Document:

AGREEMENT

     THIS AGREEMENT is entered into as of the 23rd day of November, 1992, by and
between BOISE CASCADE CORPORATION, a Delaware corporation (hereinafter called
"Boise Cascade") and AMERICAN TISSUE MILLS OF OREGON, INC., a New York
corporation (hereinafter called "American Tissue");

     In consideration of the covenants and agreements made herein by the
parties, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereby agree as follows:

     1. Definitions.

     (a) "Accounting Code" means the Costing/Billing Method at the St. Helens
Paper Mill attached hereto as Exhibit C.

     (b) "Boise Cascade" means Boise Cascade Corporation, a Delaware
corporation.

     (c) "Direct Costs" are those costs so-defined in the Accounting Code.

     (d) "Exhibits" are those exhibits attached hereto and are incorporated
herein by reference as though fully set forth in the body of this Agreement.

     (e) "Excluded Costs" are those costs so-defined in the Accounting Code.

     (f) "Indirect Costs" are those costs so-defined in the Accounting Code.

     (g) "Mill" means the St. Helens, Oregon, pulp and paper mill premises owned
and operated by Boise Cascade as more fully described in Exhibit B. Boise
Cascade represents that the

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description set forth in Exhibit B is true, accurate, and complete.

     (h) "American Tissue" means American Tissue Mills of Oregon, Inc., a New
York corporation.

     (i) "Paper Machine" means the No. 3 Tissue Paper Machine located at the No.
3 Paper Machine Building at the Mill ("No. 3 Paper Machine Building"), as more
fully set forth on Exhibit A, but specifically excludes the Real Property. The
Paper Machine does not include any part of the foundation; i.e., the support
which lies below the sole plate of the machine. The Paper Machine shall be
deemed to be personal property.

     (j) "Real Property" means the No. 3 Paper Machine Building and the land
lying directly underneath same, as more fully described on Exhibit B-l, and
fixtures, facilities and appurtenances within the No. 3 Paper Machine Building,
but specifically excluding the Paper Machine.

     (k) "Ton" is 2,000 pounds.

     (1) "Capital Costs" are those costs defined in the Accounting Code as
capital improvements or capital repairs.

     2. Purchase of Paper Machine. Boise Cascade hereby sells to American Tissue
and American Tissue hereby purchases from Boise Cascade the Paper Machine for
the purchase price of $5,000,000.00, payable as follows:

     (a)  $833,333.00 upon execution of this agreement;

     (b)  $166,667.00 by American Tissue's assumption of Boise Cascade's
          obligation to Koplik Paper Associates ("Koplik") pursuant to a certain
          agreement between

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          Boise Cascade and Koplik dated October 20, 1992, a copy of which is
          annexed hereto as Exhibit H; and

     (c)  $4,000,000.00 pursuant to the terms of a certain Promissory Note in
          the form annexed hereto as Exhibit I executed by American Tissue in
          favor of Boise Cascade simultaneously with the execution of this
          Agreement.

Simultaneously with the execution hereof, Boise Cascade shall duly execute and
deliver to American Tissue an agreement to sell property in respect of the Paper
Machine in the form annexed hereto as Exhibit J. Except as otherwise provided
herein, American Tissue may remove the Paper Machine from the Mill. The Paper
Machine shall not be removed during the term of this Agreement, except that
component parts may be removed only for refurbishing or for the purpose of being
replaced by new components. Boise Cascade shall provide access to American
Tissue's title company representatives to survey the Real Property and/or the
Warehouse Lease Site at American Tissue's expense. Such access shall be given
upon 24 hours' advance notice.

     3. Warranty. Boise Cascade warrants that it is the sole owner and has good
and marketable title to the Paper Machine, free and clear of any and all liens,
restrictions, reservations, security interests (except the security interest
created pursuant to Section 4 hereof), conditional sales agreements, leases,
claims and encumbrances of any nature whatsoever. Except for Boise Cascade's
representations set forth in Section 10 of this Agreement, the Paper Machine is
sold "AS IS, WHERE IS." THE WARRANTIES SET FORTH IN THIS SECTION 3 ARE EXCLUSIVE
AND IN LIEU

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OF ALL OTHER WARRANTIES RELATING TO THE PHYSICAL CONDITION OF THE PAPER MACHINE,
EXPRESS OR IMPLIED BY LAW OR TRADE USAGE, INCLUDING ANY IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. BOISE CASCADE SHALL NOT BE
LIABLE FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES, IF ANY, INCLUDING BUT NOT
LIMITED TO LOSS OF USE OR LOSS OF ANTICIPATED PROFITS, WHETHER ARISING IN
CONTRACT, TORT, PRODUCT LIABILITY, OR OTHERWISE, ARISING OUT OF BREACH OF ANY
WARRANTY RELATING TO THE PHYSICAL CONDITION OF THE PAPER MACHINE.

     4. Security Interest. To secure the timely payment and performance of the
Obligations (as defined below), American Tissue does hereby grant a purchase
money (to the fullest extent permitted by applicable law) security interest in
favor of Boise Cascade in and to all the estate, right, title, and interest of
American Tissue, whether now or later acquired, in and under the Paper Machine
(including all future improvements and additions and replacements thereto), and
all leasehold improvements hereafter made by American Tissue at the No. 3 Paper
Machine Building (collectively, the "Collateral"). American Tissue shall also
execute, deliver, and record a deed of trust, the form of which is attached as
Exhibit R. The "Obligations" means all obligations of American Tissue now
existing or hereafter arising under this Agreement, including but not limited to
the Promissory Note annexed as Exhibit I and the obligation of American Tissue
to make all payments and perform all obligations pursuant to the provisions of
this Agreement and to transfer title to the Paper Machine to Boise Cascade under
certain circumstances in accordance with the provisions of this Agreement. If
American

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Tissue is in default under the provisions of this Agreement after notice and the
expiration of any grace or cure periods provided for in this Agreement, then
upon not less than ten (10) days' notice to American Tissue, Boise Cascade may
exercise all the applicable rights and remedies granted to a secured party by
applicable law, including but not limited to the Uniform Commercial Code of the
state of Oregon. American Tissue represents, warrants, and covenants that the
security interest created hereby is prior to any other security interest or lien
created or suffered by American Tissue in the Collateral. American Tissue agrees
that from time to time, at the expense of American Tissue, American Tissue will
promptly execute and deliver all further instruments and documents and take all
further action that may be reasonably necessary or that Boise Cascade may
reasonably request in order to perfect and evidence the security interest
granted pursuant to this section, including the execution and filing of such
financing or continuation statements or amendments thereto as may be reasonably
necessary. The security interest shall remain in full force and effect until
payment in full of the Obligations and shall be binding upon American Tissue,
its successors and assigns, and shall inure to the benefit of Boise Cascade and
its successors and assigns. Notwithstanding the foregoing or anything else to
the contrary set forth in this Agreement, the security interest in favor of
Boise Cascade created pursuant to this Agreement shall be and shall be deemed to
be subordinate to the lien(s) and/or security interest(s) hereafter granted by
American Tissue to one or more third parties unrelated to American Tissue in
connection with the

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financing of the Paper Machine and all improvements, additions and replacements
hereafter made to the Paper Machine, provided, however, no such subordination
shall be effective unless substantially all of the net proceeds of such
financing (whether by way of a direct loan to American Tissue or a guarantee by
American Tissue of such financing from an unrelated third party) are applied
first in full or partial payment or prepayment of the promissory note from
American Tissue to Boise Cascade in the principal amount of $4,000,000.00 of
even date herewith referred to in Section 2 of this Agreement; provided further,
the maximum aggregate principal amount of all such financing to which Boise
Cascade's lien and security interest shall be subordinate ("Maximum Subordinated
Debt") with respect to the Paper Machine (in its current condition) shall equal
(i) $4,000,000.00 and (ii) the total accumulated costs of all those
improvements, additions and replacements made to the Paper Machine which are
capitalized pursuant to the capitalization and depreciation policies set forth
in Exhibit K during the three-year period commencing on the date of this
Agreement, without any deduction for depreciation. Such subordination shall be
automatic and no further instrument of subordination or other documentation
shall be required to effectuate or evidence such subordination. However, upon
the request of American Tissue or any third party(ies) providing any such
financing, Boise Cascade agrees from time to time, at the expense of Boise
Cascade, to promptly execute and deliver to American Tissue or any such third
party(ies) all further documents or instruments and take all further action
that may be reasonably necessary or that American

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Tissue may reasonably request to effectuate and/or evidence such subordination,
including the execution and filing of such documents as may be reasonably
necessary.

     5. Lease. (a) Boise Cascade hereby leases the Real Property to American
Tissue for the term hereof and subject to the terms and conditions hereinafter
set forth. American Tissue shall obtain Boise Cascade's prior written consent
for any leasehold improvements or any improvements to loading docks which may be
utilized by American Tissue. Boise Cascade shall not unreasonably withhold or
delay such consent. Title to leasehold improvements to the Real Property shall
pass to Boise Cascade, without any payment owed to American Tissue, upon
termination of this Agreement. American Tissue shall have no title to any
improvements to the loading dock.

     (b) American Tissue shall have the exclusive use of the second floor of the
No. 3 Paper Machine Building and shall have the non-exclusive use of all other
portions of the Real Property. Boise Cascade shall have access rights to the
second floor for Mill related purposes, but such access shall not unreasonably
interfere with American Tissue's use of the Paper Machine. American Tissue shall
have access rights to the Real Property, subject to Boise Cascade's Mill access
guidelines. Boise Cascade represents that such guidelines will not unreasonably
interfere with American Tissue's access to the Real Property or the use of the
common areas at the Mill.

     (c) Boise Cascade shall maintain in good working order and repair the
exterior, public and structural portions of the Real Property and all systems,
facilities and installations

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relating thereto, including, without limitation, the plumbing, electrical,
heating, ventilating and air conditioning systems serving the Real Property,
with payment of the costs and expenses for such maintenance and repair to be in
accordance with Section 7 of this Agreement. Anything herein to the contrary
notwithstanding, any expenditure relating to first floor of the Real Property
which does not directly and exclusively benefit American Tissue shall be
appropriately apportioned between the parties.

     (d) Boise Cascade hereby covenants, warrants and represents as follows: (i)
Boise Cascade has not received any notice of any claim, suit or other action or
investigation with respect to the violation of any Federal, state or local
environmental laws rules or regulations or OSHA regulations (or the state
equivalent thereof) due to the presence of hazardous materials on the Real
Property that remain unresolved or are pending; (ii) Boise Cascade is the
beneficial and record owner of the Real Property in fee absolute, and there are
no mortgages, liens, encumbrances, charges, tenancies, licenses, covenants,
conditions, restrictions, rights-of-way, easements, encroachments or other
restrictions of any nature or character whatsoever that unreasonably restrict or
prevent American Tissue's use of the Real Property; and (iii) Boise Cascade has
the full right and authority to lease the Real Property to American Tissue and
American Tissue may peaceably and quietly enjoy the Real Property. Boise Cascade
shall warrant and defend American Tissue's quiet enjoyment of the Real Property.
The foregoing

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representations shall survive the expiration or earlier termination of this
Agreement;

     (e) Except with respect to hazardous waste placed on the Real Property by
American Tissue or its agents, employees and invitees (including contractors
hired by American Tissue), Boise Cascade shall be fully and solely responsible,
at Boise Cascade's sole and exclusive cost and expense, for any and all
maintenance, repairs or improvements, structural or otherwise, required due to
the presence of hazardous materials improperly deposited on the Real Property
and/or hazardous waste and any other preexisting conditions, normal wear and
tear excepted (i.e., the cost of repairing any part of the Real Property that
breaks or fails after the date hereof shall be a Direct Cost, but the cost of
repairing, replacing, or restoring any item damaged, broken, or currently
inoperative or defective shall be an Excluded Cost) in or upon any portion of
the Real Property and shall promptly perform any and all work relating to the
presence of such hazardous materials and any other preexisting conditions in
compliance with all applicable Federal, state and local rules and regulations.
None of such costs or expenses shall be borne by or passed along to American
Tissue, directly or indirectly;

     (f) Simultaneously with the execution hereof, Boise Cascade and American
Tissue shall execute a Memorandum of Lease for recording, substantially in the
form annexed hereto as Exhibit M.

     6. Operation of the Paper Machine. Boise Cascade shall, for the period
commencing on the date hereof and ending December 31, 2012:

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     (a) Operate, service, and maintain the Paper Machine as directed by
American Tissue and handle, store and ship the finished paper from the Paper
Machine in such manner as American Tissue may direct, including the furnishing
of all labor, materials, parts, supplies, and sundries as may be reasonably
necessary or as American Tissue may so reasonably direct, all consistent with
Boise Cascade's historical practices. Boise Cascade shall use commercially
reasonable efforts to operate the Paper Machine efficiently and at a cost level
consistent with prior management practices at the Mill. Both parties recognize
that machine malfunction and down-time is a common occurrence associated with
the operation of the Paper Machine and such malfunctions and down-time shall not
be considered a breach or default under this Agreement, including where caused
by employee error, provided, however, that Boise Cascade generally manages and
supervises the operation and maintenance of the Paper Machine with the same
general level of care and supervision as with the other paper machines at the
Mill. The Paper Machine and the Real Property shall be maintained and operated
by Boise Cascade at American Tissue's expense as herein set forth in as good a
state of repair as the same now are and shall be maintained and repaired in
compliance with all federal, state, and local laws, rules, and regulations as
are now in force or as hereafter may be in force and in accordance with Boise
Cascade's safety standards and agreements applicable to the Mill. Both parties
shall use commercially reasonable efforts to reduce costs to be incurred by
American Tissue hereunder. Boise Cascade has obtained and shall maintain in full
force and effect continuously throughout the

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term of this Agreement, all permits, licenses, certificates and other
authorizations which are required with respect to the operation of the Paper
Machine and the Mill under and pursuant to all applicable laws, rules and
regulations except for general corporate business licenses that American Tissue
must obtain in its own name. Boise Cascade shall provide adequate manpower
levels for manning the operation of the Paper Machine at full capacity and in
accordance with any applicable labor agreements. Full capacity shall include any
increase in productive capacity as a result of capital improvements, operating
efficiencies and/or grade mix efficiencies.

     (b) Without having to modify the current configuration of the Real Property
or any other property in any material respect, provide and maintain the Real
Property, including all structural facilities used in conjunction with the Paper
Machine (but excluding only the portions used for the roll grinder and slitter
grinder located in the No. 3 Paper Machine Building) and all services therein in
good condition so as to assure the continued operation of the Paper Machine in
accordance with this Agreement and, in addition, provide the necessary
equipment, facilities, and labor for transporting finished paper to the truck
facilities used in shipping finished paper from the Mill;

     (c) Without having to modify the current configuration of the Real Property
or any other property in any material respect, provide to American Tissue in
connection with its operation of the Paper Machine, the use of such truck
facilities as may from time to time be necessary. If in the ordinary of business
Boise Cascade shall be unable to ship the finished

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paper from the Mill as American Tissue may direct or if American Tissue shall
decide to store any finished paper, Boise Cascade shall furnish storage
facilities, as set forth on Exhibit D, the location of which may be changed by
Boise Cascade from time to time; provided, however, that any alternate storage
facilities shall be comparable in size and accessibility to the storage
facilities described on Exhibit D and shall not be located so as to be
unreasonably inconvenient to American Tissue. Boise Cascade shall bear all of
the costs involved in relocating any material required to be moved to alternate
storage facilities as may be designated by Boise Cascade pursuant hereto. Boise
Cascade has no obligation to furnish storage facilities in excess of those
described on Exhibit D.

     (d) Furnish to American Tissue from the pulp facilities at the Mill for use
in the Paper Machine, pulp in such quantities, types, and qualities as set forth
on Exhibit E and pursuant to all the terms and conditions of this Agreement and
Exhibit E. American Tissue shall have the right, at its own expense, to install
any necessary capital equipment solely in the Real Property to utilize secondary
fiber in addition to the minimum volume obligations on Exhibit E. American
Tissue shall have the right to provide its own pulp from outside sources from
time to time in addition to the pulp being furnished by Boise Cascade to
American Tissue pursuant to this Agreement. Use of fiber from third parties
shall not reduce American Tissue's or Boise Cascade's obligations under Exhibit
E.

     (e) American Tissue shall be excused from the Exhibit E pulp purchase
requirements for any calendar year during

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the term of this Agreement to the extent that Boise Cascade is unable to produce
at least 35,000 tons per year from the Paper Machine as directed by American
Tissue, provided that American Tissue shall complete the capital improvement
items listed in Exhibit N in the time frame set forth in Section 9 of this
Agreement, American Tissue has consented to or approved all of Boise Cascade's
reasonable recommended maintenance and capital repair items in respect of the
Paper Machine, and American Tissue's designated mix of products produced by the
Paper Machine is generally consistent with the current mix of products produced
by the Paper Machine for the months of January 1992 and March 1992 as set forth
in Exhibit P; if so, Boise Cascade shall also give American Tissue a year-end
credit with respect to each such calendar year that Boise Cascade is unable to
produce at least 35,000 tons of tissue paper in accordance with the following
formula:

            35,000 - (S+D)
          -------------------  x C = Year End Credit
                 35,000

         Where:          S           =    Tons of tissue paper produced in the
                                          Calendar Year.

                         D           =    Lost tons due to market related
                                          downtime requested by American Tissue
                                          or capital repair or improvement
                                          down-time requested by American Tissue
                                          plus any tons that are not produced as
                                          a result of an event of force majeure,
                                          calculated based on 96 tons per day.

                         C           =    Indirect Costs plus Direct Costs
                                          excluding the following items: steam,
                                          power, fuel, dyes and chemicals.

     Without in any way limiting Boise Cascade's obligations as set forth in
this Agreement, the failure of Boise Cascade to

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produce 35,000 tons in any calendar year shall not be considered a default
hereunder. Because the Agreement does not begin on January 1, there shall be a
modification of the calculation for the period beginning on the date of this
Agreement and ending December 31, 1993, as follows: The same formula as above
shall be utilized, except the numbers will be appropriately adjusted to reflect
the longer period of time (i.e., the 35,000 figure in the numerator and the
denominator shall be increased by a fraction: number of days from the date of
this Agreement to December 31, 1993, divided by 365).

     7. Payment for Pulp and Services. For the services, facilities, and pulp
furnished by Boise Cascade in accordance with this Agreement, American Tissue
shall make payments to Boise Cascade as follows:

     (a) All Direct Costs attributable to the operation, servicing, and
maintenance of the Paper Machine and the Real Property;

     (b) For pulp, American Tissue shall pay Boise Cascade an amount for each
ton furnished in accordance with Exhibit E;

     (c) Capital Costs with respect to the Paper Machine and Real Property and
Indirect Costs, as set forth on Exhibit C.

     (d) All records of costs shall be kept in accordance with the Accounting
Code, and together with all related documentation shall be made available to
American Tissue upon request for review and audit pursuant to the provisions of
Section 19 hereof and determinations as to which are Direct Costs, Indirect
Costs, Excluded Costs, and Capital Costs shall be consistent with the Accounting
Code;

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     (e) Direct Costs and Capital Costs shall be paid on or before the last day
of each calendar month against the invoice for the immediately preceding
calendar month, which invoice shall be received by American Tissue no later than
the tenth day of the month payment is due. Interest on the Direct Costs and the
amount due for pulp (Exhibit E) shall accrue beginning on the 16th day of the
month in which payment is due and continue until the amount due is paid.
Interest shall be calculated at the prime rate on the 15th of each calendar
month (or for the previous banking day if the 15th falls on a non-banking day)
plus 1%. The prime rate shall be "the base rate on corporate loans as posted by
at least 75% of the nation's 30 largest banks" as quoted by the edition of the
Wall Street Journal published on the 16th day of each calendar month (or on the
next day the Wall Street Journal shall be published).

     Indirect costs shall be reasonably estimated for each calendar month and
payable on the 15th day of the calendar month in which they are actually
incurred. The estimate shall be adjusted and American Tissue shall pay, or be
credited, as the case may be, on the 15th day of the following calendar month,
to cause the amount paid to reflect the actual Indirect Costs for the preceding
month.

     8. Mill Rules and Other Agreements. To the extent that American Tissue's
employees or contractors are at the Mill, they shall comply with all Mill rules,
standards, and guidelines, and all applicable laws, rules, and regulations, and
will take no action inconsistent with any contracts or agreements to which Boise
Cascade is a party, including but not limited to the labor

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agreement. Simultaneously with the execution hereof, Boise Cascade and American
Tissue shall execute an Assignment and Assumption Agreement in the form annexed
hereto as Exhibit Q.

     9. Improvements to and Maintenance of the Paper Machine. American Tissue
may from time to time, at its sole cost and expense, improve or upgrade the
Paper Machine so as to enhance the production capabilities of the Paper Machine
and/or the quality or types of products produced by the Paper Machine. American
Tissue shall have the right to refuse approval of any suggested capital repair
or capital improvement not necessary for safe operation (in accordance with
Boise Cascade's Mill standards) or obligatory pollution control. Notwithstanding
anything to the contrary in this Agreement, American Tissue shall cause at
American Tissue's sole cost and expense, the required capital improvements set
forth on Exhibit N to be installed prior to December 31, 1995. All repairs,
maintenance, and improvements shall be scheduled so as to minimize disruption to
Boise Cascade's operations to the extent reasonably practicable. At American
Tissue's request, and to the extent reasonably and commercially practicable,
American Tissue shall have the right to approve, in advance, any extraordinary
repairs or maintenance which Boise Cascade intends to perform with regard to the
Paper Machine. Boise Cascade has the right to make all repairs as herein set
forth necessary for the Paper Machine to comply with its safety and
environmental standards described in Section 6 hereof. Boise Cascade shall
charge American Tissue its actual costs incurred in making or performing all
such maintenance, repairs and improvements, without the addition of any
"mark-up,"

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all in accordance with the Accounting Code. American Tissue shall not create or
suffer any liens or encumbrances against Boise Cascade's property, including the
Real Property.

     10. Representations and Warranties of Boise Cascade. Boise Cascade
represents and warrants to American Tissue that:

     (a) Boise Cascade is a corporation duly organized and validly existing
under the laws of the state of Delaware, has the corporate power and authority
to own, operate, and carry on the business of the Mill as contemplated by this
Agreement and is duly qualified and in good standing in the state of Oregon;

     (b) Boise Cascade has obtained all necessary authorizations and approvals
from its Board of Directors required for the execution, delivery and performance
of this Agreement. Boise Cascade has the corporate power to execute and deliver
this Agreement and consummate such transactions contemplated hereby; such
execution and delivery does not, and such consummation will not, violate any
provision of Boise Cascade's Certificate of Incorporation or Bylaws or of any
mortgage, indenture, agreement, instrument, order, or decree to which Boise
Cascade is a party or by which it is bound and to the best of its knowledge will
not violate any law, governmental regulations, or restriction of any kind; and
the officers of Boise Cascade are duly authorized to execute this Agreement;

     (c) Boise Cascade has no contractual or other obligations of any kind
outstanding which would be violated by or result in the imposition of a lien on
the Paper Machine or the Real Property by reason of the execution or performance
of this Agreement by Boise Cascade;

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     (d) No consent, approval or authorization of, or registration,
qualification or filing with, any court, governmental agency or authority or any
other third party is required for the execution, delivery and performance of
this Agreement by Boise Cascade;

     (e) No claims, actions, suits, proceedings or investigations exist relating
to or affecting this Agreement which, if adversely determined, would materially
adversely affect American Tissue's rights and remedies under this Agreement in
any material respect, nor does Boise Cascade know of any such threatened claims,
actions, suits, proceedings or investigations;

     (f) No representation or warranty of Boise Cascade contained herein, or any
of the historical data in Exhibit 2B which is attached to Exhibit C, contains
any untrue statement of a material fact or omits to state a material fact
necessary to make the statements contained herein, or therein, not misleading;

     (g) The financial projections set forth in Exhibit S, previously delivered
to American Tissue, have been made by Boise Cascade in good faith and are based
upon all existing agreements and obligations with respect to the Mill (inclusive
of the pulp mill). The projections are not predictions. All of Boise Cascade's
material contracts that affect Direct Costs are set forth on Exhibit L and have
not been amended or modified except as set forth in Exhibit L. To the best of
Boise Cascade's knowledge, there are no existing agreements or obligations that
will materially increase Indirect Costs, taken as a whole, inconsistent with
historical data set forth in Exhibit 2B which is attached to Exhibit C. To the
best of Boise Cascade's

                                      -18-
<PAGE>

knowledge and belief, no material defaults exist in any such agreements or
obligations.

     (h) Boise Cascade has the unrestricted right to sell the Paper Machine to
American Tissue pursuant to the terms and conditions of this Agreement.

     11. Representations and Warranties of American Tissue. American Tissue
represents and warrants to Boise Cascade that:

     (a) American Tissue is a corporation duly organized and validly existing
under the laws of the state of New York, has the corporate power and authority
to own, operate, and carry on the business as contemplated by this Agreement and
shall promptly take such actions so as to become duly qualified and in good
standing in the state of Oregon;

     (b) Execution and delivery of this Agreement and consummation of the
transactions contemplated hereby have been duly authorized by the Board of
Directors of American Tissue and American Tissue has the corporate power and
authority to execute and deliver this Agreement and consummate such
transactions; such execution and delivery does not, and such consummation will
not, violate any provision of American Tissue's Certificate of Incorporation or
Bylaws or of any mortgage indenture, agreement, instrument, order, or decree to
which American Tissue is a party or by which it is bound and to the best of its
knowledge will not violate any law, governmental regulation, or restriction of
any kind;

     (c) No consent, approval or authorization of, registration, qualification
or filing with, any court, governmental agency or authority or any other third
party is

                                      -19-
<PAGE>

required for the execution, delivery and performance of this Agreement by
American Tissue;

     (d) No claims, actions, suits, proceedings or investigations are pending or
threatened against American Tissue relating to or affecting this Agreement
which, if adversely determined, would adversely affect Boise Cascade's rights
and remedies under this Agreement in any material respect, nor does American
Tissue know of any grounds for any such claims, actions, suits, proceedings or
investigations;

     (e) No representation or warranty of American Tissue contained herein
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained herein, or therein, not
misleading.

     12. Brokers or Finders. To the best of each party's knowledge and belief,
neither American Tissue nor Boise Cascade has paid nor shall be required nor
requested to pay, directly or indirectly, any finder's or brokerage fee in
connection with the transaction contemplated hereby, except Koplik Paper
Associates, whose fee shall be paid solely by American Tissue (who agrees to pay
Boise Cascade's portion of the amount due as a credit against the purchase
price) in accordance with the letter agreement between the parties dated October
21, 1992, as modified by Exhibit 0.

     13. Force Majeure and Labor Disturbances. If, by reason of fire, accident,
explosion, or strike, or if by reason of an event beyond Boise Cascade's and
American Tissue's control, such as a flood, freeze, drought, epidemic, embargo,
an inadequate supply of facilities or labor, power, fuel or any other material,
war,

                                      -20-
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riot, acts of God or the public enemy, or a law, rule or regulation prohibiting
Boise Cascade or American Tissue from fully or partially complying with its
respective obligations hereunder (collectively, "force majeure,") Boise Cascade
shall be unable to deliver or provide or American Tissue shall be unable to
receive or use any portion of the pulp or of the services contracted for in this
Agreement, such portion of the pulp or services to be delivered or provided
hereunder during the period of any such disability shall be deemed eliminated
from this Agreement and the amounts payable by American Tissue pursuant to this
Agreement for such pulp or services during the period of any such disability
shall be eliminated in the case of total disability or reduced proportionately
in the case of partial disability, provided that during the period of such total
or partial disability, American Tissue shall pay to Boise Cascade the continuing
Direct Costs and Indirect Costs which are applicable.

     Following the occurrence of any disability as aforesaid, which involves
damage or destruction to property, the party whose ability to perform hereunder
shall have been curtailed will immediately undertake and prosecute diligently to
repair and restore the property damaged or destroyed to a condition
substantially equivalent to its condition prior to such damage or destruction.

     Boise Cascade and American Tissue shall provide and maintain the insurance
policies required by Exhibit F.

     Any strike, lockout, or other labor disturbance shall be deemed an event of
force majeure. Boise Cascade shall have no

                                      -21-
<PAGE>

obligation to American Tissue to operate the Mill during any period of strike or
lockout even though it may be within Boise Cascade's power to do so.

     If Boise Cascade operates the Mill or any part thereof during any event of
force majeure, Boise Cascade shall operate the Paper Machine and supply pulp
therefore at the same relative rate of capacity as Boise Cascade operates the
other paper machines then owned by Boise Cascade at the Mill, provided that no
pulp produced by the Mill will be shipped to Vancouver, Washington, or elsewhere
until the pulp requirements of American Tissue are satisfied.

     An event of force majeure shall include excessive governmental laws and
regulations enacted, promulgated, or issued after the date of this Agreement.
"Excessive governmental laws and regulations" are any federal, state, or local
laws, rules, regulations, and ordinances which, taken as a whole (i.e., the
cumulative effect of all such laws and regulations), would require for
compliance the expenditure by Boise Cascade of amounts exceeding $25 million
(exclusive of any monies currently being expended by Boise Cascade) over any
three-year period (part of which may include monies already spent at the time a
force majeure event is declared by Boise Cascade) with respect to the pulp mill.

     14. Defaults; Waivers.

     (a) If any party hereto shall fail to perform any material covenant or
agreement herein contained on its part to be performed, other than by reason of
Force Majeure as provided for in Section 13 hereof, and such default shall
continue for a

                                      -22-
<PAGE>

period of 30 days, 10 days in the case of a monetary default (monetary defaults
are material), after written notice thereof given by the other party, the party
giving such notice may, at its option, terminate this Agreement by giving not
less than 3 business days' prior written notice of such termination to the
defaulting party, provided, however, that in the event a nonmonetary default
cannot be cured by the exercise of reasonable diligence within such period of 30
days, no such termination shall be effective if the defaulting party shall
promptly commence, within such 30-day period, the steps necessary to cure such
default and shall thereafter proceed with due diligence to complete the steps
necessary to cure such default as expeditiously as possible.

     (b) If any party hereto files a debtor's petition for insolvency,
bankruptcy, or reorganization under any chapter of the Federal Bankruptcy Code
or state law relating to insolvency or bankruptcy, or if there is filed against
any party hereto any involuntary petition under any such law relating to
insolvency or bankruptcy praying that such party be reorganized or liquidated or
declared bankrupt which is not stayed or dismissed within 60 days after such
filing, or if a receiver or a trustee is appointed by any court to take
possession of all or a major portion of the assets of such party, then the other
party hereto may terminate this Agreement by giving not less than 3 business
days' prior written notice of such termination to the defaulting party.

     (c) The failure of either party to exercise any right to terminate this
Agreement in the event of default shall not

                                      -23-
<PAGE>

constitute a waiver of the defaulting party's obligation to perform strictly in
accordance with the terms of this Agreement. Any such right to terminate shall
remain in full force and effect and may be exercised so long as such default
continues.

     (d) Whether or not this Agreement is terminated by either party by reason
of any default of the other party hereto, the defaulting party shall at all
times be liable for all damages sustained as a result of its default except as
limited by Section 15(d) hereof.

     (e) Each party shall use commercially reasonable efforts to mitigate the
damages suffered by the non-defaulting party with regard to any breach or
default of such party under the provisions of this Agreement except that Boise
Cascade shall be under no obligation to sell, lease or otherwise dispose of the
Paper Machine if Boise Cascade obtains possession or title to the Paper Machine.

     (f) If Boise Cascade shall default under this Agreement and such default
prevents the operation of the Paper Machine, then for such period of time as
such default shall continue, American Tissue shall not be required to pay the
Direct Costs and Indirect Costs which are attributable to such period of
down-time.

     (g) No waiver by either party of any default by the other party in the
strict and literal performance of or compliance with any provision, condition,
or requirement herein shall be deemed to be a waiver of strict and literal
performance of and compliance with any other provision, condition, or
requirement herein nor to be a waiver of or in any manner release

                                      -24-
<PAGE>

such other party from strict compliance with any provision, condition, or
requirement in the future; nor shall any delay or omission of either party
hereto to exercise any right hereunder in any manner impair the exercise of any
such right accruing to it thereafter. Except when otherwise expressly stated, no
remedy expressly granted herein to either party shall be deemed to exclude any
other remedy which would otherwise be available, including but not limited to a
lawsuit for damages filed in state or federal court in Oregon.

     (h) If American Tissue shall default, after notice and the expiration of
any applicable cure period, under any financing obtained by American Tissue
secured by the Paper Machine or improvements thereto to which Boise Cascade's
lien pursuant to Section 4 has been subordinated, then such default shall
constitute a material default by American Tissue under this Agreement. American
Tissue shall provide Boise Cascade with prompt notice of any notice of default
received by American Tissue with regard to any other such financing.

     (i) If American Tissue offsets any amounts owed to Boise Cascade hereunder
against any credits or other amounts American Tissue asserts that it is owed
from Boise Cascade, Boise Cascade may, if all or any material portion of such
setoff was improper, give written notice of default pursuant to the provisions
of Section 14(a) hereof and shall have all of the rights as set forth in Section
14(a). If American Tissue disputes any invoice from Boise Cascade, American
Tissue shall pay the undisputed portion of the invoice within the time for
payment set forth in Section 7 hereof.

                                      -25-
<PAGE>

     15. Termination by Boise Cascade and American Tissue and Purchase Option.
There are four circumstances described below in subsections (a) through (d) in
which one of the parties has a right to purchase or an obligation to sell the
Paper Machine and, in some cases, certain leasehold improvements. In all such
cases the calculation of the sales price is based in whole or in part on the
"Net Book Value" (or "NBV") of the Paper Machine or leasehold improvements. NBV
is defined as the acquisition cost of the Paper Machine (including but not
limited to the purchase price of $5,000,000.00) or leasehold improvements, and
the cost of all capital improvements to the Paper Machine and/or other leasehold
improvements incurred by American Tissue, less depreciation, all in accordance
with generally accepted accounting principles and the capitalization and
depreciation policies set forth in Exhibit K. Capitalization and depreciation
methods otherwise utilized by American Tissue for financial statements or income
tax purposes shall not be controlling for purposes of this Section 15. In no
case shall the useful life of any asset exceed 20 years from the date such asset
is placed in service for purposes of calculation of the NBV. At the closing of
any sale of the Paper Machine or leasehold improvements to Boise Cascade,
American Tissue shall give the same warranties of title to Boise Cascade as
those given by Boise Cascade to American Tissue pursuant to Exhibit J attached
hereto, except for any liens or encumbrances incurred or suffered by Boise
Cascade, and except as otherwise provided in subsection 15(d) hereof. The
closing of any sale of the Paper Machine shall also constitute termination of
this Agreement in accordance with Section 16 of

                                      -26-
<PAGE>

this Agreement, and shall automatically terminate the Warehouse Site Lease. For
purposes of this Section 15, the Paper Machine shall be deemed to include all
capital improvements thereto.

     (a) Default of American Tissue and Expiration of Term. Upon any termination
of this Agreement due to the default of American Tissue or upon the expiration
of the fixed term of this Agreement on December 31, 2012, Boise Cascade shall
have the option to purchase the Paper Machine on the date of termination of this
Agreement. In the event of American Tissue's default, the purchase price for the
Paper Machine shall be the NBV of the Paper Machine on the date of termination;
Boise Cascade's damages against American Tissue may be applied against the
purchase price. In the event of the expiration of the fixed term of this
Agreement, the purchase price for the Paper Machine shall be the higher of (i)
the NBV of the Paper Machine on December 31, 2002 or (ii) the "fair market
value" of the Paper Machine, calculated on the following basis: The Paper
Machine shall be valued on the assumption that it has been removed from the Mill
and is in storage (but shall not be so removed by American Tissue if such option
is exercised) in Portland, Oregon and there shall be deducted from the resulting
value the estimated cost of removing and transporting the Paper Machine to
Portland, Oregon, and estimated costs of restoration of the Real Property for
any damage that would be caused by the removal of the Paper Machine. In the case
of the expiration of the fixed term of this Agreement, Boise Cascade shall give
American Tissue not less that 120 days' notice prior to the expiration of the
fixed term of this Agreement exercising its option to purchase the Paper

                                      -27-
<PAGE>

Machine. If Boise Cascade fails to exercise its option to purchase the Paper
Machine as aforementioned, the provisions of Section 16 of the Agreement shall
apply. If Boise Cascade exercises its option to purchase the Paper Machine, the
closing shall take place on the fixed expiration date of this Agreement.

     In the case of termination of this Agreement prior to the expiration of the
term hereof by reason of American Tissue's default, Boise Cascade shall have a
30-day period after such termination to elect whether or not to exercise its
option to purchase the Paper Machine, during which time the Paper Machine shall
not be removed from the No. 3 Paper Machine Building or altered in any manner.
If Boise Cascade exercises its option to purchase the Paper Machine within said
30-day period and otherwise in accordance with the provisions of this Agreement,
the closing shall take place ten days after the expiration of said 30-day
period. If Boise Cascade does not exercise its option to purchase the Paper
Machine within such 30-day period and otherwise in accordance with the
provisions of this Agreement, the provisions of Section 16 of the Agreement
shall apply.

     (b) Force Majeure. If Boise Cascade declares an event of force majeure with
respect to excessive governmental laws and regulations in accordance with the
last paragraph of Section 13 of this Agreement and, in connection therewith,
permanently closes its pulp mill at the Mill, American Tissue shall have the
right to require Boise Cascade to purchase the Paper Machine for a purchase
price equal to the NBV of the Paper Machine plus $5,000,000.00 and to purchase
American Tissue's leasehold

                                      -28-
<PAGE>

improvements to the Real Property and to the premises subject to the Warehouse
Site Lease for a purchase price equal to the NBV of such assets as calculated on
the date the pulp mill is permanently closed. Such right shall be exercisable by
American Tissue's giving Boise Cascade notice of such exercise within 30 days of
the closing of the pulp mill and closing shall take place within 30 days after
the giving of such notice. This Agreement shall be terminated at the closing of
such transaction and the applicable provisions of Section 16 shall apply.

     (c) American Tissue's Option. At any time during the six-month period
ending December 31, 2001, American Tissue shall have the right to make a request
to Boise Cascade in writing that any or all of the terms and conditions of this
Agreement be renegotiated. The parties shall have a period of 90 days after such
written request (the "Negotiation Period") to renegotiate any or all of the
terms and conditions of this Agreement. If the parties are unable to reach an
agreement on new terms and conditions for any reason, then American Tissue shall
have the option to terminate this Agreement effective as of December 31, 2002,
by written notice given to Boise Cascade within 90 days after the expiration of
the Negotiation Period. In such event, Boise Cascade shall have the option to
purchase the Paper Machine at a closing to be held on the termination date for a
purchase price equal to the NBV of the Paper Machine as of the date of closing
less $5,000,000.00. If the resulting purchase price figure is negative, such
amount shall be paid to Boise Cascade at the closing. Boise Cascade must
exercise its right to purchase the Paper Machine by giving American Tissue
written notice

                                      -29-
<PAGE>

thereof within 150 days after the expiration of the Negotiation Period.

     (d) Third-Party Action; Breach of Warranty. If any action or proceeding is
commenced by any third party contesting in any manner Boise Cascade's warranty
of title to the Paper Machine or seeking relief that, if granted, would cause
Boise Cascade's warranty of title to the Paper Machine to be breached or would
prohibit American Tissue's ownership, use or possession of the Paper Machine or
the Real Property pursuant to this Agreement (where such prohibition results
other than by reason of American Tissue's fault), Boise Cascade shall, at Boise
Cascade's sole cost and expense (including attorneys' fees by counsel to be
chosen by Boise Cascade, subject to the approval of American Tissue, which
approval shall not be unreasonably withheld or delayed) vigorously defend such
action or proceeding on behalf of Boise Cascade and/or American Tissue. The
parties shall give prompt notice to each other upon learning of any such action
or proceeding. American Tissue shall have the right, but not the obligation, to
participate with Boise Cascade in defending such action or proceeding with
separate counsel of American Tissue's choice, at American Tissue's expense. If
by reason of such action or proceeding, American Tissue must relinquish the
ownership, use or possession of the Paper Machine for a period of at least three
years, then American Tissue shall have the right to terminate this Agreement
effective at any time after the expiration of such three-year period and to
require Boise Cascade to purchase the Paper Machine for a purchase price equal
to the NBV of the Paper Machine plus $5,000,000.00 and to purchase

                                      -30-
<PAGE>

American Tissue's leasehold improvements to the Real Property and to the
Warehouse Site Lease premises for the NBV of such assets (such NBV calculated in
both cases as of the date that American Tissue was required to relinquish such
ownership, use, or possession). The closing of such purchase shall be held 30
days after American Tissue gives notice to Boise Cascade of American Tissue's
election to terminate this Agreement and to require Boise Cascade to purchase
such assets. Simultaneously with the receipt and collection of all of the
closing funds, American Tissue will quit claim to Boise Cascade by using a bill
of sale or other appropriate document or instrument under applicable law, any
and all right, title and interest American Tissue has or may have acquired in
the Paper Machine and shall warrant title to other assets conveyed in accordance
with the first paragraph of this Section 15 and to the extent that American
Tissue has title consistent with the terms of this Agreement. Without limitation
of the foregoing, during the period American Tissue shall have been required to
relinquish ownership, use, or possession of the Paper Machine and thereafter
until such time as American Tissue elects to require Boise Cascade to purchase
the Paper Machine and leasehold improvements pursuant to this Section 15(d) and
the closing in respect thereof is held, (i) all of American Tissue's obligations
under and pursuant to this Agreement shall be suspended, (ii) Boise Cascade
shall not be obligated to furnish to American Tissue the pulp and services
called for in this Agreement and (iii) Boise Cascade shall pay to American
Tissue monthly in arrears, on the fifth day of each month for the previous
month, interest on the NBV of the Paper Machine and

                                      -31-
<PAGE>

leasehold improvements to the Real Property and to the Warehouse Site Lease as
of the date that American Tissue was required to relinquish such ownership, use,
or possession at an interest rate equal to the Prime Rate on the fourth day of
each such month plus 1%. The interest rate calculation shall be made in the same
manner as interest rate calculations are made pursuant to Exhibit I, for
purposes of identifying the Prime Rate. If Boise Cascade is able to restore full
title, use and possession to the Paper Machine to American Tissue on or before
the expiration of the aforementioned three-year period upon all of the terms and
conditions set forth in this Agreement, then it shall do so, and upon such
restoration all such interest accruals and payments shall thereupon cease and
this Agreement shall thereupon be fully reinstated. Such reinstatement shall not
lengthen the term of this Agreement. Boise Cascade shall indemnify American
Tissue for and hold American Tissue harmless against any and all amounts payable
to third parties, such as damages, penalties, costs and expenses (including
reasonable attorneys' fees and court costs) incurred by or asserted against
American Tissue arising out of or in connection with the third party action or
proceeding referred to in this subsection 15(d). The remedies set forth in this
subsection 15(d) shall be American Tissue's sole remedies with respect to the
subject matter of this subsection.

     16. Termination. Upon expiration or termination of this Agreement, American
Tissue shall remove its inventory from the Mill and shall surrender the office
which it occupies pursuant to Section 18 hereof, and the Real Property to Boise
Cascade in as good condition as when received by American Tissue, as same may

                                      -32-
<PAGE>

have been improved or altered pursuant to this Agreement, ordinary wear and tear
excepted. If Boise Cascade does not exercise its purchase option as set forth in
subsections 15(a) and 15(c), American Tissue must, no less than 60 days prior to
termination if termination occurs at the expiration of the term of this
Agreement or in accordance with subsection 15(c) hereof, or within 45 days after
termination if termination otherwise occurs prior to the expiration of the term
of this Agreement, give written notice of its intention to remove or abandon the
Paper Machine. Failure of American Tissue to provide such notice, time being of
the essence, shall result in an abandonment of the Paper Machine to Boise
Cascade without the necessity of any further documentation or conveyances by
American Tissue and the warranties of title required by the first paragraph of
Section 15 hereof shall apply. If American Tissue elects to remove the Paper
Machine, American Tissue must remove the entire Paper Machine, but shall not
remove any of the Real Property, and shall place the Real Property in a safe,
stable, and commercially reasonable condition, and shall have 180 days from the
date of written notice to complete all removal and other related work, such time
period to be tolled by any period of force majeure which prevents or materially
impairs removal of the Paper Machine. If American Tissue abandons the Paper
Machine, no portion of the Paper Machine, or improvements shall be removed. Upon
termination of this Agreement for any reason, American Tissue and Boise Cascade
shall each execute and deliver all documents reasonably requested by the other
party to evidence termination of the lease of the Real Property and the
Warehouse

                                      -33-
<PAGE>

Site Lease, and, in the case of abandonment, documents of conveyance of the
Paper Machine and leasehold improvements to Boise Cascade, free and clear of all
liens, except as otherwise provided hereunder.

     17. Assignment. Except as may be otherwise agreed by the parties hereto, no
party shall assign this Agreement or any interest herein (whether through a sale
of the Paper Machine, sale of stock, merger, consolidation, or otherwise)
without the prior written consent of the other party, which consent each party
covenants shall not be unreasonably withheld or delayed provided that such
assignment is to a financially responsible third party and provided further, no
such assignment shall be permitted to an assignee who is a competitor of Boise
Cascade's business operated at the Mill. However, Boise Cascade may assign all
of its rights and obligations hereunder to any corporation into which it shall
be merged or consolidated or to which it shall sell all or substantially all of
its assets, provided that such corporation assumes all of the obligations so
assigned and that Boise Cascade may assign this Agreement to a purchaser of
substantially all the assets of the Mill which assumes all of the obligations so
assigned. Either party hereto, without such consent, may also assign any or all
of its rights or obligations hereunder to any subsidiary of such party, provided
that such subsidiary shall assume all of the obligations so assigned and that
the assigning party shall unconditionally guarantee performance of such
obligations by such subsidiary. No assignment shall relieve the assignor of any
of its duties, obligations, or liabilities hereunder. Notwithstanding the

                                      -34-
<PAGE>

foregoing, American Tissue shall not assign this Agreement to any third party
which does not simultaneously purchase the Paper Machine.

     18. Facilities for Representatives of American Tissue. Without limitation
of any other provisions of this Agreement, Boise Cascade shall furnish to
American Tissue sufficient enclosed office space (no more than two offices) at
the Mill for the use of representatives authorized by American Tissue while at
the Mill and for the storage of records with respect to the Paper Machine. Boise
Cascade shall also furnish such representatives with such identification papers
as may be necessary to gain access to those parts of the Mill which relate to
the Paper Machine and other facilities relating to the production, storage, and
shipping of the paper from the Paper Machine.

     19. Inspection of Books and Records. Without limitation of any other
provisions of this Agreement, American Tissue shall have the right to inspect
the books, records, related documentation, meters, scales and other measuring
equipment of Boise Cascade for the purpose of determining the accuracy of the
determinations required to be made by Boise Cascade hereunder, such as those
relating to the determination of the pulp price, Direct Costs, Indirect Costs,
Capital Costs, and Excluded Costs. Such inspections shall be conducted during
normal business hours and not more frequently than monthly. Such inspections may
be conducted by employees of American Tissue or by duly authorized
representatives of American Tissue, and all information of Boise Cascade
obtained during or as a result of such inspections shall

                                      -35-
<PAGE>

be kept strictly confidential and shall be used only for the purposes herein
provided.

     20. Payment of Expenses. Each party shall pay the costs and expenses
(including fees of attorneys and accountants) incurred by it in connection with
the negotiation, execution, delivery, and consummation of this Agreement.

     21. Further Documents. Each party will execute and deliver to the other
party such further instruments and documents as such other party may reasonably
request in connection with the consummation of the transactions contemplated by
this Agreement.

     22. Survival of Representations and Warranties. All representations and
warranties included herein shall survive the execution of this Agreement,
notwithstanding any investigation by any party. Each party shall indemnify and
hold the other party harmless from and against any and all claims, damages,
demands, liabilities, actions, proceedings, judgments, penalties, losses, costs,
and expenses (including, without limitation, reasonable attorneys' fees and
court costs) suffered or incurred by the indemnified party arising out of or in
connection with the breach of any representation or warranty by the indemnifying
party.

     23. Governing Law. This Agreement shall be deemed to have been entered into
pursuant to, and shall be governed by the laws of the state of Oregon.

     24. Notices. Any notice, request, or other communication required or
permitted to be given or made hereunder shall be deemed properly given or made
if delivered personally or if mailed by certified mail, return receipt
requested, in the ordinary course, postage prepaid, as follows:

                                      -36-
<PAGE>

             If to Boise Cascade:     Boise Cascade Corporation
                                      Attn: Director of Finance, White Paper
                                      One Jefferson Square
                                      P.O. Box 50
                                      Boise, ID 83728-0001

             With a copy of any
             notice of default to:    Boise Cascade Corporation
                                      Attn: Legal Department
                                      One Jefferson Square
                                      P.O. Box 50
                                      Boise, ID 83728-0001

             If to American Tissue:   American Tissue Mills of Oregon, Inc.
                                      Attn: Messrs. Medhi
                                      Gabayzadeh and Frank DiMaio
                                      50 Cabot Court
                                      Hauppauge, New York 11788

             With a copy of any
             notice of default to:    Mandel & Resnik P.C.
                                      Attn: Barry H. Handel, Esq.
                                      220 East 42nd Street
                                      New York, New York 10017

     25. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.

     26. Captions. The titles of the sections and subsections of this Agreement
have been prepared and assigned for convenience only and shall not be construed
as limiting, defining, or affecting the substantive terms of this Agreement.

     27. Entire Agreement. This Agreement contains the entire agreement between
the parties hereto with respect to the transactions contemplated hereby and
supersedes all previous written or oral negotiations, representations,
commitments, and writings with respect to such transactions.

                                      -37-
<PAGE>

     28. Option to Lease. By written notice given at any time prior to December
31, 1997, American Tissue may cause the terms and conditions of the Warehouse
Site Lease annexed hereto as Exhibit G to become effective as of the date which
is 30 days after the date of the notice, without the necessity for any further
signatures or actions by either party.

     29. Venue. The venue for any action brought by one party against the other
party shall be in state or Federal court in Oregon.

     30. Good Faith. There is an obligation of good faith and fair dealing for
both parties with respect to all aspects of this Agreement.

     31. Cumulative Remedies. Except as specifically set forth in subsection
15(d), all remedies available to either party under this Agreement, at law
and/or in equity, shall be cumulative, and such remedies may be exercisable
separately, concurrently, and in any manner or order of priority.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers the day and year first above written.

ATTEST:                                       BOISE CASCADE CORPORATION

/s/ ILLEGIBLE                                 By /s/ ILLEGIBLE
------------------------------                   -------------------------------
Assistant Secretary                                  VICE PRESIDENT

ATTEST:                                       AMERICAN TISSUE MILLS OF
                                                OF OREGON, INC.

/s/ ILLEGIBLE                                 By /s/ Nourollah Elghanayan
------------------------------                   -------------------------------
Secretary                                     Title Pres.
DP2lO16C.V3

                                      -38-

<PAGE>

                                    AMENDMENT

     THIS AMENDMENT is entered into as of the 1st day of January 1999, by and
among BOISE CASCADE CORPORATiON ("Boise Cascade") and AMERICAN TISSUE MILLS OF
OREGON, INC. and AMERICAN TISSUE CORPORATION (collectively referred to
hereinafter as "ATC").

     WHEREAS, Boise Cascade and American Tissue Mills of Oregon, Inc. entered
into an agreement dated November 23, 1992 ("Agreement"): and

     WHEREAS, the parties desire to amend the Agreement.

     NOW, THEREFORE, the parties hereby agree as follows:

     1. Definitions. All capitalized terms not otherwise defined herein shall
have the meaning as set forth in the Agreement.

     2. Joint and Several Obligations. The duties and obligations of ATC under
this Amendment and under the Agreement shall be the joint and several
obligations of both American Tissue Mills of Oregon, Inc. and American Tissue
Corporation.

     3. Term. The termination date set forth in Section 6 of the Agreement and
all other references in the Agreement to the term are amended to extend the term
of the Agreement to December 31, 2022.

     4. Outside Pulp Storage. Section 6(d) is amended to provide that Boise
Cascade has no obligations to provide outside pulp storage beginning on the date
the warehouse to be constructed by ATC (as hereinafter provided) is completed.

     5. Late Pay Interest Rate. The first paragraph of Section 7(e) of the
Agreement is deleted and amended to read as follows:

          Direct Costs, Capital Costs, and the amount due for pulp shall be paid
          45 days after the end of the month in which they were incurred
          ("45-Day Option"), which invoice shall be

<PAGE>

          received by ATC no later than ten days following such month end;
          provided, however, at ATC's option, ATC shall be permitted to make
          equal payments spread over 30 days ("30-Day Option") beginning the
          30th day after the end of the month; if the 30-Day Option Is chosen
          and ATC defaults on any of these payments, interest shall accrue on
          the entire unpaid balance of these amounts beginning 45 days after the
          end of the month in which the costs were incurred until such default
          is cured. Except as provided in the preceding sentence, interest on
          late pay amounts shall accrue beginning when payment is due and
          continue until the amount due is paid. Interest shall be calculated at
          the prime rate (or for the previous banking day if such date falls on
          a non-banking day) plus 3.5%. The prime rate shall be "the base rate
          on corporate loans as posted by at least 75% of the nation's 30
          largest banks: as quoted by the edition of The Wall Street Journal
          published on the next day The Wall Street Journal shall be published.
          Interest on the Indirect Costs shall be calculated beginning on the
          16th of each month, if not paid by the 15th of that month, at the
          interest rate set forth above. The failure of Boise Cascade to declare
          a default when payment is not made as required hereunder shall not be
          deemed a waiver of Boise Cascade's right to declare defaults in the
          future (i.e., if interest is accruing, Boise Cascade may declare a
          default under the agreement, subject to the ten-day cure period set
          forth in Section 14 of the Agreement).

     6. Mill Closure. Section 16(b) is deleted and replaced with Exhibit A-1
attached hereto.

     7. Renegotiation Option. Section 15(c) of the Agreement is amended to
delete "December 31, 2001" and replace it with "December 31, 2008."

     8. Warehouse Lease. Section 28 is amended to provide that the Warehouse
Site Lease set forth in Exhibit G thereto is considered in effect on January 1,
1999, as amended pursuant to the provisions of this section. The rent set forth
in the Warehouse Site Lease is amended to be $4,000 per year payable yearly in
advance. The rent for 1999 shall be payable upon the execution of this Amendment
by both parties. The warehouse crew at the Building is a Direct Cost to ATC. ATC
shall

                                       -2-

<PAGE>

no longer be charged overhead charges for Roll Finishing and Shipping as listed
in Exhibit 2A, effective upon completion of the Building, fixtures (including
conveyor systems), and office furnishings. ATC shall construct the Building,
fixtures (including conveyor systems), and office furnishings at ATC's sole cost
and expense, which construction shall be completed no later than the completion
of upgrade to the #3 paper machine described hereafter. Upon completion of the
Building, fixtures (including conveyor systems), and office furnishings, Boise
Cascade shall no longer be required to furnish storage facilities as set forth
in Section 6(c) and Exhibit D to the Agreement; provided, however, that ATC
shall have the option of continued use of such warehouse space until such time
as Boise Cascade chooses to install a rail spur at Boise Cascade's sole cost and
expense. If Boise Cascade chooses to install a rail spur, ATC shall be allocated
five rail cars per week. Prior to the installation of a new rail spur, Boise
Cascade shall permit ATC reasonable use, when available, of existing rail spurs
at the mill. All properly taxes and insurance on the Building, fixtures
(including conveyor systems), and office furnishings are Direct Costs to ATC and
allocated as set forth below in Section 9. ATC shall be permitted to install
stock preparation equipment in the Building if Boise Cascade reduces the pulp
available to ATC pursuant to the option contained in the amendment to Exhibit E
of the Agreement set forth hereafter. Boise Cascade hereby consents to the
construction of one or more buildings on the Premises provided that the "use" of
such building(s) complies with Article 5 of the Warehouse Site Lease.
Notwithstanding any provision of the Agreement, the Amendment or the Warehouse
Site Lease to the contrary, ATC may incur and obtain leasehold or other
financing secured by a first priority lien and mortgage on ATC's interest in the
Premises and the Building and Boise Cascade shall and will cause its

                                       -3-

<PAGE>

lenders and any other party having an interest in the Premises to promptly
execute and deliver such documents and take such actions requested by ATC, its
lender, or its title company to effectuate the foregoing. During the term of the
Warehouse Site Lease, Boise Cascade shall require that any mortgagee or other
secured lender with respect to the Mill and any other party having an interest
in the Premises subordinate its interest in the Premises to ATC and its lender.
Upon completion of the Building, fixtures (including conveyor systems), and
office furnishings, ATC shall have the right to cause Boise Cascade to purchase
the Building, fixtures (including conveyor systems), and office furnishings at
any time after ATC is in default of its obligation to the lender who provides a
financing to construct the Building, fixtures (including conveyor systems). and
office furnishings; provided that the principal amount of the construction
financing shall in no case exceed the lower of (a) construction costs (including
"soft" costs, but excluding capitalized interest) of the Building and fixtures
and (b) $4,000,000; and provided further that the construction loan is amortized
over a period not to exceed 20 years. If ATC exercises this option, the purchase
price shall be the remaining balance outstanding under the construction loan at
the time of the purchase, without any increase on account of accrued but unpaid
interest, costs, attorneys' fees, or any other amounts owed by ATC to the
lender. Boise Cascade has the option to purchase the Building, fixtures
(including conveyor systems), and office furnishings at NBV upon termination of
the Agreement by giving ATC no less than 60 days' written notice prior to the
closing. Closing shall occur 60 days after the written notice is given to ATC.
Boise Cascade shall pay cash at closing in the amount of the NBV of the
Building, fixtures (including conveyor systems), and office furnishings on the
date of closing, less the amount of any liens or encumbrances on the Building,
fixtures (including conveyor

                                       -4-

<PAGE>

systems), and office furnishings, if such liens or encumbrances are assumed by
Boise Cascade, at its option, at closing.

     9. Costing/Billing Method. Exhibit C to the Agreement is amended as
follows:

          Payment of insurance and taxes on the #3 paper machine and the #3
          paper machine building as a direct cost to ATC. All Boise Cascade
          insurance and taxes are Excluded Costs. The #3 paper machine building
          is currently appraised for property tax purposes for $1,995,600. Boise
          Cascade will continue to pay the taxes and insurance. Boise Cascade
          will charge ATC directly for their portion based on (i) actual bills
          with respect to the #3 paper machine and #3 paper machine building,
          for such insurance and taxes or (ii) the appraisals of the paper
          machine and the #3 paper machine building pro rata to values of the
          other insured (appraised on a consistent basis for insurance purposes)
          and taxable (appraised for property tax purposes), as the case may be,
          assets at the Mill. Boise Cascade shall use commercially reasonable
          efforts to minimize through tax certiorari or other applicable
          proceedings, taxes assessed on the #3 paper machine and #3 paper
          machine building and payable by ATC hereunder, and ATC shall reimburse
          Boise Cascade, without duplication, for any costs incurred in such
          proceedings.

          If ATC buys a substation, ATC shall not be charged any further
          substation lease payments pursuant to Exhibit 2A. Boise Cascade will
          purchase and install substation for ATC. ATC will reimburse Boise
          Cascade for such costs as Direct Costs.

          If Boise Cascade replaces the existing substation, ATC shall pay as a
          Direct Cost an amount equal to the acquisition of a substation for
          ATC's exclusive use, subject to mill standards, not to exceed $1
          million and upon start-up of such new substation, ATC will not be
          charged for any further substation lease payments pursuant to Exhibit
          2A. Any costs related to the termination of the existing substation
          leases will not be chargeable as an Indirect Cost or otherwise to ATC.

          If extra staffing for ATC is required during the Paper Machine
          upgrade, this would be a direct cost to ATC.

                                       -5-

<PAGE>

     10. Environmental. Boise Cascade shall allow offsets for air emission.

     The Paper Machine upgrade shall include the following design parameters:

          a.   Less than 2% fiber loss;

          b.   Less than 11 megawatts total load;

          c.   Best available control technology for air emissions;

          d.   Water usage less than 3 million gallons per day.

     Boise Cascade consents to the improvements and construction necessary to
upgrade the Paper Machine to an average production capacity of 200 tons per day,
including but not limited to those improvements set forth in Exhibit A-2

     11. Building Ventilation System. Building ventilation system to be properly
operated by Boise Cascade at all times. Boise Cascade to pay 50% of the costs of
it upgrading ventilation system at Paper Machine buildings in accordance with
specifications acceptable to both parties.

     12. lntercreditor Agreement. Boise Cascade shall consent to enter into an
lntercreditor Agreement from time to time with ATC's lenders substantially on
the terms set forth in the Consent and lntercreditor Agreement dated as of
February 11, 1994, between The CIT Group/Equipment Financing, Inc. and Boise
Cascade, as amended. Provided, however, there shall be no put option to Boise
Cascade (Section 7 of lntercreditor Agreement), and Boise Cascade is not
obligated to make payments as set forth in Section 5.c, Third (4). Boise Cascade
to have the right to operate Paper Machine at Boise Cascade's cost after
termination of Agreement due to ATC's default until disposition of the Paper
Machine. Provided further, if ATC issues bonds secured by liens on its assets at
multiple locations, Boise Cascade shall consent to an

                                       -6-

<PAGE>

intercreditor agreement as set forth above and wherein Boise Cascade and the
secured lender or trustee for the bonds shall share all proceeds of the
collateral located on the Premises on a 50-50 basis up to the first $20 million
of proceeds therefrom, and Boise Cascade will be subordinated to the security
interest of such secured lender with respect to all proceeds after the first $20
million, subject to Boise Cascade's rights under section 15(a) of the Agreement.

     13. Pulp sales. Exhibit E to the Agreement is amended as follows:

          a. Eliminate "blend pulp" requirement.

          b. Pricing for softwood pulp same as current Agreement, except that
          Exhibit E is deemed amended to provide that 50% of Daily and Annual
          Cost per ton discount (a/k/a Fixed Costs) shall be used rather than
          10% as per Agreement Exhibit E (Wallula drying costs) and Exhibit E
          Section 3(a) is amended to provide that (i) the monthly sales for
          purposes of determining weighted average U.S. and Canadian selling
          price per SADT must be sales to persons unaffiliated with Boise
          Cascade or with respect to which Boise Cascade does not have any
          economic interest and (ii) the aggregate of such monthly sales must be
          no less than 3,600 SADT during such month and if such minimum monthly
          sales by the Wallula, Washington, mill are not attained, the
          provisions of Section 3(c) shall apply for that month only as if
          Wallula ceased U.S. and Canadian sales of pulp for that month. The
          pricing formula based upon Wallula sales shall be reestablished when
          Wallula sales exceed 3,600 SADT in a month. Exhibit E is further
          amended to provide that pricing for softwood pulp shall in no month
          exceed $300 per SADT over variable cost for the previous month, nor be
          lower than $50 per SADT o over variable cost for the previous month.
          See Exhibit C-1 attached for example of how to calculate variable cost
          All references in the Agreement to softwood price or discounts off
          softwood price for hardwood or off quality pulp shall mean the
          softwood price as calculated pursuant to this Amendment Section 13.b.
          Pulp price for a given month will be

                                       -7-

<PAGE>

          based on sales and costs for the previous month. Boise Cascade will
          report to ATC the pulp cost for the month by the 7th day of that
          month. Example: July price is based on June sales minus discounts
          subject to min and max variable cost. By July 7, ATC will know what
          pulp price will be billed for July.

          c. Boise Cascade shall have available, for each calendar year,
          beginning January 1, 2000, at least the following volumes of pulp
          SADT, less any tons that cannot bar produced due to force majeure:

          Hardwood and softwood                  62,000 SADT/
          combined:                                calendar year

                                                 4,500 SADT/
                                                   calendar month

          Boise Cascade shall have available at least 15.000 SADT per year of
          hardwood. If ATC requires softwood or hardwood pulp over the volume
          obligations of Boise Cascade, Boise Cascade shall use commercially
          reasonable efforts to supply ATC's requirements prior to any
          requirements of outside customers; provided however, this sentence
          shall not apply if Boise Cascade exercises the option contained in the
          following sentence; and provided further, Boise Cascade may first
          satisfy the pulp requirements of its paper machines at the Mill before
          supplying such excess pulp. Boise Cascade may at any time, but only
          one time (unless otherwise agreed to by ATC), upon six months' prior
          written notice to ATC, reduce its volume requirements to as low as
          45,000 tons per year (3,000 SADT/calendar month), hardwood and
          softwood combined. If this option is exercised, ATC's minimum volume
          would be reduced pro rata with the current Agreement. In the event of
          a reduction, Boise Cascade must continue to supply the hardwood at a
          rate of 15,000 SADT per year.

          ATC shall utilize Boise Cascade pulp for 100% of its softwood needs
          for the No. 3 Paper Machine.

          ATC shall utilize Boise Cascade-supplied softwood for at least 60% of
          its wood pulp requirements. Wood pulp includes recycled pulp.

                                       -8-

<PAGE>

          ATC's minimum volume obligations in the Agreement are amended as set
          forth below, beginning in the later of (i) December 31, 2002, or (ii)
          completion of the start-up curve; provided, however, that if the
          Tissue Machine is not producing at design capacity (which is estimated
          to be 75,000 tons per year) within six months following substantial
          completion of the machine upgrade, ATC's minimum volume obligations
          set forth below shall be reduced pro rata with the current Agreement
          requirements until such design capacity threshold is achieved, but in
          no case shall ATC purchase wood pulp (other than recycle and
          grade-specific needs) from sources other than Boise Cascade beginning
          February 1,1999, and ending on the later of December 31, 2002, and
          completion of the start-up curve. See main agreement for Boise
          Cascade's performance obligations with respect to operation of
          machine.

          Hardwood and                                           57,000 SADT/
          softwood combined:                                     calendar yr
                                                                 3,800 SADT/
                                                                 calendar mo

          d. Pricing for hardwood pulp: 90% of price for softwood pulp and
          beginning upon completion of the start-up curve (with volume measured
          on a calendar-year basis) 90% of price for softwood pulp on first
          15,000 tons in each year; remainder priced at 100% of softwood pulp
          price. If ATC is obligated to purchase 100% of its pulp needs from
          Boise Cascade due to performance issues during start-up curve, Boise
          Cascade shall make every reasonable effort to supply ATC hardwood pulp
          (at 90% of softwood pricing), for 40% of ATC's wood pulp needs;
          provided Boise Cascade may first satisfy the hardwood pulp
          requirements of its paper machines at the Mill. Boise Cascade and ATC
          may agree from time to time on additional hardwood pulp sales.

          e. Specs for pulp: See Exhibit E-1, attached hereto.

          f. Purchased pulp from third parties shall be stored in ATC's
          warehouse.

                                      -9-

<PAGE>

          g. ATC has a right of first refusal to purchase off quality pulp not
          utilized by Boise Cascade to be offered to ATC at $50/ton discount to
          applicable softwood or hardwood price. See Exhibit E-1 for
          specifications. Boise Cascade at its cost to install system to deliver
          off-quality pulp to ATC on or before June 1, 1999. Off quality tons
          count toward ATC's volume commitment hereunder and Boise Cascade's
          volume obligations hereunder.

          h. Any pulp purchased by ATC from Boise Cascade counts toward ATC's
          volume commitment hereunder and Boise Cascade's minimum volume
          obligations hereunder, even if ATC ships pulp to other locations. ATC
          shall provide its own facilities (e.g., wet lap) for the handling and
          shipping such pulp out of its warehouse.

          i. If the machine upgrade is coordinated with the paper mill annual
          shutdown, ATC shall be relieved pro rata from its pulp purchase
          obligations while the machine is not operating during the upgrade
          ("Upgrade Shutdown") and Indirect Costs during the Upgrade Shutdown
          shall be deferred and are payable in 12 equal monthly installments
          without interest commencing three months after the conclusion of the
          Upgrade Shutdown. ATC shall utilize 100% of Boise Cascade's pulp
          (other than recycle and grade-specific needs) during startup curve and
          prior to the shutdown.

                                      -10-

<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Amendment on the date
first above written.

BOISE CASCADE CORPORATION

By     /s/ N. David Spence
    ---------------------------------

Title  Senior Vice President
       ------------------------------

AMERICAN TISSUE MILLS OF OREGON, INC.

By     /s/ Mehdi Gabayzedeh
    ---------------------------------

Title   Mehdi Gabayzedeh - President
       ------------------------------

AMERICAN TISSUE CORPORATION

By     /s/ Mehdi Gabayzedeh
    ---------------------------------

Title   Mehdi Gabayzedeh - President
       ------------------------------INDEX OF EXHIBITS

A.   Paper machine

B.   Mill

B1.  Real Property

C.   Accounting Code

D.   Storage Facilities

E.   Pulp Agreement

F.   Insurance Requirements

G.   Warehouse Site Lease
       Exhibit 1 - Description of Warehouse Site Lease Property

H.   Brokerage Agreement between BCC and Koplik Paper Associates

I.   Promissory Note

J.   Agreement to Sell Property

K.   Capitalization and Depreciation Policies

L.   Agreements Provided

M.   Memorandum of Lease

N.   Required Capital Improvements

O.   Letter from Koplik

P.   Paper Mix of Products

Q.   Assignment and Assumption Agreement

R.   Deed of Trust

S.   Financial Projections

                                      -39-
<PAGE>

                                   EXHIBIT A

                                  NO. 3 MACHINE

     The No. 3 Paper Machine located at the Mill, more particularly described as
all machinery, equipment and component parts located above the sole plate and
all spare parts at the Mill relating exclusively to the No. 3 Paper Machine
including, without limitation, the following:

     Beloit 258" Fourdrinier tissue paper making machine No. 3 consisting of
steel air cushioned controlled flow stock inlet, 5 rectifier and distributing
rolls, PH meter; wet end control panel, removable suspended fourdrinier section
with 258" x 73' wire, suction boxes, rubber covered wire rolls with doctors, 32"
suction couch roll, 48" brass suction breast roll, 28" rubber covered pressure
roll, 32" top suction press, suction roll on 32" rubber covered roll, rubber
covered felt rolls, 32" rubber covered second press roll on 40" rubber covered
suction roll, 3 felt guides and stretchers for 262" x 108' and 262" x 71' wet
felts, press section control panel, 12' Yankee dryer, two 40" rubber covered
suction pressure rolls, suction box, Beloit high velocity hood, pneumatic loaded
skinning, creping and cleaning doctors, dry end control board, drum reel with
36" drum and sliding shaft, roll lowering device, reel control panel, unwind
stand with direct double belt drive, pneumatic pressure device, iron carrier
roll, 2-drum slitter and 252" rewinder with galvanized iron hood, pneumatic roll
transfer and hoist, 21" x 40' roller bed belt conveyor, control board for
rewinder, control

<PAGE>

board for transfer conveyor and hoist, pneumatic roll breaker and ejector,
3-stop holding table, together with all motors, drives, pumps, stock preparation
facilities, motor generator sets, compressors, cranes, hoists, process piping,
process wiring, spare parts, furniture and apparatus (including wire stringing
device, skids, tables, hand tools, lockers, storage racks, miscellaneous
equipment), all being located in No. 3 Machine Building; also spare parts and
apparatus and equipment auxiliary to and supporting the operation of No. 3
Machine wherever the same be situated.

The following spare parts:

Reducers                                 Storage Reference Number
--------                                 ------------------------

1 - #3 Rectifier Roll                    443-29-040

1 - Head Box Rectifier Roll 1 & 2        ###-##-####

1 - #3 Saveall  Repulper                 443-92-020

1 - Suction  Couch Roll                  443-92-052

1 - Top & Bottom Cal Roll Dr.            443--92--053

1 - Reel Drive                           443-92-052

1 - Wire Turning Roll                    443-92-180

1 - Suction Press and Top Press          443--92--057

1 - Bottom  Press  Roll 1st              443-92-058

1 -  Calendar Drive                      443-80-030

Pumps

Semens 505 Vac. Pump

Fans

Wet End Hood Exhaust                     853-26-075

<PAGE>

Miscellaneous

Rotating Ass. For Fan Pump

Gears to rebuild Yankee Dryer gearbox

H-3 Core Cutter

Roll Wrap equipment

Spare Yankee Motor  1250HP/900 RPM Motor #1347

8 - Modified 2300 volt starter

1 - South End Motor Generator set.

Rolls

1 - Yankee dryer

1 - Couch roll - 309/30" dia.

1 - Pressure Roll Top - 301/40" dia.

2 - Pressure Roll Bottom - 301 and 304/40" dia.

2 - Combine Cal Plane - 316 and 323/27.672 dia.

1 - #1 Wire Roll Hand - 31003/20" dia.

1 - #2 Wire, Roll Stretch - 31101/20" dia.

3 - Felt Rolls 33015, 33018 and 33103/18.750 dia.

1 - Mt. Hope Winder 7" dia.

Rolling Stock

1 - #6 Grab Truck

1 - #8 Tow Tractor

1 - #11 Tow Tractor

24 - Roll Carts (makes two trains)

1 - #3 Lift Truck

<PAGE>

                                    EXHIBIT B

                                 Leased Property

<PAGE>

                                    EXHIBIT B

All of that real property together with the tenements, hereditiments and
appurtenances situate, lying, and being in Columbia County, State of Oregon,
dounded and particularly described as follows, to-wit;

     Parcel: A parcel of land in the Thomas H. Smith Donation Land Claim No. 40
     in Sections 9 and 10, Lot 7 of said Section 9, and Lots 1 and 2 of said
     Section 10, all in Township 4 North. Range 1 West of Willamette Meridian,
     Columbia County, Oregon, more particularly described as follows:

     Beginning at a point in said Lot 7 which Is 1425.31 feet distant South 190
     17' 25" West from the Southwesterly corner of Block 70 in the City St.
     Helens, Columbia County, Oregon; thence South 68(degrees) 51' East for a
     distance of 174.09 feet to the most Southeasterly corner of Terrace Street
     in Hawley Addition to St. Helens, Oregon; thence North 29(degrees) 00' East
     along the most Easterly line of Terrace Street for a distance of 356.14
     feet to the most Easterly corner of said Terrace Street: thence North
     61(degrees) 00' West along the Northeasterly line of said Terrace Street
     for a distance of 420.0 feet to its intersection with the Northeasterly
     prolongation of the Northwesterly line of Lot 9 of Block 12, said Hawley
     Addition, said point of intersection being marked with an iron pipe; thence
     South 68(degrees) 51' East for a distance of 1,193.31 feet to a point
     marked by an iron pipe on the Northwesterly Line of the right of way of
     Spokane, Portland and Seattle Railway Company: thence South 21(degrees) 09'
     West along said Northwesterly right of way Line for a distance of 310.10
     feet to a point which is 50 feet distant North 68(degrees) 51' West from a
     point on the center line of Spokane, Portland and Seattle Railway Company's
     railroad, which is located by beginning at the point of the intersection of
     the center line of Columbia Street with the Southerly line of Cowlitz
     Street in said City of St. Helens and running thence South 16(degrees) 57'
     East for a distance of 670 feet to the point of beginning of a 1,910.08
     foot radius curve to the right, Southerly along said curve through a
     central angle of 38(degrees) 06' for a distance of 1,270 feet to the end of
     said curve, and South 21(degrees) 09' West tangent to said curve for a
     distance of 2,827.8 feet thence South 68(degrees) 51' East for a distance
     of 25 feet to a point 25 feet distant Northwesterly from, when measured at
     right angles to, said railroad center line; thence South 21(degrees) 09'
     West parallel to said center line for a distance of 1,671.5 feet to a
     point; then South 68(degrees) 51' East a distance of 25 feet to the center
     line of the Spokane, Portland and Seattle Railway Company right way; thence
     Southwesterly along the center line of the right of way of Spokane,
     Portland and Seattle Railway Company to its intersection with a line
     bearing South 68(degrees) 51' East from a point which is 2,191.00 feet
     distant South 21(degrees) 09' West from the point of beginning; thence
     North 68(degrees) 5' West to said point, which is 2191.00 feet distant
     South 21(degrees) 09' West from the point of beginning; thence continuing
     North 68(degrees) 51' West (or a distance of 1,093.3 feet to a point in the
     center of Milton Creek, thence Northerly along the center of said Milton
     Creek as follows: North 42(degrees) 15' East for a distance of 122.4 feet;
     North 61(degrees) East for a distance of 292.6 feet; North 42(degrees) 47'
     East for a distance of

<PAGE>

                                       -2-

     213.6 feet; North 17(degrees) 57' West for a distance of 587.0 feet: North
     37 (degrees) 22' East for a distance of 210.0 feet; North 4 (degrees) 22'
     East for a distance of 225.0 feet, and North 60 (degrees) 37' West for a
     distance of 119.1 feet to the point of intersection with the Southwesterly
     prolongation of the center line of Fir Street in said Hawley Addition:
     thence North 29(degrees) 00' East along said Southwesterly prolongation for
     a distance of 23.5 feet to a point on the South line of Brook Street in
     said Hawley Addition: thence Southeasterly along said South line of Brook
     Street as follows: South 61(degrees) 00' East a distance of 490.0 feet;
     South 29(degrees) 00' West for a distance of 50.0 feet, and South
     61(degrees) 00' East for a distance of 799.02 feet to a point which is
     969.16 feet distant South 21(degrees) 09' West from the point of beginning:
     thence North 21(degrees) 09' East along the Southeasterly line of said
     Hawley Addition for a distance of 969.16 feet to the point of beginning,
     EXCEPT that portion lying within the bounds of the Spokane, Portland and
     Seattle Railway Company right of way.

     Parcel 2: A parcel of land in the Thomas H. Smith Donation Land Claim No.
     40 in Sections 9 and 10 and Lots 1 and 2 of said Section 10, all in
     Township 4 North, Range 1 West of the Willamette Meridian, Columbia
     County, Oregon, more particularly described as follows:

     Beginning at a point in said Lot 1 which Is 2,108.59 feet distant South and
     413.1 feet distant East from the Southwesterly corner of Block 70 of the
     City of St. Helens, Columbia County, Oregon; thence North 68(degrees) 51'
     West for a distance of 25 feet to the true point of beginning of this
     description, said true point of beginning being also a point 25 feet
     distant South 68(degrees) 51' East from the center line of the railroad of
     Spokane, Portland and Seattle Railway Company at a point which is located
     by beginning at the point of intersection of the center line of Columbia
     Street with the Southerly line of Cowlitz Street in said City of St. Helens
     and running thence South 16(degrees) 57' East for a distance of 670 feet to
     the point of beginning of a 1,910.08 foot radius curve to the right; thence
     Southerly along said curve through a central angle of 38(degrees) 06' for a
     distance of 1270 feet to the end of said curve, the end of said curve being
     hereinafter referred to as "Point A', and thence South 21(degrees) 09' West
     tangent to said curve for a distance of 3,317.7 feet; thence from the true
     point of beginning South 21(degrees) 09' West parallel with said railroad
     center line for a distance of 1,171.5 feet to a point; thence North
     68(degrees) 51' West a distance of 25 feet to the center line of the
     Spokane, Portland and Seattle Railway Company right of way; thence
     Southwesterly along the center line of the right of way of Spokane,
     Portland and Seattle Railway Company to its intersection with a line
     bearing South 68(degrees) 51' East from a point, hereinafter referred to as
     "Point B", which is 2,191.00 feet distant South 21(degrees) 09' West from &
     point which is 1425.1 feet distant South 19(degrees) 17'25" West from the
     Southwesterly corner of said Block 70 of the City of St. Helens; thence
     South 68(degrees) 51' East to a point on the low water line on the West
     bank of the Willamette Slough which is 1208.20 feet distant from Point B;
     thence Northerly along said low water line as follows: North 29(degrees)
     53' East for a distance of 505.87 feet, thence North 30(degrees) 21' East
     for a distance of 700 feet, and thence North 27(degrees) 31' East for a
     distance of 603.70 feet to a point 389 feet distant South 68(degrees) 51'
     East from the true point of beginning thence South 68(degrees) 51' East for
     a distance of 206 feet to a point; thence North 3(degrees) 42' East for a
     distance of 450.3 feet to a point on the low water line or said West bank;
     thence North 17(degrees) 20' East along said low water line for a distance
     of 366.8 feet; thence * North 68(degrees) 51' West for a distance of 425.5
     feet to a point marked by an iron pipe on the Southeasterly line of the
     right way of Spokane, Portland and Seattle Railway Company which is 50 feet
     distant South 68(degrees) 51' East from the center line of the railroad of
     Spokane, Portland and Seattle Railway Company at a point which is 2,517.7
     feet distant South 21(degrees) 09' West from Point A; thence South
     21(degrees) 09' West along said Southwesterly right of way line for a
     distance of 100.0 feet; thence North 68(degrees) 51' West distance or 25
     feet; thence South 21(degrees) 09' West parallel with center ??? said
     railroad for a distance of 700 feet to the true point of beginning ????
     that portion lying within the bounds of the Spokane, Portland and Seattle
     Railway Company right of way.

<PAGE>

                                       -3-

     Parcel 3: Blocks 4, 10, 11, 12 and 13, Hawley Addition to St. Helens,
     Columbia County, Oregon.

     Parcel 4: Lots 1, 2, 3, 4, 5, 6, 7, and 8, Block 7, Hawley Addition to St.
     Helens, Columbia County, Oregon.

     Parcel 5: All tide and overflow lands fronting, abutting, and lying
     Easterly of Parcel 2 hereinabove described.

     Parcel 6: All booms, wharfs, docks, bridges, buildings, structures,
     conveyors, hoists sewer and effluent discharge pipes, water mains and
     suction pipes, conduits, conductors, wires, and all appurtenances thereto
     belonging, owned by the Grantor herein lying and being Easterly of the
     upland portions of Parcel 2 hereinabove described.

     Parcel 7: All waterfront, riparian, boom, dock, water appropriation, and
     sewage or other discharge rights and privileges with respect to the river
     frontage lying and being Easterly of the upland portion of Parcel 2
     hereinabove described.

     Parcel 8: All walk or driveways, conveyors, sewer and effluent pipes,
     culverts, water mains, conduits, conductors, wins, trackage, and all
     appurtenances thereto belonging, under, upon, over, and across the railroad
     right of way lying between Parcel 1 and Parcel 2 hereinabove described.

     Parcel 9: All rights of the Grantor hereinunder that certain indenture
     dated August 10, 1931 and recorded May 7, 1932, in Book 54, at page 260,
     Deed Records of said Columbia County, between Chas. R. McCormick Lumber Co.
     of Delaware and St. Helens Pulp and Paper Company.

     Parcel 10: All and any other property, rights, licenses, privileges,
     permits, easements, and rights of way, not enumerated above, acquired by
     the Grantor herein or its predecessors in interest, in connection with the
     use, ownership, or possession of the lands described in Parcel 1 and Parcel
     2 hereinabove a described.

Excepting therefrom the following described parcels of property:

<PAGE>

                                      -4-

Parcel 1

     Beginning at the intersection of the South line of the H.M. Knighton
     Donation Land Claim with the Southerly extension of the West line of Block
     70, St. Helens, as per plat on file and of record in the Clerk's office of
     Columbia County, Oregon in Section 1, Township 4 North, Range 1 West,
     Willamette Meridian, Columbia County, Oregon, said point being the
     Northwest corner of the first parcel described in the City of St. Helens
     tract in Deed Book 177 at page 23. Deed Records of Columbia County Oregon:
     thence along the Westerly line of said City of St. Helens tract South
     53(degrees) 53' East a distance of 451.03 feet: thence South 8(degrees) 19'
     West a distance of 590.38 feet to the South line of Section 3, a distance
     of 219.26 feet; thence leaving said Westerly line of the City of St. Helens
     tract North 45(degrees)07'53" West a distance of 79.28 feet; thence North
     36(degrees)41'53" West a distance of 322.77 feet; thence North
     28(degrees)51'40" East a distance of 220.50 feet; thence North
     29(degrees)12'47" East a distance of 119.37 feet to a point on the
     Southerly extension of the East line of Block 85, St. Helens; thence North
     16(degrees)57'23" West along said Southerly extension of the East line of
     Block 85 a distance of 208.12 feet to said South line of said H.M. Knighton
     Donation Land Claim; thence North 71(degrees)30' East along said South line
     of the H.M. Knighton Donation Land Claim a distance of 80.03 feet to the
     True Point of Beginning. CONTAINING 6.86 acres more or less.

     Subject to and excepting all easements, reservations, restrictions and
mineral rights of record.

     This conveyance shall be subject to Grantor's right of reverter as follows:

     If the property is determined by the Grantee or any successor fire
protection provider to be excess property or is not used for fire related
purposes for a period of three (3) years, and there are no written development
plans to use or continue to use the property for a fire training site or other
fire prevention or

Bargain and Sale Deed with Right of Reverter - 1

<PAGE>

                                      -5-

Parcel 2

     Beginning at the point of intersection with the Northwesterly right-of-way
     line of the S.P. & S. Railroad and the Northwesterly line of Government Lot
     4 in Section 3, Township 4 North, Range 1 West of the Willamette Meridian,
     Columbia County, Oregon; thence Southwesterly along the Northwesterly line
     of said Government Lot 4 and Northwesterly line of Government Lot 6 of said
     Section 3, 1,352.93 feet to the intersection of the prolongation
     Southeasterly of the Northeasterly right-of-way line of 9th Street and the
     Northwesterly line of said Government Lot 6; thence South 55(degrees)59'
     East, 451.03 feet; thence South 8(degrees)19' West 593.09 feet to the South
     line of said Section 3; thence West along the South line of said Section 3,
     300 feet; thence South 210091 West, 226.63 feet; thence South
     68(degrees)51' East, 750 feet to the Northwesterly right-of-way line of
     said S.P. & S. Railroad; thence North 21(degrees)09' East along the
     Northwesterly right-of-way line of said S.P. & S. Railroad right-of-way,
     1,876.84 feet to the point of beginning; and

     Part of Lot 1, Section 10, Township 4 North, Range 1 West of the Willamette
     Meridian, Columbia County, Oregon described as follows:

     Beginning at the Northeast corner of Tract 9-2 conveyed to St. Helens Paper
     Corporation, a Delaware corporation, by deed recorded May 7, 1964 in Book
     154, page 896, Deed Records of Columbia County, Oregon; thence South
     21(degrees)09' West, 100.86 feet; thence South 41(degrees)42' West, 128.16
     feet; thence South 21(degrees)09' West 84 feet; thence North 68(degrees)51'
     West, 415 feet; thence North 21(degrees)09' East 304.86 feet to the
     Northwesterly line of said Tract 9-2; thence South 68(degrees)51' East
     along the Northwesterly line of said Tract 9-2, 460 feet to the point of
     beginning

Subject to:

     1.   Right, title and interest of the State of Oregon in and to that
          portion of the above premises lying between ordinary high and low
          water.

     2.   The rights of fishing, navigation and commerce in the State of Oregon,
          the Federal Government and the public in and to that portion thereof
          lying below the ordinary high water mark of the Columbia River.

     3.   A slope easement from St. Helens Pulp and Paper Co., an Oregon
          corporation, to Chas. R. McCormick Lumber Co., of Delaware, a Delaware
          corporation, recorded May 7, 1932 in book 54, page 260, Deed Records
          of Columbia County, Oregon.

<PAGE>

                                   FLOOR PLAN

                               [GRAPHIC OMITTED]

<PAGE>

                                                                        11/12/92
                                                                     7:00 am EST

                                   EXHIBIT C

                COSTING/BILLING METHOD AT ST. HELENS PAPER MILL

1.   All costs are initially accumulated by responsibility/ department area
     and by specific accounts within those areas. Costs charged to #3 paper
     machine will begin with the effective date of this Agreement, beginning
     with the start of day shift at 7:00 a.m., with the first and last month
     charges to be on a pro rata basis determined as a percentage of calendar
     days for the month which the Agreement is in force except for those charges
     which can be specifically determined in which event the actual charges will
     be used.

     All costs will be exclusively designated as direct, indirect, capital, or
     excluded, as defined in this exhibit. No indirect or excluded cost will
     become a direct cost unless American Tissue consents thereto. American
     Tissue's consent must be first secured for any new cost account which Boise
     Cascade shall desire to charge directly to the #3 paper machine, which
     consent shall not be unreasonably withheld.

2.   Direct costs are defined as those costs which can be directly and
     exclusively attributed to #3 paper machine and the Real Property, as
     defined in this Agreement. Those costs include pulp and other direct costs.

     A.   Pulp - See exhibit E for price formula. Volume consumed by #3 paper
          machine to be calculated by scale weight of paper produced, less
          weight for finishing materials, less weight of additives retained in
          the sheet, less moisture content in finished paper, plus 2% paper
          machine sewer loss, divided by .90 to convert to air dry tons of pulp
          consumed less the air dry weight (determined by mill scales) of pulp
          and/or converting waste furnished by American Tissue and used in the
          #3 paper machine. The split between long fiber and blend is to be
          determined by stock preparation records. Additive retention and
          moisture are determined by instrument measurement and tests. Finishing
          materials will be calculated monthly according to finishing and/or #3
          paper machine department records, purchases and physical inventory.

          Boise Cascade believes this to be the most accurate method to
          determine pulp volume. If American Tissue desires to use a more
          accurate alternative method to calculate and/or measure pulp volume,
          including any or all of the components used to calculate pulp volume,
          including but not limited to sewer loss

<PAGE>

          determination, it will be used if Boise Cascade consents, which
          consent will not be unreasonably withheld, and provided American
          Tissue agrees to pay any additional costs associated, with using such
          methods.

     B.   Other Direct Costs - in addition to pulp, these are all costs directly
          and exclusively attributable to #3 paper machine and will be directly
          charged to the operations of #3 Paper Machine. Such costs are:

     o    Labor accounts, including load, which are directly and exclusively
          attributable to the #3 paper machine.

     o    Maintenance labor for hours performed on #3 paper machine at a charge
          out rate that includes an appropriate share of unallocated labor,
          material and maintenance department costs which are not directly
          charged to other departments.

     o    Operating supplies - clothinq, roll covers, chemicals, lubricants and
          other supplies.

     o    Maintenance materials - as directly charged.

     o    Contract maintenance - as directly charged.

     o    Professional fees - external technical support, including programming,
          if necessary.

     o    Other expenses - memberships, publications, travel for crew and staff
          of machine and related expenses, meetings.

     Included in direct costs will be direct consumptions of:

     o    Dyes for H-3 and chemicals, per stock preparation records.

     o    Fuel (natural gas or propane) - metered x mill rate.

     o    Steam - metered steam x cost/1000 lbs. as determined as average power
          boiler steam by mill records.

     o    Power - metered x mill rate. Should Boise Cascade elect to construct
          an electrical power generation facility at or for the St. Helens mill,
          power will be charged to the #3 paper machine at the rate applicable
          to continuing external power purchaser at the mill. If there are no
          external purchases the rate will be set at the large industrial
          contract rate of the local utility.

                                      -2-
<PAGE>

          American Tissue may purchase power from outside sources to the extent
          permitted under Boise Cascade's then current contractual arrangements.

          American Tissue is responsible to provide production and product
          delivery scheduling services and will bear the costs of such services
          as well as any outbound freight and any other costs incurred after
          delivery of product to the carrier at the mill loading dock.

3.   Indirect Costs-These are costs which cannot be directly attributed to #3
     paper machine but are costs which #3 paper machine will share with other
     mill areas. These indirect costs are for the departments and activities as
     listed in exhibit 2A as defined by example in the St. Helens
     mill responsibility statements, examples of which are attached as exhibit
     2B.

     #3 paper machine charges for indirect costs will be billed monthly at a
     rate of 13.8% for those departments involved with activities directly
     associated with only the paper machine operations in the mill and not
     exclusively associated with any single machine, and are: stock preparation,
     paper machine general, finishing, warehousing, and shipping as listed in
     exhibits 2A and 2B. These indirect costs shall be for total operating
     costs, except for stock preparation indirect charges, which shall be only
     for costs which are not variable, as variable stock preparation costs will
     be direct charged to the machines. Should American Tissue choose to provide
     facilities to allow direct charges for finishing, warehousing, and/or
     shipping, the allocated indirect costs for such specific activities which
     become direct will be eliminated and replaced by direct charges.

     #3 paper machine charges for indirect costs will be billed monthly at a
     rate of 6.0% for those departments and activities associated with general
     mill operations, but not directly attributable to any specific production
     area. This 6.0% allocation applies to all departments and activities as
     listed in exhibits 2A and 2B, except those which are identified in the
     preceding paragraph as indirect costs associated with only the paper
     machine operations. This includes total costs as defined by exhibit 2B
     except for burden; no depreciation will be charged for existing facilities
     in place as of the date of this Agreement. Depreciation charges for new
     capital assets is defined in the third paragraph of item 4 below. All real
     estate taxes shall include any real estate taxes, including taxes related
     to the Paper Machine whether assessed as real property or personal
     property, as billed to either or both American Tissue and Boise cascade for
     assets at the St. Helen's site and at all times be deemed indirect costs
     with the 6% rate applicable thereto. If Boise Cascade shall add any new
     facility which causes a definable material, increase in indirect costs, the
     percent of indirect costs

                                      -3-
<PAGE>

     payable by American Tissue will be appropriately adjusted. This shall not
     apply to modifications or improvements of existing facilities.

4.   Capital Costs - The owners of the #3 paper machine will be directly
     responsible for any capital improvements or capital repairs to the #3 paper
     machine, the building which houses the #3 paper machine, and any equipment
     or facility modifications which are directly attributable to the #3 paper
     machine. Boise Cascade shall provide mill utility services including steam,
     power, water, air, and pollution control, to be available at required
     levels for the #3 paper machine in its current configuration as of the date
     of this Agreement. Boise Cascade shall make reasonable efforts to supply
     additional services as may be requested by American Tissue in connection
     with any capital modification or otherwise, but any capital costs required
     to provide such additional services shall be the responsibility of American
     Tissue as a direct cost. Any capital repairs or improvements made directly
     to the #3 paper machine shall be the property of American Tissue.

     Boise Cascade may, but shall not be obligated to, provide engineering
     support for feasibility studies, capital estimates, or project management
     as requested by American Tissue. These services will be charged directly to
     American Tissue, with Boise Cascade employee time billed at a rate
     equivalent to that charged to its own capital projects Any capital
     estimates performed by Boise Cascade are not warranted as to their
     accuracy.

     Depreciation for capital costs incurred subsequent to the date of this
     Agreement for any of the departments or activities as described in Exhibit
     2A will be added to the cost of such department or activity and charged to
     the #3 paper machine as described in Exhibit C, paragraph 3. The capital
     costs will not otherwise be passed on to American Tissue.

5.   Excluded Costs-Excluded costs are for departments that are directly and
     exclusively associated with the pulp mill, or the fine paper machines or
     new facilities which do not directly or indirectly benefit #3 paper
     machine, or which do not otherwise directly or indirectly benefit the
     maintenance, use and operation of the #3 paper machine. Excluded costs will
     not be charged to #3 paper machine.

     Boise Cascade makes no representation, warranty or covenant that the costs
     described in Exhibit 2A and set forth in the responsibility statements in
     Exhibit 2B bear any relationship to costs that may be incurred in the
     future. The costs set forth in the responsibility statement are for
     illustrative purposes only. In no event will any cost charged to American
     Tissue be duplicative.

                                      -4-
<PAGE>

                                   EXHIBIT 2A
                 COSTING/BILLING METHOD AT ST. HELENS PAPER MILL

The description of costs and services as described in this exhibit are for
illustrative purposes only and are not intended to completely encompass or
describe each charge to be allocated to the applicable area. Other miscellaneous
charges as generally described in exhibit 2B are accumulated in the department
cost centers and will be allocated to the #3 paper machine as indirect costs at
the appropriate percentage as defined for that cost center in each case
consistent with the provisions of Exhibit C.

AREA/COST CENTER                   SERVICE

Stock Prep (13.8%)                 Preparation of pulp to headbox, addition of
                                   necessary chemicals/additives and proper
                                   consistency, as well as color dyes as
                                   required.

PM General (13.8%)                 Costs associated with the general operations
                                   of the paper machine, but not specific to any
                                   one machine.

Roll                               Preparation of rolls for shipping, wrapping,
Finishing (13.8%)                  labeling.

Shipping (13.8%)                   Storage and handling, as well as placing in
                                   truck/pig (i.e. TOFC or COFC) for shipment of
                                   product.

Power                              Electrical demand, substation lease,
Distribution (6.0%)                maintenance costs, and miscellaneous costs.
                                   Variable power costs will be metered and
                                   direct billed to #3 paper machine as defined
                                   in Exhibit C.

Pollution (6.0%)                   Treatment of paper machine waste water and
                                   associated solids load from machine services.
                                   Landfill operating and maintenance costs.

Technical (6.0%)                   Costs for managing waste systems, air, water,
                                   and landfill. Testing, monitoring and general
                                   compliance to control orders. Analytical
                                   support for mill process control and
                                   improvements. Technical issues.

                                      -5-
<PAGE>

AREA/COST CENTER                   SERVICE

Quality
Services (6.0%)                    Testing of product qualities to standards.

Engineering                        Capital spending management, management of
Services/ Energy                   mill processes and physical assets.
Management (6.0%)                  Recommendations for improvements,
                                   replacements and upgrades to facilities as
                                   required. Project management. Includes
                                   operating expenses, whereas costs for capital
                                   projects are directly charged to the capital
                                   cost of such projects.

Purchasing/ Stores                 Provide the mill with all goods and services
(6.0%)                             as necessary to operate, including raw
                                   materials, maintenance materials, and
                                   supplies.

Yard (6.0%)                        General mill appearance, cleanup, and general
                                   work around mill, but not for any specific
                                   department. Includes maintenance of grounds,
                                   roads, and other general site areas.

Human                              Hiring, firing, personnel management, fringe
Resources (6.0%)                   benefits management, labor negotiations,
                                   communications management, recruiting,
                                   training, safety, employee selections,
                                   workmen's compensation

Controller (6.0%)                  Processing of payroll, accounts payable,
                                   budgets, financial reporting.

Data                               Financial computer, supplies and maintenance
Processing (6.0%)                  for the IBM AS 400.

Mill                               Loaded administrative salaries, engineering
Manager/Salaried                   studies, mill managers office expenses,
SG&A(6.0%)                         regulatory fines.

Process                            Staff costs and outside consultant/contractor
Control (6.0%)                     costs to maintain and improve mill process
                                   controls.

Taxes (6.0%)                       Property taxes

Insurance (6.0%)                   Boiler machinery, fire, accident, liability,
                                   and business interruption. Specific
                                   provisions for insurance coverage are defined
                                   in Exhibit F.

Operating                          Loaded salaries for operating staff.
Salaries (6.0%)

                                      -6-
<PAGE>

                                    EXHIBIT E

1.   QUANTITY. Subject to the terms and conditions hereof:

     (a)  Each calendar year commencing with 1993, American Tissue is required
          to purchase a minimum of 35,000 short air dry tons ("SADT") of Boise
          Cascade's St. Helens mill's pulp per year ("Pulp") and a minimum of
          2,500 SADT per calendar month.

     (b)  Each calendar year commencing with 1993, Boise Cascade is required to
          have available to American Tissue up to 45,000 SADT of Pulp and a
          minimum of 4,000 SADT available in any calendar month.

     (c)  Boise Cascade is required to have available to American Tissue no less
          than 20 tons per day of a pulp product generally known as "Blend" (or
          "Blended Pulp") which is produced from a combination of wood chips and
          sawdust. Amounts of Blend over 20 tons will be provided to American
          Tissue only if available.

     (d)  From the date of this Agreement through December 31, 1992, Boise
          Cascade will sell and American Tissue will buy an amount of Pulp equal
          to volumes and blend fibre mix consistent with the above amounts,
          pro-rated, and also consistent with orders that Boise Cascade now has.

2.   PULP SPECIFICATIONS. St. Helens pulp is provided in two forms, as "long
     fiber" and "Blend". St. Helens Pulp specifications are as follows:

     Brightness -- 84 GE, minimum 81 / for "Blend" and "long fiber"

     Strength - 1% CED Viscosity
     ---------------------------
     "Long Fiber" --      130+ average; minimum 70
     "Blend"--            30+ average, minimum 20

     Dirt
     ----
     Shives -- "long fiber" as 10 ppm maximum
               "Blend" -- 10 ppm maximum

     Specks -- "long fiber" -- 15 ppm maximum
               "Blend" -- 30 ppm maximum

3.   PRICE.

     (a)  The "long fiber" pulp price shall be calculated by taking the weighted
          average U.S. and Canadian selling price per SADT for Northern Softwood
          Market Pulp as produced at Boise Cascade's Wallula Wash mill for the

<PAGE>

          calendar month less any applicable freight, cash discounts, and broker
          fees, then subtracting incremental drying costs for Wallula Market
          pulp, all calculated based on the weighted average SADT cost per ton
          for that month. Incremental drying costs are defined as all steam and
          electricity used directly for pulp drying together with market pulp
          baling materials and 10% of Daily and Annual Costs per ton (a/k/a
          Fixed Costs associated with the pulp drying equipment at Wallula), as
          calculated at the Wallula mill in accordance with general mill
          accounting standards. For "blend" pulp, American Tissue shall pay to
          Boise Cascade for each ton furnished an amount equal to 90% of the
          price of "long fiber" pulp.

     (b)  Payment will be made on or before the last day of each month against
          the invoice for the immediately preceding month which shall be
          received by American Tissue no later than the 10th day of the month
          payment is due.

     (c)  Should Wallula cease U.S. and Canadian sales of pulp, the parties will
          meet to agree to a market value indicator. Should the parties be
          unable to reach agreement for any reason, each party shall select an
          arbitrator, who shall in turn between them select one more. The three
          arbitrators shall determine a pricing methodology to calculate the
          price of Pulp*. The arbitrators shall have the following minimum
          qualifications: Individuals with generally accepted expertise in the
          pulp and paper industry.

          *    such that the price to be paid by American Tissue under the new
               pricing methodology is consistent with the price that would have
               been paid had sales continued.

4.   WEIGHT AND MOISTURE

     See Exhibit C.

5.   LIABILITY

     The liability of Boise Cascade arising from delivery of Pulp which is
     defective shall be limited to the cost or replacing such Pulp to American
     Tissue, plus one-half of out-of-pocket freight costs incurred by American
     Tissue as a result of the defective Pulp, plus Direct Costs and Indirect
     Costs associated with production of tissue rejected by American Tissue's
     customers as a result of the detective pulp.

6.   QUALITY

     Boise Cascade warrants that the quality of the Pulp delivered hereunder
     will be with the Pulp specifications set forth in paragraph 2 of this
     Exhibit E and will be fit for the purpose of producing paper consistent
     with the grades and specifications heretofore produced on the No. 3 Paper
     Machine at St. Helens (see Exhibit P). THE FOREGOING

                                      -2-
<PAGE>

WARRANTY IS EXCLUSIVE AND IS IN LIEU OF ALL OTHER WARRANTIES CONCERNING THE
QUALITY OF THE PULP (WHETHER WRITTEN, ORAL, OR IMPLIED) INCLUDING WARRANTY OF
MERCHANTABILITY IN OTHER RESPECTS THAN EXPRESSLY SET FORTH ABOVE AND WARRANTY OF
FITNESS FOR A PARTICULAR PURPOSE.

                                      -3-
<PAGE>

                                    EXHIBIT F

                             Insurance Requirements

     A. Boise Cascade's Obligation to Provide Insurance. Boise Cascade shall
provide for workers' compensation insurance as required by the laws of the state
of Oregon for each employee of Boise Cascade. Boise Cascade shall maintain a
commercial general liability policy, in the amount of $2 million, with American
Tissue named as an additional insured. Boise Cascade shall maintain a fire and
extended coverage insurance policy or an all-risk insurance policy in an amount
equal to the new replacement cost of the Paper Machine and the Real Property,
which policy may, at Boise Cascade's option, be a part of a policy covering all
of Boise Cascade's property at the St. Helens mill. Proceeds from the policy (or
any policy obtained by American Tissue) with respect to loss or damage to the
Paper Machine or the Real Property shall be applied to repair, replace, or
rebuild the Paper Machine and the Real Property. The deductible portion of the
property insurance procured by Boise Cascade shall be for the account of
American Tissue, and American Tissue shall have no claim against Boise Cascade
with respect to the deductible. The deductible with respect to the Paper Machine
and the Real Property shall be no greater than $2,000,000.00 (which may be
adjusted upward by Boise Cascade from time to time consistent with its insurance
for other Mill property), except that the deductible shall be reduced to no more
than $500,000.00 with respect to the Paper Machine and Real Property at the time
that Boise Cascade shall be subordinated pursuant to Section 4 hereof; American
Tissue shall be billed as a Direct Cost for any additional premium paid by Boise
Cascade to reduce the deductible on the Paper Machine and the Real Property to
$500,000.00. If a loss occurs which affects the Paper Machine or Real Property
and the Mill, the deductible shall be prorated between Boise Cascade and
American Tissue in proportion to the loss suffered to the Mill on the one hand,
and to the Paper Machine and the Real Property on the other hand; provided that
American Tissue's proportionate share of the deductible shall not exceed the
then applicable deductible amount set forth in the preceding sentence. American
Tissue shall have the option at any time to obtain its own property insurance
with coverages reasonably acceptable to Boise Cascade and with a deductible
consistent with the previous provisions. Boise Cascade shall be given a
certificate of insurance with respect to the policy and shall be named as a loss
payee as its interests may appear. Each party waives any claim against the other
party with respect to damage or liability to the other party's property; there
shall be no subrogated claim by either party's insurance carrier against the
other party.

B. Insurance Procurement Obligations of American Tissue. American Tissue shall
provide for workers' compensation insurance as required by the laws of the state
of Oregon for each employee of American Tissue. American Tissue shall require
each contractor hired by it, and all of their respective

<PAGE>

subcontractors, to provide a full indemnity running in favor of American Tissue
and Boise Cascade to protect, indemnify, and hold American Tissue and Boise
Cascade harmless from and against any and all claims, demands, and causes of
action, including reasonable attorneys' fees of any nature whatsoever, for
injury or death of persons or loss of or damage to property occurring on the St.
Helens mill property or in any manner growing out of or connected with the
indemnifying party's work except damage or injury occasioned by the sole
negligence of Boise Cascade or American Tissue. In addition, each contract
entered into between American Tissue and a contractor and any of their
respective subcontractors with respect to any work performed on the Paper
Machine or the Real Property shall contain, in substance, provisions which are
no less favorable to Boise Cascade and American Tissue than the following
insurance provisions, and American Tissue shall provide the necessary
administrative functions to ensure the insurance provisions are complied with by
the contractors and subcontractors:

     _.0 INSURANCE.

          _.1 Contractor's Liability Insurance. During the performance of the
     Work, contractor, at its cost and expense, shall purchase and maintain the
     insurance set forth in this section. The insurance shall be purchased and
     maintained in companies reasonably acceptable to American Tissue and Boise
     Cascade and shall be primary with no right of contribution.

          _.1.1 Workers' Compensation and Employers' Liability. Workers'
     Compensation insurance shall be provided as required by the law of the
     state of Oregon. Employers' Liability insurance shall be provided in
     amounts not less than $1,000,000 each accident for bodily injury by
     accident, $1,000,000 policy limit for bodily injury by disease, and
     $1,000,000 for each employee for bodily injury by disease.

          _.1.2 General Liability. Contractor shall maintain a Commercial
     General Liability (Occurrence) policy, which policy shall include coverage
     for premises and operations, products and completed operations, contractual
     liability, broad form property damage, including completed operations,
     explosion, collapse and underground hazards, and personal injury liability.
     The policy shall have a combined single limit for bodily injury and
     property damage of $5,000,000 each occurrence; $5,000,000 for personal
     injury liability; $5,000,000 aggregate for products/completed operations;
     and $5,000,000 general aggregate.

          .1.3 Automobile Liability, contractor shall maintain an Automobile
     Liability policy with a combined single limit for bodily injury and
     property damage of not less than $5,000,000 for each accident. The policy
     shall cover all owned, hired, and nonowned automobiles used in the
     performance of the Work and shall include coverage for Automobile
     Contractual Liability.

                                      -2-
<PAGE>

     _.2 Insurance Certificate. Contractor shall not be permitted to begin Work
without first delivering to American Tissue and Boise Cascade certificates from
Contractor's insurers evidencing the above-referenced coverage and:

          _2.1 Except for the coverage provided pursuant to subsection -.1.1,
     shall name American Tissue and Boise Cascade, and their respective
     subsidiaries, affiliates, directors, officers, and employees as additional
     insureds with respect to liability or any claims of liability arising out
     of the Work performed by contractor that affords the additional insureds
     the same coverage as if the additional insureds were the named insured,
     including coverage for the joint or sole negligence of the additional
     insureds. The parties intend this provision to be a waiver of immunity
     under any applicable Workers' Compensation laws to the extent permitted by
     law;

          _.2.2 shall provide on its face that the policies it represents will
     not be terminated, amended, or allowed to expire without 30 days' prior
     written notice to American Tissue and Boise Cascade; and

          _.2.3 Shall provide on its face that the policies it represents
     contain a severability of interests clause, generally providing, "the
     insurance afforded applies separately to each insured against whom claim is
     made or suit is brought, except with respect to the limits of the company's
     liability."

     _.3 Contractor's Property Insurance. During the performance of the Work,
Contractor shall procure and maintain fire and extended coverage property damage
insurance covering the full insurable value of all of the tools and equipment
used in the performance of the Work, whether located at the site or at some
other location. Contractor shall also require its Subcontractors to carry such
insurance.

     _.4 Deductibles. Contractor may purchase the above required insurance
policies with such reasonable deductibles as it may elect; provided that losses
not covered by reason of such deductible shall be for the account of Contractor.

     _.5 Parties' Waiver of Insured Claims. Contractor waives any and all rights
that Contractor might have against American Tissue or Boise Cascade to recover
all or part of any loss or damage insured or insurable by the insurance policies
carried or required to be carried by Contractor. Contractor shall require
Subcontractors and sub-subcontractors to provide similar waivers each in favor
of all other parties enumerated in this subsection _.5.

     If American Tissue shall pert on any work on the Paper Machine or the Real
Property, American Tissue shall have the same obligations with respect to
indemnity and insurance

                                      -3-
<PAGE>

(which insurance shall state that it is primary to any insurance provided by
Boise Cascade) as imposed on a Contractor pursuant to this Exhibit F. Boise
Cascade may increase the insurance amounts required from time to time to adjust
for inflation.

                                      -4-
<PAGE>

                                   EXHIBIT G

                              WAREHOUSE SITE LEASE

     THIS WAREHOUSE SITE LEASE ("Lease") is made and entered into by and between
BOISE CASCADE CORPORATION, a Delaware corporation ("Lessor"), and AMERICAN
TISSUE MILLS OF OREGON, INC., a New York corporation ("Lessee")

                                   WITNESSETH:

     WHEREAS, Lessor and Lessee have previously entered into an Agreement dated
November 23, 1992, ("Main Agreement") regarding the No. 3 Paper Machine located
at the St. Helens, Oregon, pulp and paper mill operated by Lessor; and

     WHEREAS, Lessor is the owner of certain real property located in Columbia
County, state of Oregon; and

     WHEREAS, Lessee has exercised its option in accordance with Section 28 of
the Main Agreement to lease the Premises (as defined below).

     NOW, THEREFORE, in consideration of the mutual covenants and conditions set
forth herein, the parties agree as follows:

     1. Premises. Lessor hereby leases to Lessee and Lessee hereby hires from
Lessor those certain premises located in Columbia County, Oregon, more
particularly described on Exhibit 1 attached hereto and by this reference made a
part hereof ("Premises").

     2. Main Agreement. This Lease shall be construed consistently with the
terms and conditions of the Main Agreement, certain of which are referred to
herein. Capitalized terms not

<PAGE>

defined herein shall have the same meanings as set forth in the Main Agreement.

     3. Term. The term of this Lease shall be for a period commencing the day
and year determined pursuant to Section 28 of the vain Agreement and terminating
on the date of expiration or earlier termination of the Main Agreement.

     4. Rental. During the ten of this Lease, Lessee shall pay to Lessor the sum
of $10.00 per month as rental for the Premises, said payments to be made monthly
on the 15th day of each month during the term of this Lease. Additionally, all
Direct Costs and Capital Costs attributable to the use, operation, and
maintenance of the Premises and any improvements thereon shall be paid to Lessor
by Lessee subject to and in accordance with the applicable tens of the Main
Agreement.

     5. Use and Maintenance of Premises. Lessor acknowledges that Lessee intends
to utilize the Premises to build and maintain a storage, shipping and/or
finishing facility and offices incidental thereto and Lessor hereby consents to
such use by Lessee, subject to the terms and conditions hereinafter set forth.
The Premises shall not be used for any other purpose whatsoever. Lessee shall
not commit, or suffer to be committed, any waste upon the Premises, nor allow or
cause said Premises to be used for any unlawful purpose. The use, operation and
maintenance of the Premises shall be subject to and in accordance with the
applicable terms of the Main Agreement. Lessee shall be solely responsible for
the cost and expense of all repairs required, both structural and nonstructural,
and for the

                                      -2-
<PAGE>

maintenance of the buildings or other improvements now on or hereafter placed on
the Premises covered by this Lease (collectively, the "Building"). Additionally,
Lessee shall remove and relocate the buildings, underground utilities, and other
improvements existing on the Premises as of the date of the Main Agreement to
the extent required and shall be responsible for all costs and expenses related
thereto. Any building and other improvements made to the Premises after the date
of the Main Agreement shall be removed by Lessor, at Lessor's sole cost and
expense, at or about the date of commencement of this Lease. Additionally, all
repairs, maintenance, and improvements to the Building shall be scheduled so as
to minimize disruption to Lessor's operations.

     6. Condition of Premises. Lessee hereby acknowledges that it has inspected
the Premises, knows the condition thereof, and is entering into this Lease for
the occupancy of the Premises with full knowledge of the condition of the
Premises. Except as otherwise set forth herein, Lessor makes no further warranty
or representation as to the condition of the Premises or their fitness for use
by Lessee. Lessee shall be responsible for and shall obtain all permits and
licenses required for its use of the Premises and construction of the Building.

     7. Representations. Lessor and Lessee acknowledge that the applicable
representations and covenants contained in subsections 5(d) and 5(e) of the Main
Agreement shall apply with equal force to the Premises and this Lease and are
specifically incorporated herein by reference.

                                      -3-
<PAGE>

     8. Laws and Regulations. Lessee shall comply with all federal, state, and
local laws, rules, and regulations relating to the use and occupancy of the
Premises and construction of the Building.

     9. Liens and Encumbrances. Lessee shall not take any affirmative action to
create or suffer any lien or encumbrance to remain against the Premises or the
Building undischarged as of record by bonding or otherwise for a period in
excess of 30 days following Lessee's receipt of notice of any such lien or
encumbrance.

     10. Utilities. Lessee shall assume and pay for the installation and hookup
of all utilities and all utility services provided to the Building. Lessee shall
be responsible for any and all costs associated with the use of the Building,
including any costs for reconnecting or rerouting any utilities required as a
result of Lessee's use of the Building.

     11. Insurance. The applicable insurance provisions of the Main Agreement
relating to the Real Property shall apply to this Lease; provided however,
Lessee shall, at all times during the term of this Lease, at its own cost and
expense, maintain fire and extended coverage insurance in an amount equal to new
replacement cost of the Building. Lessor shall not be liable to Lessee for any
loss or damage to Lessee's property, which is required to be covered by
insurance as provided in this Lease, and there shall be no subrogated claim by
Lessee's insurance carrier against Lessor.

                                      -4-
<PAGE>

     12. Removal of Property. At any time during the tea of this Lease, Lessee
may remove its furnishings, equipment, and other personal property from the
Premises, provided that Lessee shall reimburse Lessor for the cost of repairing
any damage to the Premises caused by such removal. Lessee shall not remove any
other property, including the warehouse or associated conveyance systems during
the term or at the termination of this Lease. All personal property not removed
from the Premises within 30 days from the date of expiration of this Lease shall
become the sole property of Lessor.

     13. Inspection. Lessor shall have the right to inspect the Premises and the
Building at all reasonable times and places for whatever purpose reasonably
deemed necessary or reasonable by Lessor.

     14. Default. In the event Lessee fails to perform any of the material
terms, provisions, or conditions contained in this Lease on its part to be
performed as and when required to be performed, Lessor shall give notice to
Lessee in writing specifying the default; and in the event Lessee shall fail,
refuse, or neglect to correct said default within 30 days from the date of
mailing of the notice of said default, then Lessor shall have the right, at its
sole option, to terminate this Lease and to expel Lessee from the Premises and
retake possession and exercise any other remedy provided by law; provided,
however, that in the event a non-monetary default cannot be cured by the
exercise of reasonable diligence within such period of 30 days, no such
termination shall be effective if Lessee shall commence,

                                      -5-
<PAGE>
within such 30-day period, the steps necessary to cure such default and shall
thereafter proceed with reasonable diligence to complete the steps necessary to
cure such default. The 30-day notice period shall be reduced to 10 days in the
case of a monetary default. Any default of a material provision of this Lease by
Lessee shall also constitute a default of the Main Agreement.

     15. Assignment. Lessee shall have the same right to assign this Lease as it
has to assign the Main Agreement.

     16. Improvements. Lessee shall not make any improvements to the Premises
without first providing Lessor with prior written notice. Any improvements to
the Premises shall be subject to Lessor's consent to detailed plans and
specifications. Such consent shall not be unreasonably withheld or delayed.
Lessee shall be responsible for obtaining all applicable permits and approvals
for any improvements. Lessor shall cooperate with Lessee in connection with
Lessee's improvement of the Premises. Any improvement by Lessee shall not
materially interfere with Lessor's access to Lessor's No. 4 Paper Machine.

     17. Easement. During the term of this Lease, Lessor hereby grants to Lessee
a right of ingress and egress to the Premises. Lessee hereby grants to Lessor a
right of ingress and egress through the Premises and the Building to the extent
same is required by Lessor's reasonable business needs. Lessee shall in no way
interfere with Lessor's unrestricted access to the No. 4 Paper Machine building
underneath the second floor conveyance

                                      -6-
<PAGE>

system which will be connecting the No. 3 Paper Machine to the Premises.

     18. Miscellaneous. The terms and conditions contained in Sections 20
through 26 and 29 through 31 of the Main Agreement are specifically incorporated
herein and made a part hereof.

                                      -7-
<PAGE>

                                   EXHIBIT 1

                                   FLOOR PLAN

                               [GRAPHIC OMITTED]

<PAGE>

Exhibit H

                                                                          [LOGO]
General Offices                                        Boise Cascade Corporation

One Jefferson Square
P.O. Box 50
Boise, Idaho 83728-0001
208/384-6161
Fax: 208/384-7298
Telex: 170 362 VIA TRT

October 20, 1992

Kenneth Koplik, president
Koplik Paper Associates
505 Park Avenue
New York City, NY 10022

Subject: Fee Arrangement

Dear Ken:

This letter will serve as our agreement with you concerning your assistance in
identifying American Tissue Corporation as a potential purchaser for Boise
Cascade Corporation's No. 3 tissue machine ("Paper Machine") located in our St.
Helens, Oregon, mill.

1.   Should American Tissue purchase the Paper Machine on or before December 31,
     1992, your fee is $250,000.

2.   The fee will be earned at closing and shall be due and payable immediately
     thereafter.

3.   Should American Tissue not purchase the Paper Machine, no fee shall be
     payable to you.

4.   If any dispute shall arise between you and Boise Cascade which results in
     litigation, the prevailing party in such litigation, as determined by the
     court, shall be entitled to an award of reasonable attorneys' fees in an
     amount determined by the court.

5.   You shall not at any time represent to any person that you have any power
     or authority to enter into a contract, agreement, lease, or other
     instrument binding or obligating Boise Cascade to sell or lease the Paper
     Machine on any terms or conditions, and nothing herein shall be construed
     to authorize or empower you to bind or obligate Boise Cascade. You shall
     not at any time represent to any person that you have any authority to
     obligate Boise Cascade to pay to any person any fee or commission on
     account of any sale or lease of the paper

<PAGE>

Page 2
October 20, 1992

     Machine procured by such person, and nothing herein shall be construed to
     authorize or empower you to so bind or obligate Boise Cascade. You shall
     not at any time make any representations or warranties with regard to the
     Paper Machine to any person, and nothing herein shall be construed to
     authorize or empower you to so bind or obligate Boise Cascade.

If the foregoing terms are acceptable to you, please sign the enclosed copy of
this letter and return it to Boise Cascade at the address set forth on this
letterhead, directed to attention.

Very truly yours,

BOISE CASCADE CORPORATION

/s/ Tom Carlile

Tom Carlile
Director, Finance & Planning
White Paper Division

CFW/CW21012A

AGREED TO AND ACCEPTED this 26th day of October, 1992.

/s/ Kenneth Koplik
--------------------
Kenneth Koplik
President

<PAGE>

                                    EXHIBIT I

                                 PROMISSORY NOTE

$4,000,000.00                                                  November 23, 1992

     American Tissue Mills of Oregon, Inc. ("Maker") promises to pay to the
order of Boise Cascade Corporation ("Payee") at Boise, Idaho, the principal
amount of $4,000,000.00, together with interest on the unpaid principal balance
hereof from time to time outstanding calculated at the annual interest rate set
forth below from November 23, 1992, until said principal amount is paid in full
as set forth below.

     For the first six months beginning on the date of this promissory note,
interest only on the principal balance hereof shall be payable by Maker monthly,
in arrears, with the annual rate of interest calculated at the Prime Rate plus
1%. Prime Rate is defined as the "base rate on corporate loans as posted by at
least 75% of the nation's 30 largest banks" as quoted by the next edition of the
Wall Street Journal immediately following the Reference Date (hereinafter
defined). Such monthly interest only payments shall commence on the date which
is one month from the date hereof and shall continue monthly thereafter through
and including the date which is six months from the date hereof, for a total of
six such monthly payments of interest only.

     Commencing on the date which is seven months from the date hereof, and
continuing monthly thereafter through and including the date which is
twenty-nine months from the date hereof, Maker

<PAGE>

shall make monthly payments in reduction of principal of $83,000.00 each,
together with interest on the unpaid principal balance of this note from time to
time outstanding, calculated at the annual interest rate equal to the Prime Rate
plus 3%.

     The Prime Rate is reset monthly. The date on which the Prime Rate is set
for each monthly installment payable hereunder (Reference Date) is the first day
of the monthly period for which such installment is due. If the Reference Date
is not a banking day, the next preceeding banking day shall be the Reference
Date. Any sum received hereunder shall be allocated first to accrued and unpaid
interest and then to the unpaid principal balance hereof.

     The entire unpaid principal balance hereof, together with all accrued,
unpaid interest thereon, shall be paid in full on the date which is thirty
months after the date of this note.

     Maker shall have the right to prepay this note in whole or in part at any
time(s) without penalty or premium.

     This Note is secured by a grant of a security interest pursuant to an
agreement of even date herewith between Maker and Payee, and it is agreed that
in the case of default in the payment of any monthly installment of principal or
interest due under this note after ten days' prior written notice of such

                                      -2-
<PAGE>

default has been given by Payee to Maker by certified mail, return receipt
requested, then, at the election of Payee or the then legal holder hereof (which
election may be made upon notice to Maker, any time after the occurrence of said
default and after the expiration of the ten-day cure period referred to above
until such time as such default may be cured), the entire unpaid principal
balance hereof, together with accrued unpaid interest thereon, shall at once
become due and payable at the place of payment aforesaid, and in such event
Maker shall pay all reasonable costs and reasonable attorneys' fees incurred by
Payee in the enforcement of this note.

     Maker hereby waives presentment for payment, notice of dishonor, protest
and notice of protest.

                                           AMERICAN TISSUE MILLS OF
                                             OREGON, INC.

                                           By: ______________________________

                                           Title: ___________________________

                                      -3-
<PAGE>

                                    EXHIBIT J

                           AGREEMENT TO SELL PROPERTY

     Pursuant to the Agreement dated as of November 23, 1992 (the "Agreement"),
by and between Boise Cascade Corporation ("Seller") and American Tissue Mills of
Oregon, Inc. ("Purchaser"), for and in consideration of the sum of Five Million
($5,000,000.00) Dollars paid or payable to Seller, Seller does hereby bargain,
sell, transfer, assign, convey and warrants to Purchaser good and marketable
title, free and clear of any and all liens, restrictions, reservations, security
interests (except the security interest created pursuant to Section 4 of the
Agreement), claims and encumbrances, the Paper Machine described in Schedule 1
annexed hereto and made a part hereof and located on the parcel of land
described in Schedule 2 annexed hereto and made a part hereof.

     This instrument shall be deemed a statutory warranty deed of equipment.

     To have and to hold the Machine onto Purchaser, its permitted successors
and assigns, forever, subject to Seller's security interest and option rights
under the Agreement and all other terms and conditions of the Agreement.

     If Purchaser shall abandon the Machine, in the absence of execution and
delivery by Purchaser of documentation evidencing abandonment of the Machine
pursuant to Section 16 of the Agreement, Purchaser shall be deemed to have given
to Seller the title warranties contemplated by Sections 15 and 16 of the
Agreement.

     Purchaser may not transfer any interest in the Paper Machine without
complying with the requirements of Section 17 of the Agreement, including the
requirement of obtaining Seller's prior written consent.

     Witness, the due execution hereof as of the 23rd day of November, 1992.

                                                  Boise Cascade Corporation

                                                  By: ________________________

                                                  Its: _______________________

JL21118B
<PAGE>

STATE OF IDAHO   )
                 )  ss.
County of ______ )

     This instrument was acknowledged before me on ______________________, 1992,
by __________________, as ______________ of Boise Cascade Corporation., a(n)
Delaware corporation.

[SEAL]
                                        ________________________________________
                                        Notary Public for Idaho
                                        My commission expires:  ________________

SELLER'S NAME AND ADDRESS:

Boise Cascade Corporation
One Jefferson Square
P0 Box 50
Boise, Idaho  83728-0001

PURCHASER'S NAME AND ADDRESS:

American Tissue Mills of Oregon,
50 Cabot Court
Hauppauge, New York 11788

AFTER RECORDING RETURN TO:

American Tissue Mills of Oregon,
50 Cabot Court
Hauppauge, New York 11788
Attn: Mr. Medhi Gabayzadeh
Executive Vice President

                                       2

<PAGE>

STATE OF OREGON    )
                   )  ss.
County of Columbia )

     I certify that the within instrument was received for record on the _____
day of ______________, 1992, at ____ o'clock __M., and recorded in
book/reel/volume No. ____ on page _____ and/or as
fee/file/instrument/microfilm/reception No. _____, Record of Deeds of said
County.

     Witness my hand and seal of County affixed.

                                                 _______________________________
                                                 NAME                     TITLE

                                                 By: ________________, Deputy

                                       3
<PAGE>

                                   SCHEDULE 1

                           (Paper Machine Description)

See attached.

                                       4

<PAGE>

                                   SCHEDULE 2

                               (Legal Description

See attached.

                                       5
<PAGE>

                                   SCHEDULE 1

                                  NO. 3 MACHINE

     The No. 3 Paper Machine located at the Mill, more particularly described as
all machinery, equipment and component parts located above the sole plate and
all spare parts at the Mill relating exclusively to the No. 3 Paper Machine
including, without limitation, the following:

     Beloit 258" Fourdrinier tissue paper making machine No. 3 consisting of
steel air cushioned controlled flow stock inlet, 5 rectifier and distributing
rolls, PH meter, wet end control panel, removable suspended fourdrinier section
with 258" x 73' wire, 3 suction boxes, rubber covered wire rolls with doctors,
32" suction couch roll, 48" brass suction breast roll, 28" rubber covered
pressure roll, 32" top suction press, suction roll on 32" rubber covered roll,
rubber covered felt rolls, 32" rubber covered second press roll on 40" rubber
covered suction roll, 3 felt guides and stretchers for 262" x 108' and 262" x
71' wet felts, press section control panel, 12' Yankee dryer, two 40" rubber
covered suction pressure rolls, suction box, Beloit high velocity hood,
pneumatic loaded skinning, creping and cleaning doctors, dry end control board,
drum reel with 36" drum and sliding shaft, roll lowering device, reel control
panel, unwind stand with direct double belt drive, pneumatic pressure device,
iron carrier roll, 2-drum slitter and 252" rewinder with galvanized iron hood,
pneumatic roll transfer and hoist, 21" x 40' roller bed belt conveyor, control
board for rewinder, control

<PAGE>

board for transfer conveyor and hoist, pneumatic roll breaker and ejector,
3-stop holding table, together with all motors, drives, pumps, stock preparation
facilities, motor generator sets, compressors, cranes, hoists, process piping,
process wiring, spare parts, furniture and apparatus (including wire stringing
device, skids, tables, hand tools, lockers, storage racks, miscellaneous
equipment), all being located in No. 3 Machine Building; also spare parts and
apparatus and equipment auxiliary to and supporting the operation of No. 3
Machine wherever the same be situated.

The following spare parts:

Reducers                                             Storage Reference Number
--------                                             ------------------------
1 - #3 Rectifier Roll                                443-29-040
1 - Head Box Rectifier Roll 1 & 2                    443-29-017
1 - #3 Saveall Repulper                              443-92-020
1 - Suction Couch Roll                               443-92-051
1 - Top & Bottom Cal Roll Dr.                        443-92-053
1 - Reel Drive                                       443-92-052
1 - Wire Turning Roll                                443-92-180
1 - Suction Press and Top Press                      443-92-057
1 - Bottom Press Roll 1st                            443-92-058
1 - Calender Drive                                   443-80-030

Pumps
-----
Semens 505 Vac. Pump

Fans
----
Wet End Hood Exhaust                                 853-26-075

<PAGE>

Miscellaneous
-------------
Rotating Ass. For Fan Pump
Gears to rebuild Yankee Dryer gearbox
H-3 Core Cutter
Roll Wrap equipment
Spare Yankee Motor 1250HP/900 RPM Motor #1347
8 - Modified 2300 volt starter
1 - South End Motor Generator set.

Rolls
-----
1 - Yankee Dryer
1 - Couch Roll - 309/30" dia.
1 - Pressure Roll Top - 301/40" dia.
2 - Pressure Roll Bottom - 301 and 304/40" dia.
2 - Combine Cal Plane - 316 and 323/27.672 dia.
1 - #1 Wire Roll Hand-- 31003/20" dia.
1 - #2 Wire Roll Stretch - 31101/20" dia.
3 - Felt Rolls 33015, 33018 and 33103/18.750 dia.
1 - Mt. Hope Winder 7" dia.

Rolling Stock
-------------
1 - #6 Grab Truck
1 - #8 Tow Tractor
1 - #11 Tow Tractor
24 - Roll Carts (makes two trains)
1 - #3 Lift Truck

<PAGE>

                                    SCHEDULE 2

All of that real property together with the tenements, hereditiments and
appurtenances situate, lying, and being in Columbia County, State of Oregon,
dounded and particularly described as follows, to-wit;

     Parcel: A parcel of land in the Thomas H. Smith Donation Land Claim No. 40
     In Sections 9 and 10, Lot 7 of said Section 9, and Lots 1 and 2 of said
     Section 10, all in Township 4 North. Range 1 West of Willamette Meridian,
     Columbia County, Oregon, more particularly described as follows:

     Beginning at a point in said Lot 7 which is 1425.31 feet distant South
     19(degrees) 17' 25" West from the Southwesterly center of Block 70 in the
     center St. Helens, Columbia County, Oregon; thence South 68(degrees) 51'
     East for a distance of 174.09 feet to the most Southeasterly corner of
     Terrace Street in Hawley Addition to St. Helens, Oregon; thence North
     29(degrees) 00' East along the most Easterly line of Terrace Street for a
     distance of 356.14 feet to the most Easterly corner of said Terrace Street:
     thence North 61(degrees) 00' West along the Northeasterly line of said
     Terrace Street for a distance of 420.0 feet to its intersection with the
     Northeasterly prolongation of the Northwesterly line of Lot 9 of Block 12,
     said Hawley Addition, said point of intersection being marked with an iron
     pipe; thence South 68(degrees) 51' East for a distance of 1,193.31 feet to
     a point marked by an iron pipe on the Northwesterly Line of the right of
     way of Spokane, Portland and Seattle Railway Company; thence South
     21(degrees) 09' West along said Northwesterly right of way Line for a
     distance of 310.10 feet to a point which is 50 feet distant North
     68(degrees) 51' West from a point on the center line of Spokane, Portland
     and Seattle Railway Company's railroad, which is located by beginning at
     the point of the intersection of the center line of Columbia Street with
     the Southerly line of Cowlitz Street in said City of St. Helens and running
     thence South 16(degrees) 57' East for a distance of 670 feet to the point
     of beginning of a 1,910.08 foot radius curve to the right, Southerly along
     said curve through a central angle of 38(degrees) 06' for a distance of
     1,270 feet to the end of said curve, and South 21(degrees) 09' West tangent
     to said curve for a distance of 2,827.8 feet thence South 68(degrees) 51'
     East for a distance of 25 feet to a point 25 feet distant Northwesterly
     from, when measured at right angles to, said railroad center line; thence
     South 21(degrees) 09' West parallel to said center line for a distance of
     1,671.5 feet to a point; then South 68(degrees) 51' East a distance of 25
     feet to the center line of the Spokane, Portland and Seattle Railway
     Company right way; thence Southwesterly along the center line of the right
     of way of Spokane, Portland and Seattle Railway Company to its intersection
     with a line bearing South 68(degrees) 51' East from a point which is
     2,191.00 feet distant South 21(degrees) 09' West from the point of
     beginning; thence North 68(degrees) 51' West to said point, which is
     2191.00 feet distant South 21(degrees) 09' West from the point of
     beginning; thence continuing North 68(degrees) 51' West (or a distance of
     1,093.3 feet to a point in the center of Milton Creek, thence Northerly
     along the center of said Milton Creek as follows: North 42(degrees) 15'
     East for a distance of 122.4 feet; North 61(degrees) East for a distance of
     292.6 feet; North 42(degrees) 47' East for a distance of

<PAGE>

                                       -2-

     213.6 feet; North 17(degrees) 57' West for a distance of 587.0 feet: North
     37 (degrees) 22' East for a distance of 210.0 feet; North 4 (degrees) 22'
     East for a distance of 225.0 feet, and North 60 (degrees) 37' West for a
     distance of 119.1 feet to the point of intersection with the Southwesterly
     prolongation of the center line of Fir Street in said Hawley Addition:
     thence North 29(degrees) 00' East along said Southwesterly prolongation for
     a distance of 23.5 feet to a point on the South line of Brook Street in
     said Hawley Addition: thence Southeasterly along said South line of Brook
     Street as follows: South 61(degrees) 00' East a distance of 490.0 feet;
     South 29(degrees) 00' West for a distance of 50.0 feet, and South
     61(degrees) 00' East for a distance of 799.02 feet to a point which is
     969.16 feet distant South 21(degrees) 09' West from the point of beginning:
     thence North 21(degrees) 09' East along the Southeasterly line of said
     Hawley Addition for a distance of 969.16 feet to the point of beginning,
     EXCEPT that portion lying within the bounds of the Spokane, Portland and
     Seattle Railway Company right of way.

     Parcel 2: A parcel of land in the Thomas H. Smith Donation Land Claim No.
     40 in Sections 9 and 10 and Lots 1 and 2 of said Section 10, all in
     Township 4 North, Range 1 West of the Willamette Meridian, Columbia
     County, Oregon, more particularly described as follows:

     Beginning at a point in said Lot 1 which Is 2,108.59 feet distant South and
     413.1 feet distant East from the Southwesterly corner of Block 70 of the
     City of St. Helens, Columbia County, Oregon; thence North 68(degrees) 51'
     West for a distance of 25 feet to the true point of beginning of this
     description, said true point of beginning being also a point 25 feet
     distant South 68(degrees) 51' East from the center line of the railroad of
     Spokane, Portland and Seattle Railway Company at a point which is located
     by beginning at the point of intersection of the center line of Columbia
     Street with the Southerly line of Cowlitz Street in said City of St. Helens
     and running thence South 16(degrees) 57' East for a distance of 670 feet to
     the point of beginning of a 1,910.08 foot radius curve to the right; thence
     Southerly along said curve through a central angle of 38(degrees) 06' for a
     distance of 1270 feet to the end of said curve, the end of said curve being
     hereinafter referred to as "Point A', and thence South 21(degrees) 09' West
     tangent to said curve for a distance of 3,317.7 feet; thence from the true
     point of beginning South 21(degrees) 09' West parallel with said railroad
     center line for a distance of 1,171.5 feet to a point; thence North
     68(degrees) 51' West a distance of 25 feet to the center line of the
     Spokane, Portland and Seattle Railway Company right of way; thence
     Southwesterly along the center line of the right of way of Spokane,
     Portland and Seattle Railway Company to its intersection with a line
     bearing South 68(degrees) 51' East from a point, hereinafter referred to as
     "Point B", which is 2,191.00 feet distant South 21(degrees) 09' West from a
     point which is 1425.1 feet distant South 19(degrees) 17'25" West from the
     Southwesterly corner of said Block 70 of the City of St. Helens; thence
     South 68(degrees) 51' East to a point on the low water line on the West
     bank of the Willamette Slough which is 1208.20 feet distant from Point B;
     thence Northerly along said low water line as follows. North 29(degrees)
     53' East for a distance of 505.87 feet, thence North 30(degrees) 21' East
     for a distance of 700 feet, and thence North 27(degrees) 31' East for a
     distance of 603.70 feet to a point 389 feet distant South 68(degrees) 51'
     East from the true point of beginning thence South 68(degrees) 51' East for
     a distance of 206 feet to a point; thence North 3(degrees) 42' East for a
     distance of 450.3 feet to a point on the low water line or said West bank;
     thence North 17(degrees) 20' East along said low water line for a distance
     of 366.8 feet; thence * North 68(degrees) 51' West for a distance of 425.5
     feet to a point marked by an iron pipe on the Southeasterly line of the
     right way of Spokane, Portland and Seattle Railway Company which is 50 feet
     distant South 68(degrees) 51' East from the center line of the railroad of
     Spokane, Portland and Seattle Railway Company at a point which is 2,517.7
     feet distant South 21(degrees) 09' West from Point A; thence South
     21(degrees) 09' West along said Southwesterly right of way line for a
     distance of 100.0 feet; thence North 68(degrees) 51' West distance or 25
     feet; thence South 21(degrees) 09' West parallel with center line in said
     railroad for a distance of 700 feet to the true point of beginning EXCEPT
     that portion lying within the bounds of the Spokane, Portland and Seattle
     Railway Company right of way.

<PAGE>

                                       -3-

     Parcel 3: Blocks 4, 10, 11, 12 and 13, Hawley Addition to St. Helens,
     Columbia County, Oregon.

     Parcel 4: Lots 1, 2, 3, 4, 5, 6, 7, and 8, Block 7, Hawley Addition to St.
     Helens, Columbia County, Oregon.

     Parcel 5: All tide and overflow lands fronting, abutting, and lying
     Easterly of Parcel 2 hereinabove described.

     Parcel 6: All booms, wharfs, docks, bridges, buildings, structures,
     conveyors, hoists sewer and effluent discharge pipes, water mains and
     suction pipes, conduits, conductors, wires, and all appurtenances thereto
     belonging, owned by the Grantor herein lying and being Easterly of the
     upland portions of Parcel 2 hereinabove described.

     Parcel 7: All waterfront, riparian, boom, dock, water appropriation, and
     sewage or other discharge rights and privileges with respect to the river
     frontage lying and being Easterly of the upland portion of Parcel 2
     hereinabove described.

     Parcel 8: All walk or driveways, conveyors, sewer and effluent pipes,
     culverts, water mains, conduits, conductors, wins, trackage, and all
     appurtenances thereto belonging, under, upon, over, and across the railroad
     right of way lying between Parcel 1 and Parcel 2 hereinabove described.

     Parcel 9: All rights of the Grantor hereinunder that certain indenture
     dated August 10, 1931 and recorded May 7, 1932, in Book 54, at page 260,
     Deed Records of said Columbia County, between Chas. R. McCormick Lumber Co.
     of Delaware and St. Helens Pulp and Paper Company.

     Parcel 10: All and any other property, rights, licenses, privileges,
     permits, easements, and rights of way, not enumerated above, acquired by
     the Grantor herein or its predecessors in interest, in connection with the
     use, ownership, or possession of the lands described in Parcel 1 and Parcel
     2 hereinabove a described.

Excepting therefrom the following described parcels of property:

<PAGE>

                                      -4-

Parcel 1

     Beginning at the intersection of the South line of the H.M. Knighton
     Donation Land Claim with the Southerly extension of the West line of Block
     70, St. Helens, as per plat on file and of record in the Clerk's office of
     Columbia County, Oregon in Section 1, Township 4 North, Range 1 West,
     Willamette Meridian, Columbia County, Oregon, said point being the
     Northwest corner of the first parcel described in the City of St. Helens
     tract in Deed Book 177 at page 23. Deed Records of Columbia County Oregon:
     thence along the Westerly line of said City of St. Helens tract South
     55(degrees) 53' East a distance of 451.03 feet: thence South 8(degrees) 19'
     West a distance of 590.38 feet to the South line of Section 3, a distance
     of 219.26 feet; thence leaving said Westerly line of the City of St. Helens
     tract North 45(degrees)07'53" West a distance of 79.28 feet; thence North
     36(degrees)41'53" West a distance of 322.77 feet; thence North
     28(degrees)51'40" East a distance of 220.50 feet; thence North
     29(degrees)12'47" East a distance of 119.37 feet to a point on the
     Southerly extension of the East line of Block 85, St. Helens; thence North
     16(degrees)57'23" West along said Southerly extension of the East line of
     Block 85 a distance of 208.12 feet to said South line of said H.M. Knighton
     Donation Land Claim; thence North 71(degrees)30' East along said South line
     of the H.M. Knighton Donation Land Claim a distance of 80.03 feet to the
     True Point of Beginning. CONTAINING 6.86 acres more or less.

     Subject to and excepting all easements, reservations, restrictions and
mineral rights of record.

     This conveyance shall be subject to Grantor's right of reverter as follows:

     If the property is determined by the Grantee or any successor fire
protection provider to be excess property or is not used for fire related
purposes for a period of three (3) years, and there are no written development
plans to use or continue to use the property for a fire training site or other
fire prevention or

Bargain and Sale Deed with Right of Reverter - 1

<PAGE>

                                      -5-

Parcel 2

     Beginning at the point of intersection with the Northwesterly right-of-way
     line of the S.P. & S. Railroad and the Northwesterly line of Government Lot
     4 in Section 3, Township 4 North, Range 1 West of the Willamette Meridian,
     Columbia County, Oregon; thence Southwesterly along the Northwesterly line
     of said Government Lot 4 and Northwesterly line of Government Lot 6 of said
     Section 3, 1,352.93 feet to the intersection of the prolongation
     Southeasterly of the Northeasterly right-of-way line of 9th Street and the
     Northwesterly line of said Government Lot 6; thence South 55(degrees)59'
     East, 451.03 feet; thence South 8(degrees)19' West 593.09 feet to the South
     line of said Section 3; thence West along the South line of said Section 3,
     300 feet; thence South 21(degrees)09' West, 226.63 feet; thence South
     68(degrees)51' East, 750 feet to the Northwesterly right-of-way line of
     said S.P. & S. Railroad; thence North 21(degrees)09' East along the
     Northwesterly right-of-way line of said S.P. & S. Railroad right-of-way,
     1,876.84 feet to the point of beginning; and

     Part of Lot 1, Section 10, Township 4 North, Range 1 West of the Willamette
     Meridian, Columbia County, Oregon described as follows:

     Beginning at the Northeast corner of Tract 9-2 conveyed to St. Helens Paper
     Corporation, a Delaware corporation, by deed recorded May 7,

     1964 in Book 154, page 896, Deed Records of Columbia County, Oregon; thence
     South 21(degrees)09' West, 100.86 feet; thence South 41(degrees)42' West,
     128.16 feet; thence South 21(degrees)09' West 84 feet; thence North
     68(degrees)51' West, 415 feet; thence North 21(degrees)09' East 304.86 feet
     to the Northwesterly line of said Tract 9-2; thence South 68(degrees)51'
     East along the Northwesterly line of said Tract 9-2, 460 feet to the point
     of beginning

Subject to:

     1.   Right, title and interest of the State of Oregon in and to that
          portion of the above premises lying between ordinary high and low
          water.

     2.   The rights of fishing, navigation and commerce in the State of Oregon,
          the Federal Government and the public in and to that portion thereof
          lying below the ordinary high water mark of the Columbia River.

     3.   A slope easement from St. Helens Pulp and Paper Co., an Oregon
          corporation, to Chas. R. McCormick Lumber Co., of Delaware, a Delaware
          corporation, recorded May 7, 1932 in book 54, page 260, Deed Records
          of Columbia County, Oregon.

<PAGE>

Exhibit K

Corporation Financial Manual
                            [LOGO]                    Number     41
                            Boise Cascade               Page     3 of 19
                            Corporation          Date Issued     March 1, 1991
                                                  Supersedes     June 15, 1990
                                                    Approved     [init.]

Title     PROPERTY AND EQUIPMENT

     POLICY

     .09  Authorization for Expenditures

          A.   Capitalization - All assets capitalized must be supported by an
               approved AFE, except that no AFE is required for office equipment
               less than $2,000 and property and equipment less than $15,000,
               excluding autos, trucks, and rolling stock (see Policy No. 121,
               Authorization for Expenditure (AFE)).

          B.   Dispositions - The disposition of property or equipment must be
               supported by an approved AFE when either fair market value or net
               book value, exceeds $500,000 for the Paper and Timber & Wood
               Products Divisions, $250,000 for all other divisions or when an
               entire line of business, regardless of dollar amount, is being
               sold (see Policy No. 121, Authorization for Expenditures (AFE)).

     .10  Environmental Assessment

          Prior to entering into a binding contract to acquire or dispose of
          real property, an environmental assessment of the property shall be
          conducted in accordance with the provisions of corporate policy No.
          13.10, Environmental Contamination Review in Real Estate Acquisitions
          and Dispositions. This includes owned and leased property, except
          leases or subleases of commercial space in multitenant structures.

     .11  Criteria for Capitalization

          Expenditures for tangible assets, including leasehold improvements,
          used in the normal conduct of business will be capitalized if the
          asset has an assigned life of two or more years and a value in excess
          of the amounts listed below:

          (1)    Office furniture and equipment                          $1,000

          (2)    Primary manufacturing facilities
                   (e.g., papermills, sawmills, plywood plants)          $5,000

          (3)    Converting operations (e.g., container
                   plants), retail and wholesale
                   distribution outlets, and miscellaneous
                   operations                                            $3,000

          When applying the capitalization limit, related items must be
          considered as a unit (e.g., a desk and chair, or motors and related
          material handling assembly). If related items are obtained separately,
          the aggregate cost must be compared against the capitalization limits.
          Therefore, each unit or project with a cost exceeding the specified
          limit will be capitalized.

MKO1212B/3

<PAGE>

Corporation Financial Manual
                            [LOGO]                    Number     41
                            Boise Cascade               Page     4 of 19
                            Corporation          Date Issued     March 1, 1991
                                                  Supersedes     June 15, 1990
                                                    Approved     [init.]

Title     PROPERTY AND EQUIPMENT

          Expenditures for real property, regardless of tract size or value,
          will be capitalized.

     .12  Expenditures Related to Existing Capitalized Assets

          A.   Expenditures will be capitalized if they

               (1)  Represent additions to property or equipment; or

               (2)  Are for alterations which substantially increase
                    productivity; or

               (3)  Extend the useful life beyond original estimates by at least
                    25%; however, the useful life must be extended by one year
                    or more; or

               (4)  Replace major components (e.g., roof replacement).

          B.   Partial Retirement - If a major component is replaced, the
               remaining book value of the old component will be retired in
               accordance with the provisions of Section .18 of this policy and
               the Property Accounting Users Manual.

     .13  Payables for the Purchase of Assets

          Payables for the purchase of assets should be recorded when the risks
          of ownership have passed. For goods or equipment purchased, this
          generally takes place when title passes, typically the date the items
          are received or, if the terms are F.O.B. shipping point, the date
          shipped. However, if title or possession is retained by the seller for
          security reasons or for the convenience of the buyer, the payable
          should nevertheless be recorded if the substantive risks of ownership
          have passed. Amounts due under construction contracts, including
          retainages, should be recorded as they become billable. Payables for
          items received subject to testing or installation should also be
          recorded unless it is probable that the items will not be accepted or
          installed. On the other hand, no liability should be recorded for
          items received on consignment until title passes or on bailment. (See
          Policy No. 45, Capitalized Interest, for a discussion of how accounts
          payable associated with major capital projects are included in the
          computation of capitalized interest.)

MKO1212B/4

<PAGE>

Corporation Financial Manual
                            [LOGO]                    Number     41
                            Boise Cascade               Page     5 of 19
                            Corporation          Date Issued     March 1, 1991
                                                  Supersedes     June 15, 1990
                                                    Approved     [init.]

Title     PROPERTY AND EQUIPMENT

     .14  Depreciation

          Depreciation will begin the month following the date an asset is
          placed in service using the straight-line or units-of-production
          depreciation method. Pulp and paper mill asset lives will be 20 years
          for manufacturing equipment and 10 years for process control
          equipment. Asset lives for other property and equipment at pulp and
          paper mills and for other operations should be in accordance with
          Section 21C and Appendix I.

          PROCEDURES

     .15  Additions to Property and Equipment

          A.   Purchased Assets - The cost of purchased assets shall include the
               cash price plus freight, sales tax, installation, and other
               acquisition costs necessary to render the asset suitable for its
               intended use. The cost of data processing equipment shall include
               the cost of software that is an Integral part of the hardware.

          B.   Constructed Assets - When assets are constructed, the following
               types of expenditures will be capitalized:

               (1)  Materials, including freight, sales tax, and installation
                    costs.

               (2)  Direct and indirect construction labor including payroll
                    load.

               (3)  Stores, materials, and expendable tools used during
                    construction.

               (4)  Temporary facilities to supply water, power, tool storage,
                    etc.

               (5)  Company and outside engineering costs actually utilized in
                    construction of project.

               (6)  Clean-up costs following project completion.

               (7)  Alteration of existing assets to tie into the new facility.

               (8)  Demolition of existing fixed assets where the only reason
                    for such retirement is to construct or install the capital
                    addition.

               (9)  Interest expense incurred In conjunction with major capital
                    additions will be capitalized as part of the asset cost (see
                    Policy No. 45, Capitalized Interest).

          C.   Land - When purchasing land, the basic land cost will be
               segregated from depreciable assets and must be in enough detail
               to allow cost determination at the time of subsequent disposal,
               should it occur.

MKO1212B/5

<PAGE>

Corporation Financial Manual
                            [LOGO]                    Number     41
                            Boise Cascade               Page     6 of 19
                            Corporation          Date Issued     March 1, 1991
                                                  Supersedes     June 15, 1990
                                                    Approved     [init.]

Title     PROPERTY AND EQUIPMENT

          D.   Buildings - Generally, the only items to be capitalized as
               buildings should be those items which do not qualify as tangible
               personal property or other tangible property. Items of other
               tangible property include: extra piling, concrete, or steel
               installed in a building's foundation to support machinery; extra
               materials installed in a building wall or roof to support
               machinery, craneways, hoists, utility lines, piping, conveyors,
               etc.; special purpose structures such as digester buildings,
               recovery boiler buildings, and lime kiln buildings. See Appendix
               III for an expanded listing of assets considered to be other
               tangible property. It is extremely important to carefully review
               assets which might initially appear to be real property but in
               fact may be other tangible property. For income tax purposes,
               other tangible property can be depreciated over a relatively
               short life compared to the depreciation period for real property.
               It is also important that a realistic book life be assigned to
               these assets.

               Items classified as buildings will be broken down into components
               and depreciated over the estimated life of the Individual
               components (see Appendix IV). The information necessary to
               capitalize the components can be obtained from engineers and
               contractors when a building is constructed or from appraisers
               when a building is purchased. In some cases it may be necessary
               to allocate costs between the building components and other
               tangible property. The estimated useful lives, including
               engineering lives, of the individual components will be based on
               the physical and economic factors encountered in the specific
               building, region or Industry. Questions regarding the useful life
               of a particular component should be referred to the Property
               Accounting Department.

     .16  Additions to Leased Property and Equipment

          A.   Additions Owned by Lessee - Additions or replacements to leased
               property and equipment, the ownership of which Is retained by the
               lessee, will be capitalized in accordance with the rules outlined
               above and will be recorded in nonleased fixed asset accounts.

          B.   Additions Owned by Lessor - Additions or replacements to leased
               assets in which the ownership reverts to the lessor will be
               recorded as follows:

               (1)  Additions or replacements that have a useful life equal to
                    or shorter than the lease period will be recorded in the
                    nonleased fixed asset accounts.

               (2)  Assets or replacements that have a useful life greater than
                    the lease period will be recorded as leasehold improvements.

MKO1212B/6
<PAGE>

Corporation Financial Manual
                            [LOGO]                    Number     41
                            Boise Cascade               Page     11 of 19
                            Corporation          Date Issued     March 1, 1991
                                                  Supersedes     June 15, 1990
                                                    Approved     [init.]

Title     PROPERTY AND EQUIPMENT

                                   APPENDIX I

     .24  Useful Lives

          The following list specifies averages or ranges for a broad class of
          assets. Specific physical and economic factors must be considered in
          the actual assignment of lives. These guidelines are for new units.

          A.  Office Furniture and Fixtures
                 (desks, files, chairs, safes)                        10 years

          B.  Office Machines
                 (typewriters, calculators, communication,
                 duplication, and copying machines)                 3-10 years

          C.  Data Processing Equipment
                 Microcomputers (PCs)                                3-5 years
                 Mini-Computers and Peripherals                      3-5 years
                 Mainframes and Peripherals                          3-5 years
                 Uninterruptible Power Systems                      5-10 years
                 Power Distribution Units                           5-10 years

          D.  Transportation Equipment
              1. Aircraft                                           6-10 years
              2. Automobiles                                         3-5 years
              3. Trucks and buses                                    3-7 years
                    (includes only vehicles used
                    over the road)
              4. Trailers and trailer mounted                       6-10 years
                    containers
              5. Railroad cars                                        15 years
              6. Vessels, barges, tugs, and similar                   18 years
                    water transportation

          E.  Land Improvements                                     7-20 years
                 (paved surfaces, sidewalks, canals,
                 drainage facilities, sewers, wharves,
                 bridges, fences, landscaping)

          F.  Building Components                            See Section .15 D

MKO1212B/11

<PAGE>

Corporation Financial Manual
                            [LOGO]                    Number     41
                            Boise Cascade               Page     12 of 19
                            Corporation          Date Issued     March 1, 1991
                                                  Supersedes     June 15, 1990
                                                    Approved     [init.]

Title     PROPERTY AND EQUIPMENT

          G.  Leasehold Improvements

              1.   Operating leases (noncapitalized leases):
                   (a)  Lease term (including renewal periods that are likely
                        to be accepted)

              2.   Capitalized leases:
                   (a)  If the ownership reverts to the lessor, the
                        improvements will be amortized over the lease term as
                        defined in policy No. 43, Capitalized Leases.

                   (b)  If the ownership of the Improvements remains with Boise
                        Cascade Corporation, the  improvements will be
                        depreciated over the lives outlined in this appendix.

          H.  Logging and Road Building Equipment                      6 years

          I.  Sawmill
                   Manufacturing Equipment                            12 years
                   Process Control Equipment                           5 years

                          Example:   Headrig setwork

          J.  Plywood and Other Wood Products
                   Manufacturing Equipment                            12 years
                   Process Control Equipment                           5 years

                          Example:   Lathe following system

          K.  Equipment Used In Wholesale or Retail Trade             10 years

          L.  Pulp and Paper
                   Manufacturing Equipment                            20 years
                   Process Control Equipment                          10 years

                          Example:   Bases weight and system moisture
                                       control system

          M.       Paper Finishing and Conversion Equipment           12 years

MKO1212B/12

<PAGE>

                                    EXHIBIT L

1.   February 21, 1992, letter from C. Norman Beckert to Gary Margason with
     attachment.

2.   December 19, 1989, letter from C. N. Beckert to Douglas Kuns with
     attachments, including Power Purchase and Option Agreement.

3.   Public Utility Commission of Oregon Order dated October 13, 1989, with
     attachments. (Agreements between Northwest Natural Gas Company and Boise
     Cascade Corporation: Special Firm Service Agreement dated September 30,
     1988; High- Volume Interruptable Transportation Agreement dated September
     30, 1988, and Amendment dated November 1990; and Letter Agreement dated
     March 14, 1989.]

4.   Transportation Agreement and Amendments between Northwest Pipeline
     Association and Boise Cascade.

5.   Gas Purchase Contract dated November 1, 1989, with June 5, 1991, letter
     from Randy Schultz to Norm Beckert.

6.   Labor Agreement with Association of Western Pulp & Paper Workers and Local
     No. 1 Dated March 15, 1990.

<PAGE>

                                    EXHIBIT M

                               MEMORANDUM OF LEASE

NAME AND ADDRESS OF LESSOR:                  Boise Cascade Corporation
                                             One Jefferson Square
                                             P.O. Box 50
                                             Boise, Idaho 83728-0001

NAME AND ADDRESS OF LESSEE:                  American Tissue Mills of
                                                  Oregon, Inc.
                                             50 Cabot Court
                                             Hauppauge, New York 11788

LEASED PREMISES:                             Land and Building
                                                 known as No. 3 Paper Machine
                                             Building at mill premises
                                                 known as Boise Cascade
                                             St. Helens, Oregon, pulp and paper
                                             mill, as set forth on the annexed
                                             diagram. Any leasehold improvements
                                             subsequently installed by Lessee
                                             are subject to a security interest
                                             in favor of Lessor. Lessor also has
                                             a security interest in and an
                                             option to purchase the paper
                                             machine located on the leased
                                             premises under certain
                                             circumstances.

DATE 0F EXECUTION OF LEASE:                  November 23, 1992.

TERM OF LEASE:                               Approximately, Twenty (20) years
                                             commencing November 23, 1992 and
                                             ending December 31, 2012.

OPTION TO LEASE:                             Lessee has option to lease
                                             additional real property adjacent
                                             to the premises for the purpose of
                                             constructing warehouse, finishing
                                             and/or shipping facilities.

                                       -2-

<PAGE>

This memorandum of lease is for information purposes only. The provisions of the
Lease shall control the rights, duties and responsibilities of the parties.

In witness whereof, the parties have duly executed this Memorandum of Lease as
of the 23rd day of November, 1992.

                                             Boise Cascade Corporation, Lessor

                                             By: _______________________________

                                             American Tissue Mills of Oregon,
                                               Inc., Lessee

                                             By: _______________________________

STATE OF              )
                      )  ss.
COUNTY OF             )

This instrument was acknowledged before me on ____________________,
1992, by _____________________________________, as ___________________________
of Boise Cascade Corporation.

                                             __________________________________
                                             Notary Public

STATE OF NEW YORK     )
                      )  ss.
COUNTY OF NEW YORK    )

This instrument was acknowledged before me on ____________________, 1992, by
Medhi Gabayzadeh, as Executive Vice-President of American Tissue Mills of
Oregon, Inc.

                                             __________________________________
                                             Notary Public

After recording, return to:                  Mandel and Resnik, P.C.
                                             220 East 42nd Street
                                             New York, New York 10017
                                             Attn:   Barry H. Mandel, Esq.

DP2lO16C.V3

<PAGE>

All of that real property together with the tenements, hereditiments and
appurtenances situate, lying, and being in Columbia County, State of Oregon,
dounded and particularly described as follows, to-wit;

     Parcel: A parcel of land in the Thomas H. Smith Donation Land Claim No. 40
     In Sections 9 and 10, Lot 7 of said Section 9, and Lots 1 and 2 of said
     Section 10, all in Township 4 North. Range 1 West of Willamette Meridian,
     Columbia County, Oregon, more particularly described as follows:

     Beginning at a point in said Lot 7 which is 1425.31 feet distant South 190
     17' 25" West from the Southwesterly center of Block 70 in the center St.
     Helens, Columbia County, Oregon; thence South 68(degrees) 51' East for a
     distance of 174.09 feet to the most Southeasterly corner of Terrace Street
     in Hawley Addition to St. Helens, Oregon; thence North 29(degrees) 00' East
     along the most Easterly line of Terrace Street for a distance of 356.14
     feet to the most Easterly corner of said Terrace Street; thence North
     61(degrees) 00' West along the Northeasterly line of said Terrace Street
     for a distance of 420.0 feet to its intersection with the Northeasterly
     prolongation of the Northwesterly line of Lot 9 of Block 12, said Hawley
     Addition, said point of intersection being marked with an iron pipe; thence
     South 68(degrees) 51' East for a distance of 1,193.31 feet to a point
     marked by an iron pipe on the Northwesterly Line of the right of way of
     Spokane, Portland and Seattle Railway Company; thence South 21(degrees) 09'
     West along said Northwesterly right of way Line for a distance of 310.10
     feet to a point which is 50 feet distant North 03(degrees) 51'West from a
     point on the center line of Spokane, Portland and Seattle Railway Company's
     railroad, which is located by beginning at the point of the intersection of
     the center line of Columbia Street with the Southerly line of Cowlitz
     Street in said City of St. Helens and running thence South 16(degrees) 57'
     East for a distance of 670 feet to the point of beginning of a 1,910.08
     foot radius curve to the right, Southerly along said curve through a
     central angle of 39(degrees) 00' for a distance of 1,270 feet to the end of
     said curve, and South 21(degrees) 09' West tangent to said curve for a
     distance of 2,827.8 feet thence South 68(degrees) 51' East for a distance
     of 25 feet to a point 25 feet distant Northwesterly from, when measured at
     right angles to, said railroad center line; thence South 21(degrees) 09'
     West parallel to said center line for a distance of 1,671.5 feet to a
     point; then South 68(degrees) 51' East a distance of 25 feet to the center
     line of the Spokane, Portland and Seattle Railway Company right way; thence
     Southwesterly along the center line of the right of way of Spokane,
     Portland and Seattle Railway Company to its intersection with a line
     bearing South 68(degrees) 51' East from a point which is 2,191.00 feet
     distant South 21(degrees) 09' West from the point of beginning; thence
     North 68(degrees) 5' West to said point, which is 2191.00 feet distant
     South 21(degrees) 09' West from the point of beginning; thence continuing
     North 68(degrees) 51' West (or a distance of 1,093.3 feet to a point in the
     center of Milton Creek, thence Northerly along the center of said Milton
     Creek a follows: North 42(degrees) 15' East for a distance of 122.4 feet;
     North 61(degrees) East for a distance of 292.6 feet; North 42(degrees) 47'
     East for a distance of

<PAGE>

                                       -2-

     213.6 feet; North 17(degrees) 57' West for a distance of 587.0 feet: North
     37 (degrees) 22' East for a distance of 210.0 feet; North 4 (degrees) 22'
     East for a distance of 225.0 feet, and North 60(degrees) 37' West for a
     distance of 119.1 feet to the point of intersection with the Southwesterly
     prolongation of the center line of Fir Street in said in said Hawley
     Addition; thence North 29(degrees) 00' East along said Southwesterly
     prolongation for a distance of 23.5 feet to a point on the South line of
     Brook Street in said Hawley Addition; thence Southeasterly along said South
     line of Brook Street as follows: South 61(degrees) 00' East a distance of
     490.0 feet; South 29(degrees) 00' West for a distance of 50.0 feet, and
     South 61(degrees) 00' East for a distance of 799.02 feet to a point which
     is 969.16 feet distant South 21(degrees) 09' West from the point of
     beginning; thence North 21(degrees) 09' East along the Southeasterly line
     of said Hawley Addition for a distance of 969.16 feet to the point of
     beginning, EXCEPT that portion lying within the bounds of the Spokane,
     Portland and Seattle Railway Company right of way.

     Parcel 2: A parcel of land in the Thomas H. Smith Donation Land Claim No.
     40 in Sections 9 and 10 and Lots 1 and 2 of said Section 10, all in
     Township 4 North, Range 1 West of the Williamette Meridian, Columbia
     County, Oregon, more particularly described as follows:

     Beginning at a point in said Lot 1 which Is 2,108.59 feet distant South and
     413.1 feet distant East from the Southwesterly corner of Block 70 of the
     City of St. Helens, Columbia County, Oregon; thence North 68(degrees) 51'
     West for a distance of 25 feet to the true point of beginning of this
     description, said true point of beginning being also a point 25 feet
     distant South 68(degrees) 51' East from the center line of the railroad of
     Spokane, Portland and Seattle Railway Company at a point which is located
     by beginning at the point of intersection of the center line of Columbia
     Street with the Southerly line of Cowlitz Street in said City of St. Helens
     and running thence South 16(degrees) 57' East for a distance of 670 feet to
     the point of beginning of a 1,910.08 foot radius curve to the right; thence
     Southerly along said curve through a central angle of 38(degrees) 06' for a
     distance of 1270 feet to the end of said curve, the end of said curve being
     hereinafter referred to as "Point A', and thence South 21(degrees) 09' West
     tangent to said curve for a distance of 3,317.7 feet; thence from the true
     point of beginning South 210 09' West parallel with said railroad center
     line for a distance of 1,171.5 feet to a point; thence North 68(degrees)
     51' West a distance of 25 feet to the center line of the Spokane, Portland
     and Seattle Railway Company right of way; thence Southwesterly along the
     center line of the right of way of Spokane, Portland and Seattle Railway
     Company to its intersection with a line bearing South 68(degrees) 51' East
     from a point, hereinafter referred to as "Point B", which is 2,191.00 feet
     distant South 21(degrees) 09' West from & point which is 1425.1 feet
     distant South 19(degrees) 17'25" West from the Southwesterly corner of said
     Block 70 of the City of St. Helens; thence South 68(degrees) 51' East to a
     point on the low water line on the West bank of the Willamette Slough which
     is 1208.20 feet distant from Point B; thence Northerly along said low water
     line as follows. North 29(degrees) 53' East for a distance of 505.87 feet,
     thence North 30(degrees) 21' East for a distance of 700 feet, and thence
     North 27(degrees) 31' East for a distance of 603.70 feet to a point 389
     feet distant South 68(degrees) 51' East from the true point of beginning
     thence South 68(degrees) 51' East for a distance of 206 feet to a point;
     thence North 3(degrees) 42' East for a distance of 450.3 feet to a point on
     the low water 1ine or said West bank; thence North 17(degrees) 20' East
     along said low water line for a distance of 366.8 feet; thence * North
     68(degrees) 51' West for a distance of 425.5 feet. to a point marked by an
     iron pipe on the Southeasterly line of the right way of Spokane, Portland
     and Seattle Railway Company which is 50 feet distant South 68(degrees) 51'
     East from the center line of the railroad of Spokane, Portland and Seattle
     Railway Company at a point which is 2,517.7 feet distant South 21(degrees)
     09' West from Point A; thence South 21(degrees) 09' West along said
     Southwesterly right of way line for a distance of 100.0 feet; thence North
     68(degrees) 51' West distance or 25 feet; thence South 21(degrees) 09' West
     parallel with center ??? said railroad for a distance of 700 feet to the
     true point of beginning ???? that portion lying within the bounds of the
     Spokane, Portland and Seattle Railway Company right of way.

<PAGE>

                                       -3

     Parcel 3: Blocks 4, 10, 11, 12 and 13, Hawley Addition to St. Helens,
     Columbia County, Oregon.

     Parcel 4: Lots 1, 2, 3, 4, 5, 6, 7, and 8, Block 7, Hawley Addition to St.
     Helens, Columbia County, Oregon.

     Parcel 5: All tide and overflow lands fronting, abutting, and lying
     Easterly of Parcel 2 hereinabove described.

     Parcel 6: All booms, wharfs, docks, bridges, buildings, structures,
     conveyors, hoists sewer and effluent discharge pipes, water mains and
     suction pipes, conduits, conductors, wires, and all appurtenances thereto
     belonging, owned by the Grantor herein lying and being Easterly of the
     upland portions of Parcel 2 hereinabove described.

     Parcel 7: All waterfront, riparian, boom, dock, water appropriation, and
     sewage or other discharge rights and privileges with respect to the river
     frontage lying and being Easterly of the upland portion of Parcel 2
     hereinabove described.

     Parcel 8: All walk or driveways, conveyors, sewer and effluent pipes,
     culverts, water mains, conduits, conductors, wins, trackage, and all
     appurtenances thereto belonging, under, upon, over, and across the railroad
     right of way lying between Parcel 1 and Parcel 2 hereinabove described.

     Parcel 9: All rights of the Grantor hereinunder that certain indenture
     dated August 10, 1931 and recorded May 7, 1932, in Book 54, at page 260,
     Deed Records of said Columbia County, between Chas. R. McCormick Lumber Co.
     of Delaware and St. Helens Pulp and Paper Company.

     Parcel lO: All and any other property, rights, licenses, privileges,
     permits, easements, and rights of way, not enumerated above, acquired by
     the Grantor herein or its predecessors in interest, in connection with the
     use, ownership, or possession of the lands described in Parcel 1 and Parcel
     2 hereinabove a described.

Excepting therefrom the following described parcels of property:

<PAGE>

Parcel 1

     Beginning at the intersection of the South line of the H.M. Knighton
     Donation Land Claim with the Southerly extension of the West line of Block
     70, St. Helens, as per plat on file and of record in the Clerk's office of
     Columbia County, Oregon in Section 1, Township 4 North, Range 1 West,
     Williamette Meridian, Columbia County, Oregon, said point being the
     Northwest corner of the first parcel described in the City of St. Helens
     tract in Deed Book 177 at page 23. Deed Records of Columbia County Oregon:
     thence along the Westerly line of said City of St. Helens tract South______
     East a distance of 451.03 feet: thence South 8(degrees) 19' West a distance
     of 590.38 feet to the South line of Section 3, a distance of 219.26 feet;
     thence leaving said Westerly line of the City of St. Helens tract North
     45(degrees)07'53" West a distance of 79.28 feet; thence North
     36(degrees)41'53" West a distance of 322.77 feet; thence North
     28(degrees)51'40" East a distance of 220.50 feet; thence North
     29(degrees)12'47" East a distance of 119.37 feet to a point on the
     Southerly extension of the East line of Block 85, St. Helens; thence North
     16(degrees)57'23" West along said Southerly extension of the East line of
     Block 85 a distance of 208.12 feet to said South line of said H.M. Knighton
     Donation Land Claim; thence North 71(degrees)30' East along said South line
     of the H.M. Knighton Donation Land Claim a distance of 80.03 feet to the
     True Point of Beginning. CONTAINING 6.86 acres more or less.

     Subject to and excepting all easements, reservations, restrictions and
mineral rights of record.

     This conveyance shall be subject to Grantor's right of reverter as follows:

     If the property is determined by the Grantee or any successor fire
protection provider to be excess property or is not used for fire related
purposes for a period of three (3) years, and there are no written development
plans to use or continue to use the property for a fire training site or other
fire prevention or

Bargain and Sale Deed with Right of Reverter - 1

<PAGE>

                                      -5-

Parcel 2

     Beginning at the point of intersection with the Northwesterly right-of-way
     line of the S.P. & S. Railroad and the Northwesterly line of Government Lot
     4 in Section 3, Township 4 North, Range 1 West of the Willamette Meridian,
     Columbia County, Oregon; thence Southwesterly along the Northwesterly line
     of said Government Lot 4 and Northwesterly line of Government Lot 6 of said
     Section 3, 1,352.93 feet to the intersection of the prolongration
     Southeasterly of the Northeasterly right-of-way line of 9th Street and the
     Northwesterly line of said Government Lot 6; thence South 55(degrees)59'
     East, 451.03 feet; thence South 8(degrees)19' West 593.09 feet to the South
     line of said Section 3; thence West along the South line of said Section 3,
     300 feet; thence South 21(degrees)09' West, 226.63 feet; thence South
     68(degrees)51' East, 750 feet to the Northwesterly right-of-way line of
     said S.P. & S. Railroad; thence North 21(degrees)09' East along the
     Northwesterly right-of-way line of said S.P. & S. Railroad right-of-way,
     1,876.84 feet to the point of beginning; and

     Part of Lot 1, Section 10, Township 4 North, Range 1 West of the Willamette
     Meridian, Columbia County, Oregon described as follows:

     Beginning at the Northeast corner of Tract 9-2 conveyed to St. Helens Paper
     Corporation, a Delaware corporation, by deed recorded May 7,

     1964 in Book 154, page 896, Deed Records of Columbia County, Oregon; thence
     South 21(degrees)09' West, 100.86 feet; thence South 41(degrees)42' West,
     128.16 feet; thence South 21(degrees)09' West 84 feet; thence North
     68(degrees)51' West, 415 feet; thence North 21(degrees)09' East 304.86 feet
     to the Northwesterly line of said Tract 9-2; thence South 68(degrees)51'
     East along the Northwesterly line of said Tract 9-2, 460 feet to the point
     of beginning

Subject to:

     1.   Right, title and interest of the State of Oregon in and to that
          portion of the above premises lying between ordinary high and low
          water.

     2.   The rights of fishing, navigation and commerce in the State of Oregon,
          the Federal Government and the public in and to that portion thereof
          lying below the ordinary high water mark of the Columbia River.

     3.   A slope easement from St. Helens Pulp and Paper Co., an Oregon
          corporation, to Chas. R. McCormick Lumber Co., of Delaware, a Delaware
          corporation, recorded May 7, 1932 in book 54, page 260, Deed Records
          of Columbia County, Oregon.

<PAGE>

                                    EXHIBIT N

                          REQUIRED CAPITAL IMPROVEMENTS

          -    Head Box and breast roll replacement

          -    3 Ply Winder capability

          -    Profile Control for moisture, weight, and caliper

          -    Yankee Drive upgrade

          -    Roll Wrap replacement

<PAGE>

                             KOPLIK PAPER ASSOCIATES
                                 505 PARK AVENUE
                               NEW YORK, NY 10022
                                 (212] 339-1811

                                   EXHIBIT O
                                   ---------

                                                               November 13, 1992

 Mr. Tom Carlile
 Director, Finance and Planning
 Boise Cascade Corporation
 One Jefferson Square
 P.O. Box 5O
 Boise, Idaho 83728-001

          Re:  Agreement dated October 10, 1992
               between Boise Cascade Corporation and
               Koplik Paper Associates ("Agreement")

Dear Tom:

This will acknowledge that Koplik Paper Associates ("Koplik") will look solely
to American Tissue Mills of Oregon, Inc, ("American") for payment of the fee
which way become due and owing to Koplik as a result of the purchase by American
from Boise Cascade Corporation ("Boise") of the paper machine designated No. 3
at St. Helen's, Oregon.

Boise's obligation under the Agreement is hereby deemed cancelled, null and
void, and Koplik releases Boise from any and all liability with respect to the
Agreement.

                                                        Very truly yours,

                                                        Koplik Paper Associates

                                                        By:/s/ Kenneth E. Koplik
                                                           ---------------------
                                                           Kenneth E. Koplik

            TELEX 420018        TWX (710)581-5392            FAX (212) 838-8790

<PAGE>

                          EXHIBIT P

JANUARY 1992
#3 PAPER MACHINE PRODUCTION - 3383 TONS

NOTE: THE # OF REELS IS BASED ON # OF PAPER TESTS THE DATE IS THE END OF RUN

   OLD                    GRADE            #
SPEC CODE              WEIGHT DATE       REELS
----------            --------------     -----
3002--05 123             9  01/01/92       12    SPEC CODE CONVERSIONS
3002--05 647             9  01/03/92       21    1000'S = MARKING TISSUE, ETC.
2101--17 647            12  01/04/92        4    2000'S = GOWNSTOCK & NAPKIN
2101--17 513            12  01/04/92        4    3000'S = TISSUE
2101--17 937            12  01/04/92        3    4000'S = FACIAL
2101--17 422            12  01/05/92        2    5000'S = WADDING
3002--05 423             9  01/06/92       15    6000'S = TOWEL
2202--16 181          10.5  01/06/92        4    7000'S = CARRIER
2301--16 181            11  01/06/92        3
2402--16 181          10.5  01/07/92        5    COLOR CODE CONVERSIONS
2002--03 181            14  01/07/92        7    100'S =  WHITE
2402--16 181          10.5  01/07/92        6    200'S =  MANILA, ETC.
2401--16 181          10.5  01/08/92        3    300'S =  YELLOW
7001--06 123          10.5  01/08/92        2    400'S =  BUFF
7001--06 123          10.2  01/08/92        2    500'S =  GREEN
2402--16 181            10  01/08/92        4    600'S =  BLUE
2101--17 123            12  01/08/92        3    700'S =  PINK, MAUVE
3002--05 123             9  01/10/92       16    800'S =  GRAY
2101--17 123            12  01/11/92       15    900'S =  MELON, ETC.
2101--17 385            12  01/12/92        8
3201--10 123            11  01/13/92        3
3002--05 423             9  01/13/92        5
2101--17 423            12  01/14/92        5
4301--05 181            13  01/14/92        4
4101--05 181            13  01/14/92        2
2001--03 123          13.8  01/14/92        3
3002--05 123             9  01/15/92        6
4101--05 181            13  01/15/92        1
2001--03 123          13.8  01/15/92        1
3002--05 123             9  01/19/92       39
6102--13 123            11  01/20/92       19
3002--05 123             9  01/21/92        8
6101--13 123            11  01/22/92        5
2602--16 181            12  01/22/92        2
2601--16 181            12  01/22/92        1
2101--17 123            12  01/23/92        8
2402--16 181            10  01/23/92        5
2101--17 123            12  01/23/92        3
6101--13 123            11  01/24/92        2
3002--05 123             9  01/25/92       14
3201--10 123            11  01/26/92       19
6101--13 123            11  01/27/92       10

<PAGE>

3201--10 123            11 01/28/92         3
2002--03 181            14 01/28/92         2
3201--10 123            11 01/28/82         7
7001--06 123          10.5 01/29/92         3
3002--05 123             9 01/31/92        24
3201--10 123            11 01/31/92         2
3002--05 123             9 01/31/92         2

MARCH 1992
#3 PAPER MACHINE PRODUCTION = 3359 TONS

NOTE:

NOTE: THE # OF REELS IS BASED ON # OF PAPER TESTS THE DATE IS THE END OF RUN

   OLD                   GRADE            #
SPEC CODE              WEIGHT DATE       REELS
----------            -------------      -----

2101--17 423            12 03/01/92         7    SPEC CODE CONVERSIONS
3002--05 123             9 03/0292          6    1000'S = MARKING TISSUE, ET
4202--11 123             9 03/02/92         6    2000'S = GOWNSTOCK & NAPKIN
3002--05 123             9 03/03 92        15    3000'S = TISSUE
1601--17 181            16 03/04/92        17    4000'S = FACIAL
2001--03 123          13.8 03/05/92         4    5000'S = WADDING
3002--05 123             9 03/06/92        11    6000'S = TOWEL
3002--05 759             9 03/06/92         4    7000'S = CARRIER
2101--17 647            12 03/06/92         6
6902--13 123            13 03/08/92        21    COLOR CODE CONVERSIONS
6901--13 123            13 03/09/92         7    100'S = WHITE
7001--06 123          10.2 03/09.92         5    200'S = MANILA, ETC.
2101--17 123            12 03/09/92         5    300'S = YELLOW
6901--13 123            13 03/10/92        17    400'S = BUFF
1702--17 123          16.6 03/11/92         8    500'S = GREEN
2001--03 123          13.8 03/11/92         4    600'S = BLUE
7001--06 123          10.5 03/11/92         2    700'S = PINK, MAUVE
4202--11 123             9 03/12/92         4    800'S = GRAY
3002--05 123             9 03/12/92         3    900'S = MELON, ETC.
6101--13 123            12 03/14/92        24
3002--05 123             9 03/15/92         5
6101--13 123            11 03/15/92         9
3002--05 123             9 03/17/92        11
3201--10 123            11 03/17/92         5
2101--17 123            12 03/18/92         6
2101--17 382            12 03/18/92         4
3002--05 385             9 03/18/92         1
3002--05 423             9 03/18/92         1
2101--17 423            12 03/18/92         4
3002--05 937             9 03/19/92         1
3002--05 647             9 03/19/92         2
4301--05 181            13 03/19/92         5
3201--10 123            11 03/20/92         8
4202--11 123             9 03/20/92         5
3002--05 123             9 03/21/92         6
2202--16 181            10 03/23/92        21
6601--04 123          13.7 03/23/92         4

                                      -2-
<PAGE>

6801--05 123          15.3 03/23/92         3
2202--16 181            10 03/24/92         7
3002--05 123             9 03/24/92         6
2202--16 181            10 03/26/92        20
2101--17 123            12 03/26/92         2
2402--16 181            10 03/26/92         2
2201--16 181            10 03/27/92        12
2202--16 715            10 03/28/92         9
2202--16 647            10 03/29/92         8
2201--16 647            10 03/29/92         4
2201--16 385            10 03/30/92         2
6101--13 123            12 03/31/92        17
3002--05 123             9 03/31/92         3

                                      -3-
<PAGE>

                                   EXHIBIT Q

                       ASSIGNMENT AND ASSUMPTION AGREEMENT

     THIS AGREEMENT, made and entered into this 23rd day of November, 1992, by
and between BOISE CASCADE CORPORATION ("Boise Cascade") and AMERICAN TISSUE
MILLS OF OREGON, INC. ("American Tissue").

                              W I T N E S S E T H:

     WHEREAS, Boise Cascade and American Tissue have entered into an Agreement
with even date herewith (the "Main Agreement"); and

     WHEREAS, the Main Agreement requires Boise Cascade to assign to American
Tissue and American Tissue to assume Boise Cascade's Tissue Agreement, as
defined below.

     NOW, THEREFORE, the parties hereto agree as follows:

     1. Definitions. The term "Tissue Agreement," for purposes of this
Agreement, shall mean the November 11, 1992, tissue agreement between Boise
Cascade and The Veratex Corporation and TIDI Products, Inc. Boise Cascade
represents that a copy of the Tissue Agreement, together with all extensions,
modifications, and amendments thereto, if any, is attached hereto as Exhibit Q1.
American Tissue's assumption of the Tissue Agreement, if any, shall relate only
to obligations and duties which occur and arise or which relate to events which
occur and liabilities which arise from and after the date of the assignment.

     2. Consents to Assignment. Boise Cascade shall use its best efforts to
promptly obtain the required consent to the assignment of the Tissue Agreement.
Prior to the assignment, American Tissue will sell tissue paper to Boise Cascade
on the

<PAGE>

same terms as Boise Cascade is obligated to sell or perform under the Tissue
Agreement and Boise Cascade shall, at American Tissue's option, pay to American
Tissue or credit American Tissue an amount equal to the purchase price therefor,
inclusive of sales tax. If Boise Cascade is unable to obtain consent to the
assignment, American Tissue will sell tissue paper to Boise Cascade on the same
terms as Boise Cascade is obligated to sell or perform under the Tissue
Agreement for the remainder of the term thereof and Boise Cascade shall pay
American Tissue therefor as set forth in the preceding sentence.

     3. Further Assurances. Each party hereby promises to deliver, upon request
of the other party, all such additional assignments, assumptions, and other
documents which may be reasonably necessary and convenient to accomplish the
intent of this Agreement.

     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as of the date set forth above.

                                                 BOISE CASCADE CORPORATION

                                                 By_____________________________
                                                 Title__________________________

                                                 AMERICAN TISSUE MILLS
                                                 OF OREGON, INC.

                                                 By_____________________________
                                                 Title__________________________

                                      -2-

<PAGE>

                                                                     Exhibit Q-l
                             THE VERATEX CORPORATION
                               TIDI PRODUCTS, INC.
                            c/o 1304 East Maple Road
                              Troy, Michigan 48084
                         313-588-2970; FAX 313-588-1779

                                                                     11/11, 1992
Mr. J. Ray Barbee
Boise Cascade, White Paper Division
1800 SW First Avenue (97201-5324)
P.0. Box 1414
Portland, Oregon 97207

     Re:  TISSUE AGREEMENT

Dear Mr. Barbee:

     As discussed Mr. John S. Sitter, President of Sitter & Associates, among
The Veratex Corporation ("Veratex"), Tidi Products, Inc. ("Tidi"), and your
company, Boise Cascade Corporation, White Paper Division ("Boise Cascade"), set
forth below are the terms and conditions upon which Boise Cascade shall sell,
and Veratex and Tidi shall purchase, certain tissue products:

     1. Product -- Grade and Quality. The grade of the product or goods in
question is the so-called Boise Tissue as currently manufactured at your Boise,
St. Helens, Oregon location, No. 3 Paper Machine, 1 and 2-ply, in both white and
the other colors described in Paragraph 4 below (the "Tissue

<PAGE>

Mr. J. Ray Barbee
Vice President and General Sales Manager
Boise Cascade, White Paper Division
11/11, 1992
Page 2

Products"). Upon delivery, the Tissue Products shall be in rolls with a maximum
outside diameter of forty-five (45) inches and shall be of a quality conforming
to the prevailing specifications as shall be agreed upon from time to time by
the parties to this agreement.

     2. Contract period. This agreement shall apply to the period beginning on
the date of your confirmation and agreement hereof and ending on March 31, 1993.

     3. Quantity. Boise Cascade agrees to sell such amounts of the Tissue
Products as Veratex and/or Tidi shall collectively request, provided that in no
event shall Boise Cascade be obligated to sell an aggregate of more than four
hundred and seventy-five (475) short tons of the Tisette Products per month.

     4. Price. The price for the Tissue Products shall be as set forth below.

     (a) Veratex. The price for the Tissue Products sold to Veratex shall be as
follows:

      White                 $815.00/ST F.O.B. Del'd to Veratex

      Beige, Blue, Green,
        Peach and Yellow  $890.00/ST F.O.B. Del'd to Veratex

      Mauve and Grey        $895.00/ST F.O.B. Del'd to Veratex

The foregoing prices are collectively referred to as the "Veratex Prices".

     (b) Tidi. The price for the Tissue Products sold to Tidi shall be as
follow:

      White                 $825.00/ST F.O.B. Boise Mill

      Beige, Blue, Green,   $840.00/ST F.O.B. Boise Mill
        Peach, and Yellow

      Mauve and Grey        $845.00/ST F.O.B. Boise Mill

The foregoing prices are collectively referred to as the "Tidi Prices".

     5. Delivery.

<PAGE>

Mr. J. Bay Barbee
Vice President and General Sales Manager
Boise Cascade, White Paper Division
11/11, 1992
Page 3

     (a) Veratex. As indicated in Paragraph 4(a) above, the Tissue Products sold
to Veratex will be delivered F.O.B. to Veratex located at 19000 Fitzpatrick,
Detroit, Michigan. Accordingly, Boise Cascade shall bear all the
responsibilities and costs up to the point of delivery, including without
limitation, insurance, risk of loss, transportation and shipping costs. In
addition to the foregoing, it is expressly acknowledged and agreed that Boise
Cascade shall pay when due the off-site storage costs incurred by Veratex with
respect to any bulk purchase orders made hereunder by Veratex as charged from
time to time by Burnham or other warehouses for the storage of any such bulk
purchase orders, provided that, in the event Boise Cascade fails to timely pay
any such costs, Veratex shall be entitled to pay same on behalf of Boise Cascade
and deduct same from any payments due Boise Cascade under this agreement.

     (b) Tidi. As indicated in Paragraph 4(b) above, the Tissue Products sold to
Tidi will be F.O.B. Boise Cascade's mill located at 1300 Kaster Road, St.
Helens, Oregon.

     6. Payment. One hundred percent (l00%) of the Veratex Prices and the Tidi
Prices shall be Payable net cash thirty (30) days after date of invoice or
shipment (whichever is later). It is expressly acknowledged and agreed that
Veratex shall be obligated to make payments to Boise Cascade for Tissue
Products delivered to Veratex pursuant to Paragraph 5 hereof and, likewise, Tidi
shall buy obligated to make payments to Boise Cascade for Tissue Products
delivered to Tidi pursuant to Paragraph 5 hereof.

     7. Title. Although Boise Cascade shall continue to bear the
responsibilities and costs described in Paragraph 5 of this letter agreement,
ownership and title to the Tissue Products shall be transferred from Boise
Cascade to Veratex or Tidi, as the case may be, at such time as Boise Cascade
completes its performance under this agreement (or in such other manner as shall
be mutually agreed upon in writing by the parties from time to time) with
respect to the physical delivery of the Tissue Products or at such time as full
payment therefor is tendered to Boise Cascade, whichever is the earlier to occur
(which, for purposes of this agreement, includes payment of the applicable
Veratex Prices and Tidi Prices due Boise Cascade hereunder, less any applicable
credits due Veratex and/or Tidi hereunder).

     8. Miscellaneous.

     (a) Entire Agreement; Amendment. This letter agreement is the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof. No representation, inducement, agreement, promise, or
understanding altering, modifying, taking from or adding to the terms and

<PAGE>

Mr. J. Ray Barbee
Vice President and General Sales Manager
Boise Cascade, White Paper Division
11/11, 1992
Page 4

conditions hereof shall have any force and effect unless the same is in writing
and validly executed by the parties hereto. In connection therewith, this
agreement shall supersede any purchase order, or any inconsistency in a purchase
order, issued subsequent to the date hereof unless the same is in writing and
validly executed by the parties hereto.

     (b) Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed to have been duly given if
physically delivered, telephonically transmitted via telecopier or other similar
means or three (3) days after having been deposited in the United Stares Mail,
as certified mail with return receipt requested and with postage prepaid,
addressed to the recipient as follows:

     If to Boise Cascade:

     Boise Cascade Corporation, White Paper Division
     1800 SW First Avenue (97201-5324)
     P.0. Box 1414
     Portland, Oregon 97207
          503-790-9721; FAX 503-790-9508
     Attention Mr. J. Ray Barbee, Vice President
                   and General Sales Manager

     If to Veratex or to Tidi:

     c/o The Veratex Corporation
     1304 East Maple Road
     Troy, Michigan 48084
     313-588-2970; FAX 313-588-1779
     Attention: President

     When a notice is sent hereunder, a courtesy copy shall be sent to:

     Sitter & Associates
     224 South Glendora, Suite B
     Glendora, California 91740
            818-9l4-4555; FAX 818-963-5481
     Attention: Mr. John S. Sitter

The addressee so indicated for any party ray be changed by similar written
notice.

     (c) Force Majeure -- Excuse by Failure of Presupposed Conditions. The
parties acknowledge and agree that, with regard to Section

<PAGE>

Mr. J. Ray Barbee
Vice President and General Sales Manager
Boise Cascade, White Paper Division
11/11, 1992
Page 5

2-615 of the Uniform Commercial Code as in effect from time to time in the State
of Michigan, being MCLA 1440.2615, the occurrence of a work stoppage or strike,
the occurrence of a material breakdown in the No. 3 Paper Machine (which cannot
be repaired in a reasonable time or at a reasonable expense) or of a material
decline in demand by third parties for the Tissue Products or related products
manufactured on the No. 3 Paper Machine (which continues for an unreasonable
period of time) shall constitute a contingency the non-occurrence of which was a
basic assumption on which this agreement was made.

     (d) Taxes. Except for applicable sales taxes, which shall be the
responsibility of Veratex and/or Tidi, as the case may be, Boise Cascade shall
be responsible for all other applicable taxes, including all federal or state
income taxes, excises, assessments, impositions, tariffs, import duties, or
similar charges now or hereafter imposed by any taxing jurisdiction arising from
the manufacture, storage (not including the off-site storage of the Tissue
Products described under Paragraph 5(a) above which shall be the responsibility
of Veratex), transportation (up to the point of delivery as contemplated in this
agreement), or sale of the Tissue Products under this agreements

     (e) Warranty. Boise Cascade represents and warrants to Veratex and Tidi
that it has and will convey good title, to the Tissue Products sold and
delivered hereunder free and clear of all liens, claims and encumbrances and
that the Tissue Products sold and delivered hereunder will be at least
commercially equal to the quality of such grade which Boise Cascade has
traditionally run on the No. 3 Paper Machine. EXCEPT AS SET FORTH HEREIN, BOISE
CASCADE MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED AS
TO THE MERCENTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE, CONDITION, OR ANY
OTHER MATTER WITH RESPECT TO THE TISSUE PRODUCTS.

     (f) Parties in Interest. This Agreement shall be binding upon and inure to
the benefit it of, and be enforceable by, the parties hereto and their
respective successors and assigns.

     (g) Assignment.

     (i) By Veratex and/or Tidi. Veratex and/or Tidi may assign their rights and
obligations under this agreement in connection with the sale or other
disposition of all or substantially all of their business and assets or upon
Boise Cascade's prior written consent, which consent shall not be unreasonably
withheld; provided that, Boise Cascade shall be deemed to have reasonable
grounds to withhold its consent to an assignment to a person engaged, directly
or indirectly, in the same business in which Boise Cascade is currently engaged
in and provided further that, Boise Cascade's prior written

<PAGE>

Mr. J. Ray Barbee
Vice President and General Sales Manager
Boise Cascade, White Paper Division
11/11, 1992
Page 6

consent shall not be required for any assignment by Veratex and/or Tidi to
another person which controls, is controlled by, or is wider common control with
Veratex and/or Tidi.

     (ii) By Boise Cascade. Boise Cascade may assign its rights and obligations
under this agreement in connection with the sale or other disposition of all or
substantially all of its business and assets or upon Veratex's and Tidi's prior
written consent, which consent shall not be unreasonably withheld; provided
that, Veratex and/or Tidi shall be deemed to have reasonable grounds to withhold
their consent to an assignment to is person engaged, directly or indirectly, in
the same business in which Veratex and/at Tidi are currently engaged; and
provided further that, Veratex's and/or Tidi's prior written consent shall not
be required for any assignment by Boise Cascade to another person which
controls, is controlled by, or is under control with Boise Cascade.

     (h) Counterparts. This agreement may be executed in any number of
counterparts, each of which shall be treated as an original but all of which,
collectively, shall constitute a single instrument.

     (i) Waiver. Unless agreed in writing, the failure of any party, at any
time, to require performance by the other of any provisions hereunder shall not
affect his or its right thereafter to enforce the same, nor shall a waiver by
any party of any breach of any provisions hereof be taken or held to be a waiver
of any other breach of any term or provision of this agreement.

     (5) Severability. In the event that any one or more of the provision of
this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.

     (k) Construction: Govern Law and Captions. Except as otherwise provided
herein, this agreement shall be governed by and construed in accordance with the
laws of the State of Michigan, including, without limitation, the provisions of
the Uniform Commercial Code as in effect from time to time in the State of
Michigan, without regard to its rules regarding choice of law. The captions of
the paragraphs and the subparagraphs have been inserted as a matter of
convenience and reference only and shall nor control or affect the meaning or
construction of this agreement.

                                     * * *

<PAGE>

Mr. J. Ray Barbee
Vice President and General Sales Manager
Boise Cascade, White Paper Division
11/11, 1992
Page 7

     If Boise Cascade is in agreement with the foregoing terms and conditions,
please so indicate such agreement by signing and returning copy of this letter
agreement whereupon this letter will constitute agreement between Boise Cascade,
on the one hand, and Veratex and Tidi, on other hand, with respect to the
subject matter thereof.

                                                         Very truly yours,

                                                         THE VERATEX CORPORATION

                                                         By: /s/ [ILLEGIBLE]
                                                            -------------------

                                                            Its: Treasurer

                                                         TIDI PRODUCTS, INC.

                                                         By: /s/ [ILLEGIBLE]
                                                            --------------------

                                                            Its: Treasurer

Confirmed and Agreed:

BOISE CASCADE, WHITE PAPER DIVISION

   /s/ J. Ray Barbee
By:---------------------------------

   Its: Vice President

Dated: 11/11, 1992

<PAGE>

                             ADDENDUM TO TRUST DEED

AMONG: AMERICAN TISSUE MILLS OF OREGON, INC.,         ("Grantor")
       a New York Corporation

AND:   TICOR TITLE INSURANCE COMPANY                  ("Trustee")

AND:   BOISE CASCADE CORPORATION, a Delaware
       Corporation                                    ("Beneficiary")

     The following is incorporated into the Trust Deed to which this Addendum is
attached, as if fully set forth therein:

     This Trust Deed shall not increase any obligations of Grantor under the
Agreement; rather this Trust Deed is given solely to assure Beneficiary's
security interest in the Machine. Beneficiary has agreed to subordinate its lien
on the Machine under certain circumstances to the lien of Grantor's other
lenders subject to the terms of the Agreement, solely with respect to such
lenders; this Trust Deed shall not be subordinate to any other liens. The
Agreement, including all terms, conditions, and exhibits thereof are
incorporated herein by this reference. Upon the default by Grantor under the
Agreement and failure to cure such default within any applicable cure period,
Beneficiary may foreclose upon Grantor's interest in the Machine in accordance
with applicable law. Grantor's obligations under the Agreement shall be fully
performed not later than December 31, 2012 (or 180 days thereafter* if removal
of the Machine is to occur following expiration of the Agreement).

     *subject to force majeure as set forth in Section 16 of the Agreement

<PAGE>

                                    EXHIBIT A

                                  NO. 3 MACHINE

     The No. 3 Paper Machine located at the Mill, more particularly described as
all machinery, equipment and component parts located above the sole plate and
all spare parts at the Mill relating exclusively to the No. 3 Paper Machine
including, without limitation, the following:

     Beloit 258" Fourdrinier tissue paper making machine No. 3 consisting of
steel air cushioned controlled flow stock inlet, 5 rectifier and distributing
rolls, PH meter, wet end control panel, removable suspended fourdrinier section
with 258" x 73' wire, 3 suction boxes, rubber covered wire rolls with doctors,
32" suction couch roll, 48" brass suction breast roll, 28" rubber covered
pressure roll, 32" top suction press, suction roll on 32" rubber covered roll,
rubber covered felt rolls, 32" rubber covered second press roll on 40" rubber
covered suction roll, 3 felt guides and stretchers for 262" x 108' and 262" x
71' wet felts, press section control panel, 12' Yankee dryer, two 40" rubber
covered suction pressure rolls, suction box, Beloit high velocity hood,
pneumatic loaded skinning, creping and cleaning doctors, dry end control board,
drum reel with 36" drum and sliding shaft, roll lowering device, reel control
panel, unwind stand with direct double belt drive, pneumatic pressure device,
iron carrier roll, 2-drum slitter and 252" rewinder with galvanized iron hood,
pneumatic roll transfer and hoist, 21" x 40' roller bed belt conveyor, control
board for rewinder, control

<PAGE>

board for transfer conveyor and hoist, pneumatic roll breaker and ejector,
3-stop holding table, together with all motors, drives, pumps, stock preparation
facilities, motor generator sets, compressors, cranes, hoists, process piping,
process wiring, spare parts, furniture and apparatus (including wire stringing
device, skids, tables, hand tools, lockers, storage racks, miscellaneous
equipment), all being located in No. 3 Machine Building; also spare parts and
apparatus and equipment auxiliary to and supporting the operation of No. 3
Machine wherever the same be situated.

The following spare parts:

Reducers                                   Storage Reference Number
--------                                   ------------------------

1 - #3 Rectifier Roll                      443-29-040

1 - Head Box Rectifier Roll 1 & 2          443-29-017

1 - #3 Saveall Repulper                    443-92-020

1 - Suction Couch Roll                     443-92-051

1 - Top & Bottom Cal Roll Dr.              443-92-053

1 - Reel Drive                             443-92-052

1 - Wire Turning Roll                      443-92-180

1 - Suction Press and Top Press            443-92-057

1 - Bottom Press Roll 1st                  443-92-058

1 - Calender Drive                         443-80-030

Pumps
-----

Semens 505 Vac. Pump

Fans
----

Wet End Hood Exhaust                       853-26-075

<PAGE>

Miscellaneous

Rotating Ass. For Fan Pump

Gears to rebuild Yankee Dryer gearbox

H-3 Core Cutter

Roll Wrap equipment

Spare Yankee Motor 1250HP/900 RPM Motor #1347

8 - Modified 2300 volt starter

1 - South End Motor Generator set.

Rolls

1 - Yankee Dryer

1 - Couch Roll 1 - Pressure Roll Top - 301/40" dia.

2 - Pressure Roll Bottom - 301 and 304/40" dia.

2 - Combine Cal Plane - 316 and 323/27.672 dia.

1 - #1 Wire Roll Hand - 31003/20" dia.

1 - #2 Wire Roll Stretch - 31101/20" dia.

3 - Felt Rolls 33015, 33018 and 33103/18.750 dia.

1 - Mt. Hope Winder 7" dia.

Rolling Stock

1 - #6 Grab Truck

1 - #8 Tow Tractor

1 - #11. Tow Tractor

24 - Roll Carts (makes two trains)

1 - #3 Lift Truck

<PAGE>

                               [GRAPHIC OMITTED]

                                                   AREA EMERGENCY EVACUATION MAP

<PAGE>

                                    EXHIBIT B

All of that real property together with the tenements, hereditiments and
appurtenances situate, lying, and being in Columbia County, State of Oregon,
dounded and particularly described as follows, to-wit;

     Parcel: A parcel of land in the Thomas H. Smith Donation Land Claim No. 40
     In Sections 9 and 10, Lot 7 of said Section 9, and Lots 1 and 2 of said
     Section 10, all in Township 4 North, Range 1 West of Willamette Meridian,
     Columbia County, Oregon, more particularly described as follows:

     Beginning at a point in said Lot 7 which Is 1425.31 feet distant South 190
     17' 25" West from the Southwesterly center of Block 70 in the center St.
     Helens, Columbia County, Oregon; thence South 68(degrees) 51' East for a
     distance of 174.09 feet to the most Southeasterly corner of Terrace Street
     in Hawley Addition to St. Helens, Oregon; thence North 29(degrees) 00' East
     along the most Easterly line of Terrace Street for a distance of 356.14
     feet to the most Easterly corner of said Terrace Street; thence North
     61(degrees) 00' West along the Northeasterly line of said Terrace Street
     for a distance of 420.0 feet to its intersection with the Northeasterly
     prolongation of the Northwesterly line of Lot 9 of Block 12, said Hawley
     Addition, said point of intersection being marked with an iron pipe; thence
     South 68(degrees) 51' East for a distance of 1,193.31 feet to a point
     marked by an iron pipe on the Northwesterly Line of the right of way of
     Spokane, Portland and Seattle Railway Company; thence South 21(degrees) 09'
     West along said Northwesterly right of way Line for a distance of 310.10
     feet to a point which is 50 feet distant North 03(degrees) 51'West from a
     point on the center line of Spokane, Portland and Seattle Railway Company's
     railroad, which is located by beginning at the point of the intersection of
     the center line of Columbia Street with the Southerly line of Cowlitz
     Street in said City of St. Helens and running thence South 16(degrees) 57'
     East for a distance of 670 feet to the point of beginning of a 1,910.08
     foot radius curve to the right, Southerly along said curve through a
     central angle of 39(degrees) 00' for a distance of 1,270 feet to the end of
     said curve, and South 21(degrees) 09' West tangent to said curve for a
     distance of 2,827.8 feet thence South 68(degrees) 51' East for a distance
     of 25 feet to a point 25 feet distant Northwesterly from, when measured at
     right angles to, said railroad center line; thence South 21(degrees) 09'
     West parallel to said center line for a distance of 1,671.5 feet to a
     point; then South 68(degrees) 51' East a distance of 25 feet to the center
     line of the Spokane, Portland and Seattle Railway Company right way; thence
     Southwesterly along the center line of the right of way of Spokane,
     Portland and Seattle Railway Company to its intersection with a line
     bearing South 68(degrees) 51' East from a point which is 2,191.00 feet
     distant South 21(degrees) 09' West from the point of beginning; thence
     North 68(degrees) 5' West to said point, which is 2191.00 feet distant
     South 21(degrees) 09' West from the point of beginning; thence continuing
     North 68(degrees) 51' West (or a distance of 1,093.3 feet to a point in the
     center of Milton Creek, thence Northerly along the center of said Milton
     Creek as follows: North 42(degrees) 15' East for a distance of 122.4 feet;
     North 61(degrees) East for a distance of 292.6 feet; North 42(degrees) 47'
     East for a distance of

<PAGE>

                                       -2-

     213.6 feet; North 17(degrees) 57' West for a distance of 587.0 feet: North
     37 (degrees) 22' East for a distance of 210.0 feet; North 4 (degrees) 22'
     East for a distance of 225.0 feet, and North 60 (degrees) 37' West for a
     distance of 119.1 feet to the point of intersection with the Southwesterly
     prolongation of the center line of Fir Street in said in said Hawley
     Addition; thence North 29(degrees) 00' East along said Southwesterly
     prolongation for a distance of 23.5 feet to a point on the South line of
     Brook Street in said Hawley Addition; thence Southeasterly along said South
     line of Brook Street as follows: South 61(degrees) 00' East a distance of
     490.0 feet; South 29(degrees) 00' West for a distance of 50.0 feet, and
     South 61(degrees) 00' East for a distance of 799.02 feet to a point which
     is 969.16 feet distant South 21(degrees) 09' West from the point of
     beginning; thence North 21(degrees) 09' East along the Southeasterly line
     of said Hawley Addition for a distance of 969.16 feet to the point of
     beginning, EXCEPT that portion lying within the bounds of the Spokane,
     Portland and Seattle Railway Company right of way.

     Parcel 2: A parcel of land in the Thomas H. Smith Donation Land Claim No.
     40 in Sections 9 and 10 and Lots 1 and 2 of said Section 10, all in
     Township 4 North, Range 1 West of the Williamette Meridian, Columbia
     County, Oregon, more particularly described as follows:

     Beginning at a point in said Lot 1 which Is 2,108.59 feet distant South and
     413.1 feet distant East from the Southwesterly corner of Block 70 of the
     City of St. Helens, Columbia County, Oregon; thence North 68(degrees) 51'
     West for a distance of 25 feet to the true point of beginning of this
     description, said true point of beginning being also a point 25 feet
     distant South 68(degrees) 51' East from the center line of the railroad of
     Spokane, Portland and Seattle Railway Company at a point which is located
     by beginning at the point of intersection of the center line of Columbia
     Street with the Southerly line of Cowlitz Street in said City of St. Helens
     and running thence South 16(degrees) 57' East for a distance of 670 feet to
     the point of beginning of a 1,910.08 foot radius curve to the right; thence
     Southerly along said curve through a central angle of 38(degrees) 06' for a
     distance of 1270 feet to the end of said curve, the end of said curve being
     hereinafter referred to as "Point A', and thence South 21(degrees) 09' West
     tangent to said curve for a distance of 3,317.7 feet; thence from the true
     point of beginning South 210 09' West parallel with said railroad center
     line for a distance of 1,171.5 feet to a point; thence North 68(degrees)
     51' West a distance of 25 feet to the center line of the Spokane, Portland
     and Seattle Railway Company right of way; thence Southwesterly along the
     center line of the right of way of Spokane, Portland and Seattle Railway
     Company to its intersection with a line bearing South 68(degrees) 51' East
     from a point, hereinafter referred to as "Point B", which is 2,191.00 feet
     distant South 21(degrees) 09' West from & point which is 1425.1 feet
     distant South 19(degrees) 17'25" West from the Southwesterly corner of said
     Block 70 of the City of St. Helens; thence South 68(degrees) 51' East to a
     point on the low water line on the West bank of the Willamette Slough which
     is 1208.20 feet distant from Point B; thence Northerly along said low water
     line as follows. North 29(degrees) 53' East for a distance of 505.87 feet,
     thence North 30(degrees) 21' East for a distance of 700 feet, and thence
     North 27(degrees) 31' East for a distance of 603.70 feet to a point 389
     feet distant South 68(degrees) 51' East from the true point of beginning
     thence South 68(degrees) 51' East for a distance of 206 feet to a point;
     thence North 3(degrees) 42' East for a distance of 450.3 feet to a point on
     the low water 1ine or said West bank; thence North 17(degrees) 20' East
     along said low water line for a distance of 366.8 feet; thence * North
     68(degrees) 51' West for a distance of 425.5 feet. to a point marked by an
     iron pipe on the Southeasterly line of the right way of Spokane, Portland
     and Seattle Railway Company which is 50 feet distant South 68(degrees) 51'
     East from the center line of the railroad of Spokane, Portland and Seattle
     Railway Company at a point which is 2,517.7 feet distant South 21(degrees)
     09' West from Point A; thence South 21(degrees) 09' West along said
     Southwesterly right of way line for a distance of 100.0 feet; thence North
     68(degrees) 51' West distance or 25 feet; thence South 21(degrees) 09' West
     parallel with center ??? said railroad for a distance of 700 feet to the
     true point of beginning ???? that portion lying within the bounds of the
     Spokane, Portland and Seattle Railway Company right of way.

<PAGE>

                                       -3

     Parcel 3: Blocks 4, 10, 11, 12 and 13, Hawley Addition to St. Helens,
     Columbia County, Oregon.

     Parcel 4: Lots 1, 2, 3, 4, 5, 6, 7, and 8, Block 7, Hawley Addition to St.
     Helens, Columbia County, Oregon.

     Parcel 5: All tide and overflow lands fronting, abutting, and lying
     Easterly of Parcel 2 hereinabove described.

     Parcel 6: All booms, wharfs, docks, bridges, buildings, structures,
     conveyors, hoists sewer and effluent discharge pipes, water mains and
     suction pipes, conduits, conductors, wires, and all appurtenances thereto
     belonging, owned by the Grantor herein lying and being Easterly of the
     upland portions of Parcel 2 hereinabove described.

     Parcel 7: All waterfront, riparian, boom, dock, water appropriation, and
     sewage or other discharge rights and privileges with respect to the river
     frontage lying and being Easterly of the upland portion of Parcel 2
     hereinabove described.

     Parcel 8: All walk or driveways, conveyors, sewer and effluent pipes,
     culverts, water mains, conduits, conductors, wins, trackage, and all
     appurtenances thereto belonging, under, upon, over, and across the railroad
     right of way lying between Parcel 1 and Parcel 2 hereinabove described.

     Parcel 9: All rights of the Grantor hereinunder that certain indenture
     dated August 10, 1931 and recorded May 7, 1932, in Book 54, at page 260,
     Deed Records of said Columbia County, between Chas. R. McCormick Lumber Co.
     of Delaware and St. Helens Pulp and Paper Company.

     Parcel lO: All and any other property, rights, licenses, privileges,
     permits, easements, and rights of way, not enumerated above, acquired by
     the Grantor herein or its predecessors in interest, in connection with the
     use, ownership, or possession of the lands described in Parcel 1 and Parcel
     2 hereinabove a described.

Excepting therefrom the following described parcels of property:

<PAGE>

Parcel 1

     Beginning at the intersection of the South line of the H.M. Knighton
     Donation Land Claim with the Southerly extension of the West line of Block
     70, St. Helens, as per plat on file and of record in the Clerk's office of
     Columbia County, Oregon in Section 1, Township 4 North, Range 1 West,
     Williamette Meridian, Columbia County, Oregon, said point being the
     Northwest corner of the first parcel described in the City of St. Helens
     tract in Deed Book 177 at page 23. Deed Records of Columbia County Oregon:
     thence along the Westerly line of said City of St. Helens tract South______
     East a distance of 451.03 feet: thence South 8(degrees) 19' West a distance
     of 590.38 feet to the South line of Section 3, a distance of 219.26 feet;
     thence leaving said Westerly line of the City of St. Helens tract North
     45(degrees)07'53" West a distance of 79.28 feet; thence North
     36(degrees)41'53" West a distance of 322.77 feet; thence North
     28(degrees)51'40" East a distance of 220.50 feet; thence North
     29(degrees)12'47" East a distance of 119.37 feet to a point on the
     Southerly extension of the East line of Block 85, St. Helens; thence North
     16(degrees)57'23" West along said Southerly extension of the East line of
     Block 85 a distance of 208.12 feet to said South line of said H.M. Knighton
     Donation Land Claim; thence North 71(degrees)30' East along said South line
     of the H.M. Knighton Donation Land Claim a distance of 80.03 feet to the
     True Point of Beginning. CONTAINING 6.86 acres more or less.

     Subject to and excepting all easements, reservations, restrictions and
mineral rights of record.

     This conveyance shall be subject to Grantor's right of reverter as follows:

     If the property is determined by the Grantee or any successor fire
protection provider to be excess property or is not used for fire related
purposes for a period of three (3) years, and there are no written development
plans to use or continue to use the property for a fire training site or other
fire prevention or

Bargain and Sale Deed with Right of Reverter - 1

<PAGE>

                                      -5-

Parcel 2

     Beginning at the point of intersection with the Northwesterly right-of-way
     line of the S.P. & S. Railroad and the Northwesterly line of Government Lot
     4 in Section 3, Township 4 North, Range 1 West of the Willamette Meridian,
     Columbia County, Oregon; thence Southwesterly along the Northwesterly line
     of said Government Lot 4 and Northwesterly line of Government Lot 6 of said
     Section 3, 1,352.93 feet to the intersection of the prolongration
     Southeasterly of the Northeasterly right-of-way line of 9th Street and the
     Northwesterly line of said Government Lot 6; thence South 55(degrees)59'
     East, 451.03 feet; thence South 8(degrees)19' West 593.09 feet to the South
     line of said Section 3; thence West along the South line of said Section 3,
     300 feet; thence South 21(degrees)09' West, 226.63 feet; thence South
     68(degrees)51' East, 750 feet to the Northwesterly right-of-way line of
     said S.P. & S. Railroad; thence North 21(degrees)09' East along the
     Northwesterly right-of-way line of said S.P. & S. Railroad right-of-way,
     1,876.84 feet to the point of beginning; and

     Part of Lot 1, Section 10, Township 4 North, Range 1 West of the Willamette
     Meridian, Columbia County, Oregon described as follows:

     Beginning at the Northeast corner of Tract 9-2 conveyed to St. Helens Paper
     Corporation, a Delaware corporation, by deed recorded May 7,

     1964 in Book 154, page 896, Deed Records of Columbia County, Oregon; thence
     South 21(degrees)09' West, 100.86 feet; thence South 41(degrees)42' West,
     128.16 feet; thence South 21(degrees)09' West 84 feet; thence North
     68(degrees)51' West, 415 feet; thence North 21(degrees)09' East 304.86 feet
     to the Northwesterly line of said Tract 9-2; thence South 68(degrees)51'
     East along the Northwesterly line of said Tract 9-2, 460 feet to the point
     of beginning

Subject to:

     1.   Right, title and interest of the State of Oregon in and to that
          portion of the above premises lying between ordinary high and low
          water.

     2.   The rights of fishing, navigation and commerce in the State of Oregon,
          the Federal Government and the public in and to that portion thereof
          lying below the ordinary high water mark of the Columbia River.

     3.   A slope easement from St. Helens Pulp and Paper Co., an Oregon
          corporation, to Chas. R. McCormick Lumber Co., of Delaware, a Delaware
          corporation, recorded May 7, 1932 in book 54, page 260, Deed Records
          of Columbia County, Oregon.

<PAGE>

ST. HELENS #3 TISSUE MACHINE

PROPOSED TERMS FOR CONTRACT OPERATING AGREEMENT

Boise Cascade will provide ongoing operations of the #3 Tissue machine to the
purchaser according to the terms described herein.

Pulp Supply    Two grades of bleached kraft pulp will be provided by the St.
               Helens mill to the purchaser. "Long fiber" composed of 100%
               softwood chips will be offered at a price equivalent to 95% of
               the average net selling price recognized by Boise Cascade's
               Wallula, Washington, mill. This pricing formula passes market
               pulp costs for freight, drying, and high brightness bleaching
               costs on as savings to the purchaser, providing an economical
               softwood pulp source.

               "Blend fiber" composed of approximately 60% sawdust pulp and 40%
               softwood chip pulp will be offered at a discount of 8% relative
               to long fiber. This provides an economical filler pulp source to
               the purchaser. Exhibit 1 shows historic and projected pulp costs
               and compares to other pulp sources, where it can be seen that the
               proposed pricing provides pulp to the purchaser at approximately
               9% below average Southern Market Pulp pricing.

               Quality specifications will be provided by Boise Cascade and will
               be adhered to as part of the contract agreement. The purchaser
               will have the right to utilize a mix of long fiber and blend
               fiber as desired within broad levels to be established in the
               contract agreement. Historic average of approximately 60% long
               fiber and 40% blend fiber will be used for the proforma cost
               projections in this document.

Direct Costs   Cost which can be specifically attributed to the #3 tissue
               machine will be charged directly to the purchaser. These include
               operating and maintenance labor, maintenance materials, operating
               supplies, natural gas, power (energy portion), and paper machine
               additives.

<PAGE>

Indirect Costs Costs which cannot be directly attributed to the #3 tissue
               machine and are shared by the various mill operations (including
               #3) will be charged as a fixed annual fee of $3.99MM in 1993,
               escalating annually with the GNP implicit price deflator as
               calculated by DRI. These costs were determined as a percentage of
               the production levels that tissue currently represents in
               relation to the total mill. This percentage is 13.8% for costs
               associated with papermaking only, and 6.1% for costs associated
               with general mill operations.

               Common facilities allocation is an estimate to cover fair share
               of common facility costs.

Capital Costs  Capital improvements for #3 tissue machine will be the
               responsibility of the purchaser.

Production     Average weight for tissue has been 4.7# on an 17" x 22" basis;
               future estimates are on the same basis.

ST HELENS TISSUE PROFORMA COST

<TABLE>
<CAPTION>
                                ----  -----  ----  -----  ----  -----  ----  -----  ----  -----
                                1988  $/TON  1989  $/TON  1990  $/TON  1991  $/TON  1992  $/TON
                                ----  -----  ----  -----  ----  -----  ----  -----  ----  -----
<S>                             <C>     <C>  <C>     <C>  <C>     <C>  <C>     <C>  <C>     <C>
PULP                            19900   549  22650   643  22872   593  15012   411  13747   380
DIRECT COSTS
 GAS/STEAM                        790    22    813    23    938    24    900    25    947    26
 ELECTRIC                         822    23    832    24    960    25    926    25    953    26
 ANALINES & CHEMS                 434    12    442    13    514    13    494    14    449    12
 D & A                           3800   105   3914   111   4031   104   4152   114   4277   118
 TOTAL DIRECTS                   5846   161   6000   170   6443   167   6472   177   6626   183
INDIRECT COSTS                   3360    93   3498    99   3641    94   3776   103   3874   107

 TOTAL ALL ABOVE                29106   804  32149   913  32956   854  25260   692  24247   670

 TISSUE VOLUME                  36218        35206        38578        36520        36200
 PULP TRANSFER PRICE-$/SADT             544          637          587          407          376
</TABLE>

<TABLE>
<CAPTION>
                                ----  -----  ----  -----  ----  -----  ----  -----  ----  -----
                                1993  $/TON  1994  $/TON  1995  $/TON  1996  $/TON  1997  $/TON
                                ----  -----  ----  -----  ----  -----  ----  -----  ----  -----
<S>                             <C>     <C>  <C>     <C>  <C>     <C>  <C>     <C>  <C>     <C>
PULP                            15137   418  18244   504  21826   603  19963   551  17477   483
DIRECT COSTS
 GAS/STEAM                        987    27   1058    29   1111    31   1166    32   1224    34
 ELECTRIC                        1108    31   1069    30   1110    31   1133    31   1676    46
 ANALINES & CHEMS                 538    15    562    16    587    16    613    17    639    18
 D & A                           4405   122   4537   125   4673   129   4813   133   4958   137
 TOTAL DIRECTS                   7037   194   7246   200   7481   207   7725   213   8497   235
INDIRECT COSTS                   3987   110   4106   113   4233   117   4373   121   4531   125

 TOTAL ALL ABOVE                26161   723  29596   818  33542   927  32061   886  30504   843

 TISSUE VOLUME                  36200        36200        36200        36200        36200
 PULP TRANSFER PRICE-$/SADT             414          499          597          546          478
</TABLE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}]]