Document:

Exhibit 10.12

 

EXECUTION COPY

 

PATENT SECURITY AGREEMENT (SECOND
LIEN)

 

PATENT
SECURITY AGREEMENT (SECOND LIEN), dated as of February 22, 2008 (as
amended, restated or otherwise modified from time to time, the “Patent
Security Agreement”), by and among ALDABRA SUB LLC, a Delaware limited
liability company (to be merged with
and into BOISE PAPER HOLDINGS,
L.L.C., a Delaware limited liability company, the “Borrower”),
ALDABRA HOLDING SUB LLC, a Delaware limited liability company (“Holdings”),
CERTAIN SUBSIDIARIES OF THE BORROWER, as Guarantors (together with the Borrower
and Holdings, collectively, the “Grantors”), and LEHMAN COMMERCIAL PAPER
INC., in its capacity as collateral agent for the Secured Parties (together
with any successors and assigns thereto in such capacity, the “Collateral
Agent”).

 

Reference
is made to the Pledge and Security Agreement (Second Lien) dated as of the date
hereof (as amended, supplemented or otherwise modified from time to time, the “Security
Agreement”), between each of the Grantors and the Collateral Agent.  The Lenders have agreed to extend credit to
the Borrowers subject to the terms and conditions set forth in the Credit
Agreement dated as of February 22, 2008 (as amended, supplemented or
otherwise modified from time to time (the “Credit Agreement”)) by and
among each of the Grantors, the Lenders and Lehman Commercial Paper Inc., as
Administrative Agent.  The obligations of
the Lenders to extend such credit are conditioned upon, among other things, the
execution and delivery of this Agreement. 
Accordingly, the parties hereto agree as follows:

 

SECTION 1.                                Defined
Terms.  Capitalized terms used in
this Agreement and not otherwise defined herein have the meanings given to them
in the Security Agreement or the Credit Agreement.  The rules of construction specified in Article I
of the Credit Agreement also apply to this Agreement.

 

SECTION 2.                                Grant
of Security Interest in Patent Collateral. 
As security for the payment or performance in full of the Obligations,
each Grantor, pursuant to and in accordance with the Security Agreement, did
and hereby pledges and grants to the Collateral Agent, its successors and
assigns, for the benefit of the Secured Parties, a lien and security interest
in and to all of such Grantor’s right, title and interest in, to and under the
following assets and properties, whether now owned  or at any time hereafter created or acquired
by such Grantor or in which such Grantor now has or at any time in the future
may acquire any right, title, or interest,
but not including any Excluded Assets (collectively, the “Patent
Collateral”):

 

 (a)  all of its United States and foreign
patents and certificates of invention, or similar industrial property rights,
and applications for any of the foregoing, including, but not limited to: (i) each
patent and patent application, (ii) all reissues, divisions,
continuations, continuations-in-part, extensions, renewals, and reexaminations
thereof, (iii) all rights corresponding thereto throughout the world, (iv) all
inventions and improvements described therein, (v) all rights to sue for
past, present and future infringements thereof, (vi) all claims, damages,
and proceeds of suit arising therefrom, and (vii) all Proceeds of the
foregoing, now and hereinafter due and/or payable thereunder, including,
without limitation,

 

1

 

royalties, income,
payments, claims, damages, and proceeds of suit (“Patents”),  including, but not limited to each patent and
patent application referred to on Schedule I attached hereto (as such
schedule may be amended or supplemented from time to time).

 

SECTION 3.                                Supplement
to the Security Agreement.  The
security interests granted to the Collateral Agent pursuant to this Patent
Security Agreement are granted in furtherance of, and not in limitation or
expansion of, the security interests granted to the Collateral Agent for the
Secured Parties pursuant to the Security Agreement and the rights and
obligations of the parties thereto.  Each
party hereto hereby acknowledges and affirms that the rights and remedies of
each other party hereto with respect to the security interest in the Patent
Collateral made and granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.  In
the event that any provision of this Patent Security Agreement is deemed to
conflict with the Security Agreement, the provisions of the Security Agreement
shall govern.

 

SECTION 4.                                Intercreditor.
The terms and conditions of this Patent Security Agreement and the Liens and
security interests granted to the Collateral Agent pursuant to this Patent
Security Agreement and the exercise of any right or remedy by the Collateral
Agent hereunder are subject to the terms and conditions of the Intercreditor
Agreement in all respects.  In the event
of any conflict between the terms and conditions of this Patent Security
Agreement and the terms and conditions of the Intercreditor Agreement, such
conflict shall be resolved in accordance with Section 8.1 of the
Intercreditor Agreement.

 

SECTION 5.                                Termination.  This Agreement is made to secure the
satisfactory payment and performance of the Obligations.  This Patent Security Agreement and the
security interest granted hereby shall automatically terminate with respect to
all of a Grantor’s Obligations and any Lien arising therefrom shall be
automatically released upon termination of the Security Agreement or release of
such Grantor’s obligations thereunder. 
The Collateral Agent shall, in connection with any termination or
release herein or under the Security Agreement, execute and deliver to any
Grantor as such Grantor may request, an instrument in writing releasing the
security interest in the Patent Collateral acquired under this Agreement
suitable for filing with any office or agency in which the Collateral Agent has
filed this, or a similar, Agreement. 
Additionally, upon such satisfactory payment, the Collateral Agent shall
reasonably cooperate with any efforts made by a Grantor to make of record or
otherwise confirm such satisfaction including, but not limited to, the release
and/or termination of this Agreement and any security interest in, to or under
the Patent Collateral.

 

SECTION 6.                                Counterparts.  This Patent Security Agreement may be
executed in any number of counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument.

 

2

 

SECTION 7.                                Miscellaneous.  The provisions of Section 13 of the
Security Agreement are hereby incorporated by reference, mutatis mutandis.

 

[Signatures on following page]

 

3

 

IN WITNESS
WHEREOF, each Grantor has caused this Patent Security Agreement to be executed
and delivered by its duly authorized officer as of the date first set forth
above.

 

	
   

  	
  ALDABRA
  HOLDING SUB LLC,

  
	
   

  	
  as Grantor

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Samuel K. Cotterell

  
	
   

  	
  Name: Samuel K. Cotterell

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ALDABRA
  SUB LLC,

  
	
   

  	
  as Grantor

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Samuel K. Cotterell

  
	
   

  	
  Name: Samuel K. Cotterell

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BOISE
  PAPER HOLDINGS, L.L.C.,

  
	
   

  	
  as Grantor

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Samuel K. Cotterell

  
	
   

  	
  Name: Samuel K. Cotterell

  
	
   

  	
  Title: Vice President

  

 

 

	
   

  	
  BOISE
  WHITE PAPER, L.L.C.

  
	
   

  	
  BOISE
  PACKAGING & NEWSPRINT,

  L.L.C.

  
	
   

  	
  BOISE CASCADE
  TRANSPORTATION

  HOLDINGS CORP.

  
	
   

  	
  BOISE WHITE PAPER SALES CORP.

  
	
   

  	
  BOISE WHITE PAPER HOLDINGS

  CORP.

  
	
   

  	
  INTERNATIONAL FALLS POWER

  COMPANY

  
	
   

  	
  MINNESOTA, DAKOTA &
  WESTERN

  RAILWAY COMPANY

  
	
   

  	
  BEMIS CORPORATION

  
	
   

  	
  BC CHINA CORPORATION

  
	
   

  	
  B C T, INC.,

  
	
   

  	
  as Grantors

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Samuel K. Cotterell

  
	
   

  	
  Name: Samuel K. Cotterell

  
	
   

  	
  Title: Vice President

  

 

 

	
  Accepted and Agreed:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  LEHMAN COMMERCIAL PAPER
  INC.,

  	
   

  
	
   

  	
   

  
	
  as Collateral Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Laurie B. Perper

  	
   

  
	
   

  	
  Name: Laurie B. Perper

  
	
   

  	
  Title: Managing Director

  
				

 

 

SCHEDULE I

to

PATENT SECURITY AGREEMENT

 

U.S. Patent REGISTRATIONS

 

	
  Title of Patent

  	
   

  	
  Country

  	
   

  	
  Application

  Number

  	
   

  	
  Filing Date

  	
   

  	
  Patent Number

  	
   

  	
  Issue Date

  	
   

  	
  Grantor Entity

  
	
  SOOT
  BLOWER BEAM

  	
   

  	
  US

  	
   

  	
  08/019,747

  	
   

  	
  02/18/1993

  	
   

  	
  5,353,996

  	
   

  	
  10/11/1994

  	
   

  	
  Boise White
  Paper, L.L.C.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DRYER
  FOR PAPER MACHINE

  	
   

  	
  US

  	
   

  	
  08/701,249

  	
   

  	
  08/21/1996

  	
   

  	
  5,729,913

  	
   

  	
  03/24/1998

  	
   

  	
  Boise White
  Paper, L.L.C.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  METHOD
  AND APPARATUS FOR DETERMINING OUT-OF-PLANE DEFECTS IN A PAPER SAMPLE

  	
   

  	
  US

  	
   

  	
  10/324,206

  	
   

  	
  12/19/2002

  	
   

  	
  6,947,150

  	
   

  	
  09/20/2005

  	
   

  	
  Boise White
  Paper, L.L.C.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CONTAINER
  AND A BLANK FOR FORMING THE CONTAINER

  	
   

  	
  US

  	
   

  	
  29/189,507

  	
   

  	
  09/05/2003

  	
   

  	
  D548,590

  	
   

  	
  08/14/2007

  	
   

  	
  Boise White
  Paper, L.L.C.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CONTAINER

  	
   

  	
  US

  	
   

  	
  29/259,566

  	
   

  	
  05/10/2006

  	
   

  	
  D558,573

  	
   

  	
  01/01/2008

  	
   

  	
  Boise White
  Paper, L.L.C.

  

 

U.S. Patent Applications

 

	
  Title of Patent

  	
   

  	
  Country

  	
   

  	
  Application

  Number

  	
   

  	
  Filing Date

  	
   

  	
  Grantor Entity

  
	
  CONTAINER

  	
   

  	
  US

  	
   

  	
  29/258,468

  	
   

  	
  04/21/2006

  	
   

  	
  Boise White
  Paper, L.L.C.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ERASABLE
  PAPER PRODUCT

  	
   

  	
  US

  	
   

  	
  10/590,826

  	
   

  	
  08/23/2006

  	
   

  	
  Boise White
  Paper, L.L.C.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  LOW-OPACITY
  RELEASE PAPER, RELEASE-PAPER BACKING AND METHODS

  	
   

  	
  US

  	
   

  	
  10/593,671

  	
   

  	
  08/25/2005

  	
   

  	
  Boise White
  Paper, L.L.C.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CONTAINER
  FOR SHIPPING AND STORING PAPER

  	
   

  	
  US

  	
   

  	
  10/655,643

  	
   

  	
  09/05/2003

  	
   

  	
  Boise White
  Paper, L.L.C.Exhibit 10.13

 

TRANCHE A TERM LOAN NOTE

 

	
  $12,500,000

  	
   

  	
   

  
	
  February 22, 2008

  	
   

  	
  New York,
  New York

  

 

FOR
VALUE RECEIVED, BOISE PAPER HOLDINGS,
L.L.C., a Delaware limited
liability company, as successor by merger to ALDABRA SUB
LLC, a Delaware limited liability company (“Borrower”), promises to pay THE BANK OF NOVA SCOTIA (“Payee”)
or its registered permitted assigns the principal amount of TWELVE MILLION FIVE HUNDRED THOUSAND  DOLLARS ($12,500,000) in the installments
referred to below.

 

Borrower also
promises to pay interest on the unpaid principal amount hereof, from the date
hereof until paid in full (except for contingent obligations for which no claim
has been made), at the rates and at the times which shall be determined in
accordance with the provisions of that certain Credit and Guaranty Agreement,
dated as of  February 22, 2008 (as
it may be amended, supplemented or otherwise modified, the “Credit Agreement”; the terms defined
therein and not otherwise defined herein being used herein as therein defined),
by and among BORROWER,  ALDABRA
HOLDING SUB LLC, a Delaware limited liability company, certain
Subsidiaries of Borrower, as Guarantors, the Lenders party thereto from time to
time, GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Administrative Agent and certain
other agents party thereto.

 

Borrower shall
make scheduled principal payments on this Note as set forth in Section 2.12
of the Credit Agreement.

 

This Note is one
of the “Tranche A Term Loan Notes” in the aggregate principal amount of
$250,000,000 and is issued pursuant to and entitled to the benefits of the
Credit Agreement, to which reference is hereby made for a more complete
statement of the terms and conditions under which the Term Loan evidenced
hereby was made and is to be repaid.

 

All payments of
principal and interest in respect of this Note shall be made in lawful money of
the United States of America in same day funds at the Principal Office of
Administrative Agent or at such other place as shall be designated in writing
for such purpose in accordance with the terms of the Credit Agreement. Unless
and until an Assignment Agreement effecting the assignment or transfer of the
obligations evidenced hereby shall have been accepted by Administrative Agent
and, if required by the Credit Agreement, consented to by Borrower and recorded
in the Register, Borrower, each Agent and Lenders shall be entitled to deem and
treat Payee as the owner and holder of this Note and the obligations evidenced
hereby. Payee hereby agrees, by its acceptance hereof, that before disposing of
this Note or any part hereof, it will make a notation hereon of all principal
payments previously made hereunder and of the date to which interest hereon has
been paid; provided, the failure to make a notation of any payment made on this
Note shall not limit or otherwise affect the obligations of Borrower hereunder
with respect to payments of principal of or interest on this Note.

 

This Note is
subject to mandatory prepayment and to prepayment at the option of Borrower,
each as provided in the Credit Agreement.

 

THIS NOTE AND THE
RIGHTS AND OBLIGATIONS OF BORROWER AND PAYEE HEREUNDER SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.

 

The unpaid balance
of the principal amount of this Note, together with all accrued and unpaid
interest thereon, (i) will automatically upon the occurrence of any Event
of Default described in Section 8.1(f) or 8.1(g) of the Credit
Agreement or (ii) may if any other Event of Default has occurred and is
continuing, become or be declared to be due and payable in the manner, upon the
conditions and with the effect provided in the Credit Agreement.

 

 

The terms of this
Note are subject to amendment only in the manner provided in the Credit
Agreement.

 

No reference
herein to the Credit Agreement and no provision of this Note or the Credit
Agreement shall alter or impair the obligations of Borrower, which are absolute
and unconditional, to pay the principal of and interest on this Note at the
place, at the respective times, and in the currency herein prescribed.

 

Borrower promises
to pay all reasonable, out-of-pocket costs and expenses, including reasonable
attorneys’ fees, all as provided in the Credit Agreement, incurred in the
collection and enforcement of this Note. Borrower and any endorsers of this
Note hereby consent to renewals and extensions of time at or after the maturity
hereof, without notice, and hereby waive diligence, presentment, protest,
demand notice of every kind and the right to plead any statute of limitations
as a defense to any demand hereunder, in each case, to the full extent
permitted by applicable law.

 

[Remainder of page intentionally
left blank]

 

 

IN
WITNESS WHEREOF, Borrower has caused this Note to be
duly executed and delivered by its officer thereunto duly authorized as of the
date and at the place first written above.

 

	
   

  	
  BOISE
  PAPER HOLDINGS, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Samuel K. Cotterell

  
	
   

  	
  Name: Samuel K. Cotterell

  
	
   

  	
  Title: Vice President

  

 

[Signature Page to Tranche A Term Loan Note]

 

 

TRANSACTIONS ON

TRANCHE A TERM LOAN NOTE

 

	
  Date

  	
   

  	
  Amount of Loan

  Made This Date

  	
   

  	
  Amount of Principal

  Paid This Date

  	
   

  	
  Outstanding Principal

  Balance This Date

  	
   

  	
  Notation

  Made By

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