Document:

EXHIBIT
10.2

 

ADDITIONAL
CONSIDERATION AGREEMENT

 

THIS ADDITIONAL
CONSIDERATION AGREEMENT (this “Agreement”) dated October 29, 2004, is between
Boise Cascade Corporation, a Delaware corporation (“Parent”) and Boise Cascade,
L.L.C., a Delaware limited liability company (“BC LLC”).

 

WHEREAS, Parent and BC
LLC, along with certain of their respective subsidiaries and affiliated
companies, are parties to an Asset Purchase Agreement dated July 26, 2004, as
the same has been and may be amended from time to time (“the AP Agreement”).  Pursuant to the AP Agreement, BC LLC will
acquire certain of Parent’s assets, including Parent’s Timberlands and
Non-Timber Assets (as those terms are defined in the AP Agreement);

 

WHEREAS, execution and
delivery of this Agreement is a material inducement to BC LLC and Parent having
entered into the AP Agreement on the terms and conditions specified therein and
is a condition to closing of the transactions contemplated by the AP Agreement;
and

 

WHEREAS, pursuant to the
AP Agreement, Parent and BC LLC have agreed to enter into an agreement
reflecting additional mutual consideration for the Non-Timber Assets.

 

NOW, THEREFORE, for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

 

Article 1                                                Definitions

 

Each capitalized term
used in this Agreement shall have the meaning assigned to it in the AP
Agreement, unless this Agreement defines such term otherwise.

 

Article 2                                              Term

 

This Agreement shall
terminate upon the earliest occurrence of one of the following events:

 

2.1                                 The
six year anniversary of the Closing;

 

2.2                                 50%
or more of the outstanding common equity (as measured immediately after
Closing) of BC LLC is sold in an underwritten public offering of BC LLC;

 

2.3                                 BC
LLC sells or transfers more than 50% of its common equity (as measured
immediately after Closing) in Boise White Paper, L.L.C. (the Person that is
acquiring the cutsize white paper manufacturing business included in the
Non-Timber Assets); or

 

 

2.4                                 Termination
in accordance with Article 5 of this Agreement.

 

Termination of this
Agreement will not affect any rights, remedies, or obligations either party may
have accrued in respect of any period ending on or prior to the date of
termination, including the obligation to make or right to receive payment under
this Agreement.  Without limiting the
generality of the foregoing, no termination pursuant to Section 2.1 hereof
shall relieve any party of its obligations to make payments in respect of the
sixth twelve-month period following the Closing.

 

Article 3                                              Calculation
of Annual Paper Price

 

Within 45 days after each
anniversary of the Closing during the term of this Agreement, the parties shall
calculate the average price per ton of 20 lb., 84-brightness cutsize paper for
the twelve months preceding such anniversary date (the “Annual Paper Price”).  The parties shall calculate the Annual Paper
Price by averaging the monthly “Paper Trader Price” appearing in each of the
twelve editions of RISI’s Paper Trader publication that immediately precede
such anniversary of the Closing (rounded to the nearest dollar per ton).  For purposes of this Agreement, the “Paper
Trader Price” shall mean the price identified in RISI’s Paper Trader
publication for “Std. No. 4, 83-85 BRT XEROG” (rounded to the nearest dollar
per ton).  If RISI discontinues
publishing a price for “Std. No. 4, 83-85 BRT XEROG” the parties shall identify
another publication with the highest comparability between its reported prices
and RISI’s Paper Trader prices for 81⁄2 by 11-inch white, cutsize paper.  If RISI or any substitute publication
identifies a range of prices for “Std. No. 4, 83-85 BRT XEROG,” then the
parties agree to use the average of the high and low prices identified as the
monthly price.

 

Article 4                                              Additional
Consideration

 

4.1                                 Additional
Consideration by BC LLC.  On or
before the 60th day following each anniversary of Closing during the term of
this Agreement, BC LLC shall pay Parent, by cash or wire transfer, $710,000 for
each dollar by which the Annual Paper Price exceeds $920 per ton.  BC LLC shall owe no consideration pursuant to
this Section 4.1 in respect of any particular year if the Annual Paper Price is
less than or equal to $920 per ton.

 

4.2                                 Additional
Consideration by Parent.  On or
before the 60th day following each anniversary of Closing during the term of
this Agreement, Parent shall pay BC LLC, by cash or wire transfer, an
amount equal to $710,000 for each dollar by which the Annual Paper Price is
below $800 per ton.  Parent shall owe no
additional consideration pursuant to this Section 4.1 in respect of any
particular year if the Annual Paper Price is equal to or greater than $800 per
ton.

 

4.3                                 Maximum
Annual Consideration. 
Notwithstanding the provisions of Sections 4.1 and 4.2, neither party
shall be required to pay more than the Maximum Annual Consideration in respect
of any particular year during the term of this 

 

2

 

Agreement.  For purposes of this
Agreement, “Maximum Annual Consideration” shall be $45 million.

 

4.4                                 Maximum
Aggregate Consideration. 
Notwithstanding the above, neither party shall be required to pay more
than the Maximum Aggregate Consideration pursuant to this Agreement; provided
that for all purposes of determining whether a party has reached its Maximum
Aggregate Consideration, the aggregate payments made by such party to the other
party pursuant to this Agreement shall be deemed to be reduced by the aggregate
payments made to such party from the other party pursuant to this
Agreement.  Each party’s “Maximum
Aggregate Consideration” shall mean, (i) if the determination is made in
respect of the first four years following the Closing, $125 million, (ii)
if the determination is made in respect of the fifth year following Closing,
$115 million, and (iii) if the determination is made in respect of the sixth
year following the Closing, $105 million. 
Once a party has paid the Maximum Aggregate Consideration, it shall not
be entitled to “clawback” consideration in years five or six, even though the
Maximum Aggregate Consideration designated for the then-current year is less
than the amount previously paid.

 

Article 5                                                Miscellaneous
Provisions

 

5.1                                 Arbitration.  The parties shall resolve any
dispute arising under or in respect of this Agreement by binding arbitration
utilizing a single arbitrator selected by the parties, or failing agreement on
such arbitrator, appointed on the application of either party, by the chief
judge of the U.S. District Court for the District of Idaho.  The parties shall conduct such arbitration in
accordance with the rules of the American Arbitration Association.  The cost of the arbitrator shall be borne
equally by the parties.  The outcome of
the arbitration shall be final and binding by the parties and fully enforceable
in any court with jurisdiction over the parties.

 

5.2                                 Events of Default.  If
either party fails to pay any amount owed by it hereunder when due, such sum
shall earn interest from the date on which it is due at 10% per annum.  Such interest shall be payable on
demand.  If either party fails to pay any
amount owed under this Agreement (including interest accruing under the
preceding sentence) within 30 days after receipt of a written demand for such
payment, the other party shall have the right to terminate this Agreement or
suspend its performance until such delinquent sum is paid in full.  This right is in addition to any other right
provided under applicable law or this Agreement for such breach.

 

5.3                                 Notices.  All notices, demands and
other communications given or delivered under this Agreement shall be in
writing and shall be deemed to have been given (i) when delivered personally to
the recipient, (ii) one business day after being sent to the recipient by
reputable overnight courier service (charges prepaid), (iii) upon transmittal
by fax or other electronic means, provided that such notice, demand or other
communication is also deposited within 24 hours thereafter with a reputable
overnight courier service (charges prepaid) for delivery to the same Person, or
(iv) five days after being mailed to the recipient by certified or registered
mail, return receipt requested and 

 

3

 

postage prepaid.  Unless another
address is specified in writing, notices, demands and other communications to
any party shall be sent to the addresses and/or numbers indicated below:

 

	
  To
  BC LLC:

  	
  Boise
  Cascade, L.L.C.

  
	
   

  	
  c/o
  Madison Dearborn Partners, LLC

  
	
   

  	
  Three
  First National Plaza

  
	
   

  	
  Suite
  3800

  
	
   

  	
  Chicago,
  IL 60602

  
	
   

  	
  Telephone:
  (312) 895-1000

  
	
   

  	
  Fax:
  (312) 895-1056

  
	
   

  	
  Attn:
  Samuel M. Mencoff

  
	
   

  	
  Thomas
  S. Souleles

  
	
   

  	
   

  
	
  With
  a copy to:

  	
  Kirkland
  & Ellis LLP

  
	
   

  	
  200
  East Randolph Drive

  
	
   

  	
  Chicago,
  IL 60601

  
	
   

  	
  Telephone:
  (312) 861-2000

  
	
   

  	
  Fax:
  (312) 861-2200

  
	
   

  	
  Attn:
  William S. Kirsch, PC

  
	
   

  	
  Jeffrey
  W. Richards

  
	
   

  	
  Richard
  J. Campbell

  
	
   

  	
   

  
	
  To
  Parent:

  	
  Boise
  Cascade Corporation

  
	
   

  	
  1111
  West Jefferson Street

  
	
   

  	
  Boise,
  Idaho 83728

  
	
   

  	
  Telephone:
  (208) 384-7557

  
	
   

  	
  Fax:
  (208) 384-4912

  
	
   

  	
  Attn:
  Chairman and Chief Executive Officer

  
	
   

  	
   

  
	
  With
  a copy to:

  	
  Boise
  Cascade Corporation

  
	
   

  	
  1111
  West Jefferson Street

  
	
   

  	
  Boise,
  Idaho 83728

  
	
   

  	
  Telephone:
  (208) 384-7704

  
	
   

  	
  Fax:
  (208) 384-4912

  
	
   

  	
  Attn:
  General Counsel

  

 

5.4                                 Amendment; Waiver.  Any
provision of this Agreement may be amended or waived if, and only if, such
amendment or waiver is in writing and signed, in the case of an amendment, by
Parent and BC LLC, or in the case of a waiver, by the party against whom the
waiver is to be effective.  No failure or
delay by any party in exercising any right, power, or privilege under this
Agreement shall operate as a waiver nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power, or privilege.  These
rights and remedies shall be cumulative and not exclusive of any rights or
remedies provided by law.

 

4

 

5.5                                 Assignment.  This Agreement shall be binding
upon the parties and their successors and assigns.  BC LLC may not assign its rights or obligations
under this Agreement without Parent’s prior written consent.  Parent may assign its rights, but not its
obligations, under this Agreement without consent; however, Parent may not
assign any of its rights under this Agreement to a competitor of BC LLC.

 

5.6                               Public Disclosure.  Except
as may be required to comply with the requirement of any applicable laws and
the rules and regulations of each stock exchange upon which the securities of
one of the parties is listed, neither party shall disclose the terms of this
Agreement or payments made hereunder; provided that Holdings shall be
entitled to disclose the terms of this Agreement to any of its financing
sources as long as such financing sources agree with Holdings to keep the terms
hereof confidential.

 

5.7                                 Severability and Renegotiation.  If any
part of this Agreement is found to be illegal, void, or unenforceable, such
illegality, invalidity, or unenforceability shall not extend beyond the part
affected, and unaffected parts of this Agreement will continue in full force
and will be binding on the parties. 
Should any term or provision of this Agreement be found invalid by any
court or regulatory body having proper jurisdiction, the parties shall
immediately use their best efforts to renegotiate such term or provision of the
Agreement to eliminate such invalidity.

 

5.8                                 Nonwaiver.  Any waiver, at any time, by any
part of its rights, remedies, duties, and/or obligations with respect to any
matters arising in connection with this Agreement, shall not be deemed a waiver
of any other right, remedy, duty, and/or obligation with respect to such matter
or with respect to any subsequent matter.

 

5.9                                 Right to Setoff.  All debts and obligations
of Parent and BC LLC to each other are mutual and subject to setoff.  For purposes of this paragraph, “Parent” and “BC
LLC” shall be deemed to include each party’s respective subsidiaries and
affiliates which directly or indirectly control or are controlled by that
party.

 

5.10                           Choice of Law and Jurisdiction.  This
Agreement shall be governed, interpreted, and enforced under the laws of the
state of Delaware, without regard to its choice of law rules.  The courts of the state of Idaho and federal
courts sitting therein shall have exclusive jurisdiction to hear and settle
litigation in respect of this Agreement. 
In any suit between the parties or their Affiliates, each party consents
to receive service of process in any jurisdiction in which it is doing
business, including without limitation, the state of its incorporation, provided
that such service of process is issued by a federal or state court of general
jurisdiction sitting in Idaho.  The
preceding two sentences shall not apply in respect of any cross claim brought
in any litigation initiated by a person other than a party or one of its
Affiliates in a jurisdiction other than Idaho.

 

5.11                           Captions.  All indices, titles, subject
headings, and similar items in this Agreement are provided for the purpose of
reference and convenience and are not intended to be inclusive, definitive, or
to affect the meaning of the content or scope of this Agreement.

 

5

 

5.12                           Counterparts.  This Agreement may be executed
in two or more duplicate counterparts (including by facsimile or electronic transmission)
and upon such execution shall be considered a single document as though each
party had executed the same counterpart.

 

5.13                           Entire Agreement.  The
terms and provisions in this Agreement constitute the entire agreement between
the parties and supersede all agreements, either verbal or written, between the
parties with respect to the subject matter of this Agreement.

 

5.14
                        Fulfillment of Obligations.  Any
obligation of any party to any other party under this Agreement, which
obligation is performed satisfied or fulfilled by an Affiliate of such party,
shall be deemed to have been performed, satisfied, or fulfilled by such
party.  Without limiting the generality
of the foregoing, each party agrees that BC LLC may cause performance of any of
its obligations hereunder by any one or more of its Subsidiaries and, to the
extent that performance by such Subsidiary(ies) satisfies the obligations of BC
LLC hereunder, BC LLC shall be deemed to have fully performed such obligation.

 

6

 

IN
WITNESS HEREOF, the parties have executed this Agreement as of date first
written above.

 

	
  BOISE
  CASCADE, L.L.C.

  	
  BOISE
  CASCADE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
  By
  

  	
  /s/
  Thomas S. Souleles

  	
   

  	
  By
  

  	
  /s/
  Karen E. Gowland

  	
   

  
	
  Name

  	
    Thomas
  S. Souleles

  	
   

  	
  Name

  	
    Karen
  E. Gowland

  	
   

  
	
  Title
  

  	
    Vice
  President

  	
   

  	
  Title
  

  	
    Secretary

  	
   

  
								

 

7EXHIBIT 10.3

 

INSTALLMENT NOTE

 

	
  $559,500,000

  	
  October 29,
  2004

  

 

FOR VALUE RECEIVED, BOISE LAND & TIMBER, L.L.C., a Delaware
limited liability company (“Maker”), promises to pay to the order of BOISE CASCADE CORPORATION (“Initial
Holder”), which along with any other subsequent holder of this promissory
note, is sometimes referred to as the “Holder”, the principal sum of Five
Hundred Fifty-Nine Million Five Hundred Thousand and no/100ths Dollars
($559,500,000) (“Principal Sum”) together with interest at the rate set
out in paragraph 1 below, in accordance with the following:

 

1.                                       Interest.  Subject to the terms of paragraph 17
below, the unpaid Principal Sum shall bear interest from the date hereof until
paid in full at a fixed rate per annum equal to 4.982%.  Such interest shall be payable on each Payment
Date (defined below).  All interest payable under the terms of this Note
shall be calculated on the basis of twelve (12) 30-day months in a 360-day year.

 

2.                                       Payments and Maturity.  (a) Interest on the unpaid Principal Sum
shall be due and payable semi-annually, on the 29th day of each April
and October (each a “Payment Date”), commencing on April 29, 2005, and
continuing on each Payment Date thereafter through and until the Maturity Date.

 

(b)                                 The
entire unpaid Principal Sum, together with all accrued and unpaid interest,
shall mature and be due and payable in full on January 29, 2020 (“Maturity
Date”).

 

(c)                                  If
any payment under this Installment Note is due on a day which is not a Business
Day (defined below), such payment shall be due and payable on the next
succeeding Business Day.

 

3.                                       Application and Place of Payments.  All payments made on account of this
Installment Note shall be applied, first, to the payment of any unpaid and
accrued enforcement and collection costs incurred by Holder, if any, second, to
the payment of accrued and unpaid interest, and the remainder, if any, shall be
applied to the unpaid Principal Sum.  All
payments on account of this Installment Note shall be paid in lawful money of
the United States of America in immediately available funds during regular
business hours of Holder at the address set out in paragraph 9 below, or at
such other times and places as Holder may at any time designate in writing by
notice to Maker in accordance with the provisions of Paragraph 9 below.

 

4.                                       No Prepayment.  Maker may not voluntarily prepay the
Principal Sum or any part of the Principal Sum at any time.

 

5.                                       Purchase Agreement and Related Transactions.  Maker, as purchaser, and Initial Holder, as
seller, are parties to an Asset Purchase Agreement dated as of July 26, 2004 (as
such agreement may be subsequently amended, the “Purchase Agreement”),
pursuant to which the sole member of Maker has purchased from Initial Holder certain
timberland assets (the 

 

 

“Assets”),
which are more particularly described in such Purchase Agreement, and Maker is
issuing this Installment Note in payment of the purchase price for such Assets.  Wachovia Corporation (“Guarantor”) has
guaranteed the payment of certain obligations by Maker under this Installment
Note pursuant to a Guaranty dated as of the date of this Installment Note (the “Guaranty”)
executed by Guarantor, as guarantor, for the benefit of Initial Holder, as
beneficiary.

 

6.                                       Events of Default.  The occurrence of any one or more of the
following events shall constitute an event of default (individually, an “Event
of Default” and collectively, the “Events of Default”) under the
terms of this Installment Note:

 

(a)                                  The
failure of Maker to pay to Holder within three (3) Business days of the
applicable due date any and all amounts payable by Maker to Holder under the
terms of this Installment Note.

 

(b)                                 If
by the order of a court of competent jurisdiction, a trustee, receiver or
liquidator of Maker shall be appointed and such order shall not be discharged
or dismissed within 60 days after such appointment.

 

(c)                                  Maker
(i) applies for, or consents in writing to, the appointment of a receiver,
trustee or liquidator of all or substantially all of Maker’s assets; (ii) files
a voluntary petition in bankruptcy; (iii) admits in writing Maker’s inability
to pay Maker’s debts as they become due or makes a general assignment for the
benefit of creditors; (iv) files a petition or an answer seeking a
reorganization (other than a reorganization not involving the liabilities of
Maker) or an arrangement with creditors or takes advantage of any bankruptcy or
insolvency law; or (v) files an answer admitting the material allegations of a
petition filed against Maker in any bankruptcy, reorganization or insolvency
proceeding.

 

(d)                                 An
order, judgment or decree is entered by any court of competent jurisdiction on
the application of a creditor adjudicating Maker as bankrupt or insolvent, or
appointing a receiver, trustee or liquidator of Maker, or for all or
substantially all of Maker’s assets, and such order, judgment or decree
continues unstayed and in effect for a period of 60 days from the date entered.

 

(e)                                  If
Maker shall dissolve, merge, consolidate, liquidate, reorganize, or terminate
its existence without the prior written consent of Holder.

 

(f)                                    The
insolvency, receivership, conservatorship, reorganization, winding-up,
liquidation or similar occurrence in respect of the Guarantor under any
applicable law.

 

7.                                       Remedies.  Except as provided in the final sentence of
this Paragraph 7, during an Event of Default, at the option of Holder,
exercisable by notice in writing to Maker, all amounts payable by Maker to
Holder under the terms of this Installment Note shall immediately become due
and payable by Maker to Holder, and Holder shall have all of the rights,
powers, and remedies available under the terms of this Installment Note and all
applicable laws.  Maker and all
endorsers, guarantors, and other parties who may now or in the future be primarily
or secondarily liable for the payment of the indebtedness evidenced by this
Installment Note hereby severally waive presentment, protest and demand, notice
of protest, notice of demand and of 

 

2

 

dishonor
and non-payment of this Installment Note and expressly agree that this
Installment Note or any payment under this Installment Note may be extended
from time to time without in any way affecting the liability of Maker,
guarantors and endorsers.  Notwithstanding
anything in this Installment Note to the contrary, so long as the Guaranty is
in effect and Guarantor has not failed to honor, within the time permitted, any
timely and proper demand for payment under the terms of the Guaranty, the
Holder shall not have the right to accelerate the maturity of the principal
under this Installment Note or exercise any other rights and remedies under this
Installment Note at law or in equity, other than (i) to make a demand for
payment from the Guarantor under the terms of the Guaranty for accrued and
unpaid interest not paid by Maker within sixty (60) days of the applicable due
date, or (ii) to make a demand for payment from the Guarantor under the
terms of the Guaranty for the full outstanding and unpaid principal balance
under this Installment Note within 120 days after the Maturity Date.

 

8.                                       Expenses.  Maker promises to pay to Holder on demand by
Holder all costs and expenses incurred by Holder in connection with the
collection and enforcement of this Installment Note, including, without
limitation, all reasonable attorneys’ fees actually incurred and expenses and
all court costs.

 

9.                                       Notices.  All notices, requests and other
communications to any party under this Installment Note shall be in writing
(including telecopier or similar writing) and shall be given to such party at
its address or telecopier number set forth below or such other address or
telecopier number as such party may hereafter specify for the purpose by notice
to each other party.  Each such notice,
request or other communication shall be effective (i) if given by telecopier,
when such telecopy is transmitted to the telecopier number specified in this
Paragraph 9 and the confirmation is received, (ii) if given by mail, 72 hours
after such communication is deposited in the mails with first class postage
prepaid, addressed as set out below or (iii) if given by any other means, when
delivered at the address specified in this Section:

 

Maker:                                                                                                           BOISE LAND & TIMBER, L.L.C.  

1111 W. Jefferson Street

P.O. Box 50

Boise, Idaho 83728

Attn: Thomas E. Carlile

Telephone: (208) 384-6161

Facsimile: (208) 384-4920

 

with a copy to:                                                                 WACHOVIA CORPORATION

301 S. College Street

Charlotte, NC 28288

Attn: Thomas J.  Wurtz, Treasurer

Telephone: (704) 374-2250

Facsimile: (704) 374-2040

 

3

 

with a copy to:                                                                 WACHOVIA CORPORATION

301 South College Street

Charlotte, NC 28288

Attn: J. Parrish McCormack, Esq.

Telephone: (704) 374-6509

Facsimile: (704) 383-0353

 

and a copy to:                                                                    WACHOVIA BANK, NATIONAL ASSOCIATION

100 North Main Street, NC6001

Winston-Salem, NC 27150

Attn: Steve W. Whitcomb, Director

Telephone: (336) 732-2650

Facsimile: (704) 715-0065

 

Holder:                                                                                                         BOISE CASCADE CORPORATION

1111 W. Jefferson Street

Boise, ID 83702

Attn: Wayne Rancourt,

 Vice-President and Treasurer

Telephone: (208) 384-6073

Facsimile: (208) 384-4312

 

with a copy to:                                                                 BOISE CASCADE CORPORATION

1111 W. Jefferson Street

Boise, ID 83702

Attn: John Holleran

 Senior VP & General Counsel

Telephone: (208) 384-7704

Facsimile: (208) 384-4312

 

except in cases where it is expressly herein provided
that such notice, request or demand is not effective until received by the
party to whom it is addressed.

 

10.                                 Miscellaneous.  Each right, power, and remedy of Holder as
provided for in this Installment Note or now or hereafter existing under any
applicable law or otherwise shall be cumulative and concurrent and shall be in
addition to every other right, power, or remedy provided for in this
Installment Note or now or hereafter existing under applicable law, and the
exercise or beginning of the exercise by Holder of any one or more of such
rights, powers, or remedies shall not preclude the simultaneous or later
exercise by Holder of any or all such other rights, powers, or remedies.  No failure or delay by Holder to insist upon
the strict performance of any term, condition, covenant, or agreement of this
Installment Note, or to exercise any right, power, or remedy consequent upon an
Event of Default, shall constitute a waiver of any such term, condition,
covenant, or agreement or of any such breach, or preclude Holder from
exercising any such right, power, or remedy at a later time or times.  By accepting payment after the due date of
any amount payable under the terms of this Installment Note, Holder shall not
be deemed to waive the right either to require prompt payment when due of all
other amounts payable under the terms of this Installment Note or to declare an
Event of Default for the failure 

 

4

 

to
effect such prompt payment of any such other amount.  No course of dealing or conduct shall be
effective to amend, modify, waive, release, or change any provisions of this
Installment Note. As used in this Installment Note, the singular number shall
include the plural, the plural the singular and the use of the masculine,
feminine or neuter gender shall include all genders, as the context may
require.  As used in this Installment
Note, the term “Business Day” means any day except a Saturday, Sunday or other
day on which commercial banks in North Carolina are authorized by law to close.

 

11.                                 Partial Invalidity.  In the event any provision of this
Installment Note (or any part of any provision) is held by a court of competent
jurisdiction to be invalid, illegal, or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect any other
provision (or remaining part of the affected provision) of this Installment
Note; but this Installment Note shall be construed as if such invalid, illegal,
or unenforceable provision had not been contained in this Installment Note, but
only to the extent it is invalid, illegal, or unenforceable.

 

12.                                 Captions.  The captions set forth in this Installment
Note are for convenience only and shall not be deemed to define, limit, or
describe the scope or intent of this Installment Note.

 

13.                                 GOVERNING LAW.  WITHOUT IN ANY WAY LIMITING ANY ADDITIONAL
RIGHTS AND REMEDIES WHICH HOLDER MAY HAVE UNDER THE LAWS OF ANY OTHER
JURISDICTION, THIS INSTALLMENT NOTE IS TO BE GOVERNED BY, CONSTRUED UNDER, AND
ENFORCED ACCORDING TO, THE LAWS OF NEW YORK WITH THE SAME FORCE AND EFFECT AS
IF THIS INSTALLMENT NOTE HAD BEEN EXECUTED, DELIVERED, ADMINISTERED AND REPAID
SOLELY WITHIN NEW YORK.

 

14.                                 CONSENT TO JURISDICTION.  MAKER IRREVOCABLY SUBMITS TO THE JURISDICTION
OF ANY STATE OR FEDERAL COURT SITTING IN THE CITY OF NEW YORK OVER ANY SUIT,
ACTION, OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INSTALLMENT NOTE.  MAKER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION THAT MAKER MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUCH SUIT, ACTION, OR PROCEEDING BROUGHT IN ANY SUCH
COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION, OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.  FINAL JUDGMENT IN ANY SUCH SUIT, ACTION, OR
PROCEEDING BROUGHT IN ANY SUCH COURT SHALL BE CONCLUSIVE AND BINDING UPON MAKER
AND MAY BE ENFORCED IN ANY COURT IN WHICH MAKER IS SUBJECT TO JURISDICTION BY A
SUIT UPON SUCH JUDGMENT PROVIDED THAT SERVICE OF PROCESS IS EFFECTED UPON MAKER
AS PROVIDED IN THIS INSTALLMENT NOTE OR AS OTHERWISE PERMITTED BY APPLICABLE
LAW.

 

15.                                 Service of Process.  Maker consents to process being served in any
suit, action, or proceeding instituted in connection with this Installment Note
by the mailing of a copy of such pleadings by certified mail, postage prepaid,
return receipt requested, to Maker. 
Maker 

 

5

 

irrevocably
agrees that such service shall be deemed to be service of process upon Maker in
any such suit, action, or proceeding. 
Nothing in this Section shall affect the right of Holder to serve
process in any manner otherwise permitted by law and nothing in this Section
will limit the right of Holder otherwise to bring proceedings against Maker in
the courts of any jurisdiction or jurisdictions.

 

16.                                 WAIVER OF TRIAL BY JURY.  TO THE FULLEST EXTENT PERMITTED BY LAW, MAKER
AND HOLDER EACH HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH
MAKER AND HOLDER MAY BE PARTIES, ARISING OUT OF OR IN ANY WAY PERTAINING TO THIS
INSTALLMENT NOTE.  IT IS AGREED AND
UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS
AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST
PARTIES WHO ARE NOT PARTIES TO THIS INSTALLMENT NOTE. THIS WAIVER IS KNOWINGLY,
WILLINGLY AND VOLUNTARILY MADE BY MAKER AND HOLDER, AND MAKER AND HOLDER EACH
HEREBY REPRESENT AND WARRANT THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE
BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY
WAY MODIFY OR NULLIFY ITS EFFECT.  MAKER
FURTHER REPRESENTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS
INSTALLMENT NOTE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL,
SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS
THIS WAIVER WITH COUNSEL.

 

17.                                 Interest Rate Not to Exceed Applicable Laws.  The interest rate or rates required by this
Installment Note shall not exceed the maximum rate permissible under applicable
laws.

 

18.                                 Maker’s Obligation.  Maker’s obligation to pay all amounts due
under this Installment Note shall be absolute and shall not be subject to any
set-off, deduction, claim, counterclaim or other right which Maker may have
against Initial Holder pursuant to the Purchase Agreement or otherwise.

 

19.                                 No Recourse to Property, Etc.  Notwithstanding any provision in this
Installment Note to the contrary, Holder shall have no right, remedy or
recourse in respect of this Installment Note against either the Assets or any
Maker Party.  “Maker Party” means any
affiliate of Maker or any of Maker’s or Maker’s affiliates’ respective
officers, directors, agents, other representatives, stockholders, equity
holders or members (whether direct or indirect), except to the extent any such
person or entity is a successor to or assign of Maker and subject to the
obligations of this Installment Note pursuant to paragraph 20 below.  Any judgment, decree or other remedy shall
not be subject to execution on, nor lien on, the Assets, the interest of Maker
(or of any successor or assign of Maker) in the Assets or any assets of any
Maker Party, nor shall Holder seek any other relief with respect to the Assets (or
the interest of Maker or successor or assign of Maker in the Assets) or any
other Maker Party, it being specifically understood and agreed that no Maker
Party shall have any personal liability for the payment of any obligations of
Maker under this Installment Note. 
Notwithstanding anything to the contrary

 

6

 

contained
herein, Holder agrees that neither it nor any person acting on its behalf may
assert any claim or cause of action for payment of any of the obligations of
Maker under this Installment Note against the Assets, the interest of Maker (or
any successor or assign of Maker) in the Assets or any Maker Party.

 

20.                                 Assignment.  This Installment Note may, without
restriction, be assigned, pledged, hypothecated or otherwise transferred by
Holder by endorsement or assignment and delivery.  Holder shall promptly notify Maker of the
name and address of any assignee or other transferee.  This Installment Note shall be binding upon
Maker and its successors and assigns, and the term “Maker” as used in this
Agreement shall include such successors and assigns.  Maker shall have no right to assign its
obligations under this Installment Note, and any attempted assignment by Maker
of such obligations shall be void ab initio.

 

7

 

IN WITNESS WHEREOF, Maker executed this Installment
Note on the date set forth above.

 

	
   

  	
  BOISE LAND & TIMBER, L.L.C., a Delaware

  limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas E. Carlile

  	
   

  
	
   

  	
   

  	
  Thomas E. Carlile,

  
	
   

  	
   

  	
  Authorized Regular Manager

  

 

8

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