under the laws of which such recipient is organized or in which its principal
office is located or, in the case of any Lender, in which its applicable
Lending Office is located; (b) any branch profits taxes imposed by the
United States of America or any similar tax imposed by any other jurisdiction
described in clause (a) above; and (c) in the case of a Foreign
Lender, any withholding tax that (i) is imposed on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office) or (ii) is attributable to
such Foreign Lender’s failure or inability (other than as a result of a Change
in Law) to comply with Section 5.10,
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new Lending Office (or assignment),
to receive additional amounts from Borrower with respect to such withholding
tax.

 

Existing Credit Agreement:  the Third Amended and Restated Credit Agreement
dated as of May 3, 2007 by and among the Parent, Boise Cascade, the
lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent,
as amended, restated, supplemented or modified prior to the date hereof.

 

Extraordinary Expenses: all costs,
expenses or advances (which are documented to the extent they are out of
pocket) that Agent may incur during Default or Event of Default, or during the
pendency of an Insolvency Proceeding of an Obligor, including those relating to
(a) any audit, inspection, repossession, storage, repair, appraisal,
insurance, manufacture, preparation or advertising for sale, sale, collection,
or other preservation of or realization upon any Collateral; (b) any
action, arbitration or other proceeding (whether instituted by or against
Agent, any Lender, any Obligor, any representative of creditors of an Obligor
or any other Person) in any way relating to any Collateral (including the
validity, perfection, priority or avoidability of Agent’s Liens with respect to
any Collateral), Loan Documents, Letters of Credit or Obligations, including
any lender liability or other Claims; (c) the exercise, protection or
enforcement of any rights or remedies of Agent in, or the monitoring of, any
Insolvency Proceeding; (d) settlement or satisfaction of any taxes,
charges or Liens with respect to any Collateral; (e) any Enforcement
Action; (f) negotiation and documentation of any modification, waiver,
workout, restructuring or forbearance with respect to any Loan Documents or
Obligations; and (g) Protective Advances. 
Such costs, expenses and advances include transfer fees, Other Taxes,
storage fees, insurance costs, permit fees, utility reservation and standby
fees, legal fees, appraisal fees, brokers’ fees and commissions, auctioneers’
fees and commissions, accountants’ fees, environmental study fees, wages and 

 

14

 

salaries paid to employees of any Obligor or independent contractors in
liquidating any Collateral, and travel expenses.

 

Fee Letter: the fee letter agreement between Agent and
Borrower Agent dated January 18, 2008.

 

Fiscal Quarter: each period of three months, commencing on
the first day of a Fiscal Year.

 

Fiscal Year: the fiscal year of Borrowers and Subsidiaries for
accounting and tax purposes, ending on December 31 of each year.

 

Fixed Charge Coverage Ratio: the ratio, determined on a consolidated
basis for the Borrowers and their Subsidiaries as of the last day of the
most recent month then ended, of (a) EBITDA for the Rolling Period ending on
such date  minus
Capital Expenditures (except those financed with Borrowed Money (other than
Revolver Loans)) for the Rolling Period ending on such date, to (b) Fixed Charges for the Rolling Period
ending on such date.  For purposes of calculating the Fixed Charge
Coverage Ratio, EBITDA, Capital Expenditures, and Fixed Charges for periods
prior to the Closing Date shall be deemed to be the amounts set forth on Schedule 1.2.

 

Fixed Charges: the sum of cash interest expense (net of payments
received in respect of interest rate Hedging Agreements and interest income for
such period), principal payments made on Borrowed Money (including the
Amortization Equipment Amount and Amortization Mortgage Property Amount but
otherwise excluding payments on other Revolver Loans and excluding any
principal payments made with the proceeds of, and concurrently with or promptly
following the incurrence of, new Debt permitted to be incurred under this
Agreement), cash payments in respect of taxes, and Distributions (excluding
Distributions made by any Borrower or any Subsidiary to any other Borrower or
Subsidiary and any Distributions of the type described in clauses (iii) and
(iv) of Section 10.2.4).

 

FLSA: the Fair
Labor Standards Act of 1938.

 

Foreign Lender: any Lender
that is organized under the laws of a jurisdiction other than the laws of the
United States, or any state or district thereof.

 

Foreign Plan: any employee
benefit plan or arrangement (a) maintained or contributed to by any
Obligor or Subsidiary that is not subject to the laws of the United States; or (b) mandated
by a government other than the United States for employees of any Obligor or
Subsidiary.

 

Foreign Subsidiary: a Subsidiary that is a “controlled foreign
corporation” under Section 957 of the Code.

 

Forest Products: Forest Products Holdings, L.L.C., a Delaware
limited liability company.

 

Full Payment: with respect to any Obligations, (a) the
full and indefeasible cash payment thereof, including any interest, fees and
other charges accruing during an Insolvency Proceeding (whether or not allowed
in the proceeding); (b) Cash Collateralization (or delivery of a standby
letter of credit acceptable to Agent in its discretion, in the amount of
required Cash Collateral) of all LC Obligations; (c) adequate
provision (as determined by Agent in its discretion, reasonably exercised)
having been made for the repayment of all contingent or inchoate Obligations
related to the provisional application of collections to the Loan Account,
including the amount of any automated clearinghouse transfers and the full face
amount of any check or other instrument that may be dishonored or returned or
that remain unpaid for any reason, plus any bank charges and all other
reasonable costs that may be incurred by Agent or any Lender or that may
otherwise arise as a result of any such dishonor or return; and (d) adequate
provision (as determined by the Agent in its discretion, reasonably exercised)
having been made for any claims against any Indemnitee that have been asserted
or threatened or that can otherwise reasonably be identified by 

 

15

 

Agent based on the then-known facts and circumstances.  No
Loans shall be deemed to have been paid in full until all Commitments related
to such Loans have expired or been terminated.

 

GAAP: generally
accepted accounting principles in effect in the United States from time to
time.

 

General Intangibles: as defined in
Section 1.3.

 

Goods: as defined in
Section 1.3.

 

Governmental Approvals: all
authorizations, consents, approvals, licenses and exemptions of, registrations
and filings with, and required reports to, all Governmental Authorities.

 

Governmental Authority: any federal,
state, province, territory, municipal, foreign or other governmental
department, agency, commission, board, bureau, court, tribunal,
instrumentality, political subdivision, or other entity or officer exercising
executive, legislative, judicial, regulatory or administrative functions for or
pertaining to any government or court, in each case whether associated with the
United States, a state, district or territory thereof, or a foreign entity or
government.

 

Guaranteed Obligations:  as defined in Section 15.1.1.

 

Guarantor Payment: as defined in
Section 5.11.3.

 

Guarantor: each Initial
Guarantor and each other Person who guarantees payment or performance of any
Obligations from time to time.

 

Guaranty: collectively,
the Guaranty made by the Initial Guarantors hereunder, together with each other
guaranty and guaranty supplement delivered pursuant to Section 10.1.9.

 

Hedging Agreement: an agreement
relating to any swap, cap, floor, collar, option, forward, cross right or
obligation, or combination thereof or similar transaction, with respect to
interest rate, foreign exchange, currency, commodity, credit or equity risk.

 

Home Depot: Home Depot
Inc., a Delaware corporation and its Affiliates.

 

Indemnified Taxes: Taxes other
than Excluded Taxes.

 

Indemnitees: Agent
Indemnitees, Lender Indemnitees, Issuing Bank Indemnitees and Bank of America
Indemnitees.

 

Indenture: that certain
Indenture dated as of October 29, 2004 between Boise Cascade, Boise
Cascade Finance Corporation, certain guarantors party thereto and U.S. Bank
National Association.

 

Initial Guarantors: as defined in
the preamble to this Agreement.

 

Initial Guaranty: as defined in
Section 15.1.1.

 

Insolvency Proceeding: any case,
filing or proceeding commenced by or against a Person under any state, federal
or foreign law for, or any agreement of such Person to, (a) the entry of
an order for relief under the Bankruptcy Code, or any other insolvency, debtor
relief or debt adjustment law; (b) the appointment of a receiver, interim
receiver, trustee, liquidator, administrator, monitor, conservator or other
custodian for such Person or any part of its Property; or (c) an
assignment or trust mortgage for the benefit of creditors.

 

16

 

Insurance Assignment: each
collateral assignment of insurance pursuant to which an Obligor assigns to
Agent, for the benefit of Secured Parties, such Obligor’s rights under property
insurance covering the Collateral (and Equipment and Real Estate included in
PP&E during the PP&E Inclusion Period) and business interruption
insurance.  In addition, Agent, for itself
and on behalf of the Lenders, shall be named as additional insured on all
liability policies of Obligors other than D&O, fiduciary, special crime,
and workers’ compensation policies.

 

Instrument: as defined in
Section 1.3.

 

Intellectual Property: all right,
title and interest in, to and under its current and future Copyrights, Patents,
Trade Secrets, and Trademarks including, without limitation all, intellectual
rights and similar Property of a Person, including inventions, designs, internet
domain names, Patents, registered Copyrights, registered Trademarks, material
unregistered Trademarks, service marks, trade names, trade secrets,
confidential or any other proprietary information of any kind or nature,
customer lists, know-how, software and databases; all embodiments or fixations
thereof and all related documentation, applications, and registrations and
franchises; and all books and records relating to the foregoing, in any format
or media, and including without limitation all proceeds thereof (such as, by
way of example but not by way of limitation, license royalties and proceeds of
infringement suits or settlements), the right to sue for past, present and
future infringements or dilution of any of the foregoing or for any injury to
goodwill, all rights corresponding thereto throughout the world and all
re-issues, divisions, continuations, renewals,   extensions and continuations-in-part thereof;
provided, however, that Intellectual Property does not include
the Excluded Copyrights. 

 

Intellectual Property Claim: any claim or
assertion (in writing or by suit filed against a Borrower or a Subsidiary) that
a Borrower’s or Subsidiary’s ownership, use, marketing, sale or distribution of
any Inventory, Equipment, Intellectual Property or other Property violates
another Person’s Intellectual Property.

 

Intercompany Obligations: as defined in
Section 15.5.

 

Interest Period: as defined in
Section 3.1.3.

 

Inventory: as defined in
Section 1.3.

 

Inventory Formula Amount: (a) the
lesser of (i) 85% of the NOLV Percentage of the Value of Appraised
Inventory or (ii) 70% of the Value of Eligible Inventory, provided,
however, that there will be excluded from the calculation of Inventory
Formula Amount under (i) or (ii) above the Value of Eligible Offsite
Inventory in excess of 5% of the Revolving Commitments at any time; and (b) the
Value of Eligible In-Transit Inventory in excess of 10% of the Borrowing Base
at any time.

 

Inventory Reserve: reserves
established by Agent to reflect factors that may negatively impact the Value of
Inventory, including change in salability, obsolescence, seasonality, theft,
shrinkage, imbalance, change in composition or mix, markdowns and vendor
chargebacks.

 

Investment: any
acquisition of all or substantially all assets of a Person; any acquisition of
record or beneficial ownership of any Equity Interests of a Person; or any
advance or capital contribution to or other investment in a Person.  For purposes of calculation, the amount of
any Investment outstanding at any time shall be the aggregate Investment less
all cash dividends and cash distributions (or the fair market value of any
non-cash dividends and distributions) received by such Person.

 

Investment Property: as defined in
Section 1.3.

 

17

 

IPO: initial
public offering by (i) any Person that directly or indirectly owns the majority of
the Equity Interests of the Parent (other than the Principal Holder or any
Person owning the majority of its Equity Interests), (ii) the
Parent or (iii) Boise Cascade of its Equity Interests to the public by
means of an offering registered with the Securities and Exchange Commission.

 

IRS: the United
States Internal Revenue Service.

 

Issuing Bank: Bank of
America or an Affiliate of Bank of America and any other Lender selected by
Borrowers and approved by the Agent in its discretion, reasonably
exercised.  Any Issuing Bank may, in its
discretion, reasonably exercised, arrange for one or more Letters of Credit to
be issued by Affiliates of such Issuing Bank, in which case the term “Issuing
Bank” shall include any such Affiliate with respect to Letters of Credit issued
by such Affiliate.

 

Issuing Bank Indemnitees: Issuing Bank
and its officers, directors, employees, Affiliates, agents and attorneys.

 

LC Application: an application by Borrower Agent to Issuing Bank
for issuance of a Letter of Credit, in form and substance satisfactory to
Issuing Bank.

 

LC Conditions: the following conditions necessary for issuance
of a Letter of Credit: (a) each of the conditions set forth in Section 6; (b) after giving effect to such issuance,
total LC Obligations do not exceed the Letter of Credit Sublimit, no
Overadvance exists and, if no Revolver Loans are outstanding, the LC
Obligations do not exceed the Borrowing Base (without giving effect to the LC
Reserve for purposes of this calculation); (c) the expiration date of such
Letter of Credit is (i) no more than 365 days from issuance, in the case
of standby Letters of Credit, (ii) no more than 120 days from issuance, in
the case of documentary Letters of Credit, and (iii) at least 5 Business
Days prior to the Revolver Termination Date; (d) the Letter of Credit and
payments thereunder are denominated in Dollars; and (e) the form of the
proposed Letter of Credit is satisfactory to Agent and Issuing Bank in their
discretion.

 

LC Documents: all documents, instruments and agreements
(including LC Requests and LC Applications) delivered by Borrowers or any other
Person to Issuing Bank or Agent in connection with issuance, amendment or
renewal of, or payment under, any Letter of Credit.

 

LC Obligations: the sum (without duplication) of (a) all
amounts owing by Borrowers for any drawings under Letters of Credit; (b) the
stated amount of all outstanding Letters of Credit; and (c) all fees and
other amounts owing with respect to Letters of Credit.

 

LC Request: a request for issuance of a Letter of
Credit, to be provided by Borrower Agent to Issuing Bank, in form satisfactory
to Agent and Issuing Bank.

 

LC Reserve: the aggregate of all LC Obligations, other
than those that have been Cash Collateralized.

 

Lender Indemnitees: Lenders and
their officers, directors, employees, Affiliates, agents and attorneys.

 

Lenders: as defined in
the preamble to this Agreement, including Agent in its capacity as a provider
of Swingline Loans and any other Person who hereafter becomes a “Lender”
pursuant to an Assignment and Acceptance or pursuant to Section 2.4.

 

Lending Office: the office designated as
such by the applicable Lender at the time it becomes party to this Agreement or
thereafter by notice to Agent and Borrower Agent.

 

18

 

Letter of
Credit: any standby or documentary letter of credit
issued by Issuing Bank for the account of a Borrower, or any indemnity,
guarantee, exposure transmittal memorandum or similar form of credit support
issued by Agent or Issuing Bank for the benefit of a Borrower.

 

Letter-of-Credit Right: as defined in Section 1.3.

 

Letter
of Credit Sublimit: $100,000,000.  The Letter
of Credit Sublimit is part of, and not in addition to, the Revolving Credit
Facility.

 

LIBOR: for any Interest Period with respect to a
LIBOR Loan, the per annum rate of interest (rounded upward, if necessary, to
the nearest 1/32nd of 1%), determined by Agent at approximately 11:00 a.m.
(London time) two Business Days prior to commencement of such Interest Period,
for a term comparable to such Interest Period, equal to (a) the British
Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters
(or other commercially available source designated by Agent); or (b) if
BBA LIBOR is not available for any reason, the interest rate at which Dollar
deposits in the approximate amount of the LIBOR Loan would be offered by Bank
of America’s London branch to major banks in the London interbank Eurodollar
market.  If the Board of Governors
imposes a Reserve Percentage with respect to LIBOR deposits, then LIBOR shall
be the foregoing rate, divided by 1 minus the Reserve Percentage.

 

LIBOR Loan: each set of LIBOR Revolver Loans having a
common length and commencement of Interest Period.

 

LIBOR Revolver Loan: a Revolver Loan that bears interest based
on LIBOR.

 

License: any license or
agreement under which an Obligor is authorized to use Intellectual Property in
connection with (a) any manufacture, marketing, distribution or
disposition of Collateral, (b) any use of Property or (c) any other
conduct of its business (in each case, other than any shrink-wrap license or
other similar license or agreement associated with generally available “off-the-shelf”
software).

 

Licensor: any Person from
whom an Obligor obtains the right to use any Intellectual Property pursuant to
a License.

 

Lien: any Person’s interest in Property securing
an obligation owed to, or a claim by, such Person, whether such interest is
based on common law, statute or contract, including liens, security interests,
pledges, hypothecations, statutory trusts, reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases, and other title exceptions and encumbrances affecting Property; provided,
however, that non-exclusive licenses of Intellectual Property in the
Ordinary Course of Business are not Liens.

 

Lien Waiver: an agreement, in form and substance
satisfactory to Agent, by which (a) for any material Collateral located on
leased premises, the lessor waives or subordinates any Lien it may have on the
Collateral, and agrees to permit Agent to enter upon the premises and remove
the Collateral or to use the premises to store or dispose of the Collateral; (b) for
any Collateral held by a warehouseman, processor, shipper, customs broker or freight
forwarder, such Person waives or subordinates any Lien it may have on the
Collateral, agrees to hold any Documents in its possession relating to the
Collateral as agent for Agent, and agrees to deliver the Collateral to Agent
upon request; (c) for any Collateral held by a repairman, mechanic or
bailee, such Person acknowledges Agent’s Lien, waives or subordinates any Lien
it may have on the Collateral, and agrees to deliver the Collateral to Agent
upon request; and (d) for any Collateral subject to a Licensor’s
Intellectual Property rights, the Licensor grants to Agent the right, vis-à-vis such
Licensor, to use such Intellectual Property in connection with the enforcement
of Agent’s Liens with respect to the Collateral, including the right to dispose
of it with the benefit of such Intellectual 

 

19

 

Property, whether or not
a default exists under any applicable License, so long as Agent causes payments
(other than accrued payments not paid by the Borrowers) to be kept current
under such License.

 

Loan: a Revolver Loan.

 

Loan Account: the loan account established by each Lender
on its books pursuant to Section 5.8.

 

Loan Documents: this Agreement, Other Agreements and
Security Documents.

 

Loan Year: each 12 month period commencing on the
Closing Date and on each anniversary of the Closing Date.

 

Lowe’s: 
Lowes Companies Inc., a North Carolina corporation and its Affiliates.

 

Margin Stock: as defined in Regulation U of the Board of
Governors.

 

Material Acquisition has the meaning assigned to such term in the
definition of “EBITDA”.

 

Material Adverse Effect: the effect of any event or circumstance
that, taken alone or in conjunction with other events or circumstances, (a) has
or could reasonably be expected to have a material adverse effect on the
business, operations, Properties, or condition (financial or otherwise) of any
Borrower individually or the Obligors taken as a whole, on the value of any
material portion of the Collateral, on the enforceability of any Loan
Documents, or on the validity or priority of Agent’s Liens on any material
portion of the Collateral; (b) impairs the ability of any Borrower
individually or the Obligors taken as a whole to perform any obligations under
the Loan Documents, including repayment of any Obligations; or (c) otherwise
impairs the ability of Agent or any Lender to enforce or collect any
Obligations or to realize upon any material portion of the Collateral.

 

Material Contract: any agreement or arrangement to which a Borrower
or Subsidiary is party (other than the Loan Documents) (a) that is deemed
to be a material contract under any securities law applicable to such Obligor,
including the Securities Act of 1933; (b) for which breach, termination,
nonperformance or failure to renew could reasonably be expected to have a
Material Adverse Effect; or (c) that relates to Subordinated Debt, or Debt
in an aggregate amount of $10,000,000  or more,
all of which as of the Closing Date are listed on Schedule 1.3.

 

Material License: any License that is a Material Contract and
that is necessary with respect to the use of any material portion of the
Collateral (including the manufacture, distribution or disposition of
Inventory) or any other material portion of the Property of Obligors and
Subsidiaries.

 

Material Subsidiary: at any time, any Subsidiary,
whether now owned or hereafter formed or acquired, (a) whose total assets
at any time equal or exceed five percent (5%) of the consolidated assets of
Boise Cascade and its Subsidiaries as shown on Boise Cascade’s consolidated
financial statements for its most recent Fiscal Quarter or (b) whose total
revenue for such Fiscal Quarter equals or exceeds five percent (5%) of the
consolidated revenue of Boise Cascade and its Subsidiaries as shown on Boise
Cascade’s consolidated financial statements for its most recent Fiscal Quarter;
provided that, no Foreign Subsidiary shall be considered a Material
Subsidiary or be included in any of the calculations above in determining
Material Subsidiaries.

 

Members:  the
holders of the Equity Interests of Parent.

 

Moody’s: 
Moody’s Investors Service, Inc., and its successors.

 

20

 

Mortgage: each mortgage,
deed of trust, or deed to secure debt in form and substance acceptable to the
Agent pursuant to which a Borrower grants to Agent, for the benefit of Secured
Parties, Liens upon the Real Estate owned by such Borrower, as security for the
Obligations.

 

Mortgaged Property: each parcel of Real Estate of a Borrower for which a Mortgage has
been delivered to Agent.

 

Mortgage Support Documents:  for each Mortgaged Property
with respect to any Real Estate owned by a Borrower and subject to a Mortgage,
the following, in form and substance satisfactory to Agent and received by
Agent for review at least 15 days prior to the effective date of the
Mortgage:  (a) a mortgagee title
policy (or binder therefor) covering Agent’s interest under the Mortgage
(except where Agent determines such document is not necessary), in a form and
amount and by an insurer acceptable to Agent, which must be fully paid on such
effective date; (b) such assignments of leases, owner’s or lessee’s
affidavits, estoppel letters, attornment agreements, consents, waivers and
releases as Agent may require with respect to other Persons having an interest
in the Real Estate; (c) a current, as-built survey of the Real Estate,
containing a metes-and-bounds property description and flood plain
certification, and certified by a licensed surveyor acceptable to Agent; (d) flood
insurance in an amount, with endorsements and by an insurer acceptable to
Agent, if the Real Estate is within a flood plain; (e) a current fair
market appraisal of the Real Estate, prepared by an appraiser selected by Agent
and reasonably acceptable to Borrowers, and in form and substance reasonably
satisfactory to Agent; (f) an environmental assessment, prepared by
environmental engineers acceptable to Agent, and accompanied by such reports,
certificates, studies or data as Agent may reasonably require; (g) such
opinions of local counsel with respect to the Mortgages as Agent may reasonably
require, and (h) an Environmental Agreement and such other documents,
instruments or agreements as Agent may reasonably require with respect to any
environmental risks regarding the Real Estate.

 

Multiemployer Plan: any employee benefit plan of the
type described in Section 4001(a)(3) of ERISA, to which any Obligor
or ERISA Affiliate makes or is obligated to make contributions, or during the
preceding five plan years, has made or been obligated to make contributions.

 

Net Proceeds: with respect to an Asset Disposition,
proceeds (including, when received, any deferred or escrowed payments) received
by a Borrower or Subsidiary in cash from such disposition, net of (a) reasonable
and customary costs and expenses actually incurred in connection therewith,
including legal fees and sales commissions; (b) amounts applied to
repayment of Debt secured by a Permitted Lien senior to Agent’s Liens on
Collateral sold; (c) transfer or similar taxes; and (d) reserves for
indemnities, until such reserves are no longer needed.

 

NOLV Percentage: the net orderly liquidation value of Borrowers’
Inventory, expressed as a percentage, expected to be realized at an orderly,
negotiated sale held within a reasonable period of time, net of all liquidation
expenses, as determined from the most recent appraisal of Borrowers’ Inventory,
performed by an appraiser and on terms reasonably satisfactory to Agent and
which may be adjusted upward and downward in Agent’s Credit
Judgment to reflect seasonal factors as expressed in such appraisals from time
to time.

 

Notes: each Revolver Note or other promissory note
executed by a Borrower to evidence any Obligations.

 

Notice of Borrowing: a Notice of Borrowing to be provided by
Borrower Agent to request a Borrowing of Revolver Loans, in form satisfactory
to Agent.

 

Notice of
Conversion/Continuation:
a Notice of Conversion/Continuation to be provided by Borrower Agent to request
a conversion or continuation of any Loans as LIBOR Loans, in form satisfactory
to Agent.

 

21

 

Notice of Exclusive Control: as defined in Section 8.5.

 

Obligations: all (a) principal of and premium, if
any, on the Loans, (b) LC Obligations and other obligations of Obligors
with respect to Letters of Credit, (c) interest, expenses, fees and other
sums payable by Obligors under Loan Documents, (d) obligations of Obligors
under any indemnity for Claims, (e) Extraordinary Expenses, (f) Bank Product
Debt, and (g) other Debts, obligations and liabilities of any kind owing
by Obligors to Agent or Lenders pursuant to the Loan Documents, including the
Guaranteed Obligations, whether now existing or hereafter arising, whether
evidenced by a note or other writing, whether allowed in any Insolvency
Proceeding, whether arising from an extension of credit, issuance of a letter
of credit, acceptance, loan, guaranty, indemnification or otherwise, and
whether direct or indirect, absolute or contingent, due or to become due,
primary or secondary, or joint or several; provided, however,
that in no event shall Bank Product Debt payable to any Lender or any Affiliate
of any Lender (other than Bank of America and its Affiliates) constitute “Obligations”
unless (i) such Bank Product Debt was incurred after such Lender or such
Affiliate has provided written notice to Agent that such Lender or Affiliate
intends to provide Bank Products and the amount and nature thereof (together
with written notice to Agent if at any time the aggregate amount of Bank
Product Debt payable to such Lender increases by more than $100,000); (ii) sufficient
Availability exists to impose a Bank Product Reserve in respect of such Bank
Product Debt, (iii) Agent has established such Bank Product Reserve, and (iv) Agent
has delivered written notice to such Lender or such Affiliate that the
foregoing conditions have been met and the applicable Bank Product Debt
constitutes “Obligations” under this Agreement (which notice Agent agrees to
deliver promptly following the satisfaction of the conditions set forth in the
foregoing clauses (i), (ii), and (iii)).

 

Obligor: each Borrower, Guarantor, or other Person
that is liable for payment of any Obligations or that has granted a Lien in
favor of Agent on its assets to secure any Obligations.

 

Ordinary Course of Business: the ordinary course of business of any
Borrower or Subsidiary, in the exercise of its reasonable business judgment and
undertaken in good faith.

 

Organic Documents: with respect to any Person, its charter,
certificate or articles of incorporation, bylaws, articles of organization,
limited liability agreement, operating agreement, members agreement,
shareholders agreement, partnership agreement, certificate of partnership,
certificate of formation, voting trust agreement, or similar agreement or
instrument governing the formation or operation of such Person.

 

OSHA: the Occupational Safety and Hazard Act of
1970.

 

Other Agreements: the Notes, the LC Documents, the Fee
Letter, the Lien Waivers, the Mortgage Support Documents; each Borrowing Base
Certificate, each Compliance Certificate, each financial statement or report
delivered hereunder; and each other document, instrument or agreement (other
than this Agreement or a Security Document) now or hereafter delivered by an
Obligor or other Person to Agent or a Lender in connection with any
transactions relating hereto (excluding any contracts of the Borrowers or any
Subsidiaries with parties other than Agent or Lenders).

 

Other Taxes: all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.

 

Outsourcing Services
Agreement: the Outsourcing Services Agreement dated as
of February 22, 2008 by and between Boise Cascade L.L.C. and Boise Paper
Holdings, L.L.C.

 

Overadvance: as defined in Section 2.1.5.

 

22

 

Overadvance Loan: a Base Rate Loan made when an Overadvance
exists or is caused by the funding thereof.

 

Paper Group: collectively, (a) at all times prior
to the Paper Group Disposition, Boise Paper Holdings, L.L.C., Boise Packaging &
Newsprint, L.L.C., Boise Cascade Transportation Holdings Corp., and Boise White
Paper, and their respective Subsidiaries, and (b) at all times after the
Paper Group Disposition, Boise Paper Holdings, L.L.C., Boise Packaging &
Newsprint, L.L.C., Boise Cascade Transportation Holdings Corp., Boise White
Paper, Aldabra Sub Holdings, and Boise, Inc., and their respective
Subsidiaries.

 

Paper Group Disposition: the sale of Boise Paper Holdings, L.L.C.,
Boise Packaging & Newsprint, L.L.C., Boise Cascade Transportation
Holdings Corp., and Boise White Paper, and their respective Subsidiaries,
pursuant to the terms of the Purchase and Sale Agreement.

 

Parent: 
Boise Cascade Holdings, L.L.C., a Delaware limited liability company.

 

Participant: as defined in Section 13.2.

 

Patents:  (a) all letters of patent of the United
States, any other country, union of countries or any political subdivision of
any of the foregoing, and all reissues and extensions thereof, including any of
the foregoing listed in Schedule 9.1.12,
(b) all applications for letters of patent of the United States or any
other country or union of countries or any political subdivision of any of the
foregoing and all divisions, continuations and continuations-in-part thereof,
all improvements thereof, including any of the foregoing listed in Schedule 9.1.12, and (c) any reissues
or extensions of the foregoing.

 

Patent Security Agreement: each patent security agreement pursuant to which an Obligor grants a
Lien on or assigns to Agent, for the benefit of Secured Parties, a Lien on such
Obligor’s interests in its Patents, as security for the Obligations.

 

Patriot Act: the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, Pub. L. No. 107-56, 115 Stat. 272 (2001).

 

Payment Item: each check, draft or other item of payment
payable to a Borrower, including those constituting proceeds of any Collateral.

 

PBGC: the Pension Benefit Guaranty Corporation.

 

Pension Plan: any
employee pension benefit plan (as such term is defined in Section 3(2) of
ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA
and is sponsored or maintained by any Obligor or ERISA Affiliate or to which
the Obligor or ERISA Affiliate contributes or has an obligation to contribute,
or in the case of a multiple employer or other plan described in Section 4064(a) of
ERISA, has made contributions at any time during the preceding five plan years.

 

Permitted
Acquisition: means any acquisition by the Borrowers or
any Subsidiary of all or substantially all the assets of, or all the Equity
Interests in, a Person or division, line of business, or a manufacturing or
distribution facility of a Person permitted by the terms of this Agreement.

 

Permitted Asset Disposition: any Asset Disposition that is:

 

(a)            a sale of Inventory in the Ordinary Course of Business;

 

(b)            a disposition of Inventory that is used, obsolete,
surplus, worn out, unmerchantable or otherwise unsalable in the Ordinary Course
of Business, the Net Proceeds of 

 

23

 

which are deposited into an account subject
to a Deposit Account Control Agreement or remitted to the Agent for application
against outstanding Obligations;

 

(c)            termination of a lease or license of real or personal
Property the termination of which could not reasonably be expected to have a
Material Adverse Effect;

 

(d)            the Paper Group Disposition;

 

(e)            the sale of operations in Brazil including the Equity
Interests of any Subsidiary organized in Brazil or any Domestic Subsidiary with
no assets other than the Equity Interests of any Subsidiary organized in
Brazil;

 

(f)             sales of Cash Equivalents in the
Ordinary Course of Business the Net Proceeds of which are deposited into an account subject to a
Deposit Account Control Agreement or remitted to the Agent for application
against outstanding Obligations;

 

(g)            Asset Dispositions among Borrowers,
among Guarantors, from a Guarantor to a Borrower, or from any Subsidiary that
is not an Obligor to an Obligor;

 

(h)            the lease, sublease, license or
sublicense (on a non-exclusive basis with respect to any intellectual property)
of real, personal or intellectual property in the Ordinary Course of Business
so long as it does not result in a Material Adverse Effect;

 

(i)             Asset Dispositions of property that
does not constitute Collateral (or Equipment or Real Estate included in
PP&E during the PP&E Inclusion Period) (including like-kind exchanges)
to the extent that (i) such property is exchanged for credit against the
purchase price of similar replacement property or (ii) the proceeds of
such Asset Disposition are promptly applied to the purchase price of such
replacement property, in each case under Section 1031 of the Code or otherwise;

 

(j)             Asset Dispositions of Investments
in joint ventures (regardless of the form of legal entity) to the extent
required by, or made pursuant to, customary buy/sell arrangements between the
joint venture parties set forth in joint venture arrangements and similar
binding arrangements;

 

(k)            sales, discounting or forgiveness of
Accounts in the Ordinary Course of Business the Net Proceeds of which are deposited into
an account subject to a Deposit Account Control Agreement or remitted to the
Agent for application against outstanding Obligations;

 

(l)             Asset Dispositions of Real Estate
or Equipment, so long as the PP&E is not included in the Borrowing Base;

 

(m)           voluntary terminations of Hedge
Agreements;

 

(n)            the termination of leases and
licenses in the Ordinary Course of Business;

 

(o)            the abandonment of or failure to
maintain Intellectual Property in the Ordinary Course of Business that is
obsolete, uneconomical or, in the reasonable judgment of an Obligor, no longer
used or useful or necessary in, or material to, its business or that of any
Subsidiary;

 

(p)            Permitted Operating Asset Swaps; and

 

24

 

(q)            any other Asset Disposition so long as (i) no
Default or Event of Default shall exist immediately prior to or would result
directly or indirectly from such Asset Disposition, (ii) Availability
immediately after giving effect thereto and Average Availability for the most
recently ended Fiscal Quarter after giving pro forma effect to thereto, in each
case, shall not be less than the Restricted Payment Availability Threshold, and
(iii) if such Asset Disposition is an Asset Disposition of the type
described in clause (b) of this definition, the Net Proceeds of such Asset
Disposition are deposited into an account subject to a Deposit Account Control
Agreement or remitted to the Agent for application against outstanding
Obligations.

 

Permitted Contingent
Obligations:
Contingent Obligations (a) arising from endorsements of Payment Items for
collection or deposit in the Ordinary Course of Business; (b) arising from Hedging
Agreements permitted hereunder; (c) described on Schedule 10.2.1 existing on the Closing Date, and any
extension or renewal thereof that does not increase the amount of such
Contingent Obligation when extended or renewed; (d) incurred in the
Ordinary Course of Business with respect to surety, appeal or performance
bonds, or other similar obligations; (e) arising from customary
indemnification obligations in favor of purchasers in connection with
dispositions of Equipment permitted hereunder; (f) arising under the Loan
Documents; (g) in respect of Indebtedness permitted under Section 10.2.1. (other than clauses (g) or (h) of
such Section); and (h) not otherwise described in this definition in an
aggregate amount of $1,000,000 or less at any time.

 

Permitted Lien: as defined in Section 10.2.2.

 

Permitted Operating Asset
Swap: any transfer of
Eligible Swap Assets by any Borrower or any Subsidiary in which at least 95% of
the consideration received by the transferor consists of Eligible Swap Assets
(and any balance of such consideration consists of cash); provided that after
giving effect to such transfer, the aggregate fair market value of all assets
transferred pursuant to Permitted Operating Asset Swaps (i) during any
fiscal year of the Borrowers, on a cumulative basis, shall not exceed
$20,000,000 and (ii) during the term of this Agreement, on a cumulative
basis, shall not exceed $40,000,000.

 

Permitted Purchase Money
Debt: Purchase Money
Debt of Borrowers and Subsidiaries that is unsecured or secured only by a
Purchase Money Lien, as long as the aggregate amount of such Debt does not
exceed $25,000,000 at any time and its incurrence does not violate Section 10.2.3.

 

Permitted Restrictive
Agreement:  as defined in Section 10.2.14.

 

Permitted Tax
Distributions: Tax Distributions to Parent and/or by
Parent to its Members in respect of any taxable year of Parent equal to the
product of (a) the amount of taxable income allocated to the Members for
such taxable year, less the amount of taxable loss allocated to the Members for
all prior taxable years (except to the extent such taxable losses have
previously been taken into account under this provision or are not usable to
offset taxable income for such year), multiplied by (b) the highest
aggregate marginal statutory Federal (including alternative minimum tax), state
and local income tax rate (determined taking into account the deductibility of
state and local income taxes for Federal income tax purposes) to which any
of the direct or indirect Members of Parent is subject for such year; and
Parent shall be permitted to make Tax Distributions, and distributions to
Parent shall be permitted, on a quarterly basis during such taxable year based
on the best estimate of the chief financial officer of Parent of the amounts
specified in clauses (a) and (b) above; provided that if the
aggregate amount of the estimated Tax Distributions made in any taxable year of
Parent exceeds the actual maximum amount of Tax Distributions for that year as
finally determined, the amount of any Tax Distributions in the succeeding
taxable year (or, if necessary, any subsequent taxable years) shall be
reduced by the amount of such excess.

 

25

 

Person: any individual, corporation, limited
liability company, partnership, joint venture, joint stock company, land trust,
business trust, unincorporated organization, Governmental Authority or other
entity.

 

Plan: any employee benefit plan (as such
term is defined in Section 3(3) of ERISA) established by an Obligor
or, with respect to any such plan that is subject to Section 412 of the
Code or Title IV of ERISA, an ERISA Affiliate.

 

Pledge Agreement: the pledge agreement pursuant to which
the Obligors pledge and assign to the Agent, for the benefit of Secured
Parties, such Obligor’s current and future owned Equity Interests (other than
Equity Interests in Boise, Inc. and any Foreign Subsidiary that is not a
Pledged Foreign Subsidiary) as security for the Obligations.

 

Pledged Collateral: as defined in the Pledge Agreement.

 

Pledged Foreign Subsidiary: each Foreign Subsidiary identified on Schedule 1.4.

 

Post Petition Interest: as defined in Section 15.5.2.

 

PP&E: as defined in Section 2.2.

 

PP&E
Adjusted Amount: the sum of (a) 85% of the Value
of Eligible Equipment on the PP&E Inclusion Date plus (b) 65%
of the Appraisal Value of Mortgaged Property on the PP&E Inclusion Date, as
such sum shall be reduced on the first day of each month in an amount equal to
the aggregate of the Amortization Equipment Amount plus the Amortization
Mortgage Property Amount, beginning with the first month following the PP&E
Inclusion Date; provided, that such Appraisal Value of any Mortgaged
Property that is the subject of any loss, destruction, or condemnation (less
any Amortization Mortgage Property Amount attributable to such Mortgaged
Property) shall immediately be deducted from the PP&E Adjusted Amount until
such time as such Mortgaged Property is repaired or replaced and the conditions
precedent set forth in Sections 2.2.2
and 2.2.3 are satisfied in respect of the
repaired or replacement Mortgaged Property.

 

PP&E Formula Amount: an amount equal to the lesser of (a) 15%
of the Revolving Commitments, or (b) the PP&E Adjusted Amount.

 

PP&E
Inclusion Date: the date selected by the Borrowers
upon which all PP&E Inclusion Conditions have been met and PP&E is to
be included in the calculation of the Borrowing Base in accordance with the
terms of this Agreement.

 

PP&E Inclusion
Conditions: as
defined in Section 2.2.

 

PP&E Inclusion Period:  the
period commencing on the PP&E Inclusion Date and terminating on the date on
which PP&E is released from inclusion in the Borrowing Base pursuant to Section 2.2.4.

 

Principal Holder: Madison Dearborn Partners IV, L.P. or any
successor fund or partnership, the sole general partner of which is Madison
Dearborn Partners, LLC, its Affiliates and investment funds under common
management with Madison Dearborn Partners IV, L.P.

 

Pro Rata: with respect to any Lender, a percentage
(carried out to the ninth decimal place) determined (a) while Revolver
Commitments are outstanding, by dividing the amount of such Lender’s Revolver
Commitment by the aggregate amount of all Revolver Commitments; and (b) at
any other time, by dividing the amount of such Lender’s Loans and LC
Obligations by the aggregate amount of all outstanding Loans and LC
Obligations.

 

26

 

Properly Contested: with respect to any obligation of an
Obligor, (a) the obligation is subject to a bona fide dispute regarding
amount or the Obligor’s liability to pay; (b) the obligation is being
properly contested in good faith by appropriate proceedings promptly instituted
and diligently pursued; (c) appropriate reserves have been established in
accordance with GAAP; (d) non-payment could not reasonably be expected to
have a Material Adverse Effect or result in forfeiture or sale of any material
assets of the Obligor; (e) no Lien is imposed on assets of the Obligor,
unless bonded and stayed to the satisfaction of Agent; and (f) if the
obligation results from entry of a judgment or other order, such judgment or
order is stayed pending appeal or other judicial review.

 

Property: any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.

 

Protective Advances: as defined in Section 2.1.6.

 

Purchase and Sale Agreement: that certain Purchase and Sale Agreement
dated September 7, 2007 by and among Boise Cascade, Boise Paper Holdings,
L.L.C., Boise Packaging & Newsprint, L.L.C., Boise White Paper,
L.L.C., Boise Cascade Transportation Holdings Corp., L.L.C., Aldabra 2
Acquisition Corp., and Aldabra Sub LLC, as amended prior to and including the
Closing Date.

 

Purchase Money Debt: (a) Debt (other than the Obligations)
for payment of any of the purchase price of fixed or capital assets; (b) Debt
(other than the Obligations) incurred within 90 days before or after
acquisition of any fixed or capital assets, for the purpose of financing any of
the purchase price thereof; and (c) any renewals, extensions or
refinancings (but not increases) thereof.

 

Purchase Money Lien: a Lien that secures Purchase Money Debt,
encumbering only the fixed or capital assets acquired with such Debt and
constituting a Capital Lease or a purchase money security interest under the
UCC.

 

RCRA: the Resource Conservation and Recovery Act
(42 U.S.C. §§ 6991-6991i).

 

Real Estate: all right, title and interest (whether as
owner, lessor or lessee) in any real Property or any buildings, structures,
parking areas or other improvements thereon.

 

Refinancing Conditions: the following conditions for Refinancing
Debt:  (a) it is in an aggregate
principal amount that does not exceed the principal amount of the Debt being
extended, renewed or refinanced plus capitalized interest, fees and expenses
incurred in connection therewith paid in respect of the refinancing thereof; (b) it
has a final maturity no sooner than, and a weighted average life no less than,
the Debt being extended, renewed or refinanced; (c) if required under this
Agreement to be subordinated to the Obligations at least to the same extent as
the Debt being extended, renewed or refinanced; (d) the representations,
covenants and defaults applicable to it are not materially less favorable to
Borrowers than those applicable to the Debt being extended, renewed or
refinanced; (e) no additional Lien is granted to secure it; (f) no
additional Person is obligated on such Debt (unless such Person would otherwise
be permitted under this Agreement to be obligated on the Debt being
refinanced); and (g) upon giving effect to it, no Default or Event of
Default exists.

 

Refinancing Debt: Borrowed Money that is the result of an
extension, renewal or refinancing of Debt permitted under Section 10.2.1(b), (d) or (f).

 

Reimbursement Date: as defined in Section 2.3.2.

 

Registered Intellectual Property: all registered trademarks and registered copyrights, all applications
for registration of trademarks and copyrights (other than the Excluded
Copyrights), and all patents and applications for patents that are, in each
case, owned by an Obligor and that have been issued 

 

27

 

by (with respect to
patents), registered with, or filed with, the United States Patent and
Trademark Office or the United States Copyright Office.

 

Rent and Charges Reserve: the aggregate of (a) all past due rent and other amounts owing
by an Obligor to any landlord, warehouseman, processor, repairman, mechanic,
shipper, freight forwarder, broker or other Person who possesses any Collateral
or could assert a Lien on any Collateral; and (b) a reserve at least equal
to three months rent and other charges that could reasonably be expected to be
payable to any such Person, unless it has executed a Lien Waiver.

 

Report: as defined in Section 12.2.3.

 

Reportable Event: any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.

 

Reporting Availability
Threshold:  the greater of (a) $75,000,000 or (b) 20%
of the Revolving Credit Facility.

 

Required Lenders: Lenders (subject to Section 4.2) having (a) Revolver
Commitments in excess of 50% of the aggregate Revolver Commitments; and (b) if
the Revolver Commitments have terminated, Loans in excess of 50% of all outstanding
Loans.

 

Reserve Percentage: the reserve percentage (expressed as a
decimal, rounded upward to the nearest 1/32nd of 1%) applicable to member banks
under regulations issued from time to time by the Board of Governors for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to
Eurocurrency funding (currently referred to as “Eurocurrency liabilities”).

 

Restricted Investment: any Investment by a Borrower or Subsidiary,
other than (a) Investments to the extent existing on the Closing Date; (b) Investments
by any Borrower in any other Borrower; (c) Cash Equivalents held in a
Controlled Securities Account (to the extent required by the terms of this
Agreement); (d) Investments in any existing Obligor or any new Subsidiary
created or acquired after the Closing Date that becomes an Obligor (provided
that any such Investments shall not exceed $5,000,000 in the aggregate at a
time when any Default or Event of Default exists or would directly or
indirectly result from any such Investment); (e) Investments consummated
after the Closing Date in Subsidiaries that are not Obligors, in the Equity
Interests of Persons that are not Subsidiaries, and in the form of loans to
Persons in which an Obligor holds an Equity Interest; (f) loans and advances permitted under Section 10.2.7;  (g) Investments
in Equity Interests of Boise, Inc. or Debt of Boise, Inc. owing to
any Obligor; (h) Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business; (i) Investments
consisting of non-cash consideration received by the Borrowers or any
Subsidiary in connection with any sale, transfer, lease or other disposition of
assets permitted by Section 10.2.6;
(j) deposits, prepayments and other credits made or extended to suppliers
in the Ordinary Course of Business; (k) Investments in Hedging Agreements;
(l) Specified Investments; (m) minority Investments made in
cooperatives required to obtain goods or services in the ordinary course of
business, not to exceed $5,000,000 at any time outstanding; and (n) Investments
in Louisiana Timber Procurement, LLC, a
Louisiana limited liability company, not to exceed $10,000,000 at any
time outstanding; provided, however, that with respect any
Investment under clause (e) above, (i) no Default or Event of Default
exists immediately prior to or would result directly or indirectly from such
Investment, and (ii) Availability immediately after giving effect thereto
and Average Availability for the most recently ended Fiscal Quarter after
giving pro forma effect to thereto, in each case, shall not be less than the
Restricted Payment Availability Threshold.

 

28

 

Restricted Payment
Availability Threshold:
(a) at any time other than during the PP&E Inclusion Period, the
greater of (i) $45,000,000 or (ii) 15% of the Revolving Credit
Facility or (b) at any time during the PP&E Inclusion Period, the
greater of (i) $75,000,000 or (ii) 15% of the Revolving Credit
Facility.

 

Restrictive Agreement: an agreement (other than a Loan Document)
that conditions or restricts the right of any Borrower, Subsidiary or other
Obligor to incur or repay Borrowed Money, to grant Liens on any assets, to
declare or make Distributions, to modify, extend or renew any agreement
evidencing Borrowed Money, or to repay any intercompany Debt.

 

Revolver Commitment: for any Lender, its obligation to make
Revolver Loans and
to participate in LC Obligations up to the maximum principal amount
shown on Schedule 1.1, or as
hereafter determined pursuant to each Assignment and Acceptance to which it is
a party.  “Revolver Commitments”
means the aggregate amount of such commitments of all Lenders.

 

Revolver Increase Effective
Date: as defined in Section 2.4.4.

 

Revolver Loan: a loan made pursuant to Section 2.1, and any Swingline Loan,
Overadvance Loan or Protective Advance.

 

Revolver Note: a promissory note to be executed by
Borrowers in favor of a Lender, upon such Lender’s request, in the form of Exhibit A, which shall be in the
amount of such Lender’s Revolver Commitment and shall evidence the Revolver
Loans made by such Lender.

 

Revolver Termination Date: February 22, 2013.

 

Revolving Credit Facility: at any time, the aggregate
amount of Lenders’ Revolver Commitments at such time, including after giving
effect to any increase in the aggregate Revolver Commitments pursuant to Section 2.4.

 

Rolling Period: any period of the most recently
ended twelve consecutive months of Borrowers.

 

Royalties: all royalties, fees, expense reimbursement
and other amounts payable by a Borrower under a License.

 

S&P: Standard & Poor’s Ratings
Services, a division of The McGraw-Hill Companies, Inc., and its
successors.

 

Secured Parties: Agent, Issuing Bank, Lenders and providers
of Bank Products.

 

Securities Account Control Agreements: the securities account control agreements, in form and substance
reasonably acceptable to Agent, to be executed by each institution maintaining
a Controlled Securities Account for an Obligor, in favor of Agent, for the
benefit of Secured Parties, as security for the Obligations.

 

Security Documents: the Guaranties, Mortgages, Equipment Security
Agreements, Pledge Agreements, Copyright Security Agreements, Patent Security
Agreements, Trademark Security Agreements, Insurance Assignments, Deposit
Account Control Agreements, and all other documents, instruments and
agreements now or hereafter securing (or given with the intent to secure) any
Obligations.

 

Senior Officer: the chairman of the board, president, chief
executive officer or chief financial officer, treasurer or controller of a
Borrower or, if the context requires, an Obligor.

 

29

 

Settlement Report: a report delivered by Agent to Lenders
summarizing the Revolver Loans and participations in LC Obligations outstanding
as of a given settlement date, allocated to Lenders on a Pro Rata basis in
accordance with their Revolver Commitments.

 

Solvent: as to any Person, such Person (a) owns
Property whose fair salable value is greater than the amount required to pay
all of its debts (including contingent, subordinated, unmatured and unliquidated
liabilities); (b) owns Property whose present fair salable value (as
defined below) is greater than the probable total liabilities (including
contingent, subordinated, unmatured and unliquidated liabilities) of such
Person as they become absolute and matured; (c) is able to pay all of its
debts as they mature; (d) has capital that is not unreasonably small for
its business and is sufficient to carry on its business and transactions and
all business and transactions in which it is about to engage; (e) is not “insolvent”
within the meaning of Section 101(32) of the Bankruptcy Code; and (f) has
not incurred (by way of assumption or otherwise) any obligations or liabilities
(contingent or otherwise) under any Loan Documents, or made any conveyance in
connection therewith, with actual intent to hinder, delay or defraud either
present or future creditors of such Person or any of its Affiliates.  “Fair salable value” means the amount
that could be obtained for assets within a reasonable time, either through
collection or through sale under ordinary selling conditions by a capable and
diligent seller to an interested buyer who is willing (but under no compulsion)
to purchase.

 

Specified Investment: any Investment by the Borrowers or any
Subsidiary that is financed solely with proceeds received from the issuance of
Equity Interests by Boise Cascade after the Closing Date, provided that (i) the
Agent receives written notice describing such investment concurrently with or
promptly following the issuance of such Equity Interests and (ii) such
investment is made within 90 days of receipt by Boise Cascade of such proceeds.

 

Subordinated Debt: (a) the
senior subordinated notes issued by Boise Cascade on October 29, 2004 in
the aggregate principal amount of $400,000,000 and the Indebtedness represented
thereby (the “ Initial Subordinated Debt “) and (b) any
subordinated debt securities issued by Boise Cascade after such date to
refinance the Initial Subordinated Debt; provided  that (i) such subordinated debt
securities do not mature earlier than, or require any scheduled payment of
principal, sinking fund payment or similar payment prior to, the scheduled
maturity date of the Initial Subordinated Debt, (ii) the Indebtedness in
respect of such subordinated debt securities is not guaranteed by any Person
that did not guarantee (and is not permitted by this Agreement to provide a
guaranty) the Initial Subordinated Debt, (iii) the aggregate principal
amount of such subordinated debt securities does not exceed the aggregate
principal amount of Initial Subordinated Debt refinanced thereby plus
capitalized interest and any applicable redemption premiums paid in respect of
the refinancing thereof, (iv) such subordinated debt securities are
unsecured and are not supported by any letter of credit or other credit
enhancement, (v) the terms and conditions of such subordinated debt
securities and any Subordinated Debt Documents in respect thereof (including
subordination provisions, covenants, events of default and any provisions
relating to any mandatory redemption or required offer to repurchase such
subordinated debt securities) are no less favorable in any material respect to
the Obligors and the Lenders than the terms and conditions of the Initial
Subordinated Debt and the Subordinated Debt Documents in respect of the Initial
Subordinated Debt, and (vi) the Initial Subordinated Debt being refinanced
by such subordinated debt securities is repaid on the same date that such
subordinated debt securities are issued.

 

Subordinated Debt Documents:
the Indenture and all other instruments, agreements and other documents
evidencing or governing any Subordinated Debt or providing for any guarantee or
other right in respect thereof.

 

Subsidiary: any entity (other than Boise, Inc. and
its subsidiaries) more than 50% of whose voting securities or Equity Interests
is owned by a Borrower or any combination of Borrowers (including indirect
ownership by a Borrower through other entities in which Borrower directly or
indirectly owns more than

 

30

 

50% of the voting securities or Equity
Interests) and any other entity whose financial results are included in the
consolidated financial statements of the Borrowers.

 

Supporting
Obligation: as defined in Section 1.3.

 

Swingline
Loan: any Borrowing of Base Rate Loans funded with Agent’s funds, until
such Borrowing is settled among Lenders pursuant to Section 4.1.3.

 

Tax
Distributions: means cash distributions by Parent to the Members
in respect of its Equity Interests for the purpose of providing the Members
with funds to pay the tax liability attributable to their shares of the taxable
income of Parent and its subsidiaries.

 

Taxes: all present or
future taxes, levies, imposts, duties, deductions, withholdings, assessments,
fees or other charges that are in the nature of a tax imposed by any
Governmental Authority, including any interest, additions to tax or penalties
applicable thereto.

 

Title
Policy: each ALTA title insurance policy issued with respect to each
Mortgaged Property in form and substance acceptable to Agent and Lenders and
containing such endorsements as Agent and Lenders may require.

 

Trademarks: all United States, state and foreign
trademarks, trade names, corporate names, company names, business names,
fictitious business names, internet domain names, trade dress, service marks,
certification marks, collective marks, logos, all indicators of the source of
goods or services, designs and general intangibles of a like nature, all
registrations and applications for any of the foregoing including, but not
limited to the registrations and applications referred to in Schedule 9.1.12 (as such schedule may be
amended or supplemented from time to time), but excluding in all cases all
intent-to-use United States trademark applications for which an amendment to
allege use or statement of use has not been filed under 15 U.S.C. § 1051(c) or
15 U.S.C. § 1051(d), respectively, or if filed, has not been deemed in
conformance with 15 U.S.C. § 1051(a) or examined and accepted,
respectively, by the United States Patent and Trademark Office, all extensions
or renewals of any of the foregoing, all of the goodwill of the business
connected with the use of and symbolized by the foregoing, the right to sue for
past, present and future infringement or dilution of any of the foregoing or
for any injury to goodwill, and all proceeds of the foregoing, including
licenses, royalties, income, payments, claims, damages, and proceeds of suit.

 

Trademark Security
Agreement:
each trademark security agreement pursuant to which an Obligor grants to Agent,
for the benefit of Secured Parties, a Lien on such Obligor’s interests in
Trademarks, as security for the Obligations.

 

Trade
Secrets: all trade secrets and all other confidential or proprietary
information and know-how including drawings, formulae, schematics, designs,
plans, processes, supplier lists, business plans, business methods and
prototypes now or hereafter owned or used in the business of an entity
throughout the world (all of the foregoing being collectively called a “Trade
Secret”), whether or not such Trade Secret has been reduced to a writing or
other tangible form, including all documents and things embodying,
incorporating, or referring in any way to such Trade Secret, the right to sue
for past, present and future infringement of any Trade Secret, and all proceeds
of the foregoing, including license royalties, income, payments, claims,
damages, and proceeds of suit.

 

Transferee: any actual or
potential Eligible Assignee, Participant or other Person acquiring an interest
in any Obligations.

 

Trigger Period: the period (a) commencing on the
day that an Event of Default occurs, or Average Availability is less than the
Availability Threshold (i) for a period of any calendar month with 

 

31

 

respect to Sections 5.7 and 7.2.1 and (ii) at
any time with respect to Section 10.3.1;
and (b) continuing until no Event of Default has existed and Average
Availability has been greater than the Availability Threshold at all times for
two consecutive months.

 

Type: any type of a
Loan (i.e., Base Rate Loan or LIBOR Loan) that has the same interest option
and, in the case of LIBOR Loans, the same Interest Period.

 

UCC: the Uniform
Commercial Code as in effect in the State of New York or, when the laws of any
other jurisdiction govern the validity, enforceability, perfection, priority or
enforcement of any Lien, the Uniform Commercial Code of such jurisdiction.

 

Unused
Line Fee: as defined in Section 3.2.1.

 

Upstream
Payment: a Distribution by a Subsidiary of a Borrower to such Borrower.

 

Value: (a) for
Inventory, its value determined on the basis of the lower of cost or market,
with cost calculated on the Borrowers’ historical basis, and excluding any
portion of cost attributable to intercompany profit among Borrowers and their
Affiliates; (b) for an Account, its face amount, net of any returns,
rebates, discounts (calculated on the shortest terms), credits, allowances or
Taxes (including sales, excise or other taxes) that have been or could be
claimed by the Account Debtor or any other Person; and (c) for Equipment, the net orderly
liquidation value of such Equipment expected to be realized at an orderly,
negotiated sale held within a reasonable period of time, net of all liquidation
expenses, as determined from the most recent appraisal of such Equipment
performed by an appraiser selected by Agent and reasonably acceptable to
Borrowers, and in form and substance reasonably satisfactory to Agent.

 

1.2.         Accounting Terms. 
Under the Loan Documents (except as otherwise specified herein), all
accounting terms shall be interpreted, all accounting determinations shall be
made, and all financial statements shall be prepared, in accordance with GAAP
applied on a basis consistent with the most recent audited financial statements
of Borrowers delivered to Agent before the Closing Date and using the same
inventory valuation method as used in such financial statements, except for any
changes required or permitted by GAAP if Borrowers’ certified public accountants
concur in such changes and such changes are disclosed to Agent; provided
that, if Borrowers notifies the Agent that Borrowers request an amendment to
any provision hereof to eliminate the effect of any such change in GAAP or in
the application thereof on the operation of such provision (or if the Agent
notifies the Borrowers that the Required Lenders request an amendment to any
provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision  shall have been amended in accordance
herewith.

 

1.3.         Uniform Commercial Code. 
As used herein, the following terms are defined in accordance with the
UCC in effect in the State of New York from time to time:  “Chattel Paper,” “Commercial Tort Claim,” “Deposit
Account,” “Document,” “Equipment,” “General Intangibles,” “Goods,” “Instrument,”
“Inventory,” “Investment Property,” “Letter-of-Credit Right,” “Securities
Account,” and “Supporting Obligation.”

 

1.4.         Certain Matters of
Construction.  The terms “herein,” “hereof,” “hereunder” and
other words of similar import refer to this Agreement as a whole and not to any
particular section, paragraph or subdivision. 
Any pronoun used shall be deemed to cover all genders.  In the computation of periods of time from a
specified date to a later specified date, “from” means “from and including,”
and “to” and “until” each mean “to but excluding.”  The terms “including” and “include” shall
mean “including, without limitation” and, for purposes of each Loan Document,
the parties agree that the rule of ejusdem

 

32

 

generis shall not be applicable to limit any
provision.  Section titles appear as
a matter of convenience only and shall not affect the interpretation of any
Loan Document.  All references to (a) laws
or statutes include all related rules, regulations, interpretations, amendments
and successor provisions; (b) any document, instrument or agreement
include any amendments, waivers and other modifications, extensions or renewals
(to the extent permitted by the Loan Documents); (c) any section mean,
unless the context otherwise requires, a section of this Agreement; (d) any
exhibits or schedules mean, unless the context otherwise requires, exhibits and
schedules attached hereto, which are hereby incorporated by reference; (e) any
Person include successors and assigns; (f) time of day means New York time
of day; or (g) discretion of Agent, Issuing Bank or any Lender mean the
sole and absolute discretion of such Person. 
All calculations of Value, fundings of Loans, issuances of Letters of
Credit and payments of Obligations shall be in Dollars and, unless the context
otherwise requires, all determinations (including calculations of Borrowing
Base and financial covenants) made from time to time under the Loan Documents
shall be made in light of the circumstances existing at such time.  Borrowing Base calculations shall be
consistent with historical methods of valuation and calculation, and otherwise
satisfactory to Agent (and not necessarily calculated in accordance with
GAAP).  Borrowers shall have the burden
of establishing any alleged negligence, misconduct or lack of good faith by
Agent, Issuing Bank or any Lender under any Loan Documents.  No provision of any Loan Documents shall be
construed against any party by reason of such party having, or being deemed to
have, drafted the provision.  Whenever
the phrase “to the best of Borrowers’ knowledge” or words of similar import are
used in any Loan Documents, it means actual knowledge of a Senior Officer,
or knowledge that a Senior Officer would have obtained if he or she had engaged in
good faith and diligent performance of his or her duties, including reasonably
specific inquiries of employees or agents and a good faith attempt to ascertain
the matter to which such phrase relates.  Any Event of Default that
shall have occurred hereunder at any time shall be deemed continuing unless (a) such
Event of Default is cured, provided that an Event of Default may only be cured
within the time-frame and only if so expressly permitted under the terms of
this Agreement or (b) such Event of Default is waived in writing as
required under this Agreement.

 

SECTION 2          CREDIT FACILITIES

 

2.1.         Revolver Commitment.

 

2.1.1.         Revolver Loans.  Each Lender
agrees, severally on a Pro Rata basis up to its Revolver Commitment, on the
terms set forth herein, to make Revolver Loans to Borrowers from time to time
through the Commitment Termination Date. 
The Revolver Loans may be repaid and reborrowed as provided herein.  In no event shall Lenders have any obligation
to honor a request for a Revolver Loan if the unpaid balance of Revolver Loans
outstanding at such time (including the requested Loan) would exceed the
Borrowing Base.

 

2.1.2.         Revolver Notes.  The Revolver
Loans made by each Lender and interest accruing thereon shall be evidenced by
the records of Agent and such Lender.  At
the request of any Lender, Borrowers shall deliver a Revolver Note to such
Lender.

 

2.1.3.         Use of Proceeds.  The proceeds
of Revolver Loans shall be used by Borrowers solely (a) to satisfy
existing Debt; (b) to pay fees and transaction expenses associated with
the closing of this credit facility; (c) to pay Obligations in accordance
with this Agreement; and (d) for working capital and general corporate and
any other lawful corporate purposes of Borrowers (including any transaction
permitted by this Agreement).

 

2.1.4.         Termination of Revolver Commitments. 
The Revolver Commitments shall terminate on the Revolver Termination
Date, unless sooner terminated in accordance with this Agreement.  Upon at least 10 days (or such shorter period
as may be agreed to in writing by Agent in its discretion) prior written notice
to Agent, Borrowers may, at their option, terminate the Revolver Commitments
and this credit facility.  Any notice of
termination given by Borrowers shall be irrevocable; provided that if 

 

33

 

such notice is given in
connection with a refinancing and such refinancing fails to close, such notice
may be revoked one time only during the term of this Agreement and so long as
written notice of such revocation is delivered to Agent at least two Business
Days prior to the date of termination.  On the termination date, Borrowers shall make Full
Payment of all Obligations.

 

2.1.5.         Overadvances.  If the
aggregate outstanding Revolver Loans exceed the Borrowing Base (“Overadvance”)
or the aggregate Revolver Commitments at any time, the excess amount shall be
payable by Borrowers on demand by
Agent, but all such Revolver Loans shall nevertheless constitute Obligations
secured by the Collateral and entitled to all benefits of the Loan
Documents.  Unless its authority has been
revoked in writing by Required Lenders, Agent may require Lenders to honor
requests for Overadvance Loans and to forbear from requiring Borrowers to cure
an Overadvance, (a) when no other Event of Default is known to Agent, as
long as (i) the Overadvance does not continue for more than 30 consecutive
days (and no Overadvance may exist for at least five consecutive days
thereafter before further Overadvance Loans are required), and (ii) the
Overadvance is not known by Agent to exceed the greater of (x) $35,000,000
and (y) 10%
of the Borrowing Base; and (b) regardless of whether an Event of
Default exists, if Agent discovers an Overadvance not previously known by it to
exist, as long as from the date of such discovery the Overadvance (i) is
not increased to more than the greater of (x) $35,000,000 and (y) 10% of the
Borrowing Base, and (ii) does not continue for more than 30
consecutive days.  In no event shall
Overadvance Loans be required that would cause the outstanding Revolver Loans
and LC Obligations to exceed the aggregate Revolver Commitments.  Any funding of an Overadvance Loan or
sufferance of an Overadvance shall not constitute a waiver by Agent or Lenders
of the Event of Default caused thereby. 
In no event shall any Borrower or other Obligor be deemed a beneficiary
of this Section nor authorized to enforce any of its terms.

 

2.1.6.         Protective Advances.  Agent shall
be authorized, in its discretion, at any time that any conditions in Section 6 are not satisfied, and
without regard to the aggregate Commitments, to make Base Rate Loans (“Protective
Advances”) (a) up to an aggregate amount of the greater of (x) $35,000,000
and (y) 10%
of the Borrowing Base outstanding at any time, if Agent deems such Loans
necessary or desirable to preserve or protect Collateral, or to enhance the
collectibility or repayment of Obligations; or (b) to pay any other amounts
chargeable to Obligors under any Loan Documents, including costs, fees and
expenses.  Each Lender shall participate
in each Protective Advance on a Pro Rata basis. 
Required Lenders may at any time revoke Agent’s authority to make
further Protective Advances by written notice to Agent.  Absent such revocation, Agent’s determination
that funding of a Protective Advance is appropriate shall be conclusive.

 

2.2.         PP&E Addition to the Borrowing
Base.  Provided no Default or Event of Default
exists, the Borrowers may, on a single occasion during the term of this
Agreement, elect to include in the Borrowing Base certain Eligible Equipment,
fixtures and Mortgaged Property of the Borrowers (collectively, “PP&E”)
in accordance with the terms of this Section. 
In order to include PP&E in the Borrowing Base, such property must
be otherwise satisfactory to Agent in its reasonable exercise of discretion and
the following conditions shall be satisfied (the “PP&E Inclusion
Conditions”):

 

2.2.1.         Notice of PP&E Inclusion.  At
least 60 days (or such shorter period that Agent may agree in writing) prior to
the PP&E Inclusion Date, the Agent shall have received a written notice
from the Borrower Agent setting forth (a) the intent to include PP&E
in the Borrowing Base in accordance with this Agreement, (b) a description
of all PP&E to be included in the Borrowing Base, including a legal
description of each parcel of Real Estate, if any; and identification of the
type and location of all Equipment, all in form and detail satisfactory to the
Agent and (c) the proposed PP&E Inclusion Date.

 

2.2.2.         Security Instruments.  The Agent
shall have received (a) an Equipment Security Agreement duly executed by
all of the Borrowers owning Equipment, (b) written appraisals of all
Equipment and Real Estate of the Borrowers to be included in the Borrowing
Base, (c) UCC-1 financing 

 

34

 

statements covering all
Equipment, fixtures and proceeds thereof, (d) duly executed Mortgages and
Mortgage Support Document for each parcel of Real Estate to be included in the
Borrowing Base, (e) Insurance Assignments in respect of property insurance
covering the Equipment and Real Estate included in PP&E during the PP&E Inclusion
Period, and (f) all
other documents and agreements reasonably requested by the Agent, all in form
and substance reasonably satisfactory to the Agent and any Lender to the extent
any regulatory requirements (including, without limitation, under the Financial
Institutions Reform Recovery and Enforcement Act of 1989) are implicated with
respect to such Lender by the inclusion of PP&E in the Borrowing Base, and
sufficient to grant and perfect a first priority security interest (subject to
Permitted Liens, provided that such Liens (i) are junior in priority to
the Agent’s Liens or subject to Availability Reserves as required by Agent and (ii) do
not impair the ability of the Agent to realize on or obtain the full benefit of
the Collateral) in and Lien on the Equipment, fixtures and Real Estate of the
Borrowers to the Agent for the benefit of the Lenders.

 

2.2.3.         Certificate.  Agent shall
have received a certificate, in form and substance satisfactory to it, from a
Senior Officer of Borrower Agent certifying that, as of the PP&E Inclusion
Date, (i) no Default or Event of Default exists; (ii) the
representations and warranties set forth in Section 9
are true and correct in all material respects as of that date except to the
extent that such representations and warranties specifically refer to an earlier
date, in which case they are true and correct in all material respects as of
such earlier date; and (iii) that an attached copy of resolutions of the
appropriate governing body of each Borrower authorizing execution and delivery
of the Security Documents relating to the PP&E is true and complete, and
that such resolutions are in full force and effect, were duly adopted, have not
been amended, modified or revoked.

 

2.2.4.         Release of PP&E.  So long as (a) no
Event of Default exists, (b) Availability is greater than the Availability
Threshold and (c) as determined for the prior 45 days, Availability would
have at all times been greater than the Availability Threshold if such
determination had been made excluding any PP&E, then upon delivery of a
certificate requesting the release of the PP&E from inclusion in the
Borrowing Base, together with a Borrowing Base Certificate demonstrating that
outstanding Revolving Loans plus the LC Reserve does not exceed the Borrowing
Base (excluding any PP&E) calculated within seven days of the Agent’s
receipt of the most recent month end Borrowing Base Certificate , the Agent
will release all of its Liens in the PP&E and execute and deliver (at
Borrower’s expense) any documentation reasonably requested by Borrower to give
effect to such release and evidence such release and the Agent agrees to file
(or authorize the Borrowers to file) appropriate amendments to UCC financing
statements to cause such release.

 

2.3.         Letter of Credit Facility.

 

2.3.1.         Issuance of Letters of Credit. 
Issuing Bank agrees to issue Letters of Credit from time to time until 5
days prior to the Revolver Termination Date (or until the Commitment
Termination Date, if earlier), on the terms set forth herein, including the
following:

 

(a)           Each Borrower acknowledges that
Issuing Bank’s willingness to issue any Letter of Credit is conditioned upon
Issuing Bank’s receipt of a LC Application with respect to the requested Letter
of Credit, as well as such other instruments and agreements as Issuing Bank may
customarily require for issuance of a letter of credit of similar type and
amount.  Issuing Bank shall have no
obligation to issue any Letter of Credit unless (i) Issuing Bank receives
a LC Request and LC Application at least three Business Days prior to the requested
date of issuance; and (ii) each LC Condition is satisfied.  If Issuing Bank receives written notice from
a Lender at least five Business Days before issuance of a Letter of Credit that
any LC Condition has not been satisfied, Issuing Bank shall have no obligation
to issue the requested Letter of Credit (or any other) until such notice is
withdrawn in writing by that Lender or until Required Lenders have waived such
condition in accordance with this Agreement. 
Prior to receipt of any such notice, Issuing Bank shall not be deemed to
have knowledge of any failure of LC Conditions.

 

35

 

(b)           Letters of Credit may be requested by
a Borrower only (i) to support obligations of such Borrower incurred in
the Ordinary Course of Business; or (ii) for other purposes as Agent may
approve from time to time in writing in its discretion, reasonably
exercised.  The renewal or extension of any Letter of
Credit shall be treated as the issuance of a new Letter of Credit, except that
delivery of a new LC Application shall be required at the discretion of Issuing
Bank.

 

(c)           Borrowers assume all risks of the
acts, omissions or misuses of any Letter of Credit by the beneficiary.  In connection with issuance of any Letter of
Credit, none of Agent, Issuing Bank or any Lender shall be responsible for the
existence, character, quality, quantity, condition, packing, value or delivery
of any goods purported to be represented by any Documents; any differences or
variation in the character, quality, quantity, condition, packing, value or
delivery of any goods from that expressed in any Documents; the form, validity,
sufficiency, accuracy, genuineness or legal effect of any Documents or of any
endorsements thereon; the time, place, manner or order in which shipment of
goods is made; partial or incomplete shipment of, or failure to ship, any goods
referred to in a Letter of Credit or Documents; any deviation from
instructions, delay, default or fraud by any shipper or other Person in connection
with any goods, shipment or delivery; any breach of contract between a shipper
or vendor and a Borrower; errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex,
telecopy, e-mail, telephone or otherwise; errors in interpretation of technical
terms; the misapplication by a beneficiary of any Letter of Credit or the
proceeds thereof; or any consequences arising from causes beyond the control of
Issuing Bank, Agent or any Lender, including any act or omission of a
Governmental Authority.  The rights and
remedies of Issuing Bank under the Loan Documents shall be cumulative.  Issuing Bank shall be fully subrogated to the
rights and remedies of each beneficiary whose claims against Borrowers are discharged
with proceeds of any Letter of Credit.

 

(d)           In connection with its administration
of and enforcement of rights or remedies under any Letters of Credit or LC
Documents, Issuing Bank shall be entitled to act, and shall be fully protected
in acting, upon any certification, documentation or communication in whatever
form believed by Issuing Bank, in good faith, to be genuine and correct and to
have been signed, sent or made by a proper Person.  Issuing Bank may consult with and employ
legal counsel, accountants and other experts to advise it concerning its
obligations, rights and remedies, and shall be entitled to act upon, and shall
be fully protected in any action taken in good faith reliance upon, any advice
given by such experts.  Issuing Bank may
employ agents and attorneys-in-fact in connection with any matter relating to
Letters of Credit or LC Documents, and shall not be liable for the negligence
or misconduct of agents and attorneys-in-fact selected with reasonable care.

 

2.3.2.         Reimbursement; Participations.

 

(a)           If Issuing Bank honors any request
for payment under a Letter of Credit, Borrowers shall pay to Issuing Bank, on
the same day (“Reimbursement Date”), the amount paid by Issuing Bank
under such Letter of Credit,
together with interest at the interest rate for Base Rate Loans from the
Reimbursement Date until payment by Borrowers. 
The obligation of Borrowers to reimburse Issuing Bank for any payment
made under a Letter of Credit shall be absolute, unconditional, irrevocable,
and joint and several, and shall be paid without regard to any lack of validity
or enforceability of any Letter of Credit or the existence of any claim,
setoff, defense or other right that Borrowers may have at any time against the
beneficiary.  Whether or not Borrower
Agent submits a Notice of Borrowing, Borrowers shall be deemed to have
requested a Borrowing of Base Rate Loans in an amount necessary to pay all
amounts due Issuing Bank on any Reimbursement Date and each Lender agrees to
fund its Pro Rata share of such Borrowing whether or not the Commitments have
terminated, an Overadvance exists or is created thereby, or the conditions in Section 6 are satisfied.

 

(b)           Upon issuance of a Letter of Credit,
each Lender shall be deemed to have irrevocably and unconditionally purchased
from Issuing Bank, without recourse or warranty, an undivided Pro Rata interest
and participation in all LC Obligations relating to the Letter of Credit.  If Issuing Bank 

 

36

 

makes any payment under a
Letter of Credit and Borrowers do not reimburse such payment on the
Reimbursement Date, Agent shall promptly notify Lenders and each Lender shall
promptly (within one Business Day) and unconditionally pay to Agent, for the
benefit of Issuing Bank, Lender’s Pro Rata share of such payment.  Upon request by a Lender, Issuing Bank shall
furnish copies of any Letters of Credit and LC Documents in its possession at
such time.

 

(c)           The obligation of each Lender to make
payments to Agent for the account of Issuing Bank in connection with Issuing
Bank’s payment under a Letter of Credit shall be absolute, unconditional and
irrevocable, not subject to any counterclaim, setoff, qualification or
exception whatsoever, and shall be made in accordance with this Agreement under
all circumstances, irrespective of any lack of validity or unenforceability of
any Loan Documents; any draft, certificate or other document presented under a
Letter of Credit having been determined to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect; or the existence of any setoff or defense that any Obligor may
have with respect to any Obligations. 
Issuing Bank does not assume any responsibility for any failure or delay
in performance or any breach by any Borrower or other Person of any obligations
under any LC Documents.  Issuing Bank
does not make to Lenders any express or implied warranty, representation or
guaranty with respect to the Collateral, LC Documents or any Obligor.  Issuing Bank shall not be responsible to any
Lender for any recitals, statements, information, representations or warranties
contained in, or for the execution, validity, genuineness, effectiveness or
enforceability of any LC Documents; the validity, genuineness, enforceability,
collectibility, value or sufficiency of any Collateral or the perfection of any
Lien therein; or the assets, liabilities, financial condition, results of
operations, business, creditworthiness or legal status of any Obligor.

 

(d)           No Issuing Bank Indemnitee shall be
liable to any Lender or other Person for any action taken or omitted to be
taken in connection with any LC Documents except as a result of its actual
gross negligence or willful misconduct. 
Issuing Bank shall not have any liability to any Lender if Issuing Bank
refrains from any action under any Letter of Credit or LC Documents until it
receives written instructions from Required Lenders.

 

2.3.3.         Cash Collateral.  If any LC
Obligations, whether or not then due or payable, shall for any reason be
outstanding at any time (a) that an Event of Default exists, (b) that
Availability is less than zero, (c) on or after the Commitment Termination
Date, or (d) within 20 Business Days prior to the Revolver Termination
Date, then Borrowers shall, at Issuing Bank’s or Agent’s request, Cash
Collateralize the stated amount of all outstanding Letters of Credit and pay to
Issuing Bank the amount of all other LC Obligations.  If Borrowers fail to provide Cash Collateral
as required herein, Lenders may (and shall upon direction of Agent) advance, as
Revolver Loans, the amount of the Cash Collateral required (whether or not the Commitments have terminated, an Overadvance exists
or the conditions in Section 6
are satisfied).  If the Borrowers are required to provide an
amount of cash collateral hereunder as a result of the occurrence of an Event
of Default, such amount (to the extent not applied as aforesaid) shall be
returned to the Borrowers within three Business Days after all Events of
Default have been cured, to the extent permitted by and under this Agreement or
waived in writing.

 

2.4.         Increase in Revolving Credit
Facility.

 

2.4.1.         Request for Increase.  Provided
there exists no Default, upon notice to the Agent (which shall promptly notify
the Lenders), the Borrowers may from time to time, request an increase in the
Revolving Credit Facility by an amount (for all such requests) not exceeding
$150,000,000; provided that any such request for an increase shall be in a
minimum amount of $25,000,000.  At the
time of sending such notice, the Borrower Agent (in consultation with the
Agent) shall specify the time period within which each Lender is requested to
respond (which shall in no event be less than ten Business Days from the date
of delivery of such notice to the Lenders).

 

37

 

2.4.2.         Lender Elections to Increase. 
Each Lender shall have the right, but shall be under no obligation, to
participate in any requested increase in the Revolving Credit Facility under
this Section 2.4.  Each Lender shall notify the Agent within the
time period specified in accordance with Section 2.4.1
whether or not it agrees to increase its Revolver Commitment and, if so,
whether by an amount equal to, greater than, or less than its Pro Rata share of
such requested increase.  Any Lender not
responding within such time period shall be deemed to have declined to increase
its Revolver Commitment.

 

2.4.3.         Notification by Agent; Additional Lenders. 
The Agent shall notify the Borrowers and each Lender of the Lenders’
responses to each request made hereunder. 
To achieve the full amount of a requested increase, and subject to the
approval of the Agent, the Issuer Bank and the Lenders of the Swingline Loans
(which approvals shall not be unreasonably withheld), the Borrowers may also
invite additional Eligible Assignees to become Lenders pursuant to a joinder
agreement in form and substance satisfactory to Agent and its counsel.

 

2.4.4.         Effective Date and Allocations. 
If the Revolving Credit Facility is increased in accordance with this
Section, the Agent and the Borrowers shall determine the effective date (the “Revolver Increase Effective Date”) and the final allocation of such
increase.  The Agent shall promptly
notify the Borrowers and the Lenders of the final allocation of such increase
and the Revolver Increase Effective Date. 
Upon the satisfaction of the
conditions precedent set forth in Section 2.4.5
on the proposed Revolver Increase Effective Date and, with respect to any new
Lenders participating in the proposed increase, delivery to Agent of a joinder agreement in form and substance
satisfactory to Agent and its counsel and a
processing fee of $3,500 (unless otherwise agreed by Agent in its discretion), the Revolving Credit Facility shall be so increased and the
applicable Lenders, Agent and Borrowers shall make appropriate arrangements for
issuance of replacement and/or new Notes, as applicable.

 

2.4.5.         Conditions to Effectiveness of Increase. 
As a condition precedent to such increase, the Borrowers shall deliver
to the Agent a certificate of each Obligor dated as of the Revolver Increase
Effective Date signed by a Senior Officer of such Obligor (a) certifying
and attaching the resolutions adopted by such Obligor approving or consenting
to such increase, and (b) in the case of a Borrower, certifying that,
before and after giving effect to such increase, (i) the representations
and warranties contained in Section 9 and
the other Loan Documents are true and correct in all material respects on and
as of the Revolver Increase Effective Date, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they are true and correct as of such earlier date, and except that for
purposes of this Section 2.4.5, the
representations and warranties contained in Section 9.18
shall be deemed to refer to the most recent statements furnished pursuant to
clauses (a), (b) and (c), respectively, of Section 10.1.2,
and (ii) no Default exists.  The
Borrowers shall prepay any Revolver Loans outstanding on the Revolver Increase
Effective Date (and pay any additional amounts required pursuant to Section 3.9) to the extent necessary to keep the
outstanding Revolver Loans ratable with any revised change in the Pro Rata
interests of the Lenders arising from any nonratable increase in the Revolver
Commitments under this Section.

 

2.4.6.         Conflicting Provisions.  This Section shall
supersede any provisions in Section 12.5 or Section 13.1 to the contrary.

 

SECTION 3          INTEREST, FEES AND
CHARGES

 

3.1.         Interest.

 

3.1.1.         Rates and Payment of Interest.

 

(a)           The
Obligations shall
bear interest (i) if a Base Rate Loan, at the Base Rate in effect from
time to time, plus the Applicable Margin; (ii) if a LIBOR Loan, at
LIBOR for the applicable 

 

38

 

Interest
Period, plus the Applicable Margin; and (iii) if any other
Obligation (including, to the extent permitted by law, interest not paid when
due), at the Base Rate in effect from time to time, plus the Applicable
Margin for Base Rate Loans.  Interest shall accrue from the
date the Loan is advanced or the Obligation is incurred or payable, until paid
by Borrowers.  If a Loan is repaid on the
same day made, one day’s interest shall accrue.

 

(b)           During an Insolvency Proceeding with
respect to any Borrower, or during any other Event of Default if Required
Lenders in their discretion so elect, Obligations shall bear interest at the
Default Rate (whether before or after any judgment).  Each Borrower acknowledges that the cost and
expense to Agent and Lenders due to an Event of Default are difficult to
ascertain and that the Default Rate is a fair and reasonable estimate to compensate
Agent and Lenders for this.

 

(c)           Interest accrued on the Loans shall be
due and payable in arrears, (i) on the first day of each month; (ii) on
any date of prepayment, with respect to the principal amount of Loans being
prepaid; and (iii) on the Commitment Termination Date.  Interest accrued on any other Obligations
shall be due and payable as provided in the Loan Documents and, if no payment
date is specified, shall be due and payable on demand.  Notwithstanding the
foregoing, interest accrued at the Default Rate shall be due and payable on demand.

 

3.1.2.         Application of LIBOR to Outstanding Loans.

 

(a)           Borrowers may on any Business Day,
subject to delivery of a Notice of Conversion/Continuation, elect to convert
any portion of the Base Rate Loans to, or to continue any LIBOR Loan at the end
of its Interest Period as, a LIBOR Loan. 
During any Default or Event of Default, Agent may (and shall at the
direction of Required Lenders) declare that no Loan may be made, converted or
continued as a LIBOR Loan. In addition, until the earlier of (a) Agent
notifying Borrower Agent that syndication of the credit facility hereunder is
complete and (b) 120 days following the Closing Date, no Loan may be made
as or converted into a LIBOR Loan, other than a LIBOR Loan with an Interest
Period of one week.

 

(b)           Whenever Borrowers desire to convert
or continue Loans as LIBOR Loans, Borrower Agent shall give Agent a Notice of Conversion/Continuation, no later than
12:00 p.m. at least three Business Days before the requested conversion or
continuation date.  Promptly after
receiving any such notice, Agent shall notify each Lender thereof.  Each Notice of Conversion/Continuation shall
be irrevocable, and shall specify the amount of Loans to be converted or
continued, the conversion or continuation date (which shall be a Business Day),
and the duration of the Interest Period (which shall be deemed to be one month
if not specified).  If, upon the
expiration of any Interest Period in respect of any LIBOR Loans, Borrowers
shall have failed to deliver a Notice of Conversion/Continuation, they shall be
deemed to have elected to convert such Loans into Base Rate Loans.

 

3.1.3.         Interest Periods.  In connection
with the making, conversion or continuation of any LIBOR Loans, Borrowers shall
select an interest period (“Interest Period”) to apply, which Interest
Period shall be a period of one week or a period of one, two or three months; provided,
however, that:

 

(a)           the Interest Period shall commence on
the date the Loan is made or continued as, or converted into, a LIBOR Loan, and
shall expire on (i) the eighth day after commencement in the case of
weekly LIBOR Loans and (ii) on the numerically corresponding day in the
calendar month at its end in the case of monthly LIBOR Loans;

 

(b)           if any Interest Period commences on a
day for which there is no corresponding day in the calendar month at its end or
if such corresponding day falls after the last Business Day of such month, then
the Interest Period shall expire on the last Business Day of such month; and if
any Interest 

 

39

 

Period would expire on a
day that is not a Business Day, the period shall expire on the next Business
Day; and

 

(c)           no Interest Period shall extend beyond
the Revolver Termination Date.

 

3.2.         Fees.

 

3.2.1.         Unused Line Fee.  Borrowers
shall pay to Agent, for the Pro Rata benefit of Lenders, a fee (the “Unused
Line Fee”) equal to the Applicable Margin for the Unused Line Fee times the
amount by which the Revolver Commitments exceed the average daily balance of Revolver Loans
and stated amount of Letters of Credit during any month. 
The Unused Line Fee shall be payable in arrears, on the first day
of each month and on the Commitment Termination Date.

 

3.2.2.         LC Facility Fees.  Borrowers
shall pay (a) to Agent, for the Pro Rata benefit of Lenders, a fee equal
to the Applicable Margin in effect for LIBOR Revolver Loans times the average
daily stated amount of Letters of Credit, which fee shall be payable monthly in
arrears, on the first day of each month; (b) to Issuing Lender, for its
own account, a fronting fee equal to .125% per annum (or such other amount as
may be agreed between Issuing Lender and Borrowers) on the stated amount of
each Letter of Credit it issues, which fee shall be payable monthly in arrears,
on the first day of each month; and (c) to Issuing Bank, for its own
account, all customary charges associated with the issuance, amending,
negotiating, payment, processing, transfer and administration of Letters of
Credit, which charges shall be paid as and when incurred.  During any period when the Default Rate is
applicable pursuant to Section 3.1.1(b),
the fee payable under clause (a) shall be increased by 2% per annum.

 

3.2.3.         Other Fees.  Borrowers
shall pay to Agent the fees described in the Fee Letter.

 

3.3.         Computation of Interest,
Fees, Yield Protection.  All interest,
as well as fees and other charges calculated on a per annum basis, shall be
computed for the actual days elapsed, based on a year of 360 days.  Each determination by Agent of any interest,
fees or interest rate hereunder shall be final, conclusive and
binding for all purposes, absent manifest error.  All fees
shall be fully earned when due and shall not be subject to rebate, refund or
proration.  All fees payable under Section 3.2 are compensation for
services and are not, and shall not be deemed to be, interest or any other
charge for the use, forbearance or detention of money.  A certificate as to amounts
payable by Borrowers under Section 3.4,
3.6, 3.7,  3.9 or 5.9, submitted to Borrower Agent by Agent
or the affected Lender, as applicable, shall be final, conclusive and binding
for all purposes, absent manifest error, and Borrowers shall pay such amounts to the appropriate
party within 10 days following receipt of the certificate.

 

3.4.         Reimbursement Obligations. 
Borrowers shall reimburse Agent for all Extraordinary Expenses.  Borrowers shall also reimburse Agent for all
reasonable legal, accounting, appraisal, consulting, and other fees, costs and
expenses incurred by it in connection with (a) negotiation and preparation
of any Loan Documents, including any amendment or other modification thereof; (b) administration
of and actions relating to any Collateral, Loan Documents and transactions
contemplated thereby, including any actions taken to perfect or maintain
priority of Agent’s Liens on any Collateral, to maintain any insurance required
hereunder or to verify Collateral; and (c) subject to the limits of Section 10.1.1(b), each inspection,
audit or appraisal with respect to any Obligor or Collateral, whether prepared
by Agent’s personnel or a third party. All legal, accounting and consulting
fees shall be charged to Borrowers by Agent’s professionals at their full
hourly rates, regardless of any reduced or alternative fee billing arrangements
that Agent, any Lender or any of their Affiliates may have with such
professionals with respect to this or any other transaction.  If,
for any reason (including inaccurate reporting on financial statements or a
Compliance Certificate), it is determined that a higher Applicable Margin
should have applied to a period than was actually applied, then the proper
margin shall be applied retroactively and Borrowers shall immediately pay to
Agent, for the Pro Rata benefit of Lenders, an amount equal to the difference
between the amount of interest and fees that would have accrued using the
proper margin 

 

40

 

and the amount actually paid. 
All amounts payable by Borrowers under this Section shall be due on
demand.

 

3.5.         Illegality. 
If any Lender determines that any Applicable Law has made it unlawful,
or that any Governmental Authority has asserted that it is unlawful, for any
Lender or its applicable Lending Office to make, maintain or fund LIBOR Loans,
or to determine or charge interest rates based upon LIBOR, or any Governmental
Authority has imposed material restrictions on the authority of such Lender to
purchase or sell, or to take deposits of, Dollars in the London interbank
market, then, on notice thereof by such Lender to Agent, any obligation of such
Lender to make or continue LIBOR Loans or to convert Base Rate Loans to LIBOR
Loans shall be suspended for such Lender until such Lender notifies Agent that
the circumstances giving rise to such determination no longer exist.  Upon delivery of such notice, Borrowers shall
prepay or, if applicable, convert all LIBOR Loans of such Lender to Base Rate
Loans, either on the last day of the Interest Period therefor, if such Lender
may lawfully continue to maintain such LIBOR Loans to such day, or immediately,
if such Lender may not lawfully continue to maintain such LIBOR Loans.  Upon any such prepayment or conversion,
Borrowers shall also pay accrued interest on the amount so prepaid or
converted.

 

3.6.         Inability to Determine Rates. 
If Required Lenders notify Agent for any reason in connection with a
request for a Borrowing of, or conversion to or continuation of, a
LIBOR Loan that (a) Dollar
deposits are not being offered to banks in the London interbank Eurodollar
market for the applicable amount and Interest Period of such Loan, (b) adequate
and reasonable means do not exist for determining LIBOR for the requested
Interest Period, or (c) LIBOR for the requested Interest Period does not
adequately and fairly reflect the cost to such Lenders of funding such Loan,
then Agent will promptly so notify Borrower Agent and each Lender.  Thereafter, the obligation of Lenders to make
or maintain LIBOR Loans shall be suspended until Agent (upon instruction by
Required Lenders) revokes such notice. 
Upon receipt of such notice, Borrower Agent may revoke any pending
request for a Borrowing of, conversion to or continuation of a LIBOR Loan or,
failing that, will be deemed to have submitted a request for a Base Rate Loan.

 

3.7.         Increased Costs; Capital Adequacy.

 

3.7.1.         Change in Law.  If any Change
in Law shall:

 

(a)           impose modify or deem applicable any reserve,
special deposit, compulsory loan, insurance charge or similar requirement
against assets of, deposits with or for the account of, or credit extended or
participated in by, any Lender (except any reserve requirement reflected in
LIBOR) or Issuing Bank;

 

(b)           subject any Lender or Issuing Bank to any
Tax with respect to any Loan, Loan Document, Letter of Credit or participation
in LC Obligations, or change the basis of taxation of payments to such Lender
or Issuing Bank in respect thereof (except for Indemnified Taxes or Other Taxes
covered by Section 5.9 and
the imposition of, or any change in the rate of, any Excluded Tax payable by
such Lender or Issuing Bank); or

 

(c)           impose on any Lender or Issuing Bank or
the London interbank market any other condition, cost or expense affecting any
Loan, Loan Document, Letter of Credit or participation in LC Obligations;

 

and the result thereof shall be to increase
the cost to such Lender of making or maintaining any LIBOR Loan (or of
maintaining its obligation to make any such Loan), or to increase the cost to
such Lender or Issuing Bank of participating in, issuing or maintaining any Letter
of Credit (or of maintaining its obligation to participate in or to issue any
Letter of Credit), or to reduce the amount of any sum received or receivable by
such Lender or Issuing Bank hereunder (whether of principal, interest or any
other 

 

41

 

amount) then, upon request of such Lender or
Issuing Bank, Borrowers will pay to such Lender or Issuing Bank, as applicable,
such additional amount or amounts as will compensate such Lender or Issuing
Bank, as applicable, for such additional costs incurred or reduction
suffered.  Notwithstanding the foregoing,
if Borrowers reasonably believe that any such Taxes were not correctly or
legally asserted, the applicable Lender or Issuing Bank, as the case may be,
will use reasonable efforts to cooperate with the Borrowers to obtain a refund
of such Taxes so long as such efforts would not, in the sole determination of
such Lender or Issuing Bank, as the case may be, result in any non-reimbursable
additional costs, expenses or risks or be otherwise disadvantageous to it.

 

3.7.2.         Capital Adequacy.  If any Lender
or Issuing Bank determines that any Change in Law affecting such Lender or
Issuing Bank or any Lending Office of such Lender or such Lender’s or Issuing
Bank’s holding company, if any, regarding capital requirements has or would
have the effect of reducing the rate of return on such Lender’s, Issuing Bank’s
or holding company’s capital as a consequence of this Agreement, or such Lender’s
or Issuing Bank’s Commitments, Loans, Letters of Credit or participations in LC
Obligations, to a level below that which such Lender, Issuing Bank or holding
company could have achieved but for such Change in Law (taking into
consideration such Lender’s, Issuing Bank’s and holding company’s policies with
respect to capital adequacy), then from time to time Borrowers will pay to such
Lender or Issuing Bank, as the case may be, such additional amount or amounts
as will compensate it or its holding company for any such reduction suffered.

 

3.7.3.         Compensation.  Failure or
delay on the part of any Lender or Issuing Bank to demand compensation pursuant
to this Section shall not constitute a waiver of its right to demand such
compensation, but Borrowers shall not be required to compensate a Lender or
Issuing Bank for any increased costs incurred or reductions suffered more than
six months prior to the date that such Lender or Issuing Bank notifies Borrower
Agent of the Change in Law giving rise to such increased costs or reductions
and of such Lender’s or Issuing Bank’s intention to claim compensation therefor
(except that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the six-month period referred to above shall be
extended to include the period of retroactive effect thereof).

 

3.8.         Mitigation. 
If any Lender gives a notice under Section 3.5
or requests compensation under Section 3.7,
or if Borrowers are required to pay additional amounts with respect to a Lender
under Section 5.9, then such
Lender shall use reasonable efforts to designate a different Lending Office or
to assign its rights and obligations hereunder to another of its offices,
branches or Affiliates, if, in the judgment of such Lender, such designation or
assignment (a) would eliminate the need for such notice or reduce amounts
payable in the future, as applicable; and (b) in each case, would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. 
Borrowers agree to pay all reasonable costs and expenses incurred by any
Lender in connection with any such designation or assignment.

 

3.9.         Funding Losses. 
If for any reason (other than default by a Lender) (a) any
Borrowing of, or conversion to or continuation of, a LIBOR Loan does not occur
on the date specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation (whether or not withdrawn), (b) any repayment or
conversion of a LIBOR Loan occurs on a day other than the end of its Interest
Period, or (c) Borrowers fail to repay a LIBOR Loan when required
hereunder, then Borrowers shall pay to Agent its customary administrative
charge and to each Lender all losses and expenses that it sustains as a
consequence thereof, including loss of anticipated profits and any loss or
expense arising from liquidation or redeployment of funds or from fees payable
to terminate deposits of matching funds. 
Lenders shall not be required to purchase Dollar deposits in the London
interbank market or any other offshore Dollar market to fund any LIBOR Loan,
but the provisions hereof shall be deemed to apply as if each Lender had
purchased such deposits to fund its LIBOR Loans.

 

3.10.       Maximum Interest. 
Notwithstanding anything to the contrary contained in any Loan Document,
the interest paid or agreed to be paid under the Loan Documents shall not
exceed the 

 

42

 

maximum rate of
non-usurious interest permitted by Applicable Law (“maximum rate”).  If Agent or any Lender shall receive interest
in an amount that exceeds the maximum rate, the excess interest shall be
applied to the principal of the Obligations or, if it exceeds such unpaid
principal, refunded to Borrowers.  In
determining whether the interest contracted for, charged or received by Agent
or a Lender exceeds the maximum rate, such Person may, to the extent permitted
by Applicable Law, (a) characterize any payment that is not principal as
an expense, fee or premium rather than interest; (b) exclude voluntary
prepayments and the effects thereof; and (c) amortize, prorate, allocate
and spread in equal or unequal parts the total amount of interest throughout
the contemplated term of the Obligations hereunder.

 

SECTION 4          LOAN ADMINISTRATION

 

4.1.         Manner of Borrowing and Funding
Revolver Loans.

 

4.1.1.         Notice of Borrowing.

 

(a)           Whenever Borrowers desire funding of
a Borrowing of Revolver Loans, Borrower Agent shall give Agent a Notice of
Borrowing.  Such notice must be received
by Agent (i) no later than 2:00 p.m. New York City time on the Business
Day of the requested funding date, in the case of Base Rate Loans, and (ii) no
later than 12:00 p.m. noon, New York city time, at least three Business
Days prior to the requested funding date, in the case of LIBOR Loans.  Notices received after 2:00 p.m. in the
case of Base Rate Loans and 12:00 noon in the case of LIBOR Loans shall be
deemed received on the next Business Day. 
Each Notice of Borrowing shall be irrevocable and shall specify (A) the
amount of the Borrowing, (B) the requested funding date (which must be a
Business Day), (C) whether the Borrowing is to be made as Base Rate Loans
or LIBOR Loans, and (D) in the case of LIBOR Loans, the duration of the
applicable Interest Period (which shall be deemed to be one month if not
specified).

 

(b)           Unless payment is otherwise timely
made by Borrowers, the becoming due of any Obligations (whether principal,
interest, fees or other charges, including Extraordinary Expenses, LC Obligations,
Cash Collateral and Bank Product Debt) shall be deemed to be a request
for Base Rate Loans on the due date, in the amount of such Obligations.  The proceeds of such Revolver Loans shall be
disbursed as direct payment of the relevant Obligation.  In addition, Agent may, at its option, charge
such Obligations against any operating, investment or other account of a
Borrower maintained with Agent or any of its Affiliates.

 

(c)           If Borrowers establish a controlled
disbursement account with Agent or any Affiliate of Agent, then the
presentation for payment of any check or other item of payment drawn on such
account at a time when there are insufficient funds to cover it shall be deemed
to be a request for Base Rate Loans on the date of such presentation, in the
amount of the check and items presented for payment.  The proceeds of such Revolver Loans may be
disbursed directly to the controlled disbursement account or other appropriate
account.

 

4.1.2.         Fundings by Lenders.  Each Lender
shall timely honor its Revolver Commitment by funding its Pro Rata share of
each Borrowing of Revolver Loans that is properly requested hereunder.  Except for Borrowings to be made as Swingline
Loans, Agent shall endeavor to notify Lenders of each Notice of Borrowing (or
deemed request for a Borrowing) by 12:00 noon on the proposed funding date for
Base Rate Loans or by 3:00 p.m. at least two Business Days before any proposed
funding of LIBOR Loans.  Each Lender
shall fund to Agent such Lender’s Pro Rata share of the Borrowing to the
account specified by Agent in immediately available funds not later than 2:00 p.m.
on the requested funding date, unless Agent’s notice is received after the
times provided above, in which event Lender shall fund its Pro Rata share by
11:00 a.m. on the next Business Day. 
Subject to its receipt of such amounts from Lenders, Agent shall
disburse the proceeds of the Revolver Loans as directed by Borrower Agent.  Unless Agent shall have received (in
sufficient time to act) written notice from a Lender that it does not intend to
fund its Pro Rata share of a Borrowing, Agent may assume that such Lender has

 

43

 

deposited or promptly
will deposit its share with Agent, and Agent may disburse a corresponding
amount to Borrowers.  If a Lender’s share
of any Borrowing is not in fact received by Agent, then Borrowers agree to
repay to Agent on demand the amount of such
share, together with interest thereon from the date disbursed until repaid, at
the rate applicable to such Borrowing.

 

4.1.3.         Swingline Loans; Settlement.

 

(a)           Agent may, but shall not be obligated to,
advance Swingline Loans to Borrowers, up to an aggregate outstanding amount of (i) the
greater of $35,000,000 or 10% of the Revolving Credit Facility, unless the
funding is specifically required to be made by all Lenders hereunder.  Each Swingline Loan shall constitute a
Revolver Loan for all purposes, except that payments thereon shall be made to
Agent for its own account.  The
obligation of Borrowers to repay Swingline Loans shall be evidenced by the records of Agent
and need not be evidenced by any promissory note.

 

(b)           To facilitate administration of the
Revolver Loans, Lenders and Agent agree (which agreement is solely among them,
and not for the benefit of or enforceable by any Borrower) that settlement
among them with respect to Swingline Loans and other Revolver Loans may take
place periodically on a date determined from time to time by Agent, which shall
occur at least once each week.  On each settlement
date, settlement shall be made with each Lender in accordance with the
Settlement Report delivered by Agent to Lenders.  Between settlement dates, Agent may in its
discretion apply payments on Revolver Loans to Swingline Loans, regardless of
any designation by Borrower or any provision herein to the contrary.  Each Lender’s obligation to make settlements
with Agent is absolute and unconditional, without offset, counterclaim or other
defense, and whether or not the
Commitments have terminated, an Overadvance exists or the conditions in Section 6 are satisfied.  If, due to an Insolvency Proceeding with
respect to a Borrower or otherwise, any Swingline Loan may not be settled among
Lenders hereunder, then each Lender shall be deemed to have purchased from
Agent a Pro Rata participation in each unpaid Swingline Loan and shall transfer
the amount of such participation to Agent, in immediately available funds,
within one Business Day after Agent’s request therefor.

 

4.1.4.         Notices.   Each
Borrower authorizes Agent and Lenders to extend, convert or continue Loans,
effect selections of interest rates, and transfer funds to or on behalf of
Borrowers based on telephonic or e-mailed instructions.  Borrowers shall confirm each such request by
prompt delivery to Agent of a Notice of Borrowing or Notice of
Conversion/Continuation, if applicable, but if it differs in any material respect
from the action taken by Agent or Lenders, the records of Agent and Lenders
shall govern.  Neither Agent nor any
Lender shall have any liability for any loss suffered by a Borrower as a result
of Agent or any Lender acting upon its understanding of telephonic or e-mailed
instructions from a person believed in good faith by Agent or any Lender to be
a person authorized to give such instructions on a Borrower’s behalf.

 

4.2.         Defaulting Lender. 
If a Lender fails to make any payment to Agent that is required
hereunder, Agent may (but shall not be required to), in its discretion, retain
payments that would otherwise be made to such defaulting Lender hereunder,
apply the payments to such Lender’s defaulted obligations or readvance the
funds to Borrowers in accordance with this Agreement.  The failure of any Lender to fund a Loan or to make a
payment in respect of a LC Obligation
shall not relieve any other Lender of its obligations hereunder, and
no Lender shall be responsible for default by another Lender.  Lenders and Agent agree (which agreement is
solely among them, and not for the benefit of or enforceable by any Borrower)
that, solely for purposes of determining a defaulting Lender’s right to vote on
matters relating to the Loan Documents and to share in payments, fees and
Collateral proceeds thereunder, a defaulting Lender shall not be deemed to be a
“Lender” until all its defaulted obligations have been cured.

 

4.3.         Number and Amount of LIBOR Loans; Determination of
Rate. 
For ease of administration, all LIBOR Revolver Loans having the same
length and beginning date of their Interest 

 

44

 

Periods shall be
aggregated together, and such Borrowings shall be allocated among Lenders on a
Pro Rata basis.  No more than eight (8) Borrowings
of LIBOR Loans may be outstanding at any time (of which no more than four (4) Borrowings
of LIBOR Loans may have an Interest Period of one week), and each Borrowing of
LIBOR Loans when made shall be in a minimum amount of $1,000,000, or an
increment of $100,000 in excess thereof. 
Upon determining LIBOR for any Interest Period requested by Borrowers,
Agent shall promptly notify Borrowers thereof by telephone or electronically
and, if requested by Borrowers, shall confirm any telephonic notice in writing.

 

4.4.         Borrower Agent.   Each Borrower hereby designates Boise Cascade (“Borrower
Agent”) as its representative and agent for all purposes under the Loan
Documents, including requests for Loans and Letters of Credit, designation of
interest rates, delivery or receipt of communications, preparation and delivery
of Borrowing Base and financial reports, receipt and payment of Obligations,
requests for waivers, amendments or other accommodations, actions under the
Loan Documents (including in respect of compliance with covenants), and all
other dealings with Agent, Issuing Bank or any Lender.  Borrower Agent hereby accepts such
appointment.  Agent and Lenders shall be
entitled to rely upon, and shall be fully protected in relying upon, any notice
or communication (including any notice of borrowing) delivered by Borrower
Agent on behalf of any Borrower.  Agent
and Lenders may give any notice or communication with a Borrower hereunder to
Borrower Agent on behalf of such Borrower. 
Each of Agent, Issuing Bank and Lenders shall have the right, in its
discretion, to deal exclusively with Borrower Agent for any or all purposes
under the Loan Documents.  Each Borrower
agrees that any notice, election, communication, representation, agreement or
undertaking made on its behalf by Borrower Agent shall be binding upon and
enforceable against it.

 

4.5.         One Obligation. 
The Loans, LC Obligations and other Obligations shall constitute one general
obligation of Borrowers and (unless otherwise expressly provided in any Loan
Document) shall be secured by Agent’s Lien upon all Collateral; provided,
however, that Agent and each Lender shall be deemed to be a creditor of,
and the holder of a separate claim against, each Borrower to the extent of any
Obligations jointly or severally owed by such Borrower.

 

4.6.         Effect of Termination. 
On the Commitment Termination Date, all Obligations shall be immediately
due and payable, and any Lender may terminate its and its Affiliates’ Bank Products
(including, only with the consent of Agent, any Cash Management Services).  All undertakings of Obligors contained in the
Loan Documents shall survive any termination, and Agent shall retain its Liens
in the Collateral and all of its rights and remedies under the Loan Documents
until Full Payment of the Obligations. 
Notwithstanding Full Payment of the Obligations, Agent shall not be
required to terminate its Liens in any Collateral unless, with respect to any
damages Agent may incur as a result of the dishonor or return of Payment Items
applied to Obligations, Agent receives (a) a written agreement, executed
by Borrowers and any Person whose advances are used in whole or in part to
satisfy the Obligations, indemnifying Agent and Lenders from any such damages;
or (b) such Cash Collateral as Agent, in its discretion, deems necessary
to protect against any such damages.  The
provisions of Sections 2.3, 3.4, 3.6, 3.7,
3.8, 3.9, 5.5,  5.9, 12, 14.2
and this  Section, and the
obligation of each Obligor and Lender with respect to each indemnity given by
it in any Loan Document, shall survive Full Payment of the Obligations and any
release relating to this credit facility.

 

SECTION 5       PAYMENTS

 

5.1.         General Payment Provisions. 
All payments of Obligations shall be made in Dollars, without offset,
counterclaim or defense of any kind, free of (and without deduction for) any
Indemnified Taxes or Other Taxes, and in immediately available funds, not later
than 2:00 p.m. on the due date.  Any
payment after such time shall be deemed made on the next Business Day.  If any payment under the Loan Documents shall
be stated to be due on a day other than a Business Day, the due date shall be
extended to the next Business Day and such extension of time shall be included
in any computation of interest and fees. 
Any payment of a LIBOR Loan prior to the end of its Interest Period
shall be accompanied by all 

 

45

 

amounts due under Section 3.9.  Any prepayment of Loans shall be applied
first to Base Rate Loans and then to LIBOR Loans; provided, however,
that as long as no Event of Default exists, prepayments of LIBOR Loans may, at
the option of Borrowers and Agent, be held by Agent as Cash Collateral and
applied to such Loans at the end of their Interest Periods.

 

5.2.         Repayment of Revolver Loans. 
Revolver Loans shall be due and payable in full on the Revolver
Termination Date, unless payment is sooner required hereunder.  Revolver Loans may be prepaid from time to
time, without penalty or premium. 
Notwithstanding anything herein to the contrary, if an Overadvance
exists, Borrowers shall, on the sooner of Agent’s demand or the first Business
Day after any Borrower has knowledge thereof, repay the outstanding Revolver
Loans in an amount sufficient to reduce the principal balance of Revolver Loans
to the Borrowing Base.

 

5.3.         [Reserved].

 

5.4.         Payment of Other Obligations. 
Obligations other than Loans, including LC Obligations and Extraordinary
Expenses, shall be paid by Borrowers as provided in the Loan Documents or, if
no payment date is specified, on demand.

 

5.5.         Marshaling; Payments Set Aside. 
None of Agent or Lenders shall be under any obligation to marshal any
assets in favor of any Obligor or against any Obligations.  If any payment by or on behalf of Borrowers
is made to Agent, Issuing Bank or any Lender, or Agent, Issuing Bank or any
Lender exercises a right of setoff, and such payment or the proceeds of such
setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by Agent, Issuing Bank or such Lender in its
discretion) to be repaid to a trustee, receiver or any other Person, then to
the extent of such recovery, the Obligation originally intended to be
satisfied, and all Liens, rights and remedies relating thereto, shall be
revived and continued in full force and effect as if such payment had not been
made or such setoff had not occurred.

 

5.6.         Post-Default Allocation of Payments.

 

5.6.1.         Allocation. 
Notwithstanding anything herein to the contrary, during an Event of
Default, monies to be applied to the Obligations, whether arising from payments
by Obligors, realization on Collateral, setoff or otherwise, shall be allocated
as follows:

 

(a)           first, to all costs and expenses, including Extraordinary
Expenses, owing to Agent;

 

(b)           second, to all amounts owing to Agent on Swingline Loans;

 

(c)           third, to all amounts owing to Issuing Bank on LC
Obligations;

 

(d)           fourth, to all Obligations constituting fees (excluding
amounts relating to Bank Products);

 

(e)           fifth, to all Obligations constituting interest (excluding
amounts relating to Bank Products);

 

(f)            sixth, to provide Cash Collateral for outstanding Letters
of Credit;

 

(g)           seventh, to all other Obligations, other than Bank Product
Debt; and

 

(h)           last, to Bank Product Debt.

 

46

 

Amounts shall be applied to each category of Obligations set forth
above until Full Payment thereof and then to the next category.  If amounts are insufficient to satisfy a
category, they shall be applied on a pro rata basis among the Obligations in
the category.  The allocations set forth
in this Section are solely to determine the rights and priorities of Agent
and Lenders as among themselves, and may be changed by agreement among them
without the consent of any Obligor.  This
Section is not for the benefit of or enforceable by any Borrower.

 

5.6.2.         Erroneous Application.  Agent shall
not be liable for any application of amounts made by it in good faith and, if
any such application is subsequently determined to have been made in error, the
sole recourse of any Lender or other Person to which such amount should have
been made shall be to recover the amount from the Person that actually received
it (and, if such amount was received by any Lender, such Lender hereby agrees
to return it).

 

5.7.         Application of Payments. 
During the Trigger Period, the ledger balance in the main Dominion
Account as of the end of a Business Day shall be applied to the Obligations at
the beginning of the next Business Day. 
Each Borrower irrevocably waives the right to direct the application of
any payments or Collateral proceeds, and agrees that Agent shall have the
continuing, exclusive right to apply and reapply same against the Obligations,
in such manner as Agent deems advisable, notwithstanding any entry by Agent in
its records.  If, as a result of Agent’s
receipt of Payment Items or proceeds of Collateral, a credit balance exists,
the balance shall not accrue interest in favor of Borrowers and shall be made
available to Borrowers as long as no Default or Event of Default exists.

 

5.8.         Loan Account; Account Stated.

 

5.8.1.         Loan Account.  Agent shall
maintain in accordance with its usual and customary practices an account or
accounts (“Loan Account”) evidencing the Debt of Borrowers resulting
from each Loan or issuance of a Letter of Credit from time to time.  Any failure of Agent to record anything in
the Loan Account, or any error in doing so, shall not limit or otherwise affect
the obligation of Borrowers to pay any amount owing hereunder.  Agent may maintain a single Loan Account in
the name of Borrower Agent, and each Borrower confirms that such arrangement
shall have no effect on the joint and several character of its liability for
the Obligations.

 

5.8.2.         Entries Binding.  Entries made
in the Loan Account shall constitute presumptive evidence of the information
contained therein.  If any information
contained in the Loan Account is provided to or inspected by any Person, then
such information shall be conclusive and binding on such Person for all
purposes absent manifest error, except to the extent such Person notifies Agent
in writing within 90 days after receipt or inspection that specific information
is subject to dispute.

 

5.9.         Taxes.

 

5.9.1.         Payments Free of Taxes.  Any and all
payments by any Obligor on account of any Obligations shall be made free and
clear of and without reduction or withholding for any Indemnified Taxes or
Other Taxes, provided that if an Obligor shall be required by Applicable
Law to deduct any Indemnified Taxes (including any Other Taxes) from such
payments, then (a) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) Agent, Lender or Issuing Bank, as
the case may be, receives an amount equal to the sum it would have received had
no such deductions been made; (b) the Obligor shall make such deductions;
and (c) Borrowers shall timely pay the full amount deducted to the
relevant Governmental Authority in accordance with Applicable Law.  Without limiting the foregoing, Borrowers
shall timely pay all Other Taxes to the relevant Governmental Authorities.

 

5.9.2.         Payment.  Borrowers
shall indemnify, hold harmless and reimburse Agent, Lenders and Issuing Bank,
within 10 days after written demand therefor, for the full amount of any 

 

47

 

Indemnified Taxes or
Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on
or attributable to amounts payable under this Section) paid by Agent, any
Lender or Issuing Bank with respect to any Obligations, Letters of Credit or
Loan Documents, and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority.  A certificate as
to the amount of such payment or liability delivered to Borrower Agent by a
Lender or Issuing Bank (with a copy to Agent), or by Agent, shall be conclusive
absent manifest error.  As soon as
practicable after any payment of Indemnified Taxes or Other Taxes by a
Borrower, Borrower Agent shall deliver to Agent a receipt issued by the
Governmental Authority evidencing such payment or other reasonable evidence of
payment; provided that if Borrower reasonably believes that
such taxes were not correctly or legally asserted, the Agent, Lender or Issuing
Bank, as the case may be, will use reasonable efforts to cooperate with the
Borrower to obtain a refund of such taxes so long as such efforts would not, in
the sole determination of the Agent, such Lender or the Issuing Bank, as the
case may be, result in any non-reimbursable additional costs, expenses or risks
or be otherwise disadvantageous to it.

 

5.9.3.         If Agent, a Lender or Issuing Bank determines, in its
sole discretion, that it has received a refund of, or the benefit of any credit
or deduction with respect to, any Indemnified Taxes or Other Taxes as to which
it has been indemnified by Borrowers or with respect to which Borrowers have
paid additional amounts pursuant to this Section 5.9, it shall pay over
such refund, or the value of any such credit or deduction, to Borrowers (but
only to the extent of indemnity payments made, or additional amounts paid, by
Borrowers under this Section 5.9 with respect to the Indemnified Taxes or
Other Taxes giving rise to such refund), net of all out-of-pocket expenses of
such Agent, Lender or Issuing Bank and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund); provided that Borrowers, upon the request of Agent, Lender or Issuing
Bank, agree to repay the amount paid over to Borrowers (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority) to
Agent, Lender or Issuing Bank in the event Agent, Lender or Issuing Bank is
required to repay such refund to such Governmental Authority, or is not
permitted to recognize the benefit of such credit or deduction.

 

5.10.       Foreign Lenders.

 

5.10.1.       Exemption.  Any Foreign
Lender that is entitled to an exemption from or reduction of withholding tax
under the law of the jurisdiction in which an Obligor is resident for tax
purposes, or any treaty to which such jurisdiction is a party, with respect to
payments under any Loan Document shall deliver to Agent and Borrower Agent, at
the time or times prescribed by Applicable Law or reasonably requested by Agent
or Borrower Agent, such properly completed and executed documentation
prescribed by Applicable Law as will permit such payments to be made without
withholding or at a reduced rate of withholding.  In addition, any Lender, if requested by
Agent or Borrower Agent, shall deliver such other documentation prescribed by
Applicable Law or reasonably requested by Agent or Borrower Agent as will
enable Agent and Borrower Agent to determine whether or not such Lender is
subject to backup withholding or information reporting requirements.

 

5.10.2.       Documentation.  Without
limiting the generality of the foregoing, if a Borrower is resident for tax
purposes in the United States, a Foreign Lender shall deliver to Agent and
Borrower Agent (in such number of copies as shall be requested by the
recipient) on or prior to the date on which such Foreign Lender becomes a
Lender hereunder (and from time to time thereafter upon the request of Agent or
Borrower Agent, but only if such Foreign Lender is legally entitled to do so), (a) duly
completed copies of IRS Form W-8BEN claiming eligibility for benefits of
an income tax treaty to which the United States is a party; (b) duly
completed copies of IRS Form W-8ECI; (c) in the case of a Foreign
Lender claiming the benefits of the exemption for portfolio interest under
section 881(c) of the Code, (i) a certificate to the effect that such
Foreign Lender is not (A) a “bank” within the meaning of section 881(c)(3)(A) of
the Code, (B) a “10 percent shareholder” of any Obligor within the meaning
of section 881(c)(3)(B) of the Code, or (C) a “controlled foreign
corporation” described in section 881(c)(3)(C) of the 

 

48

 

Code, and (ii) duly
completed copies of IRS Form W-8BEN; or (d) any other form prescribed
by Applicable Law as a basis for claiming exemption from or a reduction in
United States federal withholding tax, duly completed together with such
supplementary documentation as may be prescribed by Applicable Law to permit
Borrowers to determine the withholding or deduction required to be made.

 

5.11.       Nature and Extent of Each Borrower’s Liability.

 

5.11.1.       Joint and Several Liability. 
Each Borrower agrees that it is jointly and severally liable for, and
absolutely and unconditionally guarantees to Agent and Lenders the prompt
payment and performance of, all Obligations and all agreements under the Loan
Documents; provided, however, that each Borrower shall only be
liable under this Section for the maximum amount of such liability that
can be hereby incurred without rendering this Section, as it relates to such
Borrower, voidable under applicable law relating to fraudulent conveyance or
fraudulent transfer, and not for any greater amount.  Each Borrower agrees that its guaranty
obligations hereunder constitute a continuing guaranty of payment and
performance and not of collection, that such obligations shall not be
discharged until Full Payment of the Obligations, and that such obligations are
absolute and unconditional, irrespective of (a) the genuineness, validity,
regularity, enforceability, subordination or any future modification of, or
change in, including any increase of the amount of, any Obligations or Loan
Document, or any other document, instrument or agreement to which any Obligor is
or may become a party or be bound; (b) the absence of any action to
enforce this Agreement (including this Section) or any other Loan Document, or
any waiver, consent or indulgence of any kind by Agent or any Lender with
respect thereto; (c) the existence, value or condition of, or failure to
perfect a Lien or to preserve rights against, any security or guaranty for the
Obligations or any action, or the absence of any action, by Agent or any Lender
in respect thereof (including the release of any security or guaranty); (d) the
insolvency of any Obligor; (e) any election by Agent or any Lender in an
Insolvency Proceeding for the application of Section 1111(b)(2) of
the Bankruptcy Code; (f) any borrowing or grant of a Lien by any other
Borrower, as debtor-in-possession under Section 364 of the Bankruptcy Code
or otherwise; (g) the disallowance of any claims of Agent or any Lender
against any Obligor for the repayment of any Obligations under Section 502
of the Bankruptcy Code or otherwise; or (h) any other action or
circumstances that might otherwise constitute a legal or equitable discharge or
defense of a surety or guarantor, except Full Payment of all Obligations.

 

5.11.2.       Waivers.

 

(a)           Each Borrower expressly waives all rights that it may
have now or in the future under any statute, at common law, in equity or
otherwise, to compel Agent or Lenders to marshal assets or to proceed against
any Obligor, other Person or security for the payment or performance of any
Obligations before, or as a condition to, proceeding against such
Borrower.  Each Borrower waives all
defenses available to a surety, guarantor or accommodation co-obligor other
than Full Payment of all Obligations.  It
is agreed among each Borrower, Agent and Lenders that the provisions of this Section 5.11 are of the essence of the
transaction contemplated by the Loan Documents and that, but for such
provisions, Agent and Lenders would decline to make Loans and issue Letters of
Credit.  Each Borrower acknowledges that
its guaranty pursuant to this Section is necessary to the conduct and
promotion of its business, and can be expected to benefit such business.

 

(b)           Agent and Lenders may, in their discretion, pursue
such rights and remedies as they deem appropriate, including realization upon
Collateral or any Real Estate to the extent Real Estate has been included
during the PP&E Inclusion Period, by judicial foreclosure or non-judicial
sale or enforcement, without affecting any rights and remedies under this Section 5.11.  If, in taking any action in connection with
the exercise of any rights or remedies, Agent or any Lender shall forfeit any
other rights or remedies, including the right to enter a deficiency judgment
against any Borrower or other Person, whether because of any Applicable Laws
pertaining to “election of remedies” or otherwise, each Borrower consents to
such action and waives any claim based upon it, even if the action may result
in loss of any rights of subrogation that any Borrower might otherwise have
had.  Any election of remedies that 

 

49

 

results in denial or
impairment of the right of Agent or any Lender to seek a deficiency judgment
against any Borrower shall not impair any other Borrower’s obligation to pay
the full amount of the Obligations.  Each
Borrower waives all rights and defenses arising out of an election of remedies,
such as nonjudicial foreclosure with respect to any security for the
Obligations, even though that election of remedies destroys such Borrower’s
rights of subrogation against any other Person. 
Agent may bid all or a portion of the Obligations at any foreclosure or
trustee’s sale or at any private sale, and the amount of such bid need not be
paid by Agent but shall be credited against the Obligations.  The amount of the successful bid at any such
sale, whether Agent or any other Person is the successful bidder, shall be
conclusively deemed to be the fair market value of the Collateral, and the
difference between such bid amount and the remaining balance of the Obligations
shall be conclusively deemed to be the amount of the Obligations guaranteed
under this Section 5.11,
notwithstanding that any present or future law or court decision may have the
effect of reducing the amount of any deficiency claim to which Agent or any
Lender might otherwise be entitled but for such bidding at any such sale.

 

5.11.3.       Extent of Liability; Contribution.

 

(a)           Notwithstanding anything herein to the contrary, each
Borrower’s liability under this Section 5.11
shall be limited to the greater of (i) all amounts for which such Borrower
is primarily liable, as described below, and (ii) such Borrower’s
Allocable Amount.

 

(b)           If any Borrower makes a payment under this Section 5.11 of any Obligations (other
than amounts for which such Borrower is primarily liable) (a “Guarantor
Payment”) that, taking into account all other Guarantor Payments previously
or concurrently made by any other Borrower, exceeds the amount that such
Borrower would otherwise have paid if each Borrower had paid the aggregate
Obligations satisfied by such Guarantor Payments in the same proportion that
such Borrower’s Allocable Amount bore to the total Allocable Amounts of all
Borrowers, then such Borrower shall be entitled to receive contribution and
indemnification payments from, and to be reimbursed by, each other Borrower for
the amount of such excess, pro rata based upon their respective Allocable
Amounts in effect immediately prior to such Guarantor Payment.  The “Allocable Amount” for any
Borrower shall be the maximum amount that could then be recovered from such
Borrower under this Section 5.11
without rendering such payment voidable under Section 548 of the
Bankruptcy Code or under any applicable state fraudulent transfer or conveyance
act, or similar statute or common law.

 

(c)           Nothing contained in this Section 5.11 shall limit the liability of any Borrower to
pay Loans made directly or indirectly to that Borrower (including Loans
advanced to any other Borrower and then re-loaned or otherwise transferred to,
or for the benefit of, such Borrower), LC Obligations relating to Letters of
Credit issued to support such Borrower’s business, and all accrued interest,
fees, expenses and other related Obligations with respect thereto, for which
such Borrower shall be primarily liable for all purposes hereunder.  Agent and Lenders shall have the right, at
any time in their discretion, to condition Loans and Letters of Credit upon a
separate calculation of borrowing availability for each Borrower and to
restrict the disbursement and use of such Loans and Letters of Credit to such
Borrower.

 

5.11.4.       Joint Enterprise.  Each Borrower has requested that Agent and Lenders make
this credit facility available to Borrowers on a combined basis, in order to
finance Borrowers’ business most efficiently and economically.  Borrowers’ business is a mutual and
collective enterprise, and Borrowers believe that consolidation of their credit
facility will enhance the borrowing power of each Borrower and ease the
administration of their relationship with Lenders, all to the mutual advantage
of Borrowers.  Borrowers acknowledge and
agree that Agent’s and Lenders’ willingness to extend credit to Borrowers and
to administer the Collateral on a combined basis, as set forth herein, is done
solely as an accommodation to Borrowers and at Borrowers’ request.

 

5.11.5.        Subordination. Each Borrower hereby subordinates any claims,
including any rights at law or in equity to payment, subrogation,
reimbursement, exoneration, contribution, 

 

50

 

indemnification or set
off, that it may have at any time against any other Obligor, howsoever arising,
to the Full Payment of all Obligations.

 

SECTION 6       CONDITIONS
PRECEDENT

 

6.1.         Conditions Precedent to Initial Loans. 
In addition to the conditions set forth in Section 6.2, Lenders shall not be required to fund any
requested Loan,
issue any Letter of Credit, or otherwise extend credit to Borrowers
hereunder, until the date (“Closing Date”) that each of the following
conditions has been satisfied:

 

(a)           Notes shall have been executed by Borrowers and
delivered to each Lender that requests issuance of a Note.  Each other Loan Document (other than the
Equipment Security Agreement, Mortgages, and Mortgage Support Documents) shall
be in form and substance satisfactory to Agent, shall have been duly executed
and delivered to Agent by each of the signatories thereto, and each Obligor
shall be in compliance with all terms thereof.

 

(b)           Agent shall have received acknowledgments of all filings
or recordations necessary to perfect its Liens in the Collateral (to the extent
perfection of such Liens is required hereunder), as well as UCC and Lien
searches and other evidence reasonably satisfactory to Agent that such Liens
are the only Liens upon the Collateral, except Permitted Liens.

 

(c)           The Agent shall have received certificates and
instruments evidencing the Pledged Collateral existing on the Closing Date
accompanied by an undated instrument of assignment executed in blank by the
applicable Obligor.

 

(d)           Agent shall have received duly executed agreements
establishing the Dominion Account, in form and substance reasonably
satisfactory to Agent.

 

(e)           Agent shall have received a certificate, in form and
substance satisfactory to it, from a knowledgeable Senior Officer of Borrower
Agent certifying that, after giving effect to the initial Loans and
transactions hereunder, as of the Closing Date (i) each of the Borrowers
individually and the Obligors taken as a whole on a consolidated basis are Solvent;
(ii) no Default or Event of Default exists; (iii) the representations
and warranties set forth in Section 9
are true and correct in all material respects; and (iv) each Obligor has
complied with all agreements and conditions to be satisfied by it under the
Loan Documents as of the Closing Date (unless waived by Agent).

 

(f)            Agent shall have received a certificate of a duly
authorized officer of each Obligor, certifying (i) that attached copies of
such Obligor’s Organic Documents are true and complete, and in full force and
effect, without amendment except as shown; (ii) that an attached copy of
resolutions authorizing execution and delivery of the Loan Documents is true
and complete, and that such resolutions are in full force and effect, were duly
adopted, have not been amended, modified or revoked, and constitute all
resolutions adopted with respect to this credit facility; and (iii) to the
title, name and signature of each Person authorized to sign the Loan
Documents.  Agent may conclusively rely
on this certificate until it is otherwise notified by the applicable Obligor in
writing.

 

(g)           Agent shall have received a written opinion, from
Kirkland & Ellis LLP, counsel to Borrowers and the Initial Guarantors
in form and substance reasonably satisfactory to Agent.

 

(h)           Agent shall have received good standing certificates
for each Obligor, issued by the Secretary of State or other appropriate
official of such Obligor’s jurisdiction of organization.

 

51

 

(i)            Agent shall have received Insurance Assignments and
copies of policies or certificates of insurance for the insurance policies
carried by Obligors, all in compliance with the Loan Documents.

 

(j)            To the extent not previously received, Agent shall
have received (i) Parent’s 2005 and 2006 audited consolidated financial
statements, (ii) Parent’s unaudited consolidated financial statements as
of and for the periods ended March 31, 2007, June 30, 2007, and September 30,
2007, (iii) unaudited balance sheet and income statement of the Building
Materials Distribution and Wood Products businesses of the Borrowers from the
Borrowers’ internal operating statements for December 31, 2005, December 31,
2006, March 31, 2007, June 30, 2007, September 30, 2007 and for
each closed month ending after September 30, 2007 (which are not intended
to be prepared in accordance with generally accepted accounting principles and
exclude footnotes to the financial statements), (iv) a pro forma
consolidated balance sheet of the Borrowers and their Subsidiaries as of December 31,
2007 giving effect to the Paper Group Disposition and the effect of entering
into the Revolving Credit Facility, and (v) projections of the Borrowers
giving effect to the Paper Group Disposition, the proposed uses of the proceeds
thereof, and the effect on the Borrowers and the Revolving Credit Facility for
the period beginning January 1, 2008 and ending December 31, 2012.

 

(k)           No Closing Date Material Adverse Effect shall have
occurred.

 

(l)            Borrowers shall have paid all fees and expenses to be
paid to Agent and Lenders on the Closing Date.

 

(m)          Agent shall have received a Borrowing
Base Certificate prepared as of a date that is no more than 45 days prior to
the Closing Date.

 

(n)           After giving effect to (i) the initial
funding of Loans and issuance of Letters of Credit, (ii) the consummation
of the Paper Group Disposition and application of all proceeds thereof,  (iii) the payment by Borrowers of all fees and expenses incurred in
connection with this Agreement and the transactions contemplated hereby,
including the Paper Group Disposition, and (iv) any payables stretched
beyond their customary payment practices, Availability shall be at least $150,000,000.

 

(o)           Agent shall have received the following in connection with the Paper
Group Disposition:

 

(i)            copies of the fully executed Purchase and Sale
Agreement and all amendments thereto, together with evidence of consummation of
the Paper Group Disposition;

 

(ii)           a fully executed payoff letter with respect to the
Existing Credit Agreement evidencing the payment in full and termination of all
Debt and other obligations under the Existing Credit Agreement and related loan
documents, together with all release documentation with respect to any security
interest granted in connection therewith 
reasonably requested by Agent;

 

(iii)          an 8-K issued by Parent evidencing its intent to make
an Asset Disposition tender (as defined in the Indenture) for not less than
$150,000,000 of the Subordinated Debt and evidence that such amount has been
invested in Cash Equivalents pending delivery to the trustee in a manner
reasonably acceptable to Agent;

 

(iv)          evidence of termination of the receivables
securitization program of Boise Cascade and certain of its subsidiaries with
Bank of America and certain other 

 

52

 

investors party thereto,
together with all release documentation with respect to any security interests
granted in connection therewith reasonably requested by Agent; and

 

(v)           evidence of payment and termination of all obligations
under any interest rate swaps hedging any of variable rate obligations being
repaid or to the extent not terminated: (a) such swaps do not have a
mark-to-market position that would cause Excess Availability under this
Agreement to be less than $150,000,000 on the Closing Date if such swaps were
terminated and (b) the swap counterparties have released their liens under
the Existing Credit Agreement or agreed to a continuation of such swaps in
respect of the Revolving Loans.

 

(p)           Agent shall be satisfied with the capital structure of the Borrowers as
of the Closing Date.

 

(q)           No action, suit, investigation, litigation or proceeding shall be
pending or threatened in writing in any court or before any arbitrator or governmental
instrumentality that in Agent’s reasonable business judgment could reasonably
be expected to have a Closing Date Material Adverse Effect.

 

(r)            To the extent not already provided to Agent, the Borrowers shall have
provided all documentation and other information required by bank regulatory
authorities under applicable “know your customer” and anti-money laundering rules and
regulations, including, without limitation, the U.S.A. Patriot Act, to the
extent such information is requested at least ten Business Days prior to the
Closing Date.

 

(s)           Agent shall not
have become aware of any material information or other matter not previously
known to Agent that in its good faith, reasonable determination is inconsistent
in a material and adverse manner with any previous due diligence, information
or matter known to Agent, which material information or other matter not
previously known to Agent is reasonably likely to have a Closing Date Material
Adverse Effect.

 

6.2.         Conditions Precedent to All Credit Extensions. 
Agent, Issuing Bank and Lenders shall not be required to fund any Loans,
arrange for issuance of any Letters of Credit or grant any other accommodation
to or for the benefit of Borrowers, unless the following conditions are
satisfied:

 

(a)           No Default or Event of Default shall exist at the time
of, or result from, such funding, issuance or grant;

 

(b)           The representations and warranties of each Obligor in
the Loan Documents (including, without limitation, in Section 9.1.8)
shall be true and correct in all material respects on the date of, and upon
giving effect to, such funding, issuance or grant (except to the extent that
such representations and warranties specifically refer to an earlier date, in
which case they shall be true and correct in all material respects as of such
earlier date);

 

(c)           All conditions precedent in any other Loan Document
shall be satisfied; and

 

(d)           With respect to issuance of a Letter of Credit, the LC
Conditions shall be satisfied.

 

Each request (or deemed request) by Borrowers for funding of a Loan,
issuance of a Letter of Credit or grant of an accommodation shall constitute a
representation by Borrowers that the foregoing conditions are satisfied on the
date of such request and on the date of such funding, issuance or grant.  As an additional condition to any funding,
issuance or grant, Agent shall have received such other information, 

 

53

 

documents, instruments and agreements as it deems reasonably
appropriate in connection therewith (but only to the extent such other
information, documents, instruments or agreements are in the possession of or
available to the Obligors).

 

6.3.         Limited Waiver of Conditions Precedent. 
If Agent, Issuing Bank or Lenders fund any Loans, arrange for issuance
of any Letters of Credit or grant any other accommodation when any conditions
precedent are not satisfied (regardless of whether the lack of satisfaction was
known or unknown at the time), it shall not operate as a waiver of (a) the
right of Agent, Issuing Bank and Lenders to insist upon satisfaction of all
conditions precedent with respect to any subsequent funding, issuance or grant;
nor (b) any Default or Event of Default due to such failure of conditions
or otherwise.

 

SECTION 7       COLLATERAL

 

7.1.         Grant of Security Interest. 
To secure the prompt payment and performance of all Obligations, each
Obligor hereby grants to Agent, for the benefit of Secured Parties, a
continuing security interest in and Lien upon the following Property of such
Obligor whether now owned or hereafter acquired, and wherever located:

 

(a)           all Accounts;

 

(b)           all Chattel Paper, including electronic chattel paper;

 

(c)           all Deposit Accounts;

 

(d)           all Documents;

 

(e)           all General Intangibles, including Intellectual Property;

 

(f)            all Inventory;

 

(g)           all Instruments;

 

(h)           all Investment Property;

 

(i)            all Letter-of-Credit Rights;

 

(j)            all Supporting Obligations;

 

(k)           all monies, whether or not in the possession or under
the control of Agent, a Lender, or a bailee or Affiliate of Agent or a Lender, including any
Cash Collateral;

 

(l)            all accessions to, substitutions for, and all
replacements, products, and cash and non-cash proceeds of the foregoing,
including proceeds of and unearned premiums with respect to insurance policies,
and claims against any Person for loss, damage or destruction of any
Collateral; and

 

(m)          all books and records (including customer lists,
files, correspondence, tapes, and print-outs and computer records) pertaining
to the foregoing so long as such security interests in such books and records
does not violate the provisions of the Outsourcing Services Agreement (as
modified by the Assignment of Outsourcing Services Agreement).

 

Notwithstanding anything herein to the contrary, in no
event shall the security interest granted under this Section 7.1 include (a) any
of the outstanding Equity Interests in any member of the Paper Group, any Debt
owing from any member of the Paper Group to any Obligor, or any proceeds of any
of the 

 

54

 

foregoing, (b) any of the outstanding Equity
Interests of a Pledged Foreign Subsidiary in excess of 65% of the voting power
of all classes of Equity Interests of such Pledged Foreign Subsidiary entitled
to vote, (c) any of the outstanding Equity Interests of a Foreign
Subsidiary that is not a Pledged Foreign Subsidiary, or (d) any Excluded
Asset.

 

7.2.         Lien on Deposit Accounts; Cash Collateral.

 

7.2.1.         Deposit Accounts.  To further
secure the prompt payment and performance of all Obligations, each Obligor
hereby grants to Agent, for the benefit of Secured Parties, a continuing
security interest in and Lien upon all amounts credited to any Deposit Account
of such Obligor, including any sums in any blocked or lockbox accounts or in any
accounts into which such sums are swept. 
Each Obligor authorizes and directs each bank or other depository,
during any Trigger Period and to the extent a Notice of Exclusive Control has
been delivered, to deliver to the Dominion Account, on a daily basis, all
balances in each Controlled Deposit Account maintained by such Obligor with
such depository for application to the Obligations then outstanding.

 

7.2.2.         Cash Collateral.  Any Cash
Collateral may be invested, at Agent’s discretion, in Cash Equivalents, but
Agent shall have no duty to do so, regardless of any agreement or course of
dealing with any Obligor, and shall have no responsibility for any investment
or loss.  Each Obligor hereby grants to
Agent, for the benefit of Secured Parties, a security interest in all Cash
Collateral held from time to time and all proceeds thereof, as security for the
Obligations, whether such Cash Collateral is held in a Cash Collateral Account
or elsewhere.  Agent may apply Cash Collateral
to the payment of any Obligations, in such order as Agent may elect, as they
become due and payable.  Each Cash
Collateral Account and all Cash Collateral shall be under the sole dominion and
control of Agent.  No Obligor or other
Person claiming through or on behalf of any Obligor shall have any right to any
Cash Collateral, until the earlier of (i) Full Payment of all Obligations
or (ii) such time as such Obligor is no longer required to Cash
Collateralize such Obligations.

 

7.3.         [Reserved].

 

7.4.         Other Collateral.

 

7.4.1.         Intellectual Property.  Concurrently
with the delivery of the financial statements pursuant to Section 10.1.2(b),
each Obligor shall notify Agent in writing if it has obtained additional
ownership interests in any Registered Intellectual Property during the period
then ended that has not become a part of the Collateral as of such date.  Each Obligor authorizes Agent to the make the
filings referred to in Section 7.6
with respect to such new Intellectual Property and agrees to take such actions
as Agent reasonably deems appropriate or necessary to confer upon Agent (for
the benefit of Secured Parties) a duly perfected Lien upon such Registered
Intellectual Property subject only to Permitted Liens.

 

7.4.2.         Certain After-Acquired Collateral. 
Obligors shall promptly notify Agent in writing if, after the Closing
Date, any Obligor obtains any interest in any Collateral (a) consisting of
Chattel Paper, Documents, Instruments and Letter-of-Credit Rights with a value
in excess of $250,000, or (b) consisting of any Controlled Deposit
Accounts, Controlled Securities Accounts, or other Investment Property not held
in a Securities Account, shall promptly take such actions as Agent deems
appropriate to effect Agent’s duly perfected, first priority Lien upon such
Collateral, including obtaining any appropriate possession, control agreement
or Lien Waiver.  If any tangible
Collateral (other than Eligible In-Transit Inventory) is in the possession of a
third party, either (i) such Collateral shall be excluded from the
Borrowing Base or (ii) Obligors shall obtain an acknowledgment that such
third party holds the Collateral for the benefit of Agent.

 

The Obligors shall not
permit the balance of assets contained in any Securities Account that is not
subject to a Securities Account Control Agreement to exceed $250,000 at any
time, and shall not permit

 

55

 

the balance of funds and other assets contained in all
Securities Accounts that are not subject to Securities Account Control
Agreements to exceed $500,000 at any time. 
Notwithstanding the foregoing, the Obligors shall not be required to
subject to a Securities Account Control Agreement any Securities Account to the
extent it holds only the cash and Cash Equivalents described in Section 6.1(o)(iii) or cash collateral posted on
the Closing Date with US Bank in connection with letters of credit in existence
on the Closing Date.

 

7.5.                            No Assumption of Liability.  The Lien on Collateral granted hereunder is given as
security only and shall not subject Agent or any Lender to, or in any way
modify, any obligation or liability of Obligors relating to any Collateral.  Notwithstanding anything herein to the
contrary, (a) each Obligor shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed and (b) the exercise by Agent of any
of the rights hereunder shall not release such Obligor from any of its duties
or obligations under the contracts and agreements included in the Collateral.

 

7.6.                            Filing Authorization. 
Each
Obligor authorizes Agent to file any financing statement (including fixture
filings after the PP&E Inclusion Date) in any relevant jurisdiction that
indicates the Collateral, and ratifies any action taken by Agent before the
Closing Date to effect or perfect its Lien on any Collateral.  In addition, each Obligor authorizes Agent to
file with the United States Patent and Trademark Office or United States
Copyright Office or Canadian Intellectual Property Office (or any successor or
similar foreign office) the Copyright Security Agreement, the Patent Security
Agreement, the Trademark Security Agreement, and such other documents as may be
reasonably necessary for the purpose to perfecting, confirming, continuing,
enforcing or protecting the Lien granted by each Obligor, without the signature
of any Obligor (to the extent not required by any applicable filing office),
and naming any Obligor or the Obligors as debtors and Agent as secured party.

 

7.7.                            Further Assurances.  Promptly upon request, Obligors shall deliver such
instruments, assignments, title certificates, or other documents or agreements,
and shall take such actions, as Agent deems reasonably necessary under
Applicable Law to evidence or perfect its Lien on any Collateral, or otherwise
to give effect to the intent of this Agreement.

 

7.8.                            No Further Actions. 
Except for the filings and agreements referred to in Section 7.6 and
except as set forth on Schedule 7.8,
no consent, authorization, approval or other action by, and no notice of filing
with, any Governmental Authority or other Person that has not been received,
taken or made is required (i) for the grant by each Obligor of the
security interest and Lien granted hereby or under any other Security Documents
to the extent a security interest can be granted in such Collateral under the
UCC or other Applicable Law, (ii) for the perfection and maintenance of
the security interest and Lien hereunder or under any other Security Documents
to the extent such security interest may be perfected by such filings referred
to in Section 7.6, or (iii) for the
exercise by the Secured Parties of the rights or the remedies in respect of the
Collateral pursuant to this Agreement.

 

7.9.                            Cooperation. 
Each Obligor agrees, after the occurrence and during the continuance of
an Event of Default, to take any actions that Agent may reasonably request in
order to enable the Secured Parties to obtain and enjoy the full rights and
benefits granted to them by this Agreement and the other Loan Documents.  Each Obligor further consents to the transfer
of control or assignment of all or any portion of the Collateral to a receiver,
interim receiver, receiver-manager, trustee, transferee, or similar official or
to any purchaser of the Collateral pursuant to any public or private sale,
judicial sale, foreclosure or exercise of other remedies available to the
Secured Parties as permitted by the Loan Documents, Applicable Law or
otherwise.

 

56

 

SECTION 8       COLLATERAL ADMINISTRATION

 

8.1.                            Borrowing Base
Certificates.  By the 20th day of each month (or
by Tuesday of each week for the prior week any time that Availability is less
than the Availability Threshold until such times as the Average Availability
has exceeded the Availability Threshold for two consecutive calendar months),
Borrowers shall deliver to Agent (and Agent shall promptly deliver same to
Lenders) a Borrowing Base Certificate prepared as of the close of business of
the previous month (or week, if applicable), and at such other times as Agent
may request.  All calculations of
Availability in any Borrowing Base Certificate shall originally be made by
Borrowers and certified by a Senior Officer, provided that Agent may
from time to time review and adjust any such calculation (a) to reflect
its reasonable estimate of declines in value of any Collateral, due to
collections received in the Dominion Account or otherwise; (b) to adjust
advance rates to reflect changes in dilution, quality, mix and other factors
affecting Collateral; (c) to change Availability Reserves in accordance
with the terms hereof; and (d) to the extent the calculation is not made
in accordance with this Agreement or does not accurately reflect the
Availability Reserve.

 

8.2.                            Administration of Accounts.

 

8.2.1.                            Records and Schedules of Accounts. 
Each Borrower shall submit to Agent, on or before the 20th
day of each month (or more frequently as requested by Agent following the
occurrence of an Event of Default), accurate and complete records of its
Accounts, including all payments and collections thereon, and shall submit to
Agent a summary aged trial balance and sales, collection, reconciliation and
other reports in form satisfactory to Agent. 
To the extent Agent has so requested, each Borrower shall also provide
to Agent, on or before the 20th day of each month (or more
frequently as Agent may request during the continuance of an Event of Default),
a detailed aged trial balance of all Accounts as of the end of the preceding
month, specifying each Account’s Account Debtor name and address, amount,
invoice date and due date, showing any discount, allowance, credit, authorized
return or dispute, and including such proof of delivery, copies of invoices and
invoice registers, copies of related documents, repayment histories, status
reports and other information as Agent may reasonably request.  If Accounts in an aggregate face amount of
$2,000,000 or more cease to be Eligible Accounts, Borrowers shall notify Agent of
such occurrence promptly (and in any event within one Business Day) after any
Borrower has knowledge thereof.

 

8.2.2.                            Taxes.  If an Account
of any Borrower includes a charge for any Taxes, Agent is authorized, when an
Event of Default has occurred and is continuing in its discretion, to pay the
amount thereof to the proper taxing authority for the account of such Borrower
and to charge Borrowers therefor; provided,
however, that neither Agent nor Lenders
shall be liable for any Taxes that may be due from Borrowers or with respect to
any Collateral.

 

8.2.3.                            Account Verification. 
Whether or not a Default or Event of Default exists, Agent shall have
the right at any time, in the name of Agent, any designee of Agent or any
Borrower, to verify the validity, amount or any other matter relating to any
Accounts of Borrowers by mail, telephone or otherwise.  Borrowers shall cooperate fully with Agent in
an effort to facilitate and promptly conclude any such verification
process.  Agent shall endeavor to give
Boise Cascade prior notice of the Agent’s intention to conduct such
verifications by telephone; provided, that the failure by Agent to give such
notice shall in no event limit the right of the Agent to conduct such
verifications; and provided, further, that in no event shall the
Agent have any liability to any Obligors or otherwise for failure to deliver
any notice described above.

 

8.2.4.                            Maintenance of Dominion Account. 
Borrowers shall at all times maintain the Dominion Account pursuant to
lockbox or other arrangements acceptable to Agent.  Neither Agent nor Lenders assume any
responsibility to Borrowers for any lockbox arrangement or Dominion Account, 

 

57

 

including any claim of
accord and satisfaction or release with respect to any Payment Items accepted
by any bank.

 

8.2.5.                            Proceeds of Collateral. 
Each Obligor shall request in writing and otherwise take all necessary
steps to ensure that all payments on Accounts or otherwise relating to
Collateral are made directly to the Dominion Account (or a lockbox relating to
the Dominion Account) or a deposit account over which the Agent has a perfected
security interest.  If any Obligor or
Subsidiary receives cash or Payment Items with respect to any Collateral, it
shall hold same in trust for Agent and promptly (not later than the next
Business Day) deposit same into the Dominion Account or a deposit account over
which the Agent has a perfected security interest.

 

8.3.                            Administration of
Inventory.

 

8.3.1.                            Records and Reports of Inventory. 
Each Borrower shall keep accurate and complete records of its Inventory
in all material respects, including costs and daily withdrawals and additions,
and shall submit to Agent inventory and reconciliation reports in form
satisfactory to Agent, on such periodic basis as Agent may request (but in no
event more than monthly).  Each Borrower
shall conduct a physical inventory at least once per calendar year (and on a
more frequent basis if requested by Agent when an Event of Default exists) and
periodic cycle counts consistent with historical practices, and shall provide
to Agent a report based on each such inventory and count promptly upon
completion thereof, together with such supporting information as Agent may
request.  Agent may participate in and
observe each physical count.  Each
Borrower shall also provide to Agent, on or before the 20th day of
each month (or more frequently as Agent may request during the continuance of
an Event of Default), a detailed report of all Inventory as of the end of the
preceding month, in form satisfactory to Agent.

 

8.3.2.                            Returns of Inventory. 
No Borrower shall return any Inventory to a supplier, vendor or other
Person, whether for cash, credit or otherwise, unless (a) such return is
in the Ordinary Course of Business; (b) no Default, Event of Default or
Overadvance exists or would result therefrom; (c) Agent is promptly
notified if the aggregate Value of all Inventory returned in any month exceeds
$2,000,000;
and (d) any payment received by a Borrower for a return is promptly
remitted to Agent for application to the Obligations.

 

8.3.3.                            Acquisition, Sale and Maintenance. 
Borrowers shall take all steps to assure that all Inventory is produced
in accordance with Applicable Law, including the FLSA.  Borrowers shall use, store and maintain all
Inventory with reasonable care and caution, in accordance with applicable
standards of any insurance and in conformity with all Applicable Law, and shall
make current rent payments (within applicable grace periods provided for in
leases) at all locations where any Collateral is located.

 

8.4.                            Administration of
Equipment.

 

8.4.1.                            Records and Schedules of Equipment. 
Each Borrower shall keep accurate and complete records of its Equipment
in all material respects, including kind, quality, quantity, cost, acquisitions
and dispositions thereof, and shall submit to Agent, on such periodic basis as
Agent may request (but no more than monthly), a current schedule thereof, in
form satisfactory to Agent.  Promptly
upon request, Borrowers shall deliver to Agent evidence of their ownership or
interests in any Equipment.

 

8.4.2.                            Dispositions of Equipment. 
No Borrower shall sell, lease or otherwise dispose of any Equipment,
without the prior written consent of Agent, other than (a) a Permitted
Asset Disposition; and (b) replacement of Equipment that is worn, damaged
or obsolete with Equipment of like function and value, if the replacement
Equipment is acquired substantially contemporaneously with such disposition and
is free of Liens (other than Permitted Liens).

 

58

 

8.4.3.                            Condition of Equipment. 
The Borrowers will use commercially reasonable efforts to keep the
Equipment in good operating condition and repair, and make all necessary
replacements and repairs so that the value and operating efficiency of the
Equipment is preserved at all times, reasonable wear and tear excepted.  Each Borrower shall ensure that the Equipment
is mechanically and structurally sound, and capable of performing the functions
for which it was designed, in accordance with manufacturer specifications.  No Borrower shall permit any Equipment
included in the Collateral to become affixed to real Property it does not own
or has mortgaged unless any landlord or mortgagee delivers a Lien Waiver.

 

8.5.                            Administration of Deposit
Accounts.  Schedule 8.5 sets forth all Deposit Accounts
maintained by Obligors as of the Closing Date, including the Dominion Account,
and including a designation as to whether each such Deposit Account is a “Controlled
Deposit Account”.  Each Obligor shall
take all actions necessary to establish Agent’s control of each Controlled
Deposit Account pursuant to a Deposit Account Control Agreement stating, among
other things, (a) that the applicable financial institution shall comply
with instructions from Agent regarding the applicable Controlled Deposit
Account and the balance of funds on deposit therein from time to time without
further consent of the applicable Obligor, (b) that until such financial
institution receives a written notice from Agent that Agent is exercising
exclusive control over transfers, withdrawals, and other dispositions of funds
from the applicable Controlled Deposit Account (a “Notice of Exclusive Control”),
the applicable Obligor and its authorized representatives shall have control of
the applicable deposit account and all funds on deposit therein from time to
time, including the authority to make transfers, withdrawals, and other
dispositions of funds by check or any other means, and (c) that, promptly
following receipt by such financial institution of a Notice of Exclusive
Control from Agent, (i) such financial institution shall not permit any
funds to be transferred or withdrawn by any Obligor from the applicable
Controlled Deposit Account except with the prior written consent of Agent, and (ii) Agent
shall have exclusive control over transfers, withdrawals, and other
dispositions of funds from the applicable Controlled Deposit Account, in each
case.  Agent agrees that it shall not
deliver a Notice of Exclusive Control except during a Trigger Period or
following an Event of Default and Agent agrees to promptly withdraw such Notice
of Exclusive Control when such Trigger Periods is no longer in effect or such
Event of Default is cured or waived in writing to the extent permitted and in
accordance with the terms of this Agreement.

 

The Obligors shall be the
sole account holders of each of its Deposit Accounts and shall not allow any
other Person (other than Agent) to have control over a Deposit Account or any
Property deposited therein.  Each Obligor
shall promptly notify Agent of any opening or closing of a Deposit Account and,
with the consent of Agent, will amend Schedule 8.5 to
reflect same (provided that any Deposit Account opened after the Closing Date
shall be a “Controlled Deposit Account” and shall be identified on Schedule 8.5 as such). 
The Obligors shall not permit the balance of funds contained in any
Deposit Account that is not subject to a Deposit Account Control Agreement
(other than Deposit Accounts used solely for the purpose of making tax, payroll, or
employee benefit payments) to exceed $250,000 at any time, and shall not permit the balance of
funds contained in all Deposit Accounts that are not subject to Deposit Account
Control Agreements (other than Deposit Accounts used solely for the purpose of making tax, payroll,
or employee benefit payments) to exceed $500,000 at any time.

 

8.6.                            General Provisions.

 

8.6.1.                            Location of Collateral. 
All tangible items of Collateral, other than Inventory in transit, and
Collateral delivered to the Agent, shall at all times be kept by Obligors at
the locations set forth in Schedule 8.6.1 (which shall indicate if such locations are
not owned or leased by Obligors), except that Obligors may (a) make
sales or other dispositions of Collateral in accordance with Section 10.2.6; and (b) move
Collateral to another location in the United States not included on Schedule 8.6.1 upon 5 Business Days prior written notice to
Agent.  Notwithstanding the foregoing, so
long as Collateral on consignment is not part of the Eligible Inventory or
Eligible Offsite Inventory and is not subject to a bailee waiver in favor of
Agent, such Collateral shall not be required to be included on Schedule 8.6.1 or subject to the 

 

59

 

limitations set forth
herein and the Borrowers may have Collateral with an aggregate value not to
exceed $1,000,000 for all locations not set forth on Schedule
8.6.1.

 

8.6.2.                            Insurance of Collateral; Condemnation
Proceeds.

 

(a)                                  Each Obligor shall maintain insurance
with respect to the Collateral, covering casualty, hazard, public liability,
theft, malicious mischief, flood and other risks, in amounts, with endorsements
and with insurers (with a Best Rating of at least A7, unless otherwise approved
by Agent) satisfactory to Agent (and Agent agrees that insurance in effect on
the Closing Date is satisfactory).  From
time to time upon request, Obligors shall deliver to Agent the originals or certified
copies of its insurance policies and updated flood plain searches if Real
Estate has been included in the PP&E during the PP&E Inclusion
Period.  Unless Agent shall agree
otherwise, each policy of property insurance covering the Collateral (and Equipment
and Real Estate included
in PP&E during the PP&E Inclusion Period), each policy of business
interruption insurance, and each policy of liability insurance (other than
D&O, fiduciary, special crime, and workers’ compensation insurance) shall include satisfactory endorsements
(i) showing Agent as sole loss payee or additional insured, as
appropriate; (ii) requiring 30 days prior written notice to Agent in the
event of cancellation of the policy for any reason whatsoever; and (iii) specifying
that the interest of Agent shall not be impaired or invalidated by any act or
neglect of any Obligor or the owner of the Property, nor by the occupation of
the premises for purposes more hazardous than are permitted by the policy.  If any Obligor fails to provide and pay for
any such insurance, Agent may, at its option, but shall not be required to,
procure such insurance and charge Obligors therefor.  Each Obligor agrees to deliver to Agent,
promptly as rendered, copies of all reports made to insurance companies for
claims in excess of $2,500,000.  While no
Event of Default exists, Obligors may settle, adjust or compromise any insurance
claim, as long as the
proceeds are delivered to Agent to the extent required hereunder.  If an Event of Default exists, only Agent
shall be authorized to settle, adjust and compromise claims with respect to
property insurance covering the Collateral (and Equipment and Real
Estate included in
PP&E during the PP&E Inclusion Period), business interruption
insurance, and liability insurance for any claims involving Agent or any Lender
(other than D&O, fiduciary, special crime, and workers’ compensation
insurance).

 

(b)                                 Any proceeds of property insurance
covering the Collateral (and, subject to clause (c) below, Equipment and
Real Estate included
in PP&E during the PP&E Inclusion Period), any awards arising from condemnation of any
Collateral (and, subject to clause (c) below, Equipment and Real Estate included in
PP&E during the PP&E Inclusion Period), and any proceeds of business
interruption insurance shall be paid to Agent and  shall be applied to payment of the Revolver
Loans, and then to any other Obligations outstanding.

 

(c)                                  If Equipment and Real Estate has been
included in PP&E during the PP&E Inclusion Period, if requested by
Borrowers in writing within 15 days after Agent’s receipt of any insurance
proceeds or condemnation awards relating to any loss or destruction of
Equipment or Real Estate, Borrowers may use such proceeds or awards to repair
or replace such Equipment or Real Estate (and until so used, the proceeds shall
be held by Agent as Cash Collateral) as long as (i) no Default or Event of
Default exists; (ii) such repair or replacement is promptly undertaken and
concluded, in accordance with plans satisfactory to Agent; (iii) replacement
buildings are constructed on the sites of the original casualties and are of
comparable size, quality and utility to the destroyed buildings; (iv) the
repaired or replaced Property is free of Liens, other than Permitted Liens that
are not Purchase Money Liens; (v) Borrowers comply with disbursement
procedures for such repair or replacement as Agent may reasonably require; and (vi) the
aggregate amount of such proceeds or awards from any single casualty or
condemnation does not exceed $1,000,000.

 

8.6.3.                            Protection of Collateral. 
All expenses of protecting, storing, warehousing, insuring, handling,
maintaining and shipping any Collateral, all Taxes payable with respect to any
Collateral (including any sale thereof), and all other payments required to be
made by Agent to any Person 

 

60

 

to realize upon any
Collateral, shall be borne and paid by Obligors.  Agent shall not be liable or responsible in
any way for the safekeeping of any Collateral, for any loss or damage thereto
(except for reasonable care in its custody while Collateral is in Agent’s
actual possession), for any diminution in the value thereof, or for any act or
default of any warehouseman, carrier, forwarding agency or other Person
whatsoever, but the same shall be at Borrowers’ sole risk.

 

8.6.4.                            Defense of Title to Collateral. 
Each Obligor shall, to the extent it is commercially sensible to do so
in its reasonable business judgment), at all times defend its title to
Collateral and Agent’s Liens therein against all Persons, claims and demands
whatsoever, except Permitted Liens.

 

8.7.                            Power of Attorney. 
Each Obligor hereby irrevocably constitutes and appoints Agent (and all
Persons designated by Agent) as such Obligor ‘s true and lawful attorney (and
agent-in-fact) for the purposes provided in this Section.  This power of attorney is coupled with an
interest.   Agent, or Agent’s designee,
may, without notice and in either its or a Borrower’s name, but at the cost and
expense of Obligor:

 

(a)                                  During a Trigger Event or following the
occurrence and during the continuance of an Event of Default, endorse an
Obligor’s name on any Payment Item or other proceeds of Collateral (including
proceeds of insurance) that come into Agent’s possession or control; and

 

(b)                                 During an Event of Default, (i) notify
any Account Debtors of the assignment of their Accounts, demand and enforce
payment of Accounts, by legal proceedings or otherwise, and generally exercise
any rights and remedies with respect to Accounts; (ii) settle, adjust,
modify, compromise, discharge or release any Accounts or other Collateral, or
any legal proceedings brought to collect Accounts or Collateral; (iii) sell
or assign any Accounts and other Collateral upon such terms, for such amounts
and at such times as Agent deems advisable; (iv) take control, in any
manner, of any proceeds of Collateral; (v) prepare, file and sign an
Obligor ‘s name to a proof of claim or other document in a bankruptcy of an
Account Debtor, or to any notice, assignment or satisfaction of Lien or similar
document; (vi) receive, open and dispose of mail addressed to an Obligor,
and notify postal authorities to change the address for delivery thereof to
such address as Agent may designate; (vii) endorse any Chattel Paper,
Document, Instrument, invoice, freight bill, bill of lading, or similar
document or agreement relating to any Accounts, Inventory or other Collateral; (viii) use
an Obligor ‘s stationery and sign its name to verifications of Accounts and
notices to Account Debtors; (ix) to the extent an Obligor has rights
sufficient to allow Agent or its designee to do so, use the information
recorded on or contained in any data processing equipment and computer hardware
and software relating to any Collateral; (x) make and adjust claims under
policies of insurance; (xi) take any action as may be necessary or appropriate
to obtain payment under any letter of credit or banker’s acceptance for which
an Obligor is a beneficiary; and (xii) take all other actions as Agent deems
appropriate to fulfill any Obligor’s obligations under the Loan Documents.

 

SECTION 9        REPRESENTATIONS AND WARRANTIES

 

9.1.                            General Representations
and Warranties.  To induce
Agent and Lenders to enter into this Agreement and to make available the
Commitments, Loans and Letters of Credit, each Borrower and other Obligor, as
applicable, represents and warrants that, after giving effect to the
transactions contemplated under the Purchase and Sale Agreement and related
documents in each case as of the date of such representation and warranty is
made unless an earlier date is specified:

 

9.1.1.                            Organization and Qualification. 
Each Borrower, other Obligor and Subsidiary is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization.  Each Borrower, other
Obligor and Subsidiary is duly qualified, authorized to do business 

 

61

 

and in good standing as a
foreign corporation, company or other entity in each jurisdiction where failure
to be so qualified would reasonably be expected to have a Material Adverse
Effect.

 

9.1.2.                            Power and Authority. 
Each Obligor is duly authorized to execute, deliver and perform its Loan
Documents.  The execution, delivery and
performance of the Loan Documents have been duly authorized by all necessary
action, and do not (a) require any consent or approval of any holders of
Equity Interests of any Obligor, other than those already obtained; (b) contravene
the Organic Documents of any Obligor; (c) violate or cause a default under
any Applicable Law or Material Contract; or (d) result in or require the
imposition of any Lien (other than Permitted Liens) on any Property of any
Obligor.

 

9.1.3.                            Enforceability. 
Each Loan Document is a legal, valid and binding obligation of each Obligor
party thereto, enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors’ rights generally.

 

9.1.4.                            Capital Structure.  Schedule 9.1.4 shows, for each Obligor and
Subsidiary, as of the Closing Date, its name, its jurisdiction of organization,
its authorized and issued Equity Interests, the holders of its Equity
Interests, and all agreements binding on such holders with respect to their
Equity Interests.  Each Obligor has good
title to its Equity Interests in its Subsidiaries, subject only to Agent’s Lien
and Permitted Liens arising by operation of law), and all such Equity Interests
are duly issued, and in the case of Equity Interests representing a
corporation, fully paid and non-assessable. 
There are no outstanding options to purchase, warrants, subscription
rights, agreements to issue or sell, convertible interests, phantom rights or
powers of attorney (other than those granted under a Loan Document) relating to
any Equity Interests of any Obligor or Subsidiary.

 

9.1.5.                            Corporate Names; Locations. 
During the five years preceding the Closing Date, except as shown on Schedule 9.1.5, no Obligor or Subsidiary
has been known as or used any corporate, fictitious or trade names, has been
the surviving corporation of a merger or combination, or has acquired any
substantial part of the assets of any Person. 
As of the Closing Date, the chief executive offices and other places of
business of Borrowers and Subsidiaries are shown on Schedule 8.6.1.  During
the five years preceding the Closing Date, no Obligor or Subsidiary has had any
other office or place of business.

 

9.1.6.                            Title to Properties; Priority of Liens. 
Each Obligor and Subsidiary has good and marketable title to (or valid
leasehold interests in) all of its Real Estate, and good title to all of its
personal Property, including all Property reflected in any financial statements
delivered to Agent or Lenders, in each case free of Liens except Permitted
Liens.  Each Obligor and Subsidiary has
paid and discharged all lawful claims that, if unpaid, could become a Lien on
its Properties, other than Permitted Liens. 
All Liens of Agent in the Collateral (other than Liens on Collateral
consisting of Deposit Accounts, Securities Accounts, Equity Interests of
certain Foreign Subsidiaries, Letter of Credit Rights, and other Investment
Property not held in a Securities Account, in each case to the extent not
required to be perfected hereunder or pursuant to the Post-Closing Agreement,
money not in possession of the Agent, Copyrights, and foreign Intellectual
Property) are duly perfected, first priority Liens, subject only to Permitted
Liens.

 

9.1.7.                            Accounts.  Agent may
rely, in determining which Accounts are Eligible Accounts, on all statements
and representations made by Borrowers with respect thereto.  Borrowers warrant, with respect to each
Account at the time it is shown as an Eligible Account in a Borrowing Base Certificate,
that:

 

(a)                                  it is genuine and in all respects what it
purports to be, and is not evidenced by a judgment;

 

62

 

(b)                                 it arises out of a completed, bona fide sale and delivery of goods or
rendition of services in the Ordinary Course of Business, and substantially in
accordance with any purchase order, contract or other document relating
thereto;

 

(c)                                  it is for a sum certain, maturing as
stated in the invoice covering such sale or rendition of services, a copy of
which has been furnished or is available to Agent on request;

 

(d)                                 it is not subject to any offset, Lien
(other than Agent’s Lien or Permitted Lien), deduction, defense, dispute,
counterclaim or other adverse condition except as arising in the Ordinary
Course of Business and disclosed to Agent; and it is absolutely owing by the
Account Debtor, without contingency in any respect;

 

(e)                                  no purchase order, agreement, document or
Applicable Law restricts assignment of the Account to Agent (unless such
restriction is ineffective under the UCC), and the applicable Borrower is the
sole payee or remittance party shown on the invoice;

 

(f)                                    no extension, compromise, settlement,
modification, credit, deduction or return has been authorized with respect to
the Account, except discounts or allowances granted in the Ordinary Course of
Business for prompt payment that are reflected on the face of the invoice
related thereto and in the reports submitted to Agent hereunder; and

 

(g)                                 to the best of the Senior Officer’s of
each Borrower’s knowledge, (i) there are no facts or circumstances that
are reasonably likely to impair the enforceability or collectibility of such
Account (other than rebates granted in the Ordinary Course of Business); (ii) the
Account Debtor had the capacity to contract when the Account arose, continues
to meet the applicable Borrower’s customary credit standards, is Solvent, is
not contemplating or subject to an Insolvency Proceeding, and has not failed,
or suspended or ceased doing business; and (iii) there are no proceedings
or actions threatened in writing or pending against any Account Debtor that
could reasonably be expected to have a material adverse effect on the Account
Debtor’s financial condition.

 

9.1.8.                            Financial Statements. 
The consolidated balance sheets, and related statements of income, cash
flow and shareholder’s equity, of Parent and Subsidiaries that have been
delivered to Agent and Lenders, are prepared in accordance with GAAP (except as
set forth in Section 6.1(j) and, in
the case of unaudited financial statements, subject to year-end adjustments and
the absence of footnotes), and fairly present the financial positions and
results of operations of Boise Cascade and Subsidiaries at the dates and for
the periods indicated.  All projections
delivered from time to time to Agent and Lenders have been prepared in good
faith and based on assumptions believed by Borrowers to be reasonable in light
of the circumstances at such time (it being understood that the projections are
subject to significant assumptions and contingencies, many of which are beyond
Borrowers control, no assurance can be given than the projections will be
realized and the actual results may differ materially).  As of the Closing Date, there has been no
change in the condition, financial or otherwise, the Obligors taken as a whole
that would reasonably be expected to have a Closing Date Material Adverse
Effect.  Since December 31, 2007,
there has not been a Material Adverse Effect. 
No financial statement delivered to Agent or Lenders at any time
contains any untrue statement of a material fact, nor fails to disclose any
material fact necessary to make such statement not materially misleading in
light of the circumstances under which such statements are made.  The Borrowers, individually and the Obligors
on a consolidated basis, are Solvent.

 

9.1.9.                            Surety Obligations. 
Except as disclosed on Schedule 9.19,
as of the Closing Date, no Obligor or Subsidiary is obligated as surety or
indemnitor under any bond or other contract that assures payment or performance
of any obligation of any Person.

 

9.1.10.                     Taxes.  Each Obligor
and Subsidiary has filed all federal, state and local tax returns and other
reports that it is required by law to file, and has paid, or made provision for
the payment 

 

63

 

of, all Taxes upon it,
its income and its Properties that are due and payable, except to the extent
that the failure to do so, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect or to the extent being
Properly Contested.  The provision for
Taxes on the books of each Borrower and Subsidiary is adequate for all years
not closed by applicable statutes, and for its current Fiscal Year.

 

9.1.11.                     Brokers.  There are no
third-party brokerage commissions, finder’s fees or investment banking fees
payable in connection with the Loans or the Revolver Commitments.

 

9.1.12.                     Intellectual Property. Except as would not reasonably be
expected to have a Material Adverse Effect, to the knowledge of such Obligor,
each Obligor and Subsidiary owns or has the lawful right to use all
Intellectual Property necessary for the conduct of its business, and such use
does not conflict with, misappropriate, infringe on or violate, in any material
respect, the intellectual property rights of others.  All registrations of Intellectual Property
owned by an Obligor and set forth on Schedule 9.1.12(a) are
and, to the Obligors’ knowledge, all Intellectual Property exclusively licensed
to an Obligor on the Closing Date, are valid, enforceable, subsisting and
unexpired and have not been abandoned, except for such instances that
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect.  There is no
pending or, to the knowledge of any Senior Officer of Borrowers, threatened (in
writing) pending Intellectual Property Claim that has been received by, or
filed against, a Borrower in within the last three years with respect to any
Obligor, any Subsidiary or any of their Property (including any Intellectual
Property) which could reasonably be expected to have a Material Adverse
Effect.  There is no holding or judgment
that has been rendered on or after the date that is five years prior to the
Closing Date by any Governmental Authority or arbitrator in the United States
or outside the United States which would limit or cancel the validity or
enforceability of any Intellectual Property owned by an Obligor, or to such
Obligor’s knowledge, any Intellectual Property licensed to an Obligor which could
reasonably be expected to have a Material Adverse Effect.  To the knowledge of Obligors, there are no
any unauthorized infringing uses of any item of Intellectual Property owned by
any Obligor that could reasonably be expected to (i) lead to such item becoming
invalid or unenforceable and (ii) have a Material Adverse Effect.  As of the Closing Date, no Obligor or
Subsidiary pays or owes, pursuant to a License, any material Royalty or other
material compensation to any Person with respect to any Intellectual
Property.  All Registered Intellectual
Property owned by any Obligor or Subsidiary as of the Closing Date is shown on Schedule 9.1.12(a).

 

9.1.13.                     Governmental Approvals. 
Each Obligor and Subsidiary has, is in compliance with, and is in good
standing with respect to, all Governmental Approvals necessary to conduct its
business and to own, lease and operate its Properties, including without
limitation, all material licenses, permits, leases and agreements necessary to
its business, except where the failure to do so would not be reasonably
expected to have a Material Adverse Effect. 
All necessary import, export or other licenses, permits or certificates
for the import or handling of any goods or other Collateral have been procured
and are in effect, and Obligors and Subsidiaries have complied with all foreign
and domestic laws with respect to the shipment and importation of any goods or
Collateral, except where noncompliance could not reasonably be expected to have
a Material Adverse Effect.

 

9.1.14.                     Compliance with Laws. 
Each Obligor and Subsidiary has duly complied, and its Properties and
business operations are in compliance, in all material respects with all
Applicable Law, except where noncompliance would not reasonably be expected to
have a Material Adverse Effect.  There
have been no citations, notices or orders of material noncompliance issued to
any Obligor or Subsidiary under any material Applicable Law material to the
Borrowers’ business.  To the knowledge of
the Borrowers after due inquiry, no Inventory has been produced in violation of
the FLSA.

 

9.1.15.                     Compliance with Environmental Laws. 
Except as disclosed on Schedule 9.1.15
or as would not reasonably
be expected to result in a Material Adverse Effect, no Obligor ‘s or
Subsidiary’s past or present operations, Real Estate or other Properties are
subject to any federal, state or 

 

64

 

local investigation to
determine whether any remedial action is needed to address any environmental
pollution, hazardous material or environmental clean-up.  No Obligor or Subsidiary has received any
Environmental Notice with respect to circumstances that could reasonably be
expected to result in a Material Adverse Effect.  No Borrower or Subsidiary has any contingent
liability with respect to any Environmental Release, environmental pollution or
hazardous material on any Real Estate now or previously owned, leased or
operated by it, which, in each case, would reasonably be expected to have a
Material Adverse Effect.

 

9.1.16.                     Burdensome Contracts. 
No Obligor or Subsidiary is a party or subject to any contract,
agreement or charter restriction that would reasonably be expected to have a
Material Adverse Effect.  No Obligor or
Subsidiary is party or subject to any Restrictive Agreement other than a
Permitted Restrictive Agreement, none of which prohibit the execution or
delivery of any Loan Documents by an Obligor nor the performance by an Obligor
of any obligations thereunder.

 

9.1.17.                     Litigation.  Except as
shown on Schedule 9.1.17, there
are no proceedings or investigations pending or, to any Borrower’s knowledge,
threatened in writing against any Obligor or Subsidiary, or any of their
businesses, operations, Properties, prospects or conditions, that (a) relate
to any Loan Documents or transactions contemplated thereby; or (b) there
is a reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected to have a Material Adverse
Effect.  No Obligor or Subsidiary is in
default with respect to any order, injunction or judgment of any Governmental
Authority that would reasonably be expected to have a Material Adverse Effect.

 

9.1.18.                     No Defaults. 
No event or circumstance has occurred or exists that constitutes a
Default or Event of Default.  No Obligor
or Subsidiary is in default, and no event or circumstance has occurred or
exists that with the passage of time or giving of notice would constitute a
default, under any Material Contract. 
There is no basis upon which any party (other than an Obligor or
Subsidiary) could terminate a Material Contract prior to its scheduled
termination date.

 

9.1.19.                     ERISA.  Except as
disclosed on Schedule 9.1.19:

 

(a)                                  Each Plan is in
compliance in all material respects with the applicable provisions of ERISA,
the Code, and other federal and state laws. 
Each Plan that is intended to qualify under Section 401(a) of
the Code has received a favorable determination letter from the IRS, an
application for such a letter is currently being processed by the IRS with
respect thereto or such plan is still within its applicable remedial amendment
period for purposes of such an application and, to the knowledge of Borrowers,
nothing has occurred which would reasonably be expected to prevent, or cause
the loss of, such qualification.  Each
Obligor and ERISA Affiliate has made all required contributions to each Plan
subject to Section 412 of the Code for any plan year ended in 2007 or any
prior calendar year, and no application for a funding waiver or an extension of
any amortization period pursuant to Section 412 of the Code has been made
with respect to any Plan.

 

(b)                                 There are no pending or, to the knowledge
of Borrowers, threatened claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan that would reasonably be
expected to have a Material Adverse Effect. 
There has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan that has resulted in or
would reasonably be expected to have a Material Adverse Effect.

 

(c)                                  (i) No
ERISA Event has occurred or is reasonably expected to occur (other than
resulting from the Paper Group Disposition) which would reasonably be expected
to result in a material liability; (ii) no Obligor or ERISA Affiliate has
incurred, or reasonably expects to incur, any material liability under Title IV
of ERISA with respect to any Pension Plan (other than premiums due and not
delinquent under Section 4007 of ERISA); (iii) no Obligor or ERISA
Affiliate has incurred, or reasonably expects to incur, any material liability
(and no event has occurred which, with the giving of notice under 

 

65

 

Section 4219
of ERISA, would result in such liability) under Section 4201 or 4243 of
ERISA with respect to a Multiemployer Plan; and (iv) no Obligor or ERISA
Affiliate has engaged in a transaction that could be subject to Section 4069
or 4212(c) of ERISA.

 

(d)                                 With respect to
any Foreign Plan, except as would not reasonably be expected to result in a
material liability to an Obligor, (i) all employer and employee
contributions required by law or by the terms of the Foreign Plan have been
made, or, if applicable, accrued, in accordance with normal accounting
practices; (ii) the fair market value of the assets of each funded Foreign
Plan, the liability of each insurer for any Foreign Plan funded through
insurance, or the book reserve established for any Foreign Plan, together with
any accrued contributions, is sufficient to procure or provide for the accrued
benefit obligations with respect to all current and former participants in such
Foreign Plan according to the actuarial assumptions and valuations most
recently used to account for such obligations in accordance with applicable generally
accepted accounting principles; and (iii) it has been registered as
required and has been maintained in good standing with applicable Governmental
Authority.

 

9.1.20.                     Trade Relations. 
There exists no actual or threatened (in writing) termination,
limitation or modification of any business relationship between any Obligor or
Subsidiary and any customer or supplier, or any group of customers or
suppliers, that could reasonably be expected to have a Material Adverse Effect.  There exists no condition or circumstance
that would reasonably be expected to impair in any material respect the ability
of any Obligor or Subsidiary to conduct its business at any time hereafter in
substantially the same manner as conducted on the Closing Date.

 

9.1.21.                     Labor Relations. 
Except as described on Schedule 9.1.21,
as of the Closing Date, no Obligor or Subsidiary is party to or bound by any
collective bargaining agreement, material management agreement, or material
consulting agreement.  There are no
grievances, disputes or controversies with any union or other organization of
any Obligor ‘s or Subsidiary’s employees, or, to any Borrower’s knowledge, any
asserted or threatened (in writing) strikes, work stoppages or demands for
collective bargaining, in each case, that could reasonably be expected to have
a Material Adverse Effect.

 

9.1.22.                     Payable Practices. 
No Obligor or Subsidiary has made any material change in its historical
accounts payable practices from those in effect on the Closing Date, other than
changes consistent with then-current industry practice that could not
reasonably be expected to have a Material Adverse Effect.

 

9.1.23.                     Not a Regulated Entity. 
No Obligor is (a) an “investment company” or a “person directly or
indirectly controlled by or acting on behalf of an investment company” within
the meaning of the Investment Company Act of 1940; or (b) subject to
regulation under the Federal Power Act, the Interstate Commerce Act, any public
utilities code or any other Applicable Law regarding its authority to incur
Debt.

 

9.1.24.                     Margin Stock. 
No Obligor or Subsidiary is engaged, principally or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying any Margin Stock. 
No Loan proceeds or Letters of Credit will be used by Obligors to
purchase or carry, or to reduce or refinance any Debt incurred to purchase or
carry, any Margin Stock or for any related purpose governed by Regulations T, U
or X of the Board of Governors.

 

9.1.25.                     Material Subsidiaries. 
None of the Obligors has any Material Subsidiary that is not either a
Borrower or a Guarantor.

 

9.1.26.                     Copyrights.  None of the
Excluded Copyrights are used in the manufacture or sale of any products of the
Obligors or have any material value.

 

66

 

9.2.                            Complete Disclosure. 
No Loan Document contains any untrue statement of a material fact, nor
fails to disclose any material fact necessary to make the statements contained
therein not materially misleading in light of the circumstances under which
such statements are made.   There is no
fact or circumstance that any Obligor has failed to disclose to Agent in
writing that could reasonably be expected to have a Material Adverse Effect.

 

SECTION 10                        COVENANTS AND
CONTINUING AGREEMENTS

 

10.1.                     Affirmative Covenants. 
As long as any Commitments are Outstanding or Full Payment has not been
made on all Obligations, each Obligor shall, and shall cause each Subsidiary
to:

 

10.1.1.                     Inspections; Appraisals.

 

(a)                                  Permit Agent from time to time, subject
to reasonable notice and normal business hours, to visit and inspect the
Properties of any Obligor or Subsidiary, inspect, audit and make extracts from
any Obligor ‘s or Subsidiary’s books and records, and discuss with its officers,
employees, agents, advisors and independent accountants (so long as, with
respect to advisors and accountants, a representative of the Borrowers have
been afforded a reasonable opportunity to be present at such discussions) such
Obligor ‘s or Subsidiary’s business, financial condition, assets, prospects and
results of operations.  Lenders may
participate in any such visit or inspection, at their own expense.  Neither Agent nor any Lender shall have any
duty to any Obligor to make any inspection, nor to share any results of any
inspection, appraisal or report with any Obligor.  Obligors acknowledge that all inspections,
appraisals and reports are prepared by Agent and Lenders for their purposes,
and Obligors shall not be entitled to rely upon them.

 

(b)                                 Reimburse Agent for all charges, costs
and expenses of Agent in connection with (i) examinations of any Obligor’s
books and records or any other financial or Collateral matters as Agent deems
appropriate,
(x) up to three times per Loan Year in the event that Average Availability
is less than the Availability Threshold for any month during such Loan Year or
an Event of Default has occurred and is continuing, and (y) up to two times
per Loan Year at any other time; (ii) appraisals of Inventory (x) up to two times
per Loan Year in the event that Average Availability is less than the
Availability Threshold for any month during such Loan Year or an Event of
Default has occurred and is continuing and (y) one time per Loan
Year at any other time; and (iii) during the PP&E Inclusion Period,
appraisals of Equipment, one time per Loan Year and following an Event of Default, an appraisal
of Real Estate.  Subject to and
without limiting the foregoing, Borrowers specifically agree to pay Agent’s
then standard charges for each day that an employee of Agent or its Affiliates
is engaged in any examination activities, and shall pay the standard charges of
Agent’s internal appraisal group.  This Section shall
not be construed to limit Agent’s right to conduct examinations or to obtain
appraisals at any time in its discretion, nor to use third parties for such
purposes, but payment for such examinations and appraisals by Borrowers is
limited as set forth herein.

 

10.1.2.                     Financial and Other Information. 
Keep adequate records and books of account with respect to its business
activities, in which proper entries are made in accordance with GAAP reflecting
all financial transactions; and furnish to Agent:

 

(a)                                  as soon as available, and in any event
within 90 days after the close of each Fiscal Year, balance sheets as of the
end of such Fiscal Year and the related statements of income, cash flow and
shareholders’ equity for such Fiscal Year, on a consolidated basis for Boise
Cascade and Subsidiaries, which shall be audited and certified (without
qualification as to scope, “going concern” or similar items) by KPMG LLP or
another firm of independent certified public accountants of recognized standing
selected by Obligors and reasonably acceptable to Agent, and shall set forth in
comparative form corresponding figures for the preceding Fiscal Year and other
information acceptable to Agent;

 

67

 

(b)                                 as soon as available, and in any event
within 45 days after the end of each Fiscal Quarter, unaudited balance sheets
as of the end of such Fiscal Quarter and the related statements of income and
cash flow for such Fiscal Quarter and for the portion of the Fiscal Year then
elapsed, on a consolidated basis for Boise Cascade and Subsidiaries, setting
forth in comparative form corresponding figures for the preceding Fiscal Year
and certified by the chief financial officer of Borrower Agent as prepared in
accordance with GAAP and fairly presenting the financial position and results
of operations for such fiscal quarter and period, subject to normal year-end
adjustments and the absence of footnotes;

 

(c)                                  if at any time Availability falls below
the Reporting Availability Threshold and until such time as Average
Availability for two months is greater than the Reporting Availability
Threshold, as soon as available, and in any event within 30 days after the end
of each month, unaudited balance sheets as of the end of such month and the
related statements of income and cash flow for such month and for the portion
of the Fiscal Year then elapsed, on a consolidated basis and separately for the
Building Material Distribution Group and the Wood Products businesses of the
Obligors from the Borrowers’ internal operating statements (which are not
intended to be prepared in accordance with GAAP), certified by the chief
financial officer of Borrower Agent as fairly presenting the financial position
and results of operations for such month;

 

(d)                                 as soon as available, and in any event
not later than 20 days as of the end of each month, detailed calculations
setting forth any differences from the projections delivered in the previous
month’s Borrowing Base Certificate, with respect to (i) declines in value
of any Collateral, due to collections received in the Dominion Account or
otherwise; (ii) adjustments to advance rates to reflect changes in
dilution, quality, mix and other factors affecting Collateral; and (ii) to
the extent the calculation set forth in such Borrowing Base Certificate did not
accurately reflect the Availability Reserve.

 

(e)                                  concurrently  with delivery of financial statements under
clauses (a), (b) and (c) above, or more frequently if requested by
Agent while a Default or Event of Default exists (but no more frequently than
monthly), a Compliance Certificate executed by a Senior Officer of Borrower
Agent;

 

(f)                                    concurrently with delivery of financial
statements under clause (a) above, copies of all management letters and
other material reports submitted to Obligors by their accountants in connection
with such financial statements;

 

(g)                                 concurrently with delivery of financial
statements under clauses (a) and (b) above, (i) a schedule of
all obligations of the Obligors as surety or indemnitor under any bond or other
contract that assures payment or performance of any obligation of any Person
(or a certificate that there have been no changes with respect to such
obligations since the last delivery of such a schedule), and (ii) a
schedule of all collective bargaining agreements, material management
agreements, and material consulting agreements by which any Obligor or
Subsidiary is party to or bound (or a certificate that there have been no
changes with respect to such agreements since the last delivery of such a
schedule);

 

(h)                                 as soon as
available but not
later than 45 days following the beginning of each Fiscal Year, projections of
Boise Cascade’s consolidated balance sheets, results of operations, cash flow
and Availability for the such Fiscal Year, quarter by quarter, and for the next
three Fiscal Years, year by year;

 

(i)                                     all reports and other disclosures
required under Sections 8.2.1 and 8.3.1;

 

(j)                                     at Agent’s request, a listing of each
Obligor’s trade payables, specifying the trade creditor and balance due, and a
detailed trade payable aging, all in form satisfactory to Agent;

 

68

 

(k)           promptly
after the sending or filing thereof, copies of any regular, periodic and
special reports or registration statements or prospectuses that any Borrower
files with the Securities and Exchange Commission or any other Governmental
Authority, or any securities exchange; and copies of any press releases or
other statements made available by an Obligor to the public concerning material
changes to or developments in the business of such Obligor;

 

(l)            promptly after the
sending or filing thereof, copies of any annual report to be filed in
connection with each Plan or Foreign Plan; and

 

(m)          such other reports and
information (financial or otherwise) as Agent may reasonably request from time
to time in connection with any Collateral or any Borrower’s, Subsidiary’s or
other Obligor’s financial condition or business.

 

10.1.3.       Notices.  Notify Agent and Lenders in writing, promptly
after a Borrower’s Senior Officer’s obtaining knowledge thereof, of any of the
following that affects an Obligor:  (a) the
threat or commencement of any proceeding or investigation, whether or not
covered by insurance, if an adverse determination is reasonably likely and
could reasonably be expected to have a Material Adverse Effect; (b) any
pending or threatened (in writing) labor dispute, strike or walkout, or the
expiration of any material labor contract; (c) any event of default under
or termination of a Material Contract; (d) the existence of any Default or
Event of Default; (e) any judgment in an amount exceeding $500,000; (f) the
assertion of any Intellectual Property Claim, if it could reasonably be
expected to have a Material Adverse Effect; (g) any violation or asserted
violation of any Applicable Law (including ERISA, OSHA, FLSA, or any
Environmental Laws), if an adverse resolution is reasonably likely and could
have a Material Adverse Effect; (h) any Environmental Release by an
Obligor or on any Property owned, leased or occupied by an Obligor; or receipt
of any Environmental Notice, if it could reasonably be expected to have a
Material Adverse Effect; (i) the occurrence of any ERISA Event which would
reasonably be expected to result in a material liability to an Obligor or the
failure of any Obligor or Subsidiary to timely contribute any amount required
to be contributed to a Pension Plan under Sections 412 and 430 of the Code; (j) the
discharge of or any withdrawal or resignation by Borrowers’ independent
accountants; or (k) any opening of a new office or place of business with
150 employees, at least 30 days prior to such opening.

 

10.1.4.       Landlord and Storage
Agreements.  Upon request, provide
Agent with copies of all existing material agreements between an Obligor and
any landlord, warehouseman, processor, shipper, bailee or other Person that
owns any premises at which there is any Collateral.

 

10.1.5.       Compliance with Laws.  Comply with all Applicable Laws, including
ERISA, Environmental Laws, FLSA, OSHA, Anti-Terrorism Laws, and laws regarding
collection and payment of Taxes, and maintain all Governmental Approvals
necessary to the ownership of its Properties or conduct of its business, unless
failure to comply (other than failure to comply with Anti-Terrorism Laws) or
maintain would not reasonably be expected to have a Material Adverse Effect.  Without limiting the generality of the
foregoing, if any Environmental Release occurs at or on any Properties of any
Obligor or Subsidiary that would reasonably be expected to have a Material
Adverse Effect, it shall act promptly and diligently to investigate such
Environmental Release to the extent required by Environmental Laws and report
to Agent and to the extent required by Environmental Laws report all
appropriate Governmental Authorities the extent of, and to make appropriate
remedial action to the extent required by Environmental Laws to remediate, such
Environmental Release, whether or not directed to do so by any Governmental
Authority.

 

10.1.6.       Taxes.  Pay and discharge all Taxes prior to the date
on which they become delinquent or penalties attach, unless such Taxes are being
Properly Contested or are of a de minimis
amount; provided that Taxes that are determined to have been due as a result of
a subsequent audit notwithstanding a good faith determination by the Obligors
that such Taxes were not payable at the time such Taxes are determined to have
been due shall not be deemed to be delinquent for purposes of this 

 

69

 

Section 10.1.6
so long as the Obligors shall pay and discharge such Taxes promptly following
the auditor’s determination that such Taxes were due, unless such determination
is being Properly Contested.

 

10.1.7.       Insurance.  In addition to the insurance required
hereunder with respect to Collateral, maintain insurance with insurers (with a Best Rating of at least
A7, unless otherwise approved by Agent) reasonably satisfactory to Agent (and
Agent acknowledges that insurer providing insurance on the Closing Date is
satisfactory), (a) with respect to the Properties and business of
Obligors and Subsidiaries of such type (including product liability, workers’
compensation, larceny, embezzlement, or other criminal misappropriation
insurance), in such amounts, and with such coverages and deductibles as are
customary for companies similarly situated; and (b) business interruption
insurance in such amounts, and with such coverages and deductibles, as are
customary for companies similarly situated, and subject to an Insurance Assignment
satisfactory to Agent.

 

10.1.8.       Intellectual
Property.

 

(a)           Each Obligor shall,
subject to its reasonable business judgment, (i) continue to use each
Trademark that is set forth on Schedule 9.1.12(a) in
order to maintain such Trademark in full force free from any claim of
abandonment for non-use, (ii) maintain, consistent with reasonable business
judgment, the quality of products and services offered under each such
Trademark and take all commercially reasonable steps to ensure that all
licensed users of such Trademark maintain quality standards as established by
such Obligor, (iii) use reasonable efforts to use such Trademark with the
appropriate notice of registration and all other notices and legends required
by applicable law, (iv) not adopt or use any mark owned by any Obligor
which is confusingly similar or a colorable imitation of such Trademark unless
Agent, for the benefit of the Secured Parties, shall be entitled to obtain a
perfected security interest in such mark pursuant to this Agreement, the
Trademark Security Agreement and any other Security Document, immediately
following such adoption or use, and (v) not knowingly (and not knowingly
permit any licensee or sublicensee thereof to, subject to existing Licenses) do
any act or knowingly omit to do any act whereby any registration of such
Trademark would be reasonably likely to become invalidated or impaired in any
way; in each case with respect to subsections (i) to (v), except for such
instances of non-compliance, that individually or in the aggregate, could not
reasonably be expected to have Material Adverse Effect.

 

(b)           Each Obligor, except in
accordance with its reasonable business judgment, shall not knowingly (and not
knowingly permit any licensee or sublicensee thereof to) do any act, or omit to
do any act, whereby any Patent owned by an Obligor that is set forth on Schedule 9.1.12(a) would be reasonably likely to become
forfeited, abandoned or dedicated to the public, except for such instances of
non-compliance, that individually or in the aggregate, could not reasonably be
expected to have Material Adverse Effect.

 

(c)           Each Obligor, except in
accordance with its reasonable business judgment, will not knowingly (and will
not knowingly permit any licensee thereof to, subject to existing Licenses) (i) do
any act or knowingly omit to do any act whereby any material portion of such Copyrights
owned by an Obligor would be reasonably likely to become invalidated or
otherwise impaired, or (ii) do any act which would be reasonably likely to
cause any material portion of the Copyrights owned by an Obligor to fall into
the public domain, except, in each case, for such instances of non-compliance,
that individually or in the aggregate, could not reasonably be expected to have
Material Adverse Effect.

 

(d)           Each Obligor, except in
accordance with its reasonable business judgment, agrees that it shall not (A) do any act that uses any
Intellectual Property to infringe, misappropriate or violate the intellectual
property rights of any other Person if such act is(i) done knowingly in
violation of such other person’s rights and (ii) could reasonably be
expected to have a Material Adverse Effect,  except, in each case, for such instances of
non-compliance, that individually or in the aggregate, could not reasonably be
expected to have Material Adverse Effect.

 

70

 

(e)           Concurrently with the
delivery of the financial statements as provided in this Agreement, each
Obligor shall notify Agent if it knows that any application or registration
included in the Registered Intellectual Property owned or exclusively licensed
by an Obligor has become forfeited, abandoned or dedicated to the public, or of
any materially adverse determination of any Governmental Authority regarding
any Obligor’s ownership of or right to use, or the validity of, any such
Intellectual Property or such Obligor’s right to register the same, to own and
maintain the same or use the same, except for (i) office actions issued by
the United States Patent and Trademark Office, the United States Copyright
Office or any similar office, agency or Governmental Authority in any other
country or any political subdivision thereof during the ordinary course of
prosecution of any applications for any Intellectual Property, and (ii) such
instances of non-compliance, forfeit, dedication to the public, or abandonment,
and such determinations, that, individually or in the aggregate, could not
reasonably be expected to have Material Adverse Effect.

 

(f)            Subject to such
Obligor’s reasonable business judgment, each Obligor shall take all reasonable
and necessary steps, including in any proceeding before the United States
Patent and Trademark Office, the United States Copyright Office or any similar
office, agency or Governmental Authority in any other country or any political
subdivision thereof, to maintain and pursue each pending application (and to
obtain the relevant registration) and to maintain each registration of
Intellectual Property owned by an Obligor including the payment of required
fees and taxes, the filing of responses to office actions issued by the United
States Patent and Trademark Office and the United States Copyright Office or
any similar office, agency or Governmental Authority in any other country or
any political subdivision thereof, the filing of applications for renewal or
extension, the filing of affidavits of use and affidavits of incontestability,
the filing of divisional, continuation, continuation-in-part, reissue, and
renewal applications or extensions, the payment of maintenance fees, and the
participation in interference, reexamination, opposition, cancellation,
infringement and misappropriation proceedings, except for such instances of
non-compliance, that individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.

 

(g)           Notwithstanding
anything to the contrary set forth in this Section 10.1.8,
each Obligor shall not, without the prior written consent of Agent, abandon any
registration of its material Intellectual Property, unless (i) such
Obligor shall have determined, in its discretion, reasonably exercised, that
the use or the pursuit or maintenance of such registration of Intellectual
Property is no longer commercially reasonable or desirable in the conduct of
such Obligor’s business or (ii) the loss thereof, individually or in the
aggregate with other Intellectual Property abandoned pursuant to this Section 10.1.8(g), could not reasonably be expected to
have a Material Adverse Effect. Upon the request of Agent, such Obligor shall
prepare and deliver to Agent a summary of any registrations of material
Intellectual Property so abandoned.

 

(h)           In the event that any
Obligor becomes aware that any material Intellectual Property owned by an
Obligor has been infringed, misappropriated or diluted in any material respect
by another party, such Obligor shall take such actions and cause its
Subsidiaries to take such actions, as such Obligor shall reasonably deem
appropriate under the circumstances (to the extent such infringement,
misappropriation, or dilution could reasonably be expected to have a Material
Adverse Effect, as Agent may reasonably request) to protect, maintain, enforce
and preserve the full value of such Intellectual Property.

 

(i)            Each Obligor shall
take all reasonably necessary steps reasonable under the circumstances to
protect the secrecy of all material Trade Secrets of such Obligor, except for
such instances of non-compliance that, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.

 

10.1.9.       Future Subsidiaries.  Promptly notify Agent upon any Person
becoming a Material Subsidiary and, if such Person is or becomes a Material
Subsidiary after the Closing Date, cause 

 

71

 

it to become a Guarantor
hereunder, and to execute and deliver such documents, instruments and
agreements and to take such other actions as Agent shall reasonably require to
evidence and perfect a Lien in favor of Agent (for the benefit of Secured
Parties) on all assets of such Person that would constitute Collateral at such
time, including delivery of such legal opinions, in
form and substance reasonably satisfactory to Agent, as it shall deem
appropriate.  The Borrowers may elect,
with the written consent of the Agent (which consent shall not be unreasonably
withheld), to cause any Material Subsidiary to become a Borrower hereunder (as
opposed to a Guarantor) by executing a joinder to this Agreement in form and
substance satisfactory to Agent and causing such Material Subsidiary to
execute and deliver such documents, instruments and agreements and to take such
other actions as Agent shall reasonably require to evidence and perfect a Lien
in favor of Agent (for the benefit of Secured Parties) on all assets of such
Material Subsidiary that would constitute Collateral at such time, including,
without limitation,  delivery of such legal opinions, appraisals and filed examinations in form and substance
satisfactory to Agent, as it shall deem appropriate.  It is understood and agreed that the assets
of a new Borrower shall not be eligible for advances until Agent has competed
its due diligence on such assets and the new Borrower with results satisfactory
to the Agent and has advised the new Borrower in writing of Agent’s credit
approval.

 

10.1.10.     Controlled Deposit
Accounts.  Maintain at all times
Deposit Account Control Agreements that comply with the requirements set forth
in Section 8.5 with respect to all
Controlled Deposit Accounts.

 

10.1.11.     Equity Issuances.  Notify Agent in writing within 10 days
following the issuance by Parent of any additional Equity Interests of any
class (other than pursuant to any management or employee incentive program) or
the creation by Parent of any new class of Equity Interests.

 

10.1.12.     Post-Closing Agreement.  Comply with the terms of the Post-Closing
Agreement, dated as of the date hereof between the Obligors and the Agent,
within the time periods set forth therein.

 

10.2.       Negative Covenants. 
As long as any Commitments or Obligations are outstanding, each Obligor
shall not, and shall cause each Subsidiary not to:

 

10.2.1.       Permitted Debt.  Create, incur, guarantee or suffer to exist
any Debt, except:

 

(a)           the Obligations;

 

(b)           Subordinated Debt;

 

(c)           Permitted Purchase
Money Debt;

 

(d)           Borrowed Money (other
than the Obligations, Subordinated Debt and Permitted Purchase Money Debt)
described on Schedule 10.2.1, but only to the extent outstanding on the Closing
Date and not satisfied with proceeds of the initial Loans;

 

(e)           Bank Product Debt;

 

(f)            Debt that is in
existence when a Person becomes a Subsidiary or that is secured by an asset
when such asset is acquired by a Borrower or Subsidiary, as long as such Debt (i) was
not incurred in contemplation of such Person becoming a Subsidiary or such
acquisition, (ii) is unsecured or secured by assets other than Accounts
and Inventory, and (iii) does not exceed in the aggregate at any time the
greater of (x) $25,000,000 and (y) 30% of the value of the Person
being acquired (if the transaction involves the acquisition of a Person);

 

(g)           Permitted Contingent Obligations;

 

72

 

(h)           Refinancing Debt as
long as each Refinancing Condition is satisfied;

 

(i)            other Debt that is not included in any of the
preceding clauses of this Section, is not secured by a Lien and does not exceed
$2,000,000 in the aggregate at any time;

 

(j)            Debt of (A) any Obligor owing to any
other Obligor, (B) any Subsidiary that is not an Obligor owing to any
other Subsidiary that is not an Obligor, (C) any Obligor owing to any
Subsidiary that is not an Obligor (so long as such Debt is subordinated to the
Obligations on customary terms and conditions) or (D) any Subsidiary
that is not an Obligor owing to any Obligor so long as such Debt constitutes a
Permitted Investment;

 

(k)           purchase price adjustment and similar
obligations incurred by the Borrowers or any Subsidiary in connection with a
Permitted Investment, to the extent such obligations would otherwise constitute
Debt;

 

(l)            other unsecured Debt in an aggregate
principal amount not exceeding $25,000,000 at any time outstanding;

 

(m)          any other Debt (which may be secured by Liens
on assets that do not constitute Collateral); provided that (i) no
Default or Event of Default exists immediately prior to or would result
directly or indirectly from the incurrence of such Debt and (ii) Availability
immediately after giving effect thereto and Average Availability for the most
recently ended Fiscal Quarter after giving pro forma effect to thereto, in each
case, is not less than the Restricted Payment Availability Threshold; and provided,
further, that any such Debt in excess of $5,000,000 in the aggregate
shall have a final maturity date later than the Revolver Termination Date and a
weighted average life to maturity of not less than four (4) years;

 

(n)           Debt in respect of Hedge Agreements not
entered into for speculative purposes;

 

(o)           Debt in respect of customs, stay,
performance, bid, appeal and surety bonds and completion guarantees and similar
obligations not in connection with Borrowed Money, in each case provided in the
ordinary course of business, including those incurred to secure health, safety
and environmental obligations in the ordinary course of business;

 

(p)           Debt consisting of (i) financing of
insurance premiums or (ii) take or pay obligations contained in supply
agreements, in each case arising in the Ordinary Course of Business and not in
connection with Borrowed Money;

 

(q)           Debt representing deferred compensation to
employees of the Borrowers (or any direct or indirect parent thereof) and
the Subsidiaries incurred in the Ordinary Course of Business;

 

(r)            additional Debt of Foreign Subsidiaries under
local working capital lines in an aggregate principal amount that at the time
of incurrence does not cause the aggregate principal amount of Debt incurred in
reliance on this clause to exceed $25,000,000;

 

(s)           Debt arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument drawn
against insufficient funds in the Ordinary Course of Business; provided that
such Indebtedness is extinguished within five Business Days of its incurrence;
and

 

(t)            cash management obligations and Debt in
respect of netting services, overdraft facilities, employee credit card
programs, cash pooling arrangements or similar arrangements in connection with
cash management and deposit accounts; provided that, with respect to any cash
pooling 

 

73

 

arrangements, the total amount
of all deposits subject to any such cash pooling arrangement at all times
equals or exceeds the total amount of overdrafts that may be subject to such
cash pooling arrangements.

 

10.2.2.       Permitted Liens.  Create or suffer to exist any Lien upon any
of its Property, except the following (collectively, “Permitted Liens”):

 

(a)           Liens in favor of
Agent;

 

(b)           Purchase Money Liens
securing Permitted Purchase Money Debt;

 

(c)           Liens for Taxes not yet
due or being Properly Contested;

 

(d)           statutory Liens (other
than Liens for Taxes or imposed under ERISA) arising in the Ordinary Course of
Business, but only if (i) payment of the obligations secured thereby is
not yet due or is being Properly Contested, and (ii) such Liens do not
materially impair the value or use of the Property or materially impair
operation of the business of any Obligor or Subsidiary;

 

(e)           Liens incurred or
deposits made in the Ordinary Course of Business to secure the performance of
tenders, bids, leases, contracts (except those relating to Borrowed Money),
statutory obligations and other similar obligations, or arising as a result of
progress payments under government contracts, as long as such Liens are at all
times junior to Agent’s Liens (if Agent has a Lien on such Asset);

 

(f)            Liens arising in the
Ordinary Course of Business that are subject to Lien Waivers;

 

(g)           Liens arising by virtue
of a judgment or judicial order against any Obligor or Subsidiary, or any
Property of an Obligor or Subsidiary, as long as such Liens are (i) in
existence for less than 20 consecutive days or being Properly Contested, and (ii) at
all times junior to Agent’s Liens (if Agent has a Lien on such Asset);

 

(h)           easements,
rights-of-way, restrictions, covenants or other agreements of record, and other
similar charges or encumbrances on Real Estate, that do not secure any monetary
obligation and do not interfere with the Ordinary Course of Business;

 

(i)            normal and customary
rights of setoff upon deposits in favor of depository institutions, and Liens
of a collecting bank on Payment Items in the course of collection;

 

(j)            existing Liens shown
on Schedule 10.2.2;

 

(k)           carriers’, warehousemen’s,
mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law,
arising in the ordinary course of business and securing obligations that are
not overdue by more than 60 days or are being contested in good faith;

 

(l)            pledges and deposits
made in the ordinary course of business in compliance with workers’
compensation, unemployment insurance and other social security laws or
regulations;

 

(m)          any Lien on any property
or asset acquired after the Closing Date and existing prior to the acquisition
thereof by the Borrowers or any Subsidiary or existing on any property or asset
of any Person that becomes a Subsidiary after the Closing Date that exists
prior to the time such Person becomes a Subsidiary; provided that (A) such
Lien is not created in contemplation of or in connection with such acquisition
or such Person becoming a Subsidiary, as the case may be, (B) such Lien
shall not apply to any other property or assets of the Borrowers or any
Subsidiary, (C) such Liens does not extend 

 

74

 

to any Property arising or
acquired after the date of acquisition and (D) such Lien shall secure only
those obligations which it secures on the date of such acquisition or the date
such Person becomes a Subsidiary, as the case may be, and extensions, renewals
and replacements thereof that do not increase the outstanding principal amount
thereof (other than with respect to (1) the capitalization of interest and
(2) the capitalization of any prepayment premiums payable in respect of
the obligations so extended, renewed or replaced);

 

(n)           Liens arising from
precautionary UCC financing statements filed with respect to any lease
permitted by this Agreement;

 

(o)           Liens in favor of
customs and revenue authorities arising as a matter of law to secure payment of
customs duties in connection with the importation of goods;

 

(p)           Liens on insurance
policies and the proceeds thereof securing the financing of the premiums with
respect thereto;

 

(q)           licenses, sublicenses,
leases and subleases entered into in the ordinary course of business and any
landlords’ liens arising under any such leases;

 

(r)            Liens arising solely
under Article 4 of the Uniform Commercial Code relating to collection on
items in collection and documents and proceeds related thereto;

 

(s)           other Liens on assets
not constituting Collateral securing Debt permitted under Section 10.2.1(l);

 

(t)            Liens arising from
judgments or decrees in circumstances not constituting an Event of Default; and

 

(u)           ground leases in
respect of Real Estate on which facilities owned or leased by the Borrowers or
any of their Subsidiaries are located.

 

10.2.3.          Intentionally
Deleted.

 

10.2.4.          Distributions;
Restrictions on Upstream Payments.  (a) Declare
or make any Distributions, except (i) provided that no Event of Default of the type described in clause (a), (c) (solely
to the extent such Event of Default under clause (c) results from a failure
to perform any covenant contained in Section 10.3),
or (k) of Section 11.1
exists immediately prior to such Distributions, for so long as Parent is
a pass-through (including a partnership) or disregarded entity for United
States Federal income tax purposes, Boise Cascade and Parent may make Permitted
Tax Distributions; (ii) provided
that no Default or Event of Default exists immediately prior to or would result
directly or indirectly from such Distributions, the Obligors may make Upstream
Payments; (iii)  Distributions made on the Closing Date in connection with
the Paper Group Disposition in accordance with the Contribution Agreement (as
in effect on the Closing Date); (iv) any Distribution of any Equity
Interest of Boise, Inc. or Debt of Boise, Inc. owing to any Obligor
or the proceeds thereof; and (v) provided
that (x) no Default or Event of Default exists immediately prior to or
would result directly or indirectly from such Distributions and (y) Availability
immediately after giving effect thereto and Average Availability for the most
recently ended Fiscal Quarter after giving pro forma effect to thereto, in each
case, is not less than the Restricted Payment Availability Threshold, Boise
Cascade may make Distributions to the extent otherwise permitted under this
Agreement.

 

(b)           Create or suffer to
exist any encumbrance or restriction on the ability of a Subsidiary to make any
Upstream Payment, except for restrictions under the Loan Documents, under
Applicable Law or pursuant to a Permitted Restricted Agreement.

 

75

 

10.2.5.       Restricted
Investments.  Make any Restricted
Investment.

 

10.2.6.       Disposition of
Assets.  Make any Asset Disposition
except (a) a Permitted Asset Disposition, (b) a disposition of
Equipment under Section 8.4.2, and (c) any other  Asset Disposition approved in writing by Agent and Required Lenders;
provided that the Net Proceeds from any Asset Disposition made during a
Trigger Period shall be remitted to Agent for application against outstanding
Obligations; and provided, further, that (i) any Asset
Disposition shall in any event be for fair value and (ii) in no event
shall the Obligors be permitted to sell,
lease, transfer, or otherwise dispose of all or substantially all of the assets
of any Borrower, whether in a single transaction or a series of related
transactions, except to another Borrower.

 

10.2.7.       Loans.  Make any loans or other advances of money to
any Person, except (a) advances to an officer, director or employee for
salary, travel expenses, commissions and similar items in the Ordinary Course
of Business; (b) prepaid expenses and extensions of trade credit made in
the Ordinary Course of Business; (c) deposits with financial institutions
permitted hereunder; (d) the acquisition of debt securities issued by a
member of the Paper Group in connection with the Paper Group Disposition; (e) intercompany
loans solely among Borrowers; (f) intercompany loans solely among
Guarantors; (g) intercompany loans
by any Borrower to any Guarantor or by any Guarantor to any Borrower provided
that any such loans shall not exceed $5,000,000 in the aggregate if any Default
or Event of Default exists immediately prior to or would result directly or
indirectly from the making of such loans; (h) debt obligations of a
purchaser in connection with a Permitted Asset Sale representing no more than
30% of the sale price of the assets disposed of in connection with such
Permitted Asset Sale; (i) loans from Subsidiaries that are not Obligors to
Obligors to the extent permitted under Section 10.2.1;
(i) extensions of trade credit in the Ordinary Course of Business; and (j) other
loans or advances constituting Investments that are not Restricted Investments.

 

10.2.8.       Restrictions on
Payment of Certain Debt.  Make any
payments (whether voluntary or mandatory, or a prepayment, redemption,
retirement, defeasance or acquisition) with respect to any Subordinated
Debt, except (a) regularly scheduled payments of principal, interest and
fees, but only to the extent permitted under any subordination agreement
relating to such Debt repayments of principal (together with any accrued
interest and premiums thereon) with the proceeds of the Paper Group
Disposition in at least the amount disclosed to the parties as set forth on Schedule 10.2.8 on the Closing Date and (c) any other
prepayment, redemption, retirement, defeasance or acquisition of Subordinated
Debt (together with any accrued interest and premiums thereon); provided
that in the case of clause (c), (i) no Event of Default exists
immediately prior to or would result directly or indirectly from the incurrence
of such Debt and (ii) Availability immediately after giving effect thereto
and Average Availability for the most recently ended fiscal month after giving
pro forma effect to thereto, in each case, is not less than the Restricted
Payment Availability Threshold.

 

10.2.9.       Fundamental Changes.  (a) Merge, combine or consolidate with
any Person, or liquidate, wind up its affairs or dissolve itself, in each case
whether in a single transaction or in a series of related transactions, except
for mergers or consolidations of a wholly-owned Subsidiary with another
wholly-owned Subsidiary or into a Borrower (i) any Subsidiary may merge
into a Borrower in a transaction in which such Borrower is the surviving
entity, (ii) any Subsidiary may merge into any other Subsidiary in a
transaction in which the surviving entity is a Subsidiary and if any party to
such merger is an Obligor, such surviving entity is an Obligor, (iii) any
Subsidiary may liquidate or dissolve if Boise Cascade determines in good faith
that such liquidation or dissolution is in the best interests of the Borrowers
and is not materially disadvantageous to the Lenders, (iv) any Borrower
may permit another Person to merge or consolidate with such Borrower or a Subsidiary
in order to effect a Permitted Investment (provided that the surviving entity
is a Borrower or a wholly-owned Subsidiary) and (v) a Subsidiary may merge
into and consolidate with another Person in order to effect a transaction in
which all the Equity Interests of such Subsidiary owned directly or indirectly
by the Borrowers would be disposed of pursuant to a Permitted Asset
Disposition, (b) change its name, change its tax, charter or other 

 

76

 

organizational identification
number, or change its form or state of organization, in each case except on 10
Business Days prior notice and so long as the Borrowers provide Agent with all
appropriate documentation (and confirmation of filing thereof) that Agent reasonably
requests to confirm the continued perfection of its security interests in the
Collateral.

 

10.2.10.      Subsidiaries.  (a) Form or acquire any
Subsidiary after the Closing Date, except in accordance with Sections 10.1.9 and 10.2.5; or (b) permit
any existing Subsidiary to issue any additional Equity Interests except
director’s qualifying interests and Equity Interests issued to Obligors
constituting Collateral hereunder.

 

10.2.11.     Organic Documents.  Amend, modify or otherwise change any of its
Organic Documents in any material respect as in effect on the Closing Date,
except for changes required by or reasonably related to any transaction
permitted under Section 10.2.9.

 

10.2.12.     Accounting Changes.  Make any material change in accounting
treatment or reporting practices, except as required by GAAP and in accordance
with Section 1.2; or change
its Fiscal Year.

 

10.2.13.     Restrictive Agreements.  Become a party to any Restrictive Agreement,
except (each of the following a “Permitted Restrictive Agreement”) (a) a
Restrictive Agreement as in effect on the Closing Date and shown on Schedule 9.1.16; (b) a Restrictive
Agreement relating to secured Debt permitted hereunder, if such restrictions
apply only to the collateral for such Debt; (c) customary provisions in
leases, licenses, and other contracts restricting assignment thereof; (d) any
Loan Document, the Subordinated Debt Documents or any other document evidencing
Debt otherwise permitted to be incurred hereunder so long as such provision do
not prohibit the Borrowers from granting Liens on any of the Collateral or
amend the Loan Documents or make Distributions among Obligors and (e) customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary pending such sale, provided such restrictions and conditions apply
only to the Subsidiary that is to be sold and such sale is permitted hereunder.

 

10.2.14.     Hedging Agreements.  Enter into any Hedging Agreement, except to
hedge risks arising in the Ordinary Course of Business and not for speculative
purposes.

 

10.2.15.     Conduct of Business.  Engage in any business, other than its
business as conducted on the Closing Date and any activities incidental
thereto.

 

10.2.16.     Affiliate Transactions.  Enter into or be party to any transaction
with an Affiliate, except (a) transactions contemplated by the Loan
Documents; (b) payment of reasonable compensation to officers and
employees for services actually rendered, and loans and advances permitted by Section 10.2.7; (c) payment of
customary directors’ fees and indemnities; (d) transactions solely among
Obligors; (e) transactions with Affiliates that were consummated prior to
the Closing Date, as shown on Schedule
10.2.17; (f) transactions with Affiliates in the Ordinary
Course of Business, upon fair and reasonable terms (which terms shall be fully
disclosed to Agent in the case of transactions involving the transfer of value
in excess of $1,000,000) no less favorable than would be obtained in a
comparable arm’s-length transaction with a non-Affiliate; (g) transactions
between or among the Obligors not involving any other Affiliate, (h) the
payment to Principal Holder of management fees and expense reimbursements to
the extent such fees do not exceed $1,000,000 in the aggregate for all such
fees in any Fiscal Year, (i) any Distribution permitted by Section 10.2.4, (j) the issuance of Equity
Interests of Boise Cascade to Parent or any Foreign Subsidiary to any Obligor
so long as such issuance is otherwise permitted hereunder, (k) the
consummation of the Paper Group Disposition, (l) transactions consummated
pursuant to the Contribution Agreement or the Purchase and Sale Agreement (in
each case, as in effect on the Closing Date), and (m) any acquisition of
Equity Interests from former employees in connection with the Paper Group
Disposition.

 

77

 

10.2.17.     Plans.  Become party to any Multiemployer Plan or
Foreign Plan, other than any in existence on the Closing Date.

 

10.2.18.        Amendments to
Subordinated Debt Documents; Amendments to Outsourcing Services Agreement.  (a) Amend, supplement or otherwise
modify any Subordinated Debt Documents, if such modification (i) increases
the principal balance of such Debt, or increases any required payment of
principal or interest; (ii) accelerates the date on which any installment
of principal or any interest is due, or adds any additional redemption, put or
prepayment provisions; (iii) shortens the final maturity date or otherwise
accelerates amortization; (iv) increases the interest rate; (v) increases
or adds any fees or charges; (vi) modifies any covenant in a manner or
adds any representation, covenant or default that is more onerous or
restrictive in any material respect for any Borrower or Subsidiary, or that is
otherwise materially adverse to any Borrower, any Subsidiary or Lenders; or (vii) results
in the Obligations not constituting “Senior Indebtedness” under the Indenture,
or otherwise not being fully benefited by the subordination provisions thereof;
provided that the Obligors shall be permitted to make any such amendment,
supplement, or other modification solely to the extent that on the effective
date thereof the Obligors would have been permitted to incur new Debt under
clauses (l) or (m) of Section 10.2.1
in the full amount of the outstanding Subordinated Debt to which such
amendment, supplement, or other modification relates.

 

(b)           Amend, supplement or
otherwise modify the Outsourcing Services Agreement in a manner materially
adverse to the interests of the Lenders or terminate the Outsourcing Services
Agreement (unless following such termination the Obligors intend to perform for
themselves the services contemplated therein), in each case  without the prior written consent of Agent.

 

10.3.       Financial Covenants. 
As long as any Commitments or Obligations are outstanding, Borrowers
shall:

 

10.3.1.       Fixed Charge
Coverage Ratio. During any Trigger Period, maintain a Fixed Charge Coverage
Ratio as of the last day of any month of at least 1.0 to 1.0.

 

10.3.2.       Capital Expenditures.  Capital Expenditures may be made (a) so
long as Availability immediately after
giving effect thereto and Average Availability for the most recently ended
Fiscal Quarter after giving pro forma effect thereto, in each case, is not less
than the Restricted Payment Availability Threshold, and (b) at any
other time, $30,000,000 in the aggregate during any Fiscal Year.

 

SECTION 11        EVENTS OF
DEFAULT; REMEDIES ON DEFAULT

 

11.1.       Events of Default. 
Each of the following shall be an “Event of Default” hereunder,
if the same shall occur for any reason whatsoever, whether voluntary or
involuntary, by operation of law or otherwise:

 

(a)           An Obligor fails to pay
any Obligations when due (whether at stated maturity, on demand, upon
acceleration or otherwise);

 

(b)           Any representation,
warranty or other written statement of an Obligor made in connection with any
Loan Documents or transactions contemplated thereby is incorrect or misleading
in any material respect when given;

 

(c)           A Borrower breaches or
fail to perform any covenant contained in Sections 7.2, 7.4, 8.1,
8.2.4, 8.2.5, 8.6.2,
10.1.1, 10.1.2,
10.2 or 10.3;

 

(d)           An Obligor breaches or
fails to perform any other covenant contained in any Loan Documents, and such
breach or failure is not cured within 30 days after a Senior Officer of such 

 

78

 

Obligor has actual knowledge
thereof or receives notice thereof from Agent, whichever is sooner; provided, however,
that such notice and opportunity to cure shall not apply if the breach or
failure to perform is not capable of being cured within such period or is a
willful breach by an Obligor;

 

(e)           A Guarantor repudiates,
revokes or attempts to revoke its Guaranty; an Obligor denies or contests the
validity or enforceability of any Loan Documents or Obligations, or the
perfection or priority of any Lien granted to Agent; or any Loan Document
ceases to be in full force or effect for any reason (other than a waiver or
release by Agent and Lenders);

 

(f)            Any breach or default
of an Obligor occurs under any document, instrument or agreement to which it is
a party or by which it or any of its Properties is bound which is not
cured  or waived in accordance with such
document, instrument or agreement, relating to any Debt for Borrowed Money
(other than the Obligations) in excess of $20,000,000, if the maturity of or any
payment with respect to such Debt may be accelerated or demanded due to such
breach;

 

(g)           Any judgment or order
for the payment of money is entered against an Obligor in an amount that
exceeds, individually or cumulatively with all unsatisfied judgments or orders
against all Obligors, $7,500,000 (net of any insurance coverage therefor
acknowledged in writing by the insurer), unless a stay of enforcement of such judgment
or order is in effect, by reason of a pending appeal or otherwise;

 

(h)           A loss, casualty,
theft, damage or destruction occurs with respect to any Collateral if the
amount not covered by insurance exceeds $10,000,000;

 

(i)            An Obligor is
enjoined, restrained or in any way prevented by any Governmental Authority from
conducting any material part of its business; an Obligor suffers the loss,
revocation or termination of any material license, permit, lease or agreement
necessary to its business; there is a cessation of any material part of an
Obligor’s business for a material period of time and such cessation of business
could reasonably be expected to have a Material Adverse Effect; or any material Collateral or
Property of an Obligor is taken or impaired through condemnation;

 

(j)            an Obligor agrees to
or commences any liquidation,
dissolution or winding up of its affairs (unless otherwise permitted hereunder);
or any Borrower individually ceases to be, or the Obligors taken as a whole
cease to be, Solvent;

 

(k)           An Insolvency
Proceeding is commenced by an Obligor; an Obligor makes an offer of settlement,
extension or composition to its unsecured creditors generally; a trustee,
receiver, interim receiver, receiver and manager, monitor or similar official
is appointed to take possession of any substantial Property of or to operate
any of the business of an Obligor; or an Insolvency Proceeding is commenced
against an Obligor and the Obligor consents to institution of the proceeding,
the petition commencing the proceeding is not timely controverted by the
Obligor, the petition is not dismissed within 60 days after filing, or an order
for relief is entered in the proceeding;

 

(l)            An ERISA Event occurs
with respect to a Pension Plan or Multiemployer Plan that has resulted or could
reasonably be expected to result in material liability of an Obligor to a
Pension Plan, Multiemployer Plan or PBGC, or that constitutes grounds for
appointment of a trustee for or termination by the PBGC of any Pension Plan or
Multiemployer Plan; an Obligor or ERISA Affiliate fails to pay when due any
installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multiemployer Plan which could reasonably be expected to
result in material liability of an Obligor to such Multiemployer Plan; or any
event similar to the foregoing occurs or exists with respect to a Foreign Plan;

 

79

 

(m)          An Obligor or any of its
Senior Officers is convicted for (i) a felony committed in the conduct of
the Obligor’s business that could reasonably be expected to have a Material
Adverse Effect, or (ii) violating any state or federal law (including the
Controlled Substances Act, Money Laundering Control Act of 1986 and Illegal
Exportation of War Materials Act) that could lead to forfeiture of any material
Property of an Obligor or any material portion of the Collateral; or

 

(n)           A Change of Control
occurs.

 

11.2.       Remedies upon Default. 
If an Event of Default described in Section 11.1(k) occurs
with respect to any Obligor, then to the extent permitted by Applicable Law,
all Obligations shall become automatically due and payable and all Commitments
shall terminate, without any action by Agent or notice of any kind.  In addition, or if any other Event of Default
exists, Agent may in its discretion (and shall upon written direction of
Required Lenders) do any one or more of the following from time to time:

 

(a)           declare any Obligations
immediately due and payable, whereupon they shall be due and payable without
diligence, presentment, demand, protest or notice of any kind, all of which are
hereby waived by Obligors to the fullest extent permitted by law;

 

(b)           terminate, reduce or
condition any Commitment, or make any adjustment to the Borrowing Base;

 

(c)           require
Obligors to Cash Collateralize LC Obligations, Bank Product Debt and other
Obligations that are contingent or not yet due and payable, and, if Obligors
fail promptly to deposit such Cash Collateral, Agent may (and shall upon the
direction of Required Lenders) advance the required Cash Collateral as Revolver
Loans (whether or not an Overadvance exists or is created thereby, or the
conditions in Section 6 are satisfied); and

 

(d)           exercise
any other rights or remedies afforded under any agreement, by law, at equity or
otherwise, including the rights and remedies of a secured party under the
UCC.  Such rights and remedies include
the rights to (i) take possession of any Collateral; (ii) require
Obligors to assemble Collateral,
at Obligors’ expense, and make
it available to Agent at a place designated by Agent; (iii) enter any
premises where Collateral is located and store Collateral on such premises
until sold (and if the premises are owned or leased by an Obligor, Obligors agree not to charge for such storage); and (iv) sell or otherwise
dispose of any Collateral in its then condition, or after any further
manufacturing or processing thereof, at public or private sale, with such
notice as may be required by Applicable Law, in lots or in bulk, at such
locations, all as Agent, in its discretion, deems advisable.  Each Obligor agrees that 10 days notice of any proposed sale or other disposition of
Collateral by Agent shall be reasonable. 
Agent shall have the right to conduct such sales on any Obligor’s
premises, without charge, and such sales may be adjourned from time to time in
accordance with Applicable Law.  Agent
shall have the right to sell, lease or otherwise dispose of any Collateral for
cash, credit or any combination thereof, and Agent may purchase any Collateral
at public or, if permitted by law, private sale and, in lieu of actual payment
of the purchase price, may set off the amount of such price against the
Obligations.

 

11.3.       License. 
For the purpose of enabling the Agent, during the continuance of an
Event of Default, to exercise the rights and remedies under Section 11.2
at such time as the Agent shall be lawfully entitled to exercise such rights
and remedies, and for no other purpose, each Obligor hereby grants to the
Agent, to the extent assignable by such Obligor, is hereby granted an
irrevocable, non-exclusive license (subject, (i) in the case of
Trademarks, to sufficient rights to quality control and inspection in favor of
such Obligor to avoid the risk of invalidation of such Trademarks, and (ii) in
the case of Trade Secrets, to an obligation of the Agent to take steps
reasonable under the circumstances to keep the Trade Secrets confidential to
avoid the risk of invalidation of such Trade Secrets) or other right to use,
license or sub-license (without payment of royalty or other compensation to any
Person) any or all Intellectual Property owned by Obligors in advertising for
sale, marketing, selling, collecting, completing manufacture of, or

 

80

 

otherwise exercising any rights
or remedies with respect to, any Collateral. 
The license granted in this Section 11.3
shall continue in full force and effect until Full Payment of the Obligations
and termination of this Agreement in accordance with its terms, at which time
such license shall immediately terminate.

 

11.4.       Setoff. 
At any time during an Event of Default, Agent, Issuing Bank, Lenders,
and any of their Affiliates are authorized, to the fullest extent permitted by
Applicable Law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final, in whatever currency) at any time held
and other obligations (in whatever currency) at any time owing by Agent,
Issuing Bank, such Lender or such Affiliate to or for the credit or the account
of an Obligor against any Obligations, irrespective of whether or not Agent,
Issuing Bank, such Lender or such Affiliate shall have made any demand under
this Agreement or any other Loan Document and although such Obligations may be
contingent or unmatured or are owed to a branch or office of Agent, Issuing
Bank, such Lender or such Affiliate different from the branch or office holding
such deposit or obligated on such indebtedness. 
The rights of Agent, Issuing Bank, each Lender and each such Affiliate
under this Section are in addition to other rights and remedies (including
other rights of setoff) that such Person may have.

 

11.5.       Remedies Cumulative; No
Waiver.

 

11.5.1.       Cumulative Rights.  All covenants, conditions, provisions, warranties,
guaranties, indemnities and other undertakings of Obligors contained in the
Loan Documents are cumulative and not in derogation or substitution of each
other.  In particular, the rights and
remedies of Agent and Lenders are cumulative, may be exercised at any time and
from time to time, concurrently or in any order, and shall not be exclusive of
any other rights or remedies that Agent and Lenders may have, whether under any
agreement, by law, at equity or otherwise.

 

11.5.2.       Waivers.  The failure or delay of Agent or any Lender
to require strict performance by any Obligor with any terms of the Loan
Documents, or to exercise any rights or remedies with respect to Collateral or
otherwise, shall not operate as a waiver thereof nor as establishment of a
course of dealing.  All rights and
remedies shall continue in full force and effect until Full Payment of all
Obligations.  No modification of any
terms of any Loan Documents (including any waiver thereof) shall be effective,
unless such modification is specifically provided in a writing directed to
Borrower Agent and executed by Agent or the requisite Lenders, and such
modification shall be applicable only to the matter specified.  No waiver of any Default or Event of Default
shall constitute a waiver of any other Default or Event of Default that may
exist at such time, unless expressly stated. 
If Agent or any Lender accepts performance by any Obligor under any Loan
Documents in a manner other than that specified therein, or during any Default
or Event of Default, or if Agent or any Lender shall delay or exercise any
right or remedy under any Loan Documents, such acceptance, delay or exercise
shall not operate to waive any Default or Event of Default nor to preclude
exercise of any other right or remedy.  It is expressly acknowledged by Obligors that
any failure to satisfy a financial covenant on a measurement date shall not be
cured or remedied by satisfaction of such covenant on a subsequent date.

 

SECTION 12        AGENT

 

12.1.       Appointment, Authority
and Duties of Agent.

 

12.1.1.       Appointment and
Authority.  Each Lender appoints and
designates Bank of America as Agent hereunder. 
Agent may, and each Lender authorizes Agent to, enter into all Loan
Documents to which Agent is intended to be a party and accept all Security
Documents, for Agent’s benefit and the Pro Rata benefit of Lenders.  Each Lender agrees that any action taken by
Agent or Required Lenders in accordance with the provisions of the Loan
Documents, and the exercise by Agent or Required Lenders of any rights or
remedies set forth therein, together with all other powers reasonably
incidental thereto, shall be authorized by and binding upon all Lenders.  Without limiting the generality of the
foregoing, Agent shall have the sole and exclusive authority to (a) act as
the disbursing and collecting 

 

81

 

agent for Lenders with respect
to all payments and collections arising in connection with the Loan Documents; (b) execute
and deliver as Agent each Loan Document, including any intercreditor or
subordination agreement, and accept delivery of each Loan Document from any
Obligor or other Person; (c) act as collateral agent for Secured Parties
for purposes of perfecting and administering Liens under the Loan Documents,
and for all other purposes stated therein; (d) manage, supervise or
otherwise deal with Collateral; and (e) take any Enforcement Action or
otherwise exercise any rights or remedies with respect to any Collateral under
the Loan Documents, Applicable Law or otherwise.  The duties of Agent shall be ministerial and
administrative in nature, and Agent shall not have a fiduciary relationship
with any Lender, Secured Party, Participant or other Person, by reason of any
Loan Document or any transaction relating thereto.  Agent alone shall be authorized to determine
whether any Accounts or Inventory constitute Eligible Accounts, Eligible
In-Transit Inventory or Eligible Inventory, or whether to impose or release any
Availability Reserve, and to exercise its Credit Judgment, if applicable, in
connection therewith, which determinations and judgments, if exercised in good
faith, shall exonerate Agent from liability to any Lender or other Person for
any error in judgment.

 

12.1.2.       Duties.  Agent shall not have any duties except those
expressly set forth in the Loan Documents. 
The conferral upon Agent of any right shall not imply a duty on Agent’s
part to exercise such right, unless instructed to do so by Required Lenders in
accordance with this Agreement.

 

12.1.3.       Agent Professionals.  Agent may perform its duties through agents
and employees.  Agent may consult with
and employ Agent Professionals, and shall be entitled to act upon, and shall be
fully protected in any action taken in good faith reliance upon, any advice
given by an Agent Professional.  Agent
shall not be responsible for the negligence or misconduct of any agents,
employees or Agent Professionals selected by it with reasonable care.

 

12.1.4.       Instructions of
Required Lenders.  The rights and
remedies conferred upon Agent under the Loan Documents may be exercised without
the necessity of joinder of any other party, unless required by Applicable
Law.  Agent may request instructions from
Required Lenders with respect to any act (including the failure to act) in
connection with any Loan Documents, and may seek assurances to its satisfaction
from Lenders of their indemnification obligations under Section 12.6 against all Claims that
could be incurred by Agent in connection with any act.  Agent shall be entitled to refrain from any
act until it has received such instructions or assurances, and Agent shall not
incur liability to any Person by reason of so refraining.  Instructions of Required Lenders shall be
binding upon all Lenders, and no Lender shall have any right of action
whatsoever against Agent as a result of Agent acting or refraining from acting
in accordance with the instructions of Required Lenders.  Notwithstanding the foregoing, instructions
by and consent of all Lenders shall be required in the circumstances described
in Section 14.1.1, and in no
event shall Required Lenders, without the prior written consent of each Lender,
direct Agent to accelerate and demand payment of Loans held by one Lender
without accelerating and demanding payment of all other Loans, nor to terminate
the Commitments of one Lender without terminating the Commitments of all
Lenders.  In no event shall Agent be
required to take any action that, in its opinion, is contrary to Applicable Law
or any Loan Documents or could subject any Agent Indemnitee to personal
liability.

 

12.2.       Agreements Regarding
Collateral and Field Examination Reports.

 

12.2.1.       Lien Releases; Care
of Collateral.  The Lenders hereby
irrevocably agree that the Liens granted to the Agent by the Obligors on any
Collateral shall be automatically released (a) in the case of all
Obligors, in full, upon Full Payment, (b) upon the sale or other
disposition of such Collateral (including as part of or in connection with any
other sale or other disposition permitted hereunder) to any Person other than
another Obligor to the extent such sale or other disposition is made in
compliance with the terms of this Agreement (and the Agent may rely
conclusively on a certificate to that effect provided to it by any Obligor upon
its reasonable request without further inquiry), (c) to the extent such
Collateral is comprised of property leased to a Obligor, upon termination or
expiration of such lease, (d) if the release 

 

82

 

of such Lien is approved,
authorized or ratified in writing by the Required Lenders (or such other
percentage of the Lenders whose consent may be required in accordance with this
Section 14.1.1), (e) to the
extent the property constituting such Collateral is owned by any Subsidiary,
upon the release of such Subsidiary from its obligations under this Agreement
upon a disposition of such Subsidiary permitted under the terms of this
Agreement (it being understood that any such disposed of Subsidiary shall be
released from all of its obligations under the Loan Documents in connection
therewith) and (f) as required to effect any sale or other disposition of
Collateral in connection with any exercise of remedies of the Agent pursuant to
the Security Documents.  The Lenders
hereby authorize the Agents to execute and deliver any instruments, documents,
and agreements necessary or desirable to evidence and confirm the release of
any Subsidiary or Collateral pursuant to the foregoing provisions of this
paragraph, all without the further consent or joinder of any Lender.  Agent
shall have no obligation whatsoever to any Lenders to assure that any
Collateral exists or is owned by a Borrower, or is cared for, protected,
insured or encumbered, nor to assure that Agent’s Liens have been properly
created, perfected or enforced, or are entitled to any particular priority, nor
to exercise any duty of care with respect to any Collateral.

 

12.2.2.       Possession of
Collateral.  Agent and Lenders
appoint each other Lender as agent for the purpose of perfecting Liens (for the
benefit of Secured Parties) in any Collateral that, under the UCC or other
Applicable Law, can be perfected by possession. 
If any Lender obtains possession of any such Collateral, it shall notify
Agent thereof and, promptly upon Agent’s request, deliver such Collateral to
Agent or otherwise deal with such Collateral in accordance with Agent’s
instructions.

 

12.2.3.       Reports.  Agent shall promptly, upon receipt thereof,
forward to each Lender copies of the results of any field audit, examination or
appraisal prepared by or on behalf of Agent with respect to any Obligor or Collateral (“Report”).  Each Lender agrees (a) that
neither Bank of America nor Agent makes any representation or warranty as to
the accuracy or completeness of any Report, and shall not be liable for any
information contained in or omitted from any Report; (b) that the Reports
are not intended to be comprehensive audits or examinations, and that Agent or
any other Person performing any audit or examination will inspect only specific
information regarding Obligations or the Collateral and will rely significantly
upon Borrowers’ books and records as well as upon representations of Borrowers’
officers and employees; and (c) to keep all Reports confidential and strictly
for such Lender’s internal use, and not to distribute any Report (or the
contents thereof) to any Person (except to such Lender’s Participants,
attorneys and accountants) or use any Report in any manner other than
administration of the Loans and other Obligations.  Each Lender agrees to indemnify and hold
harmless Agent and any other Person preparing a Report from any action such
Lender may take as a result of or any conclusion it may draw from any Report,
as well as any Claims arising in connection with any third parties that obtain
any part or contents of a Report through such Lender.

 

12.3.       Reliance By Agent. 
Agent shall be entitled to rely, and shall be fully protected in
relying, upon any certification, notice or other communication (including those
by telephone, telex, telegram, telecopy or e-mail) believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person, and
upon the advice and statements of Agent Professionals.

 

12.4.       Action Upon Default. 
Agent shall not be deemed to have knowledge of any Default or Event of
Default unless it has received written notice from a Lender or Borrower
specifying the occurrence and nature thereof. 
If any Lender acquires knowledge of a Default or Event of Default, it
shall promptly notify Agent and the other Lenders thereof in writing.  Each Lender agrees that, except as otherwise
provided in any Loan Documents or with the written consent of Agent and
Required Lenders, it will not take any Enforcement Action, accelerate Obligations
under any Loan Documents, or exercise any right that it might otherwise have
under Applicable Law to credit bid at foreclosure sales, UCC sales or other
similar dispositions of Collateral. 
Notwithstanding the foregoing, however, a Lender may take action to
preserve or enforce its rights against an Obligor where a deadline or
limitation period is applicable that would, absent such action, bar enforcement
of Obligations held by such Lender, including the filing of proofs of claim in
an Insolvency Proceeding.

 

83

 

12.5.       Ratable Sharing. 
If any Lender shall obtain any payment or reduction of any Obligation,
whether through set-off or otherwise, in excess of its share of such
Obligation, determined on a Pro Rata basis or in accordance with Section 5.6.1, as applicable, such
Lender shall forthwith purchase from Agent, Issuing Bank and the other Lenders
such participations in the affected Obligation as are necessary to cause the
purchasing Lender to share the excess payment or reduction on a Pro Rata basis
or in accordance with Section 5.6.1,
as applicable.  If any of such payment or
reduction is thereafter recovered from the purchasing Lender, the purchase
shall be rescinded and the purchase price restored to the extent of such
recovery, but without interest.  No
Lender shall set off against the Dominion Account without the prior consent of Agent.

 

12.6.       Indemnification of Agent
Indemnitees.  EACH LENDER SHALL INDEMNIFY AND HOLD HARMLESS AGENT INDEMNITEES, TO THE
EXTENT NOT REIMBURSED BY OBLIGORS
(BUT WITHOUT LIMITING THE INDEMNIFICATION OBLIGATIONS OF OBLIGORS UNDER
ANY LOAN DOCUMENTS), ON A PRO RATA BASIS, AGAINST ALL CLAIMS THAT MAY BE
INCURRED BY OR ASSERTED AGAINST ANY AGENT INDEMNITEE, PROVIDED THE CLAIM RELATES
TO OR ARISES FROM AN AGENT INDEMNITEE ACTING AS OR FOR AGENT (IN ITS CAPACITY
AS AGENT).  In Agent’s discretion, it
may reserve for any such Claims made against an Agent Indemnitee, and may
satisfy any judgment, order or settlement relating thereto, from proceeds of
Collateral prior to making any distribution of Collateral proceeds to
Lenders.  If Agent is sued by any
receiver, bankruptcy trustee, debtor-in-possession or other Person for any
alleged preference or fraudulent transfer, then any monies paid by Agent in
settlement or satisfaction of such proceeding, together with all interest,
costs and expenses (including attorneys’ fees) incurred in the defense of same,
shall be promptly reimbursed to Agent by each Lender to the extent of its Pro
Rata share.

 

12.7.       Limitation on
Responsibilities of Agent.  Agent shall not be liable to Lenders for any
action taken or omitted to be taken under the Loan Documents, except for losses
directly and solely caused by Agent’s gross negligence or willful misconduct.  Agent does not assume any responsibility for
any failure or delay in performance or any breach by any Obligor or Lender of
any obligations under the Loan Documents. 
Agent does not make to Lenders any express or implied warranty,
representation or guarantee with respect to any Obligations, Collateral, Loan
Documents or Obligor.  No Agent
Indemnitee shall be responsible to Lenders for any recitals, statements,
information, representations or warranties contained in any Loan Documents; the
execution, validity, genuineness, effectiveness or enforceability of any Loan
Documents; the genuineness, enforceability, collectibility, value, sufficiency,
location or existence of any Collateral, or the validity, extent, perfection or
priority of any Lien therein; the validity, enforceability or collectibility of
any Obligations; or the assets, liabilities, financial condition, results of
operations, business, creditworthiness or legal status of any Obligor or
Account Debtor.  No Agent Indemnitee
shall have any obligation to any Lender to ascertain or inquire into the
existence of any Default or Event of Default, the observance or performance by
any Obligor of any terms of the Loan Documents, or the satisfaction of any
conditions precedent contained in any Loan Documents.

 

12.8.       Successor Agent and
Co-Agents.

 

12.8.1.       Resignation;
Successor Agent.  Subject to the
appointment and acceptance of a successor Agent as provided below, Agent may
resign at any time by giving at least 30 days written notice thereof to Lenders
and Borrowers.  Upon receipt of such
notice, Required Lenders shall have the right to appoint a successor Agent
which shall be (a) a Lender or an Affiliate of a Lender; or (b) a
commercial bank that is organized under the laws of the United States or any
state or district thereof, has a combined capital surplus of at least
$200,000,000 and (provided no Default or Event of Default exists) is reasonably
acceptable to Borrowers.  If no successor
agent is appointed prior to the effective date of the resignation of Agent,
then Agent may appoint a successor agent from among Lenders.  Upon acceptance by a successor Agent of an
appointment to serve as Agent hereunder, such successor Agent shall thereupon
succeed to and become vested with all the powers and duties of the retiring
Agent without further act, and the retiring 

 

84

 

Agent shall be discharged from
its duties and obligations hereunder but shall continue to have the benefits of
the indemnification set forth in Sections 12.6 and 14.2.  Notwithstanding any Agent’s resignation, the
provisions of this Section 12
shall continue in effect for its benefit with respect to any actions taken or
omitted to be taken by it while Agent. 
Any successor to Bank of America by merger or acquisition of stock or
this loan shall continue to be Agent hereunder without further act on the part
of the parties hereto, unless such successor resigns as provided above.

 

12.8.2.       Separate Collateral
Agent.  It is the intent of the
parties that there shall be no violation of any Applicable Law denying or
restricting the right of financial institutions to transact business in any
jurisdiction.  If Agent believes that it
may be limited in the exercise of any rights or remedies under the Loan
Documents due to any Applicable Law, Agent may appoint an additional Person who
is not so limited, as a separate collateral agent or co-collateral agent.  If Agent so appoints a collateral agent or
co-collateral agent, each right and remedy intended to be available to Agent
under the Loan Documents shall also be vested in such separate agent.  Every covenant and obligation necessary to
the exercise thereof by such agent shall run to and be enforceable by it as
well as Agent.  Lenders shall execute and
deliver such documents as Agent deems appropriate to vest any rights or
remedies in such agent.  If any
collateral agent or co-collateral agent shall die or dissolve, become incapable
of acting, resign or be removed, then all the rights and remedies of such
agent, to the extent permitted by Applicable Law, shall vest in and be
exercised by Agent until appointment of a new agent.

 

12.9.       Due Diligence and
Non-Reliance.  Each Lender acknowledges and agrees that it
has, independently and without reliance upon Agent or any other Lenders, and
based upon such documents, information and analyses as it has deemed
appropriate, made its own credit analysis of each Obligor and its own decision
to enter into this Agreement and to fund Loans and participate in LC Obligations hereunder.  Each Lender has made such inquiries
concerning the Loan Documents, the Collateral and each Obligor as such Lender
feels necessary.  Each Lender further
acknowledges and agrees that the other Lenders and Agent have made no
representations or warranties concerning any Obligor, any Collateral or the
legality, validity, sufficiency or enforceability of any Loan Documents or
Obligations.  Each Lender will,
independently and without reliance upon the other Lenders or Agent, and based
upon such financial statements, documents and information as it deems
appropriate at the time, continue to make and rely upon its own credit
decisions in making Loans and participating in LC Obligations, and in taking or
refraining from any action under any Loan Documents.  Except for notices, reports and other
information expressly requested by a Lender, Agent shall have no duty or
responsibility to provide any Lender with any notices, reports or certificates
furnished to Agent by any Obligor or any credit or other information concerning
the affairs, financial condition, business or Properties of any Obligor (or any
of its Affiliates) which may come into possession of Agent or any of Agent’s
Affiliates.

 

12.10.     Replacement of Certain
Lenders.  If a Lender (a) fails to fund its Pro Rata
share of any Loan or LC Obligation hereunder, and such failure is not cured
within two Business Days, (b) defaults in performing any of its
obligations under the Loan Documents, or (c) fails to give its consent to
any amendment, waiver or action for which consent of all Lenders was required
and Required Lenders consented, then, in addition to any other rights and
remedies that any Person may have, Agent may, by notice to such Lender within
120 days after such event, require such Lender to assign all of its rights and
obligations under the Loan Documents to Eligible Assignee(s) specified by
Agent, pursuant to appropriate Assignment and Acceptance(s) and within 20
days after Agent’s notice.  Agent is
irrevocably appointed as attorney-in-fact to execute any such Assignment and
Acceptance if a Lender fails to execute same. 
Such Lender shall be entitled to receive, in cash, concurrently with
such assignment, all amounts owed to it under the Loan Documents, including all
principal, interest and fees through the date of assignment (but excluding any
prepayment charge).  All fees, cost and
expenses (including any assignment or processing fee due to Agent) associated
with an assignment pursuant to this Section 12.10
shall be paid by Borrowers.

 

85

 

12.11.     Remittance of Payments and
Collections.

 

12.11.1.     Remittances Generally.  All payments by any Lender to Agent shall be
made by the time and on the day set forth in this Agreement, in immediately
available funds.  If no time for payment
is specified or if payment is due on
demand by Agent and request for payment is made by Agent by 11:00 a.m.
on a Business Day, payment shall be made by Lender not later than 2:00 p.m.
on such day, and if request is made after 11:00 a.m., then payment shall
be made by 11:00 a.m. on the next Business Day.  Payment by Agent to any Lender shall be made
by wire transfer, in the type of funds received by Agent.  Any such payment shall be subject to Agent’s
right of offset for any amounts due from such Lender under the Loan Documents.

 

12.11.2.     Failure to Pay.  If any Lender fails to pay any amount when
due by it to Agent pursuant to the terms hereof, such amount shall bear
interest from the due date until paid at the rate determined by Agent as customary
in the banking industry for interbank compensation.  In no event shall Borrowers be entitled to receive credit for any interest paid by
a Lender to Agent.

 

12.11.3.     Recovery of Payments.  If Agent pays any amount to a Lender in the
expectation that a related payment will be received by Agent from an Obligor
and such related payment is not received, then Agent may recover such amount
from each Lender that received it.  If
Agent determines at any time that an amount received under any Loan Document must
be returned to an Obligor or paid to any other Person pursuant to Applicable
Law or otherwise, then, notwithstanding any other term of any Loan Document,
Agent shall not be required to distribute such amount to any Lender.  If
any amounts received and applied by Agent to any Obligations are later required
to be returned by Agent pursuant to Applicable Law, each Lender shall pay to
Agent, on demand, such Lender’s Pro Rata share of the amounts required to be
returned.

 

12.12.     Agent in its Individual
Capacity.  As a Lender, Bank of America shall have the
same rights and remedies under the other Loan Documents as any other Lender,
and the terms “Lenders,” “Required Lenders” or any similar term shall include
Bank of America in its capacity as a Lender. 
Each of Bank of America and its Affiliates may accept deposits from,
maintain deposits or credit balances for, invest in, lend money to, provide
Bank Products to, act as trustee under indentures of, serve as financial or
other advisor to, and generally engage in any kind of business with, Obligors
and their Affiliates, as if Bank of America were any other bank, without any
duty to account therefor (including any fees or other consideration received in
connection therewith) to the other Lenders. 
In their individual capacity, Bank of America and its Affiliates may
receive information regarding Obligors, their Affiliates and their Account
Debtors (including information subject to confidentiality obligations), and
each Lender agrees that Bank of America and its Affiliates shall be under no
obligation to provide such information to Lenders, if acquired in such
individual capacity and not as Agent hereunder.

 

12.13.     Agent Titles.  Each Lender, other than Bank of America, that
is designated (on the cover page of this Agreement or otherwise) by Bank
of America as an “Agent” or “Arranger” of any type shall not have any right,
power, responsibility or duty under any Loan Documents other than those
applicable to all Lenders, and shall in no event be deemed to have any fiduciary
relationship with any other Lender.

 

12.14.     No Third Party
Beneficiaries.  This Section 12
is an agreement solely among Lenders and Agent, and shall survive Full Payment
of the Obligations.  This Section 12 does not confer any rights
or benefits upon any Obligor or any other Person.  As between Obligors and Agent, any action
that Agent may take under any Loan Documents or with respect to any Obligations
shall be conclusively presumed to have been authorized and directed by Lenders.

 

86

 

SECTION 13        BENEFIT OF
AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS

 

13.1.       Successors and Assigns. 
This Agreement shall be binding upon and inure to the benefit of Borrowers, Agent, Lenders, and their
respective successors and permitted assigns, except that (a) no Borrower
shall have the right to assign its rights or delegate its obligations under any
Loan Documents; and (b) any assignment by a Lender must be made in
compliance with Section 13.3.  Agent may treat the Person which made any
Loan as the owner thereof for all purposes until such Person makes an
assignment in accordance with Section 13.3.  Any authorization or consent of a Lender
shall be conclusive and binding on any subsequent transferee or assignee of
such Lender.

 

13.2.       Participations.

 

13.2.1.       Permitted
Participants; Effect.  Any Lender may,
in the ordinary course of its business and in accordance with Applicable Law,
at any time sell to a financial institution (“Participant”) a participating
interest in the rights and obligations of such Lender under any Loan
Documents.  Despite any sale by a Lender
of participating interests to a Participant, such Lender’s obligations under
the Loan Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for performance of such obligations,
such Lender shall remain the holder of its Loans and Commitments for all
purposes, all amounts payable by Borrowers shall be determined as if such
Lender had not sold such participating interests, and Borrowers and Agent shall
continue to deal solely and directly with such Lender in connection with the
Loan Documents.  Each
Lender shall be solely responsible for notifying its Participants of any
matters under the Loan Documents, and Agent and the other Lenders shall not
have any obligation or liability to any such Participant.  A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 5.9 unless Borrowers agree otherwise in
writing.

 

13.2.2.       Voting Rights.  Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment, waiver or other
modification of any Loan Documents other than that which forgives principal,
interest or fees, reduces the stated interest rate or fees payable with respect
to any Loan or Commitment in which such Participant has an interest, postpones
the Commitment Termination Date or any date fixed for any regularly scheduled
payment of principal, interest or fees on such Loan or Commitment, or releases
any Borrower, Guarantor or substantial portion of the Collateral.

 

13.2.3.       Benefit of Set-Off.  Borrowers agree that each Participant shall
have a right of set-off in respect of its participating interest to the same
extent as if such interest were owing directly to a Lender, and each Lender
shall also retain the right of set-off with respect to any participating
interests sold by it.  By exercising any
right of set-off, a Participant agrees to share with Lenders all amounts
received through its set-off, in accordance with Section 12.5 as if such Participant were a Lender.

 

13.3.       Assignments.

 

13.3.1.       Permitted
Assignments.  A Lender may assign to
an Eligible Assignee any of its rights and obligations under the Loan
Documents, as long as (a) each assignment is of a constant, and not a
varying, percentage of the transferor Lender’s rights and obligations under the
Loan Documents and, in the case of a partial assignment, is in a minimum
principal amount of $5,000,000 (unless otherwise agreed by Agent in its
discretion) and integral multiples of $1,000,000 in excess of that amount; (b) except
in the case of an assignment in whole of a Lender’s rights and obligations, the
aggregate amount of the Commitments retained by the transferor Lender is at
least $5,000,000 (unless otherwise agreed by Agent in its discretion); and (c) the
parties to each such assignment shall execute and deliver to Agent, for its
acceptance and recording, an Assignment and Acceptance.  Nothing herein shall limit the right of a
Lender to pledge or assign any rights under the Loan Documents to (i) any
Federal Reserve Bank or the United States Treasury as collateral security
pursuant to Regulation A of the Board of Governors and any Operating Circular
issued by such Federal Reserve Bank, or (ii) counterparties to swap
agreements relating to any Loans; provided, however, that any
payment by Borrowers to the
assigning Lender in respect of any 

 

87

 

Obligations assigned as
described in this sentence shall satisfy Borrowers’ obligations hereunder to
the extent of such payment, and no such assignment shall release the assigning
Lender from its obligations hereunder.

 

13.3.2.       Effect;
Effective Date.  Upon delivery to
Agent of an assignment notice in the form of Exhibit C and a processing
fee of $3,500 (unless otherwise agreed by Agent in its
discretion),
the assignment shall become effective as specified in the notice, if it
complies with this Section 13.3.  From such effective date, the Eligible
Assignee shall for all purposes be a Lender under the Loan Documents, and shall
have all rights and obligations of a Lender thereunder.  Upon consummation of an assignment, the
transferor Lender, Agent and Borrowers shall make appropriate arrangements for
issuance of replacement and/or new Notes, as applicable.  The transferee Lender shall comply with Section 5.10 and deliver, upon
request, an administrative questionnaire reasonably satisfactory to Agent.

 

SECTION 14        MISCELLANEOUS

 

14.1.       Consents, Amendments and
Waivers.

 

14.1.1.       Amendment.  No modification of any Loan Document,
including any extension or amendment of a Loan Document or any waiver of a
Default or Event of Default, shall be effective without the prior written
agreement of Agent (with the consent of Required Lenders) and each Obligor
party to such Loan Document; provided, however, that

 

(a)           without the prior
written consent of Agent, no modification shall be effective with respect to
any provision in a Loan Document that relates to any rights, duties or
discretion of Agent;

 

(b)           without the prior
written consent of Issuing Bank, no modification shall be effective with
respect to any LC Obligations or Section 2.3;

 

(c)           without the prior
written consent of each affected Lender, no modification shall be effective
that would (i) increase the Commitment of such Lender; or (ii) reduce
the amount of, or waive or delay payment of, any principal, interest or fees
payable to such Lender; and

 

(d)           without the prior
written consent of all Lenders (except a defaulting Lender as provided in Section 4.2), no modification shall be effective that
would (i) extend the Revolver Termination Date; (ii) alter Section 5.6, 7.1 (except to add Collateral) or 14.1.1; (iii) amend the definitions of
Borrowing Base (and the defined terms used in such definition), Pro Rata or
Required Lenders; (iv) increase any advance rate, or the total
Commitments; (v) release Collateral with a book value greater than (A) $35,000,000
or (B) 10% of the Revolving Credit Facility during any calendar year,
except as currently contemplated by the Loan Documents; or (vi) release
any Obligor from liability for any Obligations, if such Obligor is Solvent at
the time of the release.

 

14.1.2.       Limitations.  The agreement of Borrowers shall not be
necessary to the effectiveness of any modification of a Loan Document that
deals solely with the rights and duties of Lenders, Agent and/or Issuing Bank
as among themselves.  Notwithstanding Section 14.1.1, only the consent of
the parties to the Fee Letter, any Lien Waiver, Deposit Account Control
Agreement, Insurance Assignment or any agreement relating to a Bank Product
shall be required for any modification of such agreement, and no Affiliate of a
Lender that is party to a Bank Product agreement shall have any other right to
consent to or participate in any manner in modification of any other Loan
Document.  The making of any Loans during
the existence of a Default or Event of Default shall not be deemed to constitute
a waiver of such Default or Event of Default, nor to establish a course of
dealing.  Any waiver or consent granted
by Lenders hereunder shall be effective only if in writing, and then only in
the specific instance and for the specific purpose for which it is given. 
Notwithstanding any of the foregoing, the Agent, acting in its sole
discretion, reasonably exercised, and the Borrowers may (without the consent of
any 

 

88

 

Lender) amend or
supplement this Agreement and the other Loan Documents to cure any ambiguity,
defect or inconsistency or to make a modification of a minor, consistency or
technical nature or to correct a manifest error.

 

14.1.3.       Payment
for Consents.  No Borrower will,
directly or indirectly, pay any remuneration or other thing of value, whether
by way of additional interest, fee or otherwise, to any Lender (in its capacity
as a Lender hereunder) as consideration
for agreement by such Lender with any modification of any Loan Documents,
unless such remuneration or value is concurrently paid, on the same terms, on a
Pro Rata basis to all Lenders providing their consent.

 

14.2.       Indemnity.  EACH OBLIGOR SHALL INDEMNIFY AND HOLD
HARMLESS THE INDEMNITEES AGAINST ANY CLAIMS THAT MAY BE INCURRED BY OR
ASSERTED AGAINST ANY INDEMNITEE, INCLUDING CLAIMS ARISING FROM THE NEGLIGENCE
OF AN INDEMNITEE.  In no event shall
any party to a Loan Document have any obligation thereunder to indemnify or
hold harmless an Indemnitee with respect to a Claim that is determined in a
final, non-appealable judgment by a court of competent jurisdiction (or
arbitrator to the extent such controversy or claim is determined by binding
arbitration in accordance with Section 14.15.2)
to result from the gross negligence or willful misconduct of such Indemnitee.

 

14.3.       Notices and
Communications.

 

14.3.1.       Notice Address.  Subject to Section 4.1.4,
all notices and other communications by or to a party hereto shall be in
writing and shall be given to any Obligor, at Borrower Agent’s address shown on
the signature pages hereof, and to any other Person at its address shown
on the signature pages hereof (or, in the case of a Person who becomes a
Lender after the Closing Date, at the address shown on its Assignment and
Acceptance), or at such other address as a party may hereafter specify by
notice in accordance with this Section 14.3.  Each such notice or other communication shall
be effective only (a) if given by facsimile transmission, when transmitted
to the applicable facsimile number, if confirmation of receipt is received; (b) if
given by mail, three Business Days after deposit in the mail, with first-class
postage pre-paid, addressed to the applicable address; or (c) if given by
personal delivery, when duly delivered to the notice address with receipt
acknowledged.  Notwithstanding the
foregoing, no notice to Agent pursuant to Section 2.1.4,
2.3, 3.1.2, 4.1.1 or 5.3.3
shall be effective until actually received by the individual to whose attention
at Agent such notice is required to be sent. 
Any written notice or other communication that is not sent in conformity
with the foregoing provisions shall nevertheless be effective on the date
actually received by the noticed party. 
Any notice received by Borrower Agent shall be deemed received by all
Obligors.

 

14.3.2.       Electronic
Communications; Voice Mail. 
Electronic mail and internet websites may be used only for routine
communications, such as financial statements, Borrowing Base Certificates and
other information required by Section 10.1.2,
administrative matters, distribution of Loan Documents for execution, and
matters permitted under Section 4.1.4.  Agent and Lenders make no assurances as to
the privacy and security of electronic communications.  Electronic and voice mail may not be used as
effective notice under the Loan Documents.

 

14.3.3.       Non-Conforming
Communications.  Agent and Lenders
may rely upon any notices purportedly given by or on behalf of any Borrower
even if such notices were not made in a manner specified herein, were
incomplete or were not confirmed, or if the terms thereof, as understood by the
recipient, varied from a later confirmation. 
Each Borrower shall indemnify and hold harmless each Indemnitee from any
liabilities, losses, costs and expenses arising from any telephonic
communication purportedly given by or on behalf of a Borrower.

 

14.4.       Performance of Obligors’
Obligations.  Agent may, in its discretion at any time and
from time to time, at Borrowers’ expense, pay any amount or do any act required
of any Obligor under 

 

89

 

any Loan Documents or otherwise
lawfully requested by Agent to (a) enforce any Loan Documents or collect
any Obligations; (b) protect, insure, maintain or realize upon any
Collateral; or (c) defend or maintain the validity or priority of Agent’s
Liens in any Collateral, including any payment of a judgment, insurance
premium, warehouse charge, finishing or processing charge, or landlord claim,
or any discharge of a Lien.  All
payments, costs and expenses (including Extraordinary Expenses) of Agent under
this Section shall be reimbursed to Agent by Obligors, on demand, with interest from the date incurred to the date
of payment thereof at the Default Rate applicable to Base Rate Loans.  Any payment made or action taken by Agent
under this Section shall be without prejudice to any right to assert an
Event of Default or to exercise any other rights or remedies under the Loan
Documents.

 

14.5.       Credit Inquiries. 
Each Obligor hereby authorizes Agent and Lenders (but they shall have no
obligation) to respond to usual and customary credit inquiries from third
parties concerning any Obligor or Subsidiary.

 

14.6.       Severability. 
Wherever possible, each provision of the Loan Documents shall be
interpreted in such manner as to be valid under Applicable Law.  If any provision is found to be invalid under
Applicable Law, it shall be ineffective only to the extent of such invalidity
and the remaining provisions of the Loan Documents shall remain in full force
and effect.

 

14.7.       Cumulative Effect;
Conflict of Terms.  The provisions of the Loan Documents are
cumulative.  The parties acknowledge that
the Loan Documents may use several limitations, tests or measurements to
regulate similar matters, and they agree that these are cumulative and that
each must be performed as provided. 
Except as otherwise provided in another Loan Document (by specific
reference to the applicable provision of this Agreement), if any provision
contained herein is in direct conflict with any provision in another Loan
Document, the provision herein shall govern and control.

 

14.8.       Counterparts. 
Any Loan Document may be executed in counterparts, each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract.  This Agreement shall become
effective when Agent has received counterparts bearing the signatures of all
parties hereto.  Delivery of a signature page of
any Loan Document by telecopy or electronic mail shall be effective as delivery
of a manually executed counterpart of such agreement.

 

14.9.       Entire Agreement. 
Time is of the essence of the Loan Documents.  The Loan Documents constitute the entire
contract among the parties relating to the subject matter hereof, and supersede
any and all previous agreements and understandings, oral or written, relating
to the subject matter hereof.

 

14.10.     Relationship with Lenders. 
The obligations of each Lender hereunder are several, and no Lender
shall be responsible for the obligations or Commitments of any other
Lender.  Amounts payable hereunder to
each Lender shall be a separate and independent debt, and each Lender shall be
entitled, to the extent not otherwise restricted hereunder, to protect and
enforce its rights arising out of the Loan Documents.  It shall not be necessary for Agent or any
other Lender to be joined as an additional party in any proceeding for such
purposes.  Nothing in this Agreement and
no action of Agent or Lenders pursuant to the Loan Documents shall be deemed to
constitute Agent and Lenders to be a partnership, association, joint venture or
any other kind of entity, nor to constitute control of any Obligor.

 

14.11.     No Advisory or Fiduciary
Responsibility.  In connection with all aspects of each
transaction contemplated by any Loan Document, Obligors acknowledge and agree
that (a)(i) this credit facility and any related arranging or other
services by Agent, any Lender, any of their Affiliates or any arranger are arm’s-length
commercial transactions between Obligors and such Person; (ii) Obligors
have consulted their own legal, accounting, regulatory and tax advisors to the
extent they have deemed appropriate; and (iii) Obligors are capable of
evaluating and understanding, and do understand and accept, the terms, risks
and conditions of the transactions contemplated by the Loan Documents; (b) each
of 

 

90

 

Agent, Lenders, their
Affiliates and any arranger is and has been acting solely as a principal in
connection with this credit facility, is not the financial advisor, agent or
fiduciary for Obligors, any of their Affiliates or any other Person, and has no
obligation with respect to the transactions contemplated by the Loan Documents
except as expressly set forth therein; and (c) Agent, Lenders, their
Affiliates and any arranger may be engaged in a broad range of transactions
that involve interests that differ from Obligors and their Affiliates, and have
no obligation to disclose any of such interests to Obligors or their
Affiliates.  To the fullest extent
permitted by Applicable Law, each Obligor hereby waives and releases any claims
that it may have against Agent, Lenders, their Affiliates and any arranger with
respect to any breach or alleged breach of agency or fiduciary duty in
connection with any aspect of any transaction contemplated by a Loan Document.

 

14.12.     Confidentiality.  Each of Agent, Lenders and Issuing Bank
agrees to maintain the confidentiality of all Information (as defined below)
with the same degree of care that it uses to protect its confidential information,
but in no event less than a reasonable degree of care, except that Information
may be disclosed (a) to its Affiliates and to its and its Affiliates’
respective partners, directors, officers, employees, agents, advisors and
representatives (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential); (b) to the extent
requested by any regulatory authority purporting to have jurisdiction over it
(including any self-regulatory authority, such as the National Association of
Insurance Commissioners); (c) to the extent required by Applicable Law or
by any subpoena or similar legal process; (d) to any other party hereto; (e) to
the extent necessary in connection with the exercise of any remedies, the
enforcement of any rights, or any action or proceeding relating to any Loan
Documents; (f) subject to an agreement containing provisions substantially
the same as those of this Section, to any Transferee or any actual or
prospective party (or its advisors) to any Bank Product; (g) with the
consent of the Obligor; or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or (ii) becomes
available to Agent, any Lender, Issuing Bank or any of their Affiliates on a
nonconfidential basis from a source other than Obligors.  Notwithstanding the foregoing, Agent and
Lenders may issue and disseminate to the public general information describing
this credit facility, including the names and addresses of Obligors and a
general description of Obligors’ businesses, and may use Obligors’ names in
advertising and other promotional materials. 
For purposes of this Section, “Information” means all information
received from an Obligor or Subsidiary relating to it or its business, or to
the Collateral, or other than any information that is available to Agent, any
Lender or Issuing Bank on a nonconfidential basis prior to disclosure by the
Obligor or Subsidiary, provided that, in the case of information
received from an Obligor or Subsidiary after the date hereof, such information
is clearly identified at the time of delivery as confidential.  Any Person required to maintain the confidentiality
of Information pursuant to this Section shall be considered to have
complied with its obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such Information as such
Person would accord to its own similar confidential information.  Each of Agent, Lenders and Issuing Bank
acknowledges that (i) Information may include material non-public
information concerning an Obligor or Subsidiary (including personally
identifiable information of an Obligor’s or its Subsidiaries’ partners,
directors, officers, employees, agents or customers); (ii) it has
developed compliance procedures regarding the use of material non-public
information; and (iii) it will handle such material non-public information
in accordance with Applicable Law, including federal and state securities laws.

 

14.13.     Certifications Regarding
Indenture.  Borrowers certify to
Agent and Lenders that neither the execution or performance of the Loan
Documents nor the incurrence of any Obligations by Borrowers violates any
provision of the Indenture.  Borrowers
further certify that the Commitments and Obligations constitute “Senior
Indebtedness” under the Indenture.  Agent
may condition Borrowings, Letters of Credit and other credit accommodations
under the Loan Documents from time to time upon Agent’s receipt of evidence
that the Commitments and Obligations continue to constitute “Senior
Indebtedness” at such time.

 

91

 

14.14.     GOVERNING LAW.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS,
UNLESS OTHERWISE SPECIFIED, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES (BUT GIVING
EFFECT TO FEDERAL LAWS RELATING TO NATIONAL BANKS).

 

14.15.     Consent to Forum; Arbitration.

 

14.15.1.     Forum.  EACH OBLIGOR HEREBY
CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT
SITTING IN OR WITH JURISDICTION OVER THE STATE OF NEW YORK, IN ANY PROCEEDING
OR DISPUTE RELATING IN ANY WAY TO ANY LOAN DOCUMENTS, AND AGREES THAT ANY SUCH
PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN ANY SUCH COURT.  EACH OBLIGOR IRREVOCABLY WAIVES ALL CLAIMS,
OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING SUCH COURT’S PERSONAL
OR SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO
SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 14.3.1.  Nothing herein shall limit the right of Agent
or any Lender to bring proceedings against any Obligor in any other court, nor
limit the right of any party to serve process in any other manner permitted by
Applicable Law.  Nothing in this
Agreement shall be deemed to preclude enforcement by Agent of any judgment or
order obtained in any forum or jurisdiction.

 

14.15.2.     Arbitration.  Notwithstanding any other provision of this
Agreement to the contrary, if for any reason a court having jurisdiction over
an action among the parties relating in any way to any Obligations or Loan
Documents does not uphold the waiver of jury trail contained in Section 14.16 or in any provision of any other Loan
Document, any controversy or claim among the parties relating in any way to any
Obligations or Loan Documents, including any alleged tort, shall at the request
of any party hereto be determined by binding arbitration conducted in
accordance with the United States Arbitration Act (Title 9 U.S. Code).  Arbitration proceedings will be determined in
accordance with the Act, the then-current rules and procedures for the
arbitration of financial services disputes of the American Arbitration
Association (“AAA”), and the terms of this Section.  In the event of any inconsistency, the terms
of this Section shall control.  If
AAA is unwilling or unable to serve as the provider of arbitration or to
enforce any provision of this Section, Agent may designate another arbitration
organization with similar procedures to serve as the provider of
arbitration.  The arbitration proceedings
shall be conducted in New York.  The
arbitration hearing shall commence within 90 days of the arbitration demand and
close within 90 days thereafter.  The
arbitration award must be issued within 30 days after close of the hearing
(subject to extension by the arbitrator for up to 60 days upon a showing of
good cause), and shall include a concise written statement of reasons for the
award.  The arbitrator shall give effect
to applicable statutes of limitation in determining any controversy or claim,
and for these purposes, service on AAA under applicable AAA rules of a
notice of claim is the equivalent of the filing of a lawsuit.  Any dispute concerning this Section or
whether a controversy or claim is arbitrable shall be determined by the
arbitrator.  The arbitrator shall have
the power to award legal fees to the extent provided by this Agreement.  Judgment upon an arbitration award may be
entered in any court having jurisdiction. 
The institution and maintenance of an action for judicial relief or
pursuant to a provisional or ancillary remedy shall not constitute a waiver of
the right of any party, including the plaintiff, to submit the controversy or
claim to arbitration if any other party contests such action for judicial
relief.  No controversy or claim shall be
submitted to arbitration without the consent of all parties if, at the time of
the proposed submission, such controversy or claim relates to an obligation
secured by Real Estate, but if all parties do not consent to submission of such
a controversy or claim to arbitration, it shall be determined as provided in
the next sentence.  At the request of any
party, a controversy or claim that is not submitted to arbitration as provided
above shall be determined by judicial reference; and if such an election is
made, the parties shall designate to the court a referee or referees selected
under the auspices of the AAA in the same manner as arbitrators are selected in
AAA sponsored proceedings and the presiding referee of the panel (or the

 

92

 

referee if there is a
single referee) shall be an active attorney or retired judge; and judgment upon
the award rendered by such referee or referees shall be entered in the court in
which proceeding was commenced.  None of
the foregoing provisions of this Section shall limit the right of Agent or
Lenders to exercise self-help remedies, such as setoff, foreclosure or sale of
any Collateral or to obtain provisional or ancillary remedies from a court of
competent jurisdiction before, after or during any arbitration proceeding.  The exercise of a remedy does not waive the
right of any party to resort to arbitration or reference.  At Agent’s option, foreclosure under a
Mortgage may be accomplished either by exercise of power of sale thereunder or
by judicial foreclosure.

 

14.16.     Waivers
by Obligors.  To the fullest extent permitted by
Applicable Law, each Obligor waives (a) the right to trial by jury (which
Agent and each Lender hereby also waives) in any proceeding or dispute of any
kind relating in any way to any Loan Documents, Obligations or Collateral; (b) presentment,
demand, protest, notice of presentment, default, non-payment, maturity,
release, compromise, settlement, extension or renewal of any commercial paper,
accounts, documents, instruments, chattel paper and guaranties at any time held
by Agent on which an Obligor may in any way be liable, and hereby ratifies
anything Agent may do in this regard; (c) notice prior to taking
possession or control of any Collateral; (d) any bond or security that
might be required by a court prior to allowing Agent to exercise any rights or
remedies; (e) the benefit of all valuation, appraisement and exemption
laws; (f) any claim against Agent or any Lender, on any theory of
liability, for special, indirect, consequential, exemplary or punitive damages
(as opposed to direct or actual damages) in any way relating to any Enforcement
Action, Obligations, Loan Documents or transactions relating thereto; and (g) notice
of acceptance hereof.  Each Obligor acknowledges that the foregoing waivers are a material inducement to
Agent and Lenders entering into this Agreement and that Agent and Lenders are
relying upon the foregoing in their dealings with Obligors.  Each
Obligor has reviewed the
foregoing waivers with its legal counsel and has knowingly and voluntarily
waived its jury trial and other rights following consultation with legal
counsel.  In the event of litigation,
this Agreement may be filed as a written consent to a trial by the court.

 

14.17.     Patriot
Act Notice.  Agent and
Lenders hereby notify Borrowers that pursuant to the requirements of the
Patriot Act, Agent and Lenders are required to obtain, verify and record
information that identifies each Borrower, including its legal name, address,
tax ID number and other information that will allow Agent and Lenders to
identify it in accordance with the Patriot Act. 
Agent and Lenders will also require information regarding each personal
guarantor, if any, and may require information regarding Borrowers’ management
and owners, such as legal name, address, social security number and date of
birth.

 

SECTION 15        GUARANTY

 

15.1.       Guaranty;
Limitation of Liability.

 

15.1.1.        Each Initial Guarantor
hereby absolutely, unconditionally and irrevocably guarantees (the undertaking
by each Initial Guarantor under this Section 15
being, as amended from time to time, the “Initial Guaranty”) the punctual payment
when due, whether at scheduled maturity or on any date of a required prepayment
or by acceleration, demand or otherwise, of all Obligations of each other
Obligor now or hereafter existing under or in respect of the Loan Documents
(including, without limitation, any extensions, modifications, substitutions,
amendments or renewals of any or all of the foregoing Obligations), whether
direct or indirect, absolute or contingent, and whether for principal,
interest, premiums, fees, indemnities, contract causes of action, costs,
expenses or otherwise (such Obligations being the “Guaranteed Obligations”), and
agrees to pay any and all expenses (including, without limitation, reasonable
fees and expenses of counsel) incurred by Agent or any other Secured Party in
enforcing any rights under this Initial Guaranty or any other Loan Document,
provided, however, that each Initial Guarantor shall only be liable under this Section for
the maximum amount of such liability that can be hereby incurred without
rendering this Section, as it relates to such Initial Guarantor, voidable 

 

93

 

under applicable law relating
to fraudulent conveyance or fraudulent transfer, and not for any greater
amount.  Without limiting the generality
of the foregoing, each Initial Guarantor’s liability shall extend to all
amounts that constitute part of the Guaranteed Obligations and would be owed by
any other Obligor to any Secured Party under or in respect of the Loan
Documents but for the fact that they are unenforceable or not allowable due to
the existence of any Insolvency Proceeding involving such other Obligor.

 

15.1.2.    Each Initial Guarantor, and by
its acceptance of this Initial Guaranty, Agent and each other Secured Party,
hereby confirms that it is the intention of all such Persons that this Initial
Guaranty and the Obligations of each Initial Guarantor hereunder not constitute
a fraudulent transfer or conveyance for purposes of the Bankruptcy Code, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar foreign, federal or state law to the extent applicable to this Initial
Guaranty and the Obligations of each Initial Guarantor hereunder.  To effectuate the foregoing intention, each
Initial Guarantor, Agent and each of the other Secured Parties hereby
irrevocably agree that such Guaranteed Obligations and other liabilities shall
be limited to the maximum amount as will, after giving effect to such maximum
amount and all other contingent and fixed liabilities of each Initial Guarantor
that are relevant under the laws referred to in the first sentence hereof, and
after giving effect to any collections from, any rights to receive
contributions from, or payments made by or on behalf of, any of the other
Obligors in respect of the Obligations under any Loan Document, result in the
Guaranteed Obligations and all other liabilities of each Initial Guarantor
under this Initial Guaranty not constituting a fraudulent transfer or
conveyance.

 

15.1.3.        Each Initial Guarantor
hereby unconditionally and irrevocably agrees that in the event any payment
shall be required to be made to any Secured Party under this Initial Guaranty
any other Loan Document or any other guaranty, each Initial Guarantor will
contribute, to the maximum extent permitted by law, such amounts to each other
Guarantor and each other guarantor so as to maximize the aggregate amount paid
to the Secured Parties under or in respect of the Loan Documents.

 

15.2.       Guaranty
Absolute.  Each Initial
Guarantor guarantees that the Guaranteed Obligations will be paid strictly in
accordance with the terms of the Loan Documents, regardless of any Applicable Law,
now or hereafter in effect in any jurisdiction affecting any of such terms or
the rights of any Secured Party with respect thereto.  The Obligations of each Initial Guarantor
under or in respect of this Initial Guaranty are independent of the Guaranteed
Obligations or any other Obligations of any other Obligor under or in respect
of the Loan Documents, and a separate action or actions may be brought and
prosecuted against each Initial Guarantor to enforce this Initial Guaranty,
irrespective of whether any action is brought against any Borrower or any other
Obligor or whether any Borrower or any other Obligor is joined in any such
action or actions.  The liability of each
Initial Guarantor under this Initial Guaranty shall be irrevocable, absolute
and unconditional irrespective of, and each Initial Guarantor hereby
irrevocably waives any defenses it may now have or hereafter acquire in any way
relating to, any or all of the following:

 

(a)           any lack of validity or
enforceability of any Loan Document or any agreement or instrument relating
thereto;

 

(b)           any change in the time, manner or place of payment of, or in any
other term of, including any increase in the amount of, all or any of the Guaranteed Obligations or any other Obligations of any
other Obligor under or in respect of the Loan Documents, or any other amendment
or waiver of or any consent to
departure from any Loan Document, including, without limitation, any increase
in the Guaranteed Obligations resulting from the extension of additional credit
to any Obligor or otherwise;

 

(c)           any taking, exchange, release or non-perfection of any Collateral or any other collateral, or
any taking, release or amendment or waiver of, or consent to departure from,
any other guaranty, for all or any of the Guaranteed Obligations;

 

94

 

(d)           any manner of application of Collateral or
any other collateral, or proceeds thereof, to all or any of the Guaranteed
Obligations, or any manner of sale or other disposition of any Collateral or
any other collateral for all or any of the Guaranteed Obligations or any other
Obligations of any Obligor under the Loan Documents or any other assets of any
Obligor; the failure of Agent, any other Secured Party or any other person to
exercise diligence or reasonable care in the preservation, protection,
enforcement, sale or other handling or treatment of all or any part of such
Collateral, property or security;

 

(e)           the fact that any
Collateral, security, security interest or lien contemplated or intended to be
given, created or granted as security for the repayment of the Guaranteed
Obligations shall not be properly perfected or created, or shall prove to be
unenforceable or subordinate to any other security interest or lien, it being
recognized and agreed by each Initial Guarantor that such Initial Guarantor is
not entering into this Initial Guaranty in reliance on, or in contemplation of
the benefits of, the validity, enforceability, collectibility or value of any
such Collateral;

 

(f)            any change,
restructuring or termination of the corporate structure or existence of any
Obligor or any of its Subsidiaries;

 

(g)           any failure of any
Secured Party to disclose to any Obligor any information relating to the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any other Obligor now or hereafter known to such
Secured Party (each Initial Guarantor waiving any duty on the part of the
Secured Parties to disclose such information);

 

(h)           the failure of any
other Person to execute or deliver any Loan Document or any supplement thereto
or any other guaranty or agreement or the release or reduction of liability of
any Guarantor or other guarantor or surety with respect to the Guaranteed
Obligations; or

 

(i)            any other circumstance
(including, without limitation, any statute of limitations) or any existence of
or reliance on any representation by any Secured Party that might otherwise
constitute a defense available to, or a discharge of, any Obligor or any other
guarantor or surety, other than payment in full of the Guaranteed Obligations
(other than contingent indemnification obligations).

 

This Initial Guaranty shall continue to be effective or be reinstated,
as the case may be, if at any time any payment of any of the Guaranteed
Obligations is rescinded or must otherwise be returned by Agent or any Secured
Party or any other Person upon the insolvency, bankruptcy or reorganization of
any Borrower or any other Obligor or otherwise, all as though such payment had
not been made and each Initial Guarantor hereby unconditionally and irrevocably
agrees that it will indemnify Agent and each of the other Secured Parties, upon
demand, for all of the costs and expenses (including, without limitation,
reasonable fees and expenses of counsel) incurred by Agent or such other
Secured Party in connection with any such rescission or restoration, including
any such costs and expenses incurred in defending against any claim alleging
that such payment constituted a preference, a fraudulent transfer or a similar
payment under any bankruptcy, insolvency or similar Law.

 

Each Initial Guarantor hereby further agrees
that, as between each Initial Guarantor on the one hand, and Agent and the
Secured Parties, on the other hand, (i) the Guaranteed Obligations of each
Initial Guarantor may be declared to be forthwith due and payable as provided
in Section 11.2 (and shall be deemed
to have become automatically due and payable in the circumstances provided in Section 11.2) for purposes of Section 15.1,
notwithstanding any stay, injunction or other prohibition preventing such
declaration in respect of the Obligations of any of the Obligors guaranteed
hereunder (or preventing such Guaranteed Obligations from becoming
automatically due and payable) as against any other Person and (ii) in the
event of any declaration of acceleration of such Guaranteed Obligations (or
such Guaranteed Obligations being deemed to have become automatically due and
payable) as provided in Section 11.2,
such Guaranteed Obligations (whether or not due and payable by any other
Person) shall forthwith become due and payable by each Initial Guarantor for
all purposes of this Initial Guaranty.

 

95

 

15.3.       Waivers
and Acknowledgments.

 

15.3.1.        Each Initial Guarantor
hereby unconditionally and irrevocably waives promptness, diligence, notice of
acceptance, presentment, demand for performance, notice of nonperformance,
default, acceleration, protest or dishonor and any other notice with respect to
any of the Guaranteed Obligations and this Initial Guaranty and any requirement
that Agent or any Secured Party protect, secure, perfect or insure any Lien or
any property subject thereto or exhaust any right or take any action against
any Obligor or any other Person or any Collateral.

 

15.3.2.        Each Initial Guarantor
hereby unconditionally and irrevocably waives any right to revoke this Initial
Guaranty and acknowledges that this Initial Guaranty is continuing in nature
and applies to all Guaranteed Obligations, whether existing now or in the
future.

 

15.3.3.        Each Initial Guarantor
hereby unconditionally and irrevocably waives (i) any defense arising by
reason of any claim or defense based upon an election of remedies by Agent or
any Secured Party that in any manner impairs, reduces, releases or otherwise
adversely affects the subrogation, reimbursement, exoneration, contribution or
indemnification rights of each Initial Guarantor or other rights of each
Initial Guarantor to proceed against any of the other Obligors, any other
guarantor or any other Person or any Collateral and (ii) any defense based
on any right of set-off or counterclaim against or in respect of the
Obligations of each Initial Guarantor hereunder and any and all other rights,
benefits, protections, and other defenses available to such Initial Guarantor
now or at any time hereafter, including under California Civil Code Sections
2787 to 2855, inclusive, and California Code of Civil Procedure Sections 580a,
680b, 580d or 726, and all successor sections, whether or not constituting
Applicable Law.

 

Any reference to California code sections shall be
deemed to include any equivalent code provisions under New York law.  Without limiting the applicability of the
equivalent code provisions under New York law, the foregoing references to the
California Code of Civil Procedure and the California Civil Code shall apply,
if, notwithstanding the provisions of Section 14.1.4,
the laws of the State of California are applied to the Loan Documents; provided
that the inclusion of such provisions does not affect or limit in any way the
parties’ choice of New York law.

 

15.3.4.        Each Initial Guarantor
acknowledges that Agent may, without notice to or demand upon each Initial
Guarantor and without affecting the liability of each Initial Guarantor under
this Initial Guaranty, foreclose under any mortgage by nonjudicial sale, and
each Initial Guarantor hereby waives any defense to the recovery by Agent and
the other Secured Parties against each Initial Guarantor of any deficiency
after such nonjudicial sale and any defense or benefits that may be afforded by
applicable law.

 

15.3.5.        Each Initial Guarantor
hereby unconditionally and irrevocably waives any duty on the part of Agent or
any Secured Party to disclose to each Initial Guarantor any matter, fact or
thing relating to the business, financial condition, operations, or performance
of any other Obligor or any of its Subsidiaries now or hereafter known by Agent
or such Secured Party.

 

15.3.6.        Each Initial Guarantor acknowledges
that it will receive substantial direct and indirect benefits from the
financing arrangements contemplated by the Loan Documents and that the waivers
set forth in Section 15.2 and this Section 15.3 are knowingly made in contemplation of
such benefits.

 

15.4.       Subrogation.  Each Initial Guarantor hereby unconditionally
and irrevocably agrees not to exercise any rights that it may now have or
hereafter acquire against any Borrower, any other Obligor or any other insider
guarantor that arise from the existence, payment, performance or enforcement of
each Initial Guarantor’s Obligations under or in respect of this Initial
Guaranty or any other Loan Document, 

 

96

 

including, without
limitation, any right of subrogation, reimbursement, exoneration, contribution
or indemnification and any right to participate in any claim or remedy of Agent
or any Secured Party against any Borrower, any other Obligor or any other
insider guarantor or any Collateral, whether or not such claim, remedy or right
arises in equity or under contract, statute or common law, including, without
limitation, the right to take or receive from any Borrower, any other Obligor
or any other insider guarantor, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security on account
of such claim, remedy or right, unless and until all of the Guaranteed
Obligations (other than contingent indemnification obligations) and all other
amounts payable under this Initial Guaranty shall have been paid in full in
cash, all Letters of Credit and all Bank Product Debt shall have expired or
been terminated or Cash Collateralized and the Commitments shall have expired
or been terminated.  If any amount shall
be paid to each Initial Guarantor in violation of the immediately preceding
sentence at any time prior to the Full Payment of the Guaranteed Obligations
and all other amounts payable under this Initial Guaranty, such amount shall be
received and held in trust for the benefit of the Secured Parties, shall be
segregated from other property and funds of each Initial Guarantor and shall
forthwith be paid or delivered to Agent in the same form as so received (with
any necessary endorsement or assignment) to be credited and applied to the
Guaranteed Obligations and all other amounts payable under this Initial
Guaranty, whether matured or unmatured, in accordance with the terms of the
Loan Documents, or to be held as Collateral for any Guaranteed Obligations or
other amounts payable under this Initial Guaranty thereafter arising.  If any Initial Guarantor shall make payment
to any Secured Party of all or any part of the Guaranteed Obligations, and Full
Payment of the Guaranteed Obligations shall occur, then the Secured Parties
will, at such Initial Guarantor’s request and expense, execute and deliver to
such Initial Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation
to such Initial Guarantor of an interest in the Guaranteed Obligations
resulting from such payment made by such Initial Guarantor pursuant to this
Initial Guaranty.

 

15.5.       Subordination.  Each Initial Guarantor hereby subordinates
any and all debts, liabilities and other Obligations owed to each Initial
Guarantor by each other Obligor (the “Intercompany Obligations”) to the
Guaranteed Obligations to the extent and in the manner hereinafter set forth in
this Section 15.5:

 

15.5.1.        Prohibited Payments,
Etc.  Except (a) during the
continuance of any Event of Default under Sections 11.1(a), (j) or (k) or (b) after notice from Agent or any Lender
of any other Event of Default under this Agreement, each Initial Guarantor may
receive regularly scheduled payments from any other Obligor on account of the
Intercompany Obligations.  During the
continuance of any Event of Default under Sections 11.1(a), (j) or (k) or after notice from Agent or any Lender of any
other Event of Default under this Agreement, however, each Initial Guarantor shall
not demand, accept or take any action to collect any payment on account of the
Intercompany Obligations unless the Required Lenders otherwise agree.

 

15.5.2.        Prior Payment of
Guaranteed Obligations.  In any
Insolvency Proceeding relating to any other Obligor, each Initial Guarantor
agrees that the Secured Parties shall be entitled to receive payment in full in
cash of all Guaranteed Obligations (other than contingent indemnification
obligations, but including all interest, expenses and fees (including legal
fees) accruing after the commencement of any Insolvency Proceeding, whether or
not constituting an allowed claim in such proceeding (“Post Petition Interest”)) before
each Initial Guarantor receives payment of any Intercompany Obligations.

 

15.5.3.        Turn-Over.  After the occurrence and during the
continuance of any Event of Default (including the commencement and
continuation of any Insolvency Proceeding relating to any other Obligor), each
Initial Guarantor shall, if Agent so requests, collect, enforce and receive
payments on account of the Intercompany Obligations as trustee for the Secured
Parties and deliver such payments to Agent on account of the Guaranteed
Obligations (including all Post Petition Interest), together with any 

 

97

 

necessary endorsements or
other instruments of transfer, but without reducing or affecting in any manner
the liability of each Initial Guarantor under the other provisions of this
Initial Guaranty.

 

15.5.4.        Agent Authorization.  After the occurrence and during the
continuance of any Event of Default (including the commencement and
continuation of any Insolvency Proceeding relating to any other Obligor), Agent
is authorized and empowered (but without any obligation to so do), in its
discretion, (i) in the name of each Initial Guarantor, to collect and
enforce, and to submit claims in respect of, Intercompany Obligations and to
apply any amounts received thereon to the Guaranteed Obligations (including any
and all Post Petition Interest), and (ii) to require each Initial
Guarantor (A) to collect and enforce, and to submit claims in respect of,
Intercompany Obligations and (B) to pay any amounts received on such
obligations to Agent for application to the Guaranteed Obligations (including
any and all Post Petition Interest).

 

15.6.       Continuing
Guaranty; Assignments. 
This Initial Guaranty is a continuing guaranty and shall (a) remain
in full force and effect until the Full Payment of the Guaranty Obligations, (b) be
binding upon each Initial Guarantor, its successors and assigns and (c) inure
to the benefit of and be enforceable by the Secured Parties and their
successors, transferees and assigns. 
Without limiting the generality of clause (c) of the
immediately preceding sentence, any Secured Party may assign or otherwise
transfer all or any portion of its rights and obligations under this Agreement
(including, without limitation, all or any portion of its Commitments, the
Loans owing to it and the Note or Notes held by it) to any other Person, and
such other Person shall thereupon become vested with all the benefits in
respect thereof granted to such Secured Party herein or otherwise, in each case
as and to the extent provided in Section 13.3.  No Initial Guarantor shall have the right to
assign its rights hereunder or any interest herein without the prior written
consent of the Secured Parties.

 

15.7.       Limitations on Guarantors.  Notwithstanding any provision set forth
herein or in any other Loan Documents to the contrary, in no event shall any
Foreign Subsidiary by required to guarantee the obligations of a Borrower or
any Domestic Subsidiary.

 

[Remainder of page intentionally left
blank; signatures begin on following page]

 

98

 

IN WITNESS
WHEREOF, this
Agreement has been executed and delivered as of the date set forth above.

 

	
   

  	
   

  	
  BORROWERS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BOISE CASCADE, L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ David G. Gadda

  
	
   

  	
   

  	
  Title:

  	
    Vice President and General Counsel

  
	
   

  	
   

  	
  Address:

  	
  1111 West Jefferson Street, Suite
  300

  
	
   

  	
   

  	
   

  	
  Boise, ID 83728

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BOISE BUILDING SOLUTIONS

  
	
   

  	
   

  	
  DISTRIBUTION, L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ David G. Gadda

  
	
   

  	
   

  	
  Title:

  	
    Vice President and General Counsel

  
	
   

  	
   

  	
  Address:

  	
  1111 West Jefferson Street,
  Suite 300

  
	
   

  	
   

  	
   

  	
  Boise, ID 83728

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BOISE BUILDING SOLUTIONS 

  
	
   

  	
   

  	
  MANUFACTURING, L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ David G. Gadda

  
	
   

  	
   

  	
  Title:

  	
    Vice President and General Counsel

  
	
   

  	
   

  	
  Address:

  	
  1111 West Jefferson Street,
  Suite 300

  
	
   

  	
   

  	
   

  	
  Boise, ID 83728

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  INITIAL GUARANTORS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BOISE BUILDING SOLUTIONS 

  
	
   

  	
   

  	
  MANUFACTURING HOLDINGS CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ David G. Gadda

  
	
   

  	
   

  	
  Title:

  	
    Vice President and General Counsel

  
	
   

  	
   

  	
  Address:

  	
  1111 West Jefferson Street,
  Suite 300

  
	
   

  	
   

  	
   

  	
  Boise, ID 83728

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BC CHILE INVESTMENT CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ David G. Gadda

  
	
   

  	
   

  	
  Title:

  	
    Vice President and General Counsel

  
	
   

  	
   

  	
  Address:

  	
  1111 West Jefferson Street,
  Suite 300

  
	
   

  	
   

  	
   

  	
  Boise, ID 83728

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BC BRAZIL INVESTMENT CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ David G. Gadda

  
	
   

  	
   

  	
  Title:

  	
    Vice President and General Counsel

  
	
   

  	
   

  	
  Address:

  	
  1111 West Jefferson Street, Suite
  300

  
	
   

  	
   

  	
   

  	
  Boise, ID 83728

  
						

 

99

 

	
   

  	
   

  	
  AGENT AND LENDERS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BANK OF AMERICA, N.A.,

  
	
   

  	
   

  	
  as Agent and Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ Todd R. Eggertsen

  
	
   

  	
   

  	
  Title:

  	
    Vice President

  
	
   

  	
   

  	
  Address:

  	
  Bank of America, N.A.

  55 South Lake Avenue

  Pasadena, CA  91101

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  [LENDERS]

  
							

 

100

 

EXHIBIT A

to

Loan and Security Agreement

 

REVOLVER
NOTE

 

	
  February 22, 2008

  	
  $___________________

  	
  New York,
  New York

  

 

BOISE
CASCADE, L.L.C.,  a
Delaware limited liability company (“Boise Cascade”), BOISE BUILDING SOLUTIONS DISTRIBUTION, L.L.C., a Delaware
limited liability company  (“Boise
Distribution”), and BOISE BUILDING SOLUTIONS
MANUFACTURING, L.L.C., a Delaware limited liability company (“Boise
Manufacturing” and, together with Boise Cascade and Boise Distribution,
collectively, “Borrowers”), for value received, hereby unconditionally
promise to pay, on a joint and several basis, to the order of
____________________________ (“Lender”), the principal sum of
______________________________ DOLLARS ($___________), or such lesser amount as
may be advanced by Lender as Revolver Loans and owing as LC Obligations from
time to time under the Loan Agreement described below, together with all accrued
and unpaid interest thereon.  Terms are
used herein as defined in the Loan and Security Agreement dated as of February 22,
2008, among Borrowers, Boise Building Solutions Manufacturing Holdings Corp.,
BC Chile Investment Corporation, and BC Brazil Investment Corporation, Bank of
America, N.A., as Agent,  and certain
financial institutions party thereto as lenders, as such agreement may be
amended, modified, renewed or extended from time to time (“Loan Agreement”).

 

Principal
of and interest on this Note from time to time outstanding shall be due and
payable as provided in the Loan Agreement. 
This Note is issued pursuant to and evidences Revolver Loans and LC
Obligations under the Loan Agreement, to which reference is made for a
statement of the rights and obligations of Lender and the duties and
obligations of Borrowers.  The Loan
Agreement contains provisions for acceleration of the maturity of this Note
upon the happening of certain stated events, and for the borrowing, prepayment
and reborrowing of amounts upon specified terms and conditions.

 

The holder of this Note is
hereby authorized by Borrowers to record on a schedule annexed to this Note (or
on a supplemental schedule) the amounts owing with respect to Revolver Loans
and LC Obligations, and the payment thereof. 
Failure to make any notation, however, shall not affect the rights of
the holder of this Note or any obligations of Borrowers hereunder or under any
other Loan Documents.

 

Time is of the essence of this
Note.  Each Borrower and all endorsers,
sureties and guarantors of this Note hereby severally waive demand, presentment
for payment, protest, notice of protest, notice of intention to accelerate the
maturity of this Note, diligence in collecting, the bringing of any suit
against any party, and any notice of or defense on account of any extensions,
renewals, partial payments, or changes in any manner of or in this Note or in
any of its terms, provisions and covenants, or any releases or substitutions of
any security, or any delay, indulgence or other act of any trustee or any
holder hereof, whether before or after maturity.  Borrowers jointly and severally agree to pay,
and to save the holder of this Note harmless against, any liability for the
payment of all costs and expenses (including without limitation reasonable
attorneys’ fees) if this Note is collected by or through an attorney-at-law.

 

In
no contingency or event whatsoever shall the amount paid or agreed to be paid
to the holder of this Note for the use, forbearance or detention of money
advanced hereunder exceed the highest lawful rate permitted under Applicable
Law.  If any such excess amount is
inadvertently paid by Borrowers or inadvertently received by the holder of this
Note, such excess shall be returned to Borrowers or credited as a payment of
principal, in accordance with the Loan Agreement.  It is the intent hereof that Borrowers not
pay or contract to pay, and that holder of this Note not receive or contract to
receive, directly or 

 

101

 

indirectly
in any manner whatsoever, interest in excess of that which may be paid by
Borrowers under Applicable Law.

 

This
Note shall be governed by the laws of the State of New York, without giving
effect to any conflict of law principles (but giving effect to federal laws
relating to national banks).

 

IN WITNESS WHEREOF, this Revolver Note is
executed as of the date set forth above.

 

 

	
  Attest:

  	
  BOISE CASCADE, L.L.C., a Delaware
  limited liability

  
	
   

  	
   

  	
  company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
  Secretary

  	
   

  	
   

  
					

 

	
  Attest:

  	
  BOISE BUILDING SOLUTIONS
  DISTRIBUTION,

  
	
   

  	
   

  	
  L.L.C., a Delaware limited
  liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
  Secretary

  	
   

  	
   

  
					

 

	
  Attest:

  	
  BOISE BUILDING SOLUTIONS

  
	
   

  	
   

  	
  MANUFACTURING, LLC, a Delaware
  limited

  
	
   

  	
   

  	
  liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
  Secretary

  	
   

  	
   

  
					

 

102

 

EXHIBIT B

to

Loan and Security Agreement

 

ASSIGNMENT
AND ACCEPTANCE

 

Reference
is made to the Loan and Security Agreement dated as of February 22, 2008,
as amended (“Loan Agreement”), among
BOISE CASCADE, L.L.C.,  a Delaware limited liability
company (“Boise Cascade”), BOISE BUILDING SOLUTIONS
DISTRIBUTION, L.L.C., a Delaware limited liability company (“Boise
Distribution”), and BOISE BUILDING
SOLUTIONS MANUFACTURING, L.L.C., a
Delaware limited liability company (“Boise Manufacturing” and together
with Boise Cascade and Boise Distribution, collectively, “Borrowers”),  BOISE BUILDING SOLUTIONS
MANUFACTURING HOLDINGS CORP., a Delaware corporation (“Boise
Manufacturing Holdings”), BC CHILE INVESTMENT CORPORATION,
a Delaware corporation (“BC Chile Investment”), and  BC BRAZIL
INVESTMENT CORPORATION, a Delaware corporation (“BC Brazil
Investment”, and together with Boise Manufacturing Holdings and BC Chile
Investment, collectively, “Guarantors”),  BANK OF AMERICA, N.A., as agent (“Agent”) for the
financial institutions from time to time party to the Loan Agreement (“Lenders”),
and such Lenders.  Terms are used herein
as defined in the Loan Agreement.

 

______________________________________
(“Assignor”) and _________________________ _____________ (“Assignee”)
agree as follows:

 

1.             Assignor hereby assigns to
Assignee and Assignee hereby purchases and assumes from Assignor (a) a
principal amount of $________ of Assignor’s outstanding Revolver Loans and $___________ of Assignor’s participations
in LC Obligations, and (b) the amount of $__________ of Assignor’s
Revolver Commitment (which represents ____% of the total Revolver Commitments),
(the foregoing items being, collectively, the “Assigned Interest”),
together with an interest in the Loan Documents corresponding to the Assigned
Interest.  This Agreement shall be
effective as of the date (“Effective Date”) indicated in the
corresponding Assignment Notice delivered to Agent, provided such Assignment
Notice is executed by Assignor, Assignee, Agent and Borrower Agent, if
applicable.  From and after the Effective
Date, Assignee hereby expressly assumes, and undertakes to perform, all of
Assignor’s obligations in respect of the Assigned Interest, and all principal,
interest, fees and other amounts which would otherwise be payable to or for
Assignor’s account in respect of the Assigned Interest shall be payable to or
for Assignee’s account, to the extent such amounts accrue on or after the
Effective Date.

 

2.             Assignor
(a) represents that as of the date hereof, prior to giving effect to this
assignment, its Revolver Commitment is $__________, the outstanding balance of
its Revolver Loans and participations in LC Obligations is $__________, (b) makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Loan Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Loan Agreement or any other instrument
or document furnished pursuant thereto, other than that Assignor is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim; and (c) makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of Borrowers or the performance by Borrowers of their obligations
under the Loan Documents.  [Assignor is attaching  the Note[s] held by it and requests that Agent
exchange such Note[s] for new Notes payable to Assignee [and Assignor].]

 

3.             Assignee
(a) represents and warrants that it is legally authorized to enter into
this Assignment and Acceptance; (b) confirms that it has received copies
of the Loan Agreement and such 

 

B-1

 

other
Loan Documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Acceptance; (c) agrees
that it shall, independently and without reliance upon Assignor and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Loan Documents; (d) confirms that it is an Eligible Assignee; (e) appoints
and authorizes Agent to take such action as agent on its behalf and to exercise
such powers under the Loan Agreement as are delegated to Agent by the terms
thereof, together with such powers as are incidental thereto; (f) agrees
that it will observe and perform all obligations that are required to be
performed by it as a “Lender” under the Loan Documents; and (g) represents
and warrants that the assignment evidenced hereby will not result in a
non-exempt “prohibited transaction” under Section 406 of ERISA.

 

4.             This Agreement shall be
governed by the laws of the State of  New
York.  If any provision is found to
be invalid under Applicable Law, it shall be ineffective only to the extent of
such invalidity and the remaining provisions of this Agreement shall remain in
full force and effect.

 

5.             Each notice or other
communication hereunder shall be in writing, shall be sent by messenger, by
telecopy or facsimile transmission, or by first-class mail, shall be deemed
given when sent and shall be sent as follows:

 

(a)           If to Assignee, to the
following address (or to such other address as Assignee may designate from time
to time):

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

(b)           If to Assignor, to the
following address (or to such other address as Assignor may designate from time
to time):

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

Payments
hereunder shall be made by wire transfer of immediately available Dollars as
follows:

 

If
to Assignee, to the following account (or to such other account as Assignee may
designate from time to time):

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ABA No.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Account No.

  	
   

  	
   

  
	
   

  	
  Reference:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
					

If
to Assignor, to the following account (or to such other account as Assignor may
designate from time to time):

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ABA No.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Account No.

  	
   

  	
   

  
	
   

  	
  Reference:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
					

B-2

 

IN WITNESS WHEREOF, this Assignment and
Acceptance is executed as of _____________.

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (“Assignee”)

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (“Assignor”)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Title:

  

 

B-3

 

EXHIBIT C

to

Loan and Security Agreement

 

ASSIGNMENT
NOTICE

 

Reference
is made to (1) the Loan and Security Agreement dated as of February 22,
2008, as amended (“Loan Agreement”), among BOISE
CASCADE, L.L.C.,  a Delaware
limited liability company (“Boise Cascade”), BOISE
BUILDING SOLUTIONS DISTRIBUTION, L.L.C., a Delaware limited
liability company (“Boise Distribution”), and BOISE BUILDING SOLUTIONS MANUFACTURING, L.L.C.,
a Delaware limited liability company (“Boise Manufacturing”, and
together with Boise Cascade and Boise Distribution, collectively, “Borrowers”), BOISE BUILDING SOLUTIONS
MANUFACTURING HOLDINGS CORP., a Delaware corporation (“Boise
Manufacturing Holdings”), BC CHILE INVESTMENT CORPORATION, a Delaware
corporation (“BC Chile Investment”), and BC BRAZIL INVESTMENT CORPORATION, a Delaware corporation (“BC
Brazil Investment”, and together with Boise Manufacturing Holdings and BC
Chile Investment, collectively, “Guarantors”), BANK OF AMERICA, N.A., as agent (“Agent”)
for the financial institutions from time to time party to the Loan Agreement (“Lenders”),
and such Lenders; and (2) the Assignment and Acceptance dated as
of ____________, 20__ (“Assignment Agreement”), between
__________________ (“Assignor”) and ____________________ (“Assignee”).  Terms are used herein as
defined in the Loan Agreement.

 

Assignor
hereby notifies Borrowers and Agent of Assignor’s intent to assign to Assignee
pursuant to the Assignment Agreement (a) a principal amount
of $________ of Assignor’s outstanding Revolver Loans and $___________ of Assignor’s participations in LC Obligations, and (b) the
amount of $__________ of Assignor’s Revolver Commitment (which represents ____%
of the total Revolver Commitments) (the foregoing items being, collectively,
the “Assigned Interest”), together with an interest in the Loan
Documents corresponding to the Assigned Interest.  This Agreement shall be
effective as of the date (“Effective Date”) indicated below, provided
this Assignment Notice is executed by Assignor, Assignee, Agent and Borrower
Agent, if applicable.  Pursuant to the
Assignment Agreement, Assignee has expressly assumed all of Assignor’s
obligations under the Loan Agreement to the extent of the Assigned Interest, as
of the Effective Date.

 

For
purposes of the Loan Agreement, Agent shall deem Assignor’s Revolver Commitment
to be reduced by $_________, and Assignee’s Revolver Commitment to be increased
by $_________.

 

The
address of Assignee to which notices and information are to be sent under the
terms of the Loan Agreement is:

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

The address of Assignee to which payments are
to be sent under the terms of the Loan Agreement is shown in the Assignment and
Acceptance.

 

This Notice is being
delivered to Borrowers and Agent pursuant to Section 13.3
of the Loan Agreement.  Please
acknowledge your acceptance of this Notice by executing and returning to
Assignee and Assignor a copy of this Notice.

 

C-1

 

IN WITNESS WHEREOF, this Assignment Notice is
executed as of _____________.

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (“Assignee”)

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (“Assignor”)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Title:

  

 

 

ACKNOWLEDGED AND AGREED,

AS OF THE DATE SET FORTH ABOVE:

 

BORROWER AGENT:*

 

	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  
	
   

  	
  Title:

  
			

 

* No signature required if Assignee is a Lender, U.S.-based Affiliate
of a Lender or Approved Fund, or if an Event of Default exists.

 

 

BANK OF AMERICA, N.A.,

as Agent

 

	
   

  	
   

  
	
  By

  	
   

  	
   

  
	
   

  	
  Title:

  
			

 

C-2

 

SCHEDULE 1.1

to

Loan and Security Agreement

 

COMMITMENTS
OF LENDERS

 

	
  Lender

  	
   

  	
  Revolver Commitment

  	
   

  
	
  Bank of America, N.A.

  	
   

  	
  $

  	
  350,000,000

  	
   

  
	
  Total

  	
   

  	
  $

  	
  350,000,000

  	
   

  

 

 

 

 

Schedule 1.2: EBITDA, Capital Expenditures,
Fixed Charges

 

(all amounts in $ millions)

 

	
  Month

  	
   

  	
  EBITDA

  	
   

  	
  Capital Expenditures

  	
   

  	
  Fixed Charges

  	
   

  
	
  February
  2007

  	
   

  	
  2.3

  	
   

  	
  5.0

  	
   

  	
  0.4

  	
   

  
	
  March 2007

  	
   

  	
  11.5

  	
   

  	
  4.1

  	
   

  	
  0.4

  	
   

  
	
  April 2007

  	
   

  	
  10

  	
   

  	
  1.8

  	
   

  	
  11.6

  	
   

  
	
  May 2007

  	
   

  	
  16.2

  	
   

  	
  2.5

  	
   

  	
  0.4

  	
   

  
	
  June 2007

  	
   

  	
  15.4

  	
   

  	
  1.9

  	
   

  	
  0.3

  	
   

  
	
  July 2007

  	
   

  	
  11.3

  	
   

  	
  3.1

  	
   

  	
  2.6

  	
   

  
	
  August 2007

  	
   

  	
  12.3

  	
   

  	
  3.3

  	
   

  	
  0.3

  	
   

  
	
  September
  2007

  	
   

  	
  6.7

  	
   

  	
  2.9

  	
   

  	
  0.2

  	
   

  
	
  October 2007

  	
   

  	
  6.3

  	
   

  	
  4.7

  	
   

  	
  11.5

  	
   

  
	
  November 2007

  	
   

  	
  2.1

  	
   

  	
  3.6

  	
   

  	
  0.2

  	
   

  
	
  December
  2007

  	
   

  	
  (2.6

  	
  )

  	
  5.8

  	
   

  	
  0.2

  	
   

  
	
  January 2008

  	
   

  	
  (6.2

  	
  )

  	
  4.2

  	
   

  	
  2.6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}]]