bluelinx holdings inc

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UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT OF 1934For the quarterly period ended October 3, 2009

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT OF 1934For the transition period from to

Commission file number: 1-32383

BlueLinx Holdings Inc.(Exact name of registrant as specified in its charter)

Delaware 77-0627356

(State of Incorporation) (I.R.S. Employer Identification No.)

4300 Wildwood Parkway, Atlanta, Georgia 30339(Address of principal executive offices) (Zip Code)

(770) 953-7000(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filingrequirements for the past 90 days. Yes þ No oIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required tobe submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required tosubmit and post such files). Yes o No oIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See thedefinitions of “large accelerated filer,” “accelerated filer,” and “small reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer o Non-accelerated filer þ(Do not check if a smaller reporting company)

Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þAs of November 5, 2009 there were 32,251,849 shares of BlueLinx Holdings Inc. common stock, par value $0.01, outstanding.

BLUELINX HOLDINGS INC.

Form 10-Q

For the Quarterly Period Ended October 3, 2009

INDEX PAGEPART I. FINANCIAL INFORMATION Item 1. Financial Statements — BlueLinx Holdings Inc. (Unaudited)

Condensed Consolidated Statements of Operations 3 Condensed Consolidated Balance Sheets 5 Condensed Consolidated Statements of Cash Flows 6 Notes to Condensed Consolidated Financial Statements 7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 28 Item 3. Quantitative and Qualitative Disclosures About Market Risk 42 Item 4. Controls and Procedures 42 PART II. OTHER INFORMATION Item 1. Legal Proceedings 42 Item 1A. Risk Factors 42 Item 2. Unregistered Sales of Equity Securities and Uses of Proceeds 43 Item 6. Exhibits 43

Signatures 44 Exhibit Index 45

Exhibit 10.1 Exhibit 10.2 Exhibit 31.1 Exhibit 31.2 Exhibit 32.1 Exhibit 32.2

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BLUELINX HOLDINGS INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)(unaudited)

Third Quarter Period from Period from July 5, 2009 June 29, 2008 to to October 3, 2009 September 27, 2008 Net sales $ 449,363 $ 726,756 Cost of sales 394,058 643,507 Gross profit 55,305 83,249 Operating expenses:

Selling, general, and administrative 55,024 73,793 Depreciation and amortization 3,882 4,940

Total operating expenses 58,906 78,733 Operating (loss) income (3,601) 4,516 Non-operating expenses:

Interest expense 7,987 8,791 Charges associated with ineffective interest rate swap, net 1,431 — Other expense, net 324 65

Loss before provision for (benefit from) income taxes (13,343) (4,340)Provision for (benefit from) income taxes 120 (1,746)

Net loss $ (13,463) $ (2,594)Basic weighted average number of common shares outstanding 30,948 31,150 Basic net loss per share applicable to common stock $ (0.44) $ (0.08)Diluted weighted average number of common shares outstanding 30,948 31,150 Diluted net loss per share applicable to common stock $ (0.44) $ (0.08)

See accompanying notes.

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BLUELINX HOLDINGS INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)(unaudited)

Nine Months Ended Period from Period from January 4, 2009 December 30, 2007 to to October 3, 2009 September 27, 2008 Net sales $ 1,280,000 $ 2,278,185 Cost of sales 1,132,119 2,009,698 Gross profit 147,881 268,487 Operating expenses:

Selling, general, and administrative 163,744 235,655 Net gain from terminating the Georgia-Pacific supply agreement (17,554) — Depreciation and amortization 13,153 15,011

Total operating expenses 159,343 250,666 Operating (loss) income (11,462) 17,821 Non-operating expenses:

Interest expense 24,610 27,530 Charges associated with ineffective interest rate swap, net 7,341 — Write-off of debt issuance costs 1,407 — Other expense, net 482 385

Loss before provision for (benefit from) income taxes (45,302) (10,094)Provision for (benefit from) income taxes 28,186 (3,508)Net loss $ (73,488) $ (6,586)Basic weighted average number of common shares outstanding 31,019 31,053 Basic net loss per share applicable to common stock $ (2.37) $ (0.21)Diluted weighted average number of common shares outstanding 31,019 31,053 Diluted net loss per share applicable to common stock $ (2.37) $ (0.21)


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BLUELINX HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands, except share and per share data)

October 3, 2009 January 3, 2009 (unaudited) Assets: Current assets:

Cash and cash equivalents $ 25,498 $ 150,353 Receivables, net 168,656 130,653 Inventories, net 173,123 189,482 Deferred income tax assets 578 11,868 Other current assets 34,356 37,351

Total current assets 402,211 519,707 Property, plant, and equipment:

Land and land improvements 52,719 53,426 Buildings 95,968 96,159 Machinery and equipment 68,906 70,491 Construction in progress 1,150 2,035

Property, plant, and equipment, at cost 218,743 222,111 Accumulated depreciation (78,866) (69,336)Property, plant, and equipment, net 139,877 152,775

Non-current deferred income tax assets — 17,468 Other non-current assets 42,437 42,457 Total assets $ 584,525 $ 732,407 Liabilities: Current liabilities:

Accounts payable $ 108,537 $ 78,367 Bank overdrafts 20,016 24,715 Accrued compensation 5,245 11,552 Current maturities of long-term debt — 60,000 Other current liabilities 26,696 24,546

Total current liabilities 160,494 199,180 Non-current liabilities:

Long-term debt 341,669 384,870 Non-current deferred income tax liabilities 578 — Other non-current liabilities 42,755 45,505

Total liabilities 545,496 629,555 Shareholders’ Equity:

Common Stock, $0.01 par value, 100,000,000 shares authorized; 32,964,201 and 32,362,330 sharesissued at October 3, 2009 and January 3, 2009, respectively; and 32,252,349 and 32,362,330outstanding at October 3, 2009 and January 3, 2009, respectively 323 323

Additional paid-in capital 144,462 144,148 Accumulated other comprehensive loss (7,569) (16,920)Accumulated deficit (98,187) (24,699)

Total shareholders’ equity 39,029 102,852 Total liabilities and shareholders’ equity $ 584,525 $ 732,407


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BLUELINX HOLDINGS INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)(unaudited)

Nine Months Ended Period Period from January 4, from December 29, 2009 to 2007 to October 3, 2009 September 27, 2008 Cash flows from operating activities: Net loss $ (73,488) $ (6,586)Adjustments to reconcile net loss to cash (used in) provided by operations:

Depreciation and amortization 13,153 15,011 Amortization of debt issuance costs 1,843 1,823 Net gain from terminating the Georgia-Pacific supply agreement (17,554) — Payments from terminating the Georgia-Pacific supply agreement 9,412 — Gain from sale of properties (4,406) — Prepayment fees associated with sale of facility 616 — Charges associated with ineffective interest rate swap 7,341 — Write-off of debt issue costs 1,407 — Vacant property charges, net 457 1,640 Deferred income tax provision (benefit) 27,228 (3,506)Share-based compensation expense 2,170 2,163 Excess tax benefits from share-based compensation arrangements — (76)Decrease in restricted cash 3,380 5,970 Changes in assets and liabilities:

Receivables (38,003) 18,698 Inventories 16,359 74,910 Accounts payable 30,170 (35,875)Changes in other working capital 6,611 28,895 Other (192), 1,968

Net cash (used in) provided by operating activities (13,496) 105,035 Cash flows from investing activities: Property, plant and equipment investments (952) (2,614)Proceeds from disposition of assets 8,454 848 Net cash provided by (used in) investing activities 7,502 (1,766)Cash flows from financing activities: Repurchase of common stock (1,862) — Proceeds from stock options exercised — 434 Excess tax benefits from share-based compensation arrangements — 76 Decrease in revolving credit facility (100,000) (27,535)Payment of principal on mortgage (3,201) — Prepayment fees associated with sale of facility (616) — Decrease in bank overdrafts (4,699) (15,450)Increase in restricted cash related to the mortgage (8,442) (5,461)Other (41) 6 Net cash used in financing activities (118,861) (47,930)(Decrease) increase in cash (124,855) 55,339 Balance, beginning of period 150,353 15,759 Balance, end of period $ 25,498 $ 71,098


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BLUELINX HOLDINGS INC.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 3, 2009

1. Basis of Presentation and Background

Basis of Presentation

BlueLinx Holdings Inc. has prepared the accompanying Unaudited Condensed Consolidated Financial Statements, including its accounts and theaccounts of its wholly-owned subsidiaries, in accordance with the instructions to Form 10-Q and therefore they do not include all of the information andnotes required by United States generally accepted accounting principles (“GAAP”). These interim financial statements should be read in conjunction withthe financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended January 3, 2009, as filed with the Securitiesand Exchange Commission (“SEC”). Our fiscal year is a 52- or 53-week period ending on the Saturday closest to the end of the calendar year. Fiscal year2009 and fiscal year 2008 contain 52 weeks and 53 weeks, respectively. BlueLinx Corporation is the wholly-owned operating subsidiary of BlueLinxHoldings Inc. and is referred to herein as the “operating subsidiary” when necessary. Certain amounts in the first nine months of fiscal 2008 have beenreclassified to conform with the presentation for the first nine months of fiscal 2009.

We believe the accompanying Unaudited Condensed Consolidated Financial Statements reflect all adjustments, consisting only of normal recurringadjustments, necessary for a fair presentation of our financial position, results of operations and cash flows for the periods presented. The preparation of theUnaudited Condensed Consolidated Financial Statements in conformity with GAAP requires us to make estimates and assumptions that affect the amountsreported in the financial statements and accompanying notes. Actual results could differ from those estimates and such differences could be material. Inaddition, the operating results for interim periods may not be indicative of the results of operations for a full year. We are exposed to fluctuations in quarterlysales volumes and expenses due to seasonal factors, with the second and third quarters typically accounting for the highest sales volumes. These seasonalfactors are common in the building products distribution industry.

We are a leading distributor of building products in North America with approximately 2,000 employees. We offer approximately 10,000 products fromover 750 suppliers to service more than 11,500 customers nationwide, including dealers, industrial manufacturers, manufactured housing producers and homeimprovement retailers. We operate our distribution business from sales centers in Atlanta and Denver, and our network of more than 70 warehouses and third-party operated warehouses.

2. Summary of Significant Accounting Policies

Revenue Recognition

We recognize revenue when the following criteria are met: persuasive evidence of an agreement exists, delivery has occurred or services have beenrendered, our price to the buyer is fixed and determinable and collectibility is reasonably assured. Delivery is not considered to have occurred until thecustomer takes title and assumes the risks and rewards of ownership. The timing of revenue recognition is largely dependent on shipping terms. Revenue isrecorded at the time of shipment for terms designated as FOB (free on board) shipping point. For sales transactions designated FOB destination, revenue isrecorded when the product is delivered to the customer’s delivery site.

All revenues are recorded at gross in accordance with the Accounting Standards Codification (“ASC”) 605-45, “Principal Agent Considerations” (“ASC605-45”), and in accordance with standard industry practice. The key indicators used to determine when and how revenue is recorded are as follows:

• We are the primary obligor responsible for fulfillment and all other aspects of the customer relationship.

• Title passes to BlueLinx, and we carry all risk of loss related to warehouse, reload and inventory shipped directly from vendors to our customers.

• We are responsible for all product returns.

• We control the selling price for all channels.

• We select the supplier.

• We bear all credit risk.

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In addition, we provide inventory to certain customers through pre-arranged agreements on a consignment basis. Customer consigned inventory ismaintained and stored by certain customers; however, ownership and risk of loss remains with us. When the inventory is sold by the customer, we recognizerevenue. We record revenue on a gross basis in accordance with the guidance outlined above relative to ASC 605-45.

All revenues recognized are net of trade allowances, cash discounts and sales returns. Cash discounts and sales returns are estimated using historicalexperience. Trade allowances are based on the estimated obligations and historical experience. Adjustments to earnings resulting from revisions to estimateson discounts and returns have been insignificant for each of the reported periods.

Cash and Cash Equivalents

Cash and cash equivalents include all highly-liquid investments with maturity dates of less than three months when purchased.

Restricted Cash

We had restricted cash of $30.9 million and $25.5 million at October 3, 2009 and January 3, 2009 respectively. Restricted cash primarily includes amountsheld in escrow related to our interest rate swap, mortgage, and insurance for workers’ compensation, auto liability, and general liability. Restricted cash isincluded in “Other current assets” and “Other non-current assets” on the accompanying Condensed Consolidated Balance Sheets.

The table below provides the balances of each individual component in restricted cash as of October 3, 2009 and January 3, 2009 (in thousands): At October 3, At January 3, 2009 2009 Cash in escrow:

Mortgage 17,560 9,118 Other (1) 13,381 16,401

Total $ 30,941 $ 25,519

(1) Other includes restricted cash related to our interest rate swap, insurance, and other items.

During the third quarter of fiscal 2009, we determined it to be appropriate to recognize changes in restricted cash required under our mortgage in thefinancing section of our Condensed Consolidated Statement of Cash Flows. In order to conform historical presentation to the current and future presentations,we reclassified $5.7 million of cash used in operating activities for the period from January 4, 2009 to July 4, 2009 to net cash used in financing activities forthe nine months ended October 3, 2009. We also reclassified $5.5 million from net cash provided by operating activities to net cash used in financingactivities for the nine months ended September 27, 2008 in our Condensed Consolidated Statement of Cash Flows.

Allowance for Doubtful Accounts and Related Reserves

We evaluate the collectibility of accounts receivable based on numerous factors, including past transaction history with customers and theircreditworthiness. We maintain an allowance for doubtful accounts for each aging category on our aged trial balance based on our historical loss experience.This estimate is periodically adjusted when we become aware of specific customers’ inability to meet their financial obligations (e.g., bankruptcy filing orother evidence of liquidity problems). As we determine that specific balances will ultimately be uncollectible, we remove them from our aged trial balance.Additionally, we maintain reserves for cash discounts that we expect customers to earn as well as expected returns. At October 3, 2009 and January 3, 2009,these reserves totaled $9.7 million and $10.1 million, respectively. Adjustments to earnings resulting from revisions to estimates on discounts anduncollectible accounts have been insignificant.

Inventory Valuation

Inventories are carried at the lower of cost or market. The cost of all inventories is determined by the moving average cost method. We evaluate ourinventory value at the end of each quarter to ensure that first quality, actively moving inventory, when

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viewed by category, is carried at the lower of cost or market. At October 3, 2009, the market value of our inventory exceeded its cost. At January 3, 2009, thelower of cost or market reserve totaled $3.4 million. Adjustments to earnings resulting from revisions to lower of cost or market estimates have beeninsignificant.

Additionally, we maintain a reserve for the estimated value impairment associated with damaged, excess and obsolete inventory. The damaged, excess andobsolete reserve generally includes discontinued items or inventory that has turn days in excess of 270 days, excluding new items during their productlaunch. At October 3, 2009 and January 3, 2009, our damaged, excess and obsolete inventory reserves totaled $3.3 million and $4.0 million, respectively.Adjustments to earnings resulting from revisions to damaged, excess and obsolete estimates have been insignificant.

We have included all material charges directly or indirectly incurred in bringing inventory to its existing condition and location.

Consignment Inventory

From time to time, we enter into consignment inventory agreements with our vendors. This vendor consignment inventory relationship allows us to obtainand store vendor inventory at our warehouses and third-party (“reload”) facilities; however, ownership and risk of loss remains with the vendor. When theinventory is sold, we are required to the pay the vendor and we simultaneously take and transfer ownership from the vendor to the customer.

Consideration Received from Vendors and Paid to Customers

Each year, we enter into agreements with many of our vendors providing for inventory purchase rebates, generally based on achievement of specifiedvolume purchasing levels and various marketing allowances that are common industry practice. We accrue for the receipt of vendor rebates based onpurchases, and also reduce inventory value to reflect the net acquisition cost (purchase price less expected purchase rebates). At October 3, 2009 andJanuary 3, 2009, the vendor rebate receivable totaled $5.8 million and $6.3 million, respectively. Adjustments to earnings resulting from revisions to rebateestimates have been insignificant.

In addition, we enter into agreements with many of our customers to offer customer rebates, generally based on achievement of specified volume saleslevels and various marketing allowances that are common industry practice. We accrue for the payment of customer rebates based on sales to the customer,and also reduce sales value to reflect the net sales (sales price less expected customer rebates). At October 3, 2009 and January 3, 2009, the customer rebatepayable totaled $5.3 million and $7.3 million, respectively. Adjustments to earnings resulting from revisions to rebate estimates have been insignificant.

Earnings per Common Share

Effective January 4, 2009, we adopted ASC 260-10, “Earnings Per Share — Overall” (“ASC 260-10”). Per ASC 260-10, unvested share-based paymentawards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are considered participating securities and shall beincluded in the computation of earnings per share pursuant to the two-class method. The two-class method is an earnings allocation formula that treats aparticipating security as having rights to earnings that would otherwise have been available to common shareholders. Restricted stock granted by us tocertain management level employees participate in dividends on the same basis as common shares and are nonforfeitable by the holder. As a result, theseshare-based awards meet the definition of a participating security and are included in the weighted average number of common shares outstanding for theperiods that present net income. Given that the restricted shareholders do not have a contractual obligation to participate in the losses, we have not includedthese amounts in our weighted average number of common shares outstanding for periods in which we report a net loss. In addition, because the inclusion ofsuch unvested restricted shares in our basic and dilutive per share calculations would be antidilutive, we have not included 1,553,128 and 1,218,844 ofunvested restricted shares that had the right to participate in dividends in our basic and dilutive calculations for the first nine months of fiscal 2009 and forthe first nine months of fiscal 2008, respectively, because both periods reflected net losses. As we experienced losses in both periods, basic and diluted lossper share are computed by dividing net loss by the weighted average number of common shares outstanding for the period. The provisions of ASC 260-10 areretroactive; therefore, prior periods have been adjusted when necessary.

Except when the effect would be anti-dilutive, the diluted earnings per share calculation includes the dilutive effect of the assumed exercise of stockoptions and performance shares using the treasury stock method. During fiscal 2008, we granted 440,733 performance shares under our 2006 Long-TermIncentive Plan in which shares are issuable upon satisfaction of certain performance criteria. As of October 3, 2009, we assumed that a total of 189,715performance shares will eventually vest based on our assumption

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that certain performance criteria will be met and that certain shares will be forfeited over the vesting term. The 189,715 performance shares we assume willvest were not included in the computation of diluted earnings per share due to the net loss for the period. We will continue to evaluate the effect of theperformance conditions on our diluted earnings per share calculation in accordance with ASC 260-10 and will change our assumptions when necessary. Ourrestricted stock units are settled in cash upon vesting and are considered liability awards. Therefore, these restricted stock units are not included in thecomputation of the basic and diluted earnings per share.

For the third quarter of fiscal 2009 and for the first nine months of fiscal 2009, we excluded 2,671,157 unvested share-based awards from the dilutedearnings per share calculation because they were anti-dilutive. For the third quarter of fiscal 2008 and for the first nine months of fiscal 2008, we excluded2,755,105 unvested share-based awards from the diluted earnings per share calculation because they were anti-dilutive.

Stock-Based Compensation

We have two stock-based compensation plans covering officers, directors and certain employees and consultants; the 2004 Long Term Equity IncentivePlan (the “2004 Plan”) and the 2006 Long Term Equity Incentive Plan (the “2006 Plan”). The plans are designed to motivate and retain individuals who areresponsible for the attainment of our primary long-term performance goals. The plans provide a means whereby our employees and directors develop a senseof proprietorship and personal involvement in our development and financial success and encourage them to devote their best efforts to our business.Although we do not have a formal policy on the matter, we issue new shares of our common stock to participants, upon the exercise of options, out of thetotal amount of common shares authorized for issuance under the 2004 Plan and the 2006 Plan.

The 2004 Plan provides for the grant of nonqualified stock options, incentive stock options and restricted shares of our common stock to participants ofthe plan selected by our Board of Directors or a committee of the Board who administer the 2004 Plan. We reserved 2,222,222 shares of our common stock forissuance under the 2004 Plan. The terms and conditions of awards under the 2004 Plan are determined by the administrator for each grant.

The 2006 Plan permits the grant of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units,performance shares, performance units, cash-based awards, and other stock-based awards. We reserved 3,200,000 shares of our common stock for issuanceunder the 2006 Plan. The terms and conditions of awards under the 2006 Plan are determined by the administrator for each grant. Awards issued under the2006 Plan are subject to accelerated vesting in the event of a change in control as such event is defined in the 2006 Plan. On January 13, 2009, theCompensation Committee granted 651,150 restricted shares of our common stock to certain of our officers.

We recognize compensation expense equal to the grant-date fair value for all share-based payment awards that are expected to vest. This expense isrecorded on a straight-line basis over the requisite service period of the entire award, unless the awards are subject to market or performance conditions, inwhich case we recognize compensation expense over the requisite service period of each separate vesting tranche. All compensation expense related to ourshare-based payment awards is recorded in “Selling, general and administrative” expense in the Condensed Consolidated Statement of Operations.

As of October 3, 2009, there was $1.0 million, $3.5 million, $0.3 million and $0.1 million of total unrecognized compensation expense related to stockoptions, restricted stock, performance shares and restricted stock units, respectively. The unrecognized compensation expense for these awards is expected tobe recognized over a period of 1.4 years, 1.7 years, 1.2 years, and 0.2 years, respectively. As of September 27, 2008, there was $1.9 million, $4.4 million,$1.0 million and $0.2 million of total unrecognized compensation expense related to stock options, restricted stock, performance shares and restricted stockunits, respectively. The unrecognized compensation expense for these awards was expected to be recognized over a period of 2.5 years, 2.2 years, 2.3 years,and 1.0 years, respectively. For the third quarter of fiscal 2009 and for the first nine months of fiscal 2009, our total stock-based compensation expense was$0.8 million and $2.3 million, respectively. For the third quarter of fiscal 2008 and for the first nine months of fiscal 2008, our total stock-basedcompensation expense was $1.3 million and $2.5 million respectively. We also recognized related income tax benefits of $0.5 million and $1.0 million forthe third quarter of fiscal 2008 and for the first nine months of fiscal 2008, respectively. There were no tax benefits recognized in fiscal 2009. There were nooptions exercised during the third quarter of fiscal 2009, first nine months of fiscal 2009, and the third quarter of fiscal 2008. During the first nine months offiscal 2008, total stock options exercised were 115,758.

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Income Taxes

Our financial statements contain certain deferred tax assets which have arisen primarily as a result of tax benefits associated with the loss before incometaxes incurred during fiscal 2008 and the first nine months of fiscal 2009, as well as deferred income tax assets resulting from other temporary differencesrelated to certain reserves, pension obligations and differences between book and tax depreciation and amortization. In evaluating our ability to recover ourdeferred income tax assets, we considered available positive and negative evidence.

During the year ended January 3, 2009, we reported a net loss. This reported loss along with losses reported in prior periods was considered negativeevidence which carried substantial weight. Therefore, we considered evidence related to the four sources of taxable income, to determine whether suchpositive evidence outweighed the negative evidence associated with the losses incurred. The positive evidence considered included:

• taxable income in prior carryback years, if carryback is permitted under the tax law;

• future reversals of existing taxable temporary differences (i.e., offset gross deferred tax

assets against gross deferred tax liabilities);

• tax planning strategies; and

• future taxable income exclusive of reversing temporary differences and carryforwards.

As of January 3, 2009, there was no taxable income in carryback years to offset the net losses recorded as deferred tax assets. We considered the futurereversal of temporary differences prior to projecting future taxable income. Net deferred tax assets that would not be offset by future reversal of deferred taxliabilities totaled $29.4 million at January 3, 2009.

As of January 3, 2009, we projected a cumulative pretax profit for the three year period ended 2010. The cumulative profit was substantially driven byprojected positive results from operations in 2010, which was developed using the housing start forecasts available at that time and operating expensereductions of 15% in 2009 and 6% in 2010. Our business is closely tied to housing starts and third party estimates of housing starts are considered whenestimating revenue. We develop housing starts assumptions using internal data, which is validated using external housing start forecasts published by thirdparty sources. At the end of fiscal 2008 and through early March 2009, housing starts were projected to be 716,000 for 2009 and 950,000 for 2010.

Additionally, expected gains from the disposal of appreciated real estate in 2009 and 2010 impacted our projections of cumulative pretax income for thethree year period ended 2010. The fair value of our real estate assets substantially exceed the carrying value, which resulted in us being in a unique positionwith the ability to forecast and consider such gains in our projection of future income.

Based on the weight of the available positive and negative evidence at the end of fiscal 2008 and through early March 2009, we concluded that theevidence relative to potential future income generated from operations and the sale of appreciated real estate carried enough weight to overcome the weightof the negative evidence of losses. Therefore, management determined that the existing federal deferred tax assets would be realized in conjunction withclosing and reporting fiscal year 2008 and did not record any valuation allowance related to federal deferred tax assets.

With regard to our state deferred tax assets, we considered the positive evidence associated with tax planning strategies that would be implemented toavoid the loss of these assets. Considering the weight of this evidence, we believed the positive evidence outweighed the negative evidence of the fiscal year2008 loss and previously reported losses in the states where the tax planning strategy was executable. Therefore, we recorded a valuation allowance of$1.1 million for those states where we would not be able to execute the strategy as of the end of fiscal 2008 and $0.3 million related to non-deductible excesscompensation.

During the first quarter of fiscal 2009, our net deferred tax assets increased to $40.2 million, net of a $1.1 million valuation allowance. The increase indeferred tax assets was primarily attributable to a pretax loss of approximately $33 million for the first quarter of 2009.

We evaluated the weight of available positive and negative evidence during the first quarter 2009 closing and reporting process. In late March and April,subsequent to the filing of the 10-K, there was a substantial drop in revenue compared to expectations. In addition, due to a combination of tighter lendingstandards and deteriorating conditions in residential construction, negotiations stalled or were terminated for several of our planned sales of real estate.

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Due to the changes in the environment and our plans noted above, we updated our projection of future taxable income. As previously discussed, we utilizethird-party forecasts in developing our annual projections, specifically related to housing starts. During the first quarter, such external estimates for fiscal2009 housing starts dropped from 716,000 to 616,000. We considered the new information in relation to our expectations in March and April.

The changes in our internal assumptions and revised external expectations of 2009 housing starts resulted in a change in our projections from cumulativepretax income to cumulative pretax loss for the three year period ended 2010.

The downward revisions in forecasted housing starts at the end of the first quarter of fiscal 2009, the lack of signs of recovery in the overall economy andthe lack of ability to close real estate transactions in late March and April caused us to conclude that, as of April 4, 2009, the weight of the positive evidencewas no longer sufficient to overcome the weight of the negative evidence of a three year cumulative loss and that a full valuation allowance of $40.2 millionfor all deferred income tax assets was necessary as of April 4, 2009.

Impairment of Long-Lived Assets

Long-lived assets, including property and equipment and intangible assets with definite useful lives, are reviewed for possible impairment wheneverevents or circumstances indicate that the carrying amount of an asset may not be recoverable.

We evaluate our long-lived assets each quarter for indicators of potential impairment. Indicators of impairment include current period losses combinedwith a history of losses, management’s decision to exit a facility, reductions in the fair market value of real properties and changes in other circumstances thatindicate the carrying amount of an asset may not be recoverable.

Our evaluation of long-lived assets is performed at the lowest level of identifiable cash flows, which is generally the individual distribution facility. In theevent of indicators of impairment, the assets of the distribution facility are evaluated by comparing the facility’s undiscounted cash flows over the estimateduseful life of the asset, which ranges between 5-20 years, to its carrying value. If the carrying value is greater than the undiscounted cash flows, an impairmentloss is recognized for the difference between the carrying value of the asset and the estimated fair market value. Impairment losses are recorded as acomponent of “Selling, general and administrative” in the Condensed Consolidated Statements of Operations.

Our estimate of undiscounted cash flows is subject to assumptions that affect estimated operating income at a distribution facility level. These assumptionsare related to future sales, margin growth rates, economic conditions, market competition and inflation. Our estimates of fair market value are generally basedon market appraisals and our experience with related market transactions. We use a historical average of income, with no growth factor assumption, toestimate undiscounted cash flows. The assumptions used to determine impairment are considered to be level 3 measurements in the fair value hierarchy asdefined in Note 10 in our Annual Report on Form 10-K for the year ended January 3, 2009.

During the first nine months of fiscal 2008, we recorded a non-cash impairment charge of $0.4 million to reduce the carrying value of certain long-livedassets to fair value as a result of unfavorable market conditions associated with our custom milling operations in California. This impairment charge wasincluded in “Selling, general and administrative” expense in our Condensed Consolidated Statement of Operations for the first nine months of fiscal 2008.

Currently, we are experiencing a reduction in operating income at the distribution facility level due to the ongoing downturn in the housing market. Tothe extent that reductions in volume and operating income have resulted in impairment indicators, in most cases our carrying values continue to be less thanour projected undiscounted cash flows. As of January 3, 2009, we had $152.8 million in net book value of fixed assets. The undiscounted cash flows were lessthan the carrying values for approximately $24.0 million of these assets. The fair value of these assets, primarily real estate, exceeded the carrying value byapproximately $23.8 million. For the first nine months of fiscal 2009, we have not identified significant known trends impacting the fair value of long-livedassets to an extent that would indicate impairment.

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Self-Insurance

It is our policy to self-insure, up to certain limits, traditional risks including workers’ compensation, comprehensive general liability, and auto liability.Our self-insured deductible for each claim involving workers’ compensation, comprehensive general liability (including product liability claims), and autoliability is limited to $0.8 million, $1.0 million, and $2.0 million, respectively. We are also self-insured up to certain limits for certain other insurable risks,primarily physical loss to property ($0.1 million per occurrence) and the majority of our medical benefit plans ($0.3 million per occurrence). Insurancecoverage is maintained for catastrophic property and casualty exposures as well as those risks required to be insured by law or contract. A provision for claimsunder this self-insured program, based on our estimate of the aggregate liability for claims incurred, is revised and recorded annually. The estimate is derivedfrom both internal and external sources including but not limited to actuarial estimates. The actuarial estimates are subject to uncertainty from varioussources, including, among others, changes in claim reporting patterns, claim settlement patterns, judicial decisions, legislation, and economic conditions.Although, we believe that the actuarial estimates are reasonable, significant differences related to the items noted above could materially affect our self-insurance obligations, future expense and cash flow. At October 3, 2009 and January 3, 2009, the self-insurance reserves totaled $9.4 million and$8.9 million, respectively.

3. Restructuring Charges

We account for exit and disposal costs in accordance with ASC 420-10, “Exit or Disposal Cost Obligations- Overall”, which requires that a liability berecognized for a cost associated with an exit or disposal activity at fair value in the period in which it is incurred or when the entity ceases using the rightconveyed by a contract (i.e. the right to use a leased property). Our restructuring charges included accruals for estimated losses on facility costs based on ourcontractual obligations net of estimated sublease income based on current comparable market rates for leases. We will reassess this liability periodicallybased on market conditions. Revisions to our estimates of this liability could materially impact our operating results and financial position in future periodsif anticipated events and key assumptions, such as the timing and amounts of sublease rental income, either do not materialize or change. These costs areincluded in “Selling, general, and administrative” expenses in the Condensed Consolidated Statements of Operations and “Other current liabilities” and“Other non-current liabilities” on the Condensed Consolidated Balance Sheets at October 3, 2009 and January 3, 2009.

We account for severance and outplacement costs in accordance with ASC 712-10, “Nonretirement Post-Employment Benefits- Overall”. These costs wereincluded in “Selling, general, and administrative” expenses in the Condensed Consolidated Statements of Operations and in “Accrued Compensation” on theCondensed Consolidated Balance Sheets at October 3, 2009 and January 3, 2009.

2007 Facility Consolidation and Severance Costs

During fiscal 2007, we announced a plan to adjust our cost structure in order to manage our costs more effectively. The plan included the consolidation ofour corporate headquarters and sales center to one building from two buildings and reduction in force initiatives which resulted in charges of $17.1 millionduring the fourth quarter of fiscal 2007. Since the inception of this plan, we recorded an additional charge of $2.4 million related to an assumption changerelated to an increase to the anticipated time required to sublease the vacated headquarters’ building during the fourth quarter of fiscal 2008. As of October 3,2009 and January 3, 2009, there was no remaining accrued severance related to reduction in force initiatives completed in fiscal 2007.

The table below summarizes the balance of accrued facility consolidation reserve and the changes in the accrual for the third quarter ended October 3,2009 (in thousands): Balance at July 5, 2009 $ 11,656 Charges — Payments (535)Accretion of discount used to calculate liability 187 Balance at October 3, 2009 $ 11,308

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The table below summarizes the balance of accrued facility consolidation reserve and the changes in the accrual for the nine months ended October 3,2009 (in thousands): Balance at January 3, 2009 $ 12,340 Charges — Payments (1,601)Accretion of discount used to calculate liability 569 Balance at October 3, 2009 $ 11,308

2008 Facility Consolidation and Severance Costs

During fiscal 2008, our board of directors approved a plan to exit our custom milling operations in California primarily due to the impact of unfavorablemarket conditions on that business. The closure of the custom milling facilities resulted in facility consolidation charges of $2.0 million during fiscal 2008.In addition, we recorded severance and outplacement costs of $1.0 million in connection with involuntary terminations at our custom milling facilities. Wealso recorded $4.2 million related to other reduction in force initiatives. At October 3, 2009 and January 3, 2009, our severance reserve totaled $0.03 millionand $0.5 million. During the first nine months of fiscal 2009, we modified certain assumptions related to sublease income and rental payments that resulted ina reduction to the reserve of approximately $0.2 million.

The table below summarizes the balance of the accrued facility consolidation and severance reserves and the changes in the accruals as of and for the thirdquarter ended October 3, 2009 (in thousands): Facility Severance Consolidation Costs Total Balance at July 5, 2009 $ 1,030 $ 77 $ 1,107 Assumption changes 67 — 67 Payments (259) (46) (305)Accretion of liability 22 — 22 Balance at October 3, 2009 $ 860 $ 31 $ 891

The table below summarizes the balances of the accrued facility consolidation and severance reserves and the changes in the accruals as of and for the ninemonths ended October 3, 2009 (in thousands): Facility Severance Consolidation Costs Total Balance at January 3, 2009 $ 1,792 $ 512 $ 2,304 Assumption changes (187) — (187)Payments (826) (481) (1,307)Accretion of liability 81 — 81 Balance at October 3, 2009 $ 860 $ 31 $ 891

2009 Facility Consolidations and Severance

During the second quarter of fiscal 2009, we exited our BlueLinx Hardwoods facility in Austin Texas to improve overall effectiveness and efficiency bytransferring operations to our San Antonio and Houston branches. Our exit of the Austin facility resulted in charges of $0.7 million. In addition, we recordedseverance charges related to reduction in force initiatives of $1.4 million. During the third quarter of fiscal 2009, we modified certain assumptions related tosublease income that resulted in a reduction to the reserve of approximately $0.1 million.

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The table below summarizes the balances of the accrued facility consolidation and severance reserves and the changes in the accrual for the third quarterended October 3, 2009 (in thousands): Facility Severance Consolidation Costs Total Balance at July 5, 2009 $ 731 $ 80 $ 811 Charges — 193 193 Assumption changes (88) — (88)Payments (50) (252) (302)Accretion of liability 14 — 14 Balance at October 3, 2009 $ 607 $ 21 $ 628

The table below summarizes the balances of the accrued facility consolidation and severance reserves and the changes in the accrual for the nine monthsended October 3, 2009 (in thousands): Facility Severance Consolidation Costs Total Balance at January 3, 2009 $ — $ — $ — Charges 731 1,422 2,153 Assumption changes (88) — (88)Payments (50) (1,401) (1,451)Accretion of liability 14 — 14 Balance at October 3, 2009 $ 607 $ 21 $ 628

4. Assets Held for Sale and Net Gain on Disposition

As part of our restructuring efforts to improve our cost structure and cash flow, we closed certain facilities and designated them as assets held for saleduring fiscal 2009 and fiscal 2008. At the time of designation, we ceased recognizing depreciation expense on these assets. As of October 3, 2009 andJanuary 3, 2009, total assets held for sale were $1.8 million and $3.0 million, respectively, and were included in “Other current assets” in our CondensedConsolidated Balance Sheets. These assets are not material for separate presentation on our Condensed Consolidated Balance Sheets. During the first ninemonths of fiscal 2009, we sold certain real properties that resulted in a $4.4 million gain recorded in “Selling, general, and administrative” expenses in theCondensed Consolidated Statements of Operations.

5. Comprehensive Loss

The calculation of comprehensive loss is as follows (in thousands): Third Quarter Period from Period from July 5, 2009 June 29, 2008 to to October 3, 2009 September 27, 2008 Net loss $ (13,463) $ (2,594) Other comprehensive income (loss):

Foreign currency translation, net of taxes 844 (242)Unrealized loss from cash flow hedge, net of taxes — (145)Interest expense recognized related to ineffective interest rate swap 2,438 —

Comprehensive loss $ (10,181) $ (2,981)

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Nine Months Ended Period from Period from January 4, 2009 December 29, 2007 to to October 3, 2009 September 27, 2008 Net loss $ (73,488) $ (6,586)Other comprehensive income (loss):

Foreign currency translation, net of taxes 1,438 (639)Unrealized gain from cash flow hedge, net of taxes — 34 Interest expense recognized related to ineffective interest rate swap 7,913 —

Comprehensive loss $ (64,137) $ (7,191)

For the third quarter of fiscal 2009, the income tax effects related to foreign currency translation was $0.5 million. Due to our interest rate swap becomingineffective, as well as our decision to record a full valuation allowance against our deferred tax assets, we will recognize the income tax effect associated withunrealized losses, initially recorded in other comprehensive income when the interest rate swap terminates. For the third quarter of fiscal 2008, the income taxeffects related to foreign currency translation and our interest rate swap were $(0.2) million and $(0.1) million, respectively.

For the first nine months of fiscal 2009, the income tax effects related to foreign currency translation and our interest rate swap were $0.9 million and$2.7 million, respectively. For the first nine months fiscal 2008, the income tax effects related to foreign currency translation and our interest rate swap were$(0.4) million and $0.02 million, respectively.

6. Employee Benefits

Defined Benefit Pension Plans

Most of our hourly employees participate in noncontributory defined benefit pension plans, which include a plan that is administered solely by us (the“hourly pension plan”) and union-administered multiemployer plans. Our funding policy for the hourly pension plan is based on actuarial calculations andthe applicable requirements of federal law. We have met our required contribution to the hourly pension plan in fiscal 2009. Benefits under the majority ofplans for hourly employees (including multiemployer plans) are primarily related to years of service.

Net periodic pension cost for our pension plans included the following (in thousands): Third Quarter Period from July 5, Period from June 29, 2008, 2009 to October 3, 2009 2008 to September 27, 2008 Service cost $ 452 $ 561 Interest cost on projected benefit obligation 1,125 1,109 Expected return on plan assets (1,132) (1,501)Amortization of unrecognized loss (gain) 180 (91)Net periodic pension cost $ 625 $ 78

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Nine Months Ended Period from January 4, Period from December 29, 2009 to October 3, 2009 2007 to September 27, 2008 Service cost $ 1,356 $ 1,684 Interest cost on projected benefit obligation 3,375 3,326 Expected return on plan assets (3,396) (4,501)Amortization of unrecognized loss (gain) 540 (274)Amortization of unrecognized prior service cost — 1 Net periodic pension cost $ 1,875 $ 236

7. Revolving Credit Facility

As of October 3, 2009, we had outstanding borrowings of $56.0 million and excess availability of $190.6 million under the terms of our revolving creditfacility. We classify the lowest projected balance of the credit facility over the next twelve months of $56.0 million as long-term debt. As of October 3, 2009and January 3, 2009, we had outstanding letters of credit totaling $13.5 million and $12.9 million, respectively, primarily for the purposes of securingcollateral requirements under the interest rate swap, insurance programs and for guaranteeing payment of international purchases based on the fulfillment ofcertain conditions. Our revolving credit facility contains customary negative covenants and restrictions for asset based loans. The most significant restrictionis a requirement that we maintain a fixed charge ratio of 1.1 to 1.0 in the event our excess availability falls below $40.0 million. The fixed charge ratio iscalculated as EBITDA over the sum of cash payments for income taxes, interest expense, cash dividends, principal payments on debt, and capitalexpenditures. EBITDA is defined as BlueLinx Corporation’s net income before interest and tax expense, depreciation and amortization expense, and othernon-cash charges. The fixed charge ratio requirement only applies to us when excess availability under our revolving credit facility is less than $40.0 millionfor three consecutive business days. As of October 3, 2009, we were in compliance with all covenants.

Under our revolving credit facility agreement, we are required to maintain a springing lock-box arrangement where customer remittances go directly to alock-box maintained by our lenders and then are forwarded to our general bank accounts. Our outstanding borrowings are not reduced by these paymentsunless our excess availability is less than $40.0 million for three consecutive business days or in the event of default. Our revolving credit facility does notcontain a subjective acceleration clause which would allow our lenders to accelerate the scheduled maturities of our debt or to cancel our agreement.

Effective March 30, 2009, we elected to permanently reduce our revolving loan threshold limit from $800.0 million to $500.0 million. This reduction doesnot impact our available borrowing capacity under our revolving credit facility as our current eligible accounts receivable and inventory (our “borrowingbase”) do not support up to $800.0 million in borrowings. We do not anticipate our borrowing base will support borrowings in excess of $500.0 million atany point during the remaining life of the credit facility. This cost-saving initiative will allow us to reduce our interest expense by $0.8 million annually bylowering our unused line fees. As a result of this action, we recorded expense of $1.4 million for the write-off of deferred financing costs that had beencapitalized associated with the borrowing capacity that was reduced during the first quarter of fiscal 2009.

8. Derivatives

We are exposed to risks such as changes in interest rates, commodity prices and foreign currency exchange rates. We employ a variety of practices tomanage these risks, including operating and financing activities and, where deemed appropriate, the use of derivative instruments. Derivative instruments areused only for risk management purposes and not for speculation or trading, and are not used to address risks related to foreign currency rates. In accordancewith ASC 815, “Derivatives and Hedging”, we record derivative instruments as assets or liabilities on the balance sheet at fair value.

On June 12, 2006, we entered into an interest rate swap agreement with Goldman Sachs Capital Markets, to hedge against interest rate risks related to ourvariable rate revolving credit facility. The interest rate swap has a notional amount of $150.0 million and the terms call for us to receive interest monthly at avariable rate equal to the 30-day LIBOR and to pay interest monthly at a fixed rate of 5.4%. This interest rate swap was designated as a cash flow hedge.

Through January 3, 2009, the hedge was highly effective in offsetting changes in expected cash flows. Fluctuations in the fair value of the ineffectiveportion, if any, of the cash flow hedge were reflected in earnings.

On January 9, 2009, we reduced our borrowings under the revolving credit facility by $60.0 million, which reduced outstanding debt below the interestrate swap’s notional amount of $150.0 million, at which point the hedge became ineffective in offsetting future

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changes in expected cash flows during the remaining term of the interest rate swap. We used cash on hand to pay down this portion of our revolving creditdebt during the first quarter of fiscal 2009. As a result, any prospective changes in fair value of the instrument will be recorded through earnings. Chargesassociated with the ineffective interest rate swap recognized in the Condensed Consolidated Statement of Operations for the first quarter of fiscal 2009 wereapproximately $4.8 million and are comprised of a $5.9 million non-cash charge on the date we reduced our borrowings outstanding under the revolvingcredit facility below the interest rate swap’s notional amount, $1.0 million of amortization of accumulated other comprehensive loss, and $2.1 million ofincome related to fair value changes since the date of the reduction.

During the second quarter of fiscal 2009, we further reduced our borrowings under the revolving credit by $15.0 million. Charges associated with theineffective interest rate swap during the second quarter of fiscal 2009 were $1.3 million on the date we reduced our borrowings outstanding by $15.0 million,$0.9 million of amortization of accumulated other comprehensive loss, and $1.1 million of income related to fair value changes since the date of reduction.

During the third quarter of fiscal 2009, we used cash on hand to reduce our borrowings under the revolving credit facility by an additional $25.0 million.This payment resulted in a third quarter non-cash charge of approximately $1.9 million recorded in interest expense on the payment date. In addition, therewas $0.5 million of amortization of accumulated other comprehensive loss, and $1.0 million of income related to fair value changes since the date ofreduction. The remaining $3.2 million of accumulated other comprehensive loss will be amortized over the remaining 19 month term of the interest rate swapand recorded as interest expense. Approximately $2.1 million will be amortized over the next 12 months and recorded as interest expense. Any furtherreductions in borrowings under our revolving credit facility will result in a pro-rata reduction in accumulated other comprehensive loss at the payment datewith a corresponding charge recorded to interest expense. Due to our interest rate swap becoming ineffective, as well as our decision to record a full valuationallowance against deferred tax assets, we will recognize the income tax effect associated with unrealized losses initially recorded in other comprehensiveincome when the interest rate swap terminates.

The following table presents a reconciliation of the unrealized losses related to our interest rate swap measured at fair value in accumulated othercomprehensive loss as of October 3, 2009 (in thousands): Balance at January 3, 2009 $ 13,229 Unrealized losses in accumulated other comprehensive loss 1,533 Charges associated with ineffective interest rate swap recorded to interest expense (11,556)Balance at October 3, 2009 $ 3,206

9. Mortgage

On June 9, 2006, certain special purpose entities that are wholly-owned subsidiaries of us entered into a $295.0 million mortgage loan with the GermanAmerican Capital Corporation. The mortgage has a term of ten years and is secured by 55 distribution facilities and 1 office building owned by the specialpurpose entities. The stated interest rate on the mortgage is fixed at 6.35%.

During the first nine months of fiscal 2009, we sold certain real properties that ceased operations. As a result of the sale of one of these properties duringthe second quarter of fiscal 2009, we reduced our mortgage loan by $3.2 million and incurred a mortgage prepayment penalty of $0.6 million recorded in“Interest expense” on the Condensed Consolidated Statements of Operations.

The mortgage loan requires interest-only payments through June 2011. The balance of the loan outstanding at the end of ten years will then become dueand payable. The principal will be paid in the following increments (in thousands): 2011 $ 1,817 2012 3,813 2013 4,119 2014 4,392 2015 4,683 Thereafter 266,845

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10. Fair Value Measurements

We apply ASC 820, “Fair Value Measurements and Disclosures”, which defines fair value, establishes a framework for measuring fair value under GAAP,and expands disclosures about fair value measurements to all applicable financial and non-financial assets. ASC 820 defines fair value as the price that wouldbe received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). ASC 820classifies inputs used to measure fair value into the following hierarchy:

Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2

Unadjusted quoted prices in active markets for similar assets or liabilities, or Unadjusted quoted prices for identical or similar assets orliabilities in markets that are not active, or Inputs other than quoted prices that are observable for the asset or liability.

Level 3 Unobservable inputs for the asset or liability.

We are exposed to market risks from changes in interest rates, which may affect our operating results and financial position. When deemed appropriate, weminimize our risks from interest rate fluctuations through the use of an interest rate swap. This derivative financial instrument is used to manage risk and isnot used for trading or speculative purposes. The swap is valued using a valuation model that has inputs other than quoted market prices that are bothobservable and unobservable.

We endeavor to utilize the best available information in measuring the fair value of the interest rate swap. The interest rate swap is classified in its entiretybased on the lowest level of input that is significant to the fair value measurement. To determine fair value of the interest rate swap we used the discountedestimated future cash flows methodology. Assumptions critical to our fair value in the period were: (i.) the present value factors used in determining fair value(ii.) projected LIBOR, and (iii.) the risk of non-performance. These and other assumptions are impacted by economic conditions and expectations ofmanagement. We have determined that the fair value of our interest rate swap is a level 3 measurement in the fair value hierarchy. The level 3 measurement isthe risk of non-performance on the interest rate swap liability that is not secured by cash collateral. The risk of counterparty non-performance did not affectthe fair value at October 3, 2009 and at January 3, 2009 due to the fact the risk of counterparty non-performance was nominal. The fair value of the interestrate swap was a liability of $10.5 million and $13.2 million at October 3, 2009 and January 3, 2009, respectively. These balances are included in “Othercurrent liabilities” and “Other non-current liabilities” on the Condensed Consolidated Balance Sheets.

The following table presents a reconciliation of the level 3 interest rate swap measured at fair value on a recurring basis as of October 3, 2009 (inthousands): Fair value at January 3, 2009 $ (13,229)Unrealized gains included in earnings, net 4,216 Unrealized losses in accumulated other comprehensive loss (1,533)Fair value at October 3, 2009 $ (10,546)

The $4.2 million unrealized gain was included in “Interest expense” in the Condensed Consolidated Statements of Operations.

Carrying amounts for our financial instruments are not significantly different from their fair value, with the exception of our mortgage. At October 3, 2009,the carrying value and fair value of our mortgage was $285.7 million and $291.0 million, respectively. To determine the fair value of our mortgage, we used adiscounted cash flow model. Assumptions critical to our fair value in the period were present value factors used in determining fair value and an interest rate.

11. Termination and Modification Agreement with G-P

On April 27, 2009, we entered into a Termination and Modification Agreement (“Modification Agreement”) related to our Supply Agreement with GeorgiaPacific (“G-P”). The Modification Agreement effectively terminates the existing Supply Agreement with

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respect to our distribution of G-P plywood, oriented strand board and lumber. As of January 3, 2009, our minimum purchases requirement totaled$31.9 million. As a result of terminating this agreement, we are no longer contractually obligated to make minimum purchases of products from G-P. We willcontinue to distribute a variety of G-P building products, including engineered lumber, which is covered under a three-year purchase agreement datedFebruary 12, 2009.

G-P agreed to pay us $18.8 million in exchange for our agreement to terminate the Supply Agreement one-year earlier than the originally agreed uponMay 7, 2010 termination date. Under the terms of the Modification Agreement, we will receive four quarterly cash payments of $4.7 million, which began onMay 1, 2009 and will end on February 1, 2010. As a result of the termination, we recognized a net gain of $17.6 million in the first nine months of fiscal 2009as a reduction to operating expense. The gain was net of a discount of $0.2 million and a $1.0 million write-off of an intangible asset associated with theSupply Agreement. We believe the early termination of the Supply Agreement contributed to the decline in our structural panel sales volume during thesecond and third quarters of fiscal 2009. However, since the majority of these sales go through the direct sales channel, the lower structural panel salesvolume had an insignificant impact on our gross profit during these periods. To the extent we are unable to replace these volumes with structural productfrom G-P or other suppliers, the early termination of the Supply Agreement may continue to negatively impact our sales of structural products which wouldimpact our net sales and our costs, which in turn could impact our gross profit, net income, and cash flows. For more information on structural unit volumechanges, refer to the tables under “Selected Factors Affecting Our Operating Results” in our Management, Discussion Analysis. For further discussion of therisks associated with the termination of the Master Supply Agreement, please also refer to our risk factors disclosed in our Annual Report on Form 10-K forthe year ended January 3, 2009, as further supplemented in our Quarterly Report on Form 10-Q for the period ended April 4, 2009, as filed with the SEC.

12. Related Party Transactions

Cerberus Capital Management, L.P., our equity sponsor, retains consultants that specialize in operations management and support and who provideCerberus with consulting advice concerning portfolio companies in which funds and accounts managed by Cerberus or its affiliates have invested. From timeto time, Cerberus makes the services of these consultants available to Cerberus portfolio companies. We believe that the terms of these consultingarrangements are favorable to us, or, alternatively, are materially consistent with those terms that would have been obtained by us in an arrangement with anunaffiliated third party. From time to time, we have normal service, purchase and sales arrangements with other entities that are owned or controlled byCerberus. We believe that these transactions are at arms’ length terms and are not material to our results of operations or financial position.

13. Commitments and Contingencies

Environmental and Legal Matters

From time to time, we are involved in various proceedings incidental to our businesses and we are subject to a variety of environmental and pollutioncontrol laws and regulations in all jurisdictions in which we operate. Although the ultimate outcome of these proceedings cannot be determined withcertainty, based on presently available information management believes that adequate reserves have been established for probable losses with respectthereto. Management further believes that the ultimate outcome of these matters could be material to operating results in any given quarter but will not havea materially adverse effect on our long-term financial condition, our results of operations, or our cash flows.

Collective Bargaining Agreements

As of October 3, 2009, approximately 31% of our total work force is covered by collective bargaining agreements. Collective bargaining agreementsrepresenting approximately 3% of our work force will expire within one year.

14. Subsequent Events

We evaluated subsequent events through the time of the filing of our Quarterly Report on Form 10-Q. We are not aware of any other significant events thatoccurred subsequent to the balance sheet date but prior to the filing of this report that would have a material impact on our Condensed ConsolidatedFinancial Statements.

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15. Recently Issued Accounting Pronouncements

Effective July 5, 2009, we adopted the Financial Accounting Standards Board (FASB) ASC 105-10, “Generally Accepted Accounting Principles —Overall” (ASC 105-10). ASC 105-10 establishes the FASB Accounting Standards Codification (the “Codification”) as the source of authoritative accountingprinciples recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP. TheCodification does not change current U.S. GAAP, but is intended to simplify user access to all authoritative U.S. GAAP by providing all the authoritativeliterature related to a particular topic in one place. This Form 10-Q for the quarter ending October 3, 2009 and all subsequent public filings will reference theCodification as the sole source of authoritative literature.

In May 2009, the FASB issued ASC 855, “Subsequent Events” (“ASC 855”). ASC 855 establishes authoritative accounting and disclosure guidance forrecognized and non-recognized subsequent events that occur after the balance sheet date but before financial statements are issued. ASC 855 also requiresdisclosure of the date through which an entity has evaluated subsequent events and the basis for that date. ASC 855 was effective for us beginning with ourQuarterly Report on Form 10-Q for the second quarter and first six months of fiscal 2009, and will be applied prospectively.

In April 2009, the FASB issued ASC 825-10, “Financial Instruments — Overall” (“ASC 825-10”), which will require that the fair value disclosures requiredfor all financial instruments be included in interim financial statements. ASC 825-10 also requires entities to disclose the method and significant assumptionsused to estimate the fair value of financial instruments on an interim and annual basis and to highlight any changes from prior periods. ASC 820-10 waseffective for us during the third quarter of fiscal 2009. The adoption of ASC 825-10 did not have a material impact on our Condensed Consolidated FinancialStatements.

In December 2008, the FASB issued ASC 715, “Compensation — Retirement Benefits” (“ASC 715”). ASC 715 requires enhanced disclosures about theplan assets of our defined benefit pension and other postretirement plans. The enhanced disclosures required by ASC 715 are intended to provide users offinancial statements with a greater understanding of: (1) how investment allocation decisions are made, including the factors that are pertinent to anunderstanding of investment policies and strategies; (2) the major categories of plan assets; (3) the inputs and valuation techniques used to measure the fairvalue of plan assets; (4) the effect of fair value measurements using significant unobservable inputs (Level 3) on changes in plan assets for the period; and (5)significant concentrations of risk within plan assets. ASC 715 is effective for us for the year ending January 2, 2010.

In June 2008, the FASB issued ASC 260-10, “Earnings Per Share — Overall” (“ASC 260-10”). Per ASC 260-10 unvested share-based payment awards thatcontain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are to be included in thecomputation of earnings per share under the two-class method described in ASC 260-10. ASC 260-10 was effective for us on January 4, 2009 and requires allpresented prior-period earnings per share data to be adjusted retrospectively. For additional information, refer to Note 2 of the Notes to CondensedConsolidated Financial Statements.

In April 2008, the FASB issued ASC 350-30, “General Intangibles Other than Goodwill” (“ASC 350-30”). ASC 350-30 amends the factors to be consideredin developing renewal or extension assumptions used to determine the useful life of intangible assets under ASC 350, “Intangibles — Goodwill and Other.”Its intent is to improve the consistency between the useful life of an intangible asset and the period of expected cash flows used to measure its fair value. ASC350-30 was effective for us on January 4, 2009 and did not have a material impact on our Condensed Consolidated Financial Statements; however, it couldhave an impact in the future if acquisitions are made.

In March 2008, the FASB issued ASC 815-10-65, “Derivatives and Hedging — Overall — Transition and Open Effective Date Information” (“ASC 815-10-65”). ASC 815-10-65 seeks to improve financial reporting for derivative instruments and hedging activities by requiring enhanced disclosures regardingthe impact on financial position, financial performance, and cash flows. To achieve this increased transparency, ASC 815-10-65 requires (1) the disclosure ofthe fair value of derivative instruments and gains and losses in a tabular format; (2) the disclosure of derivative features that are credit risk-related; and(3) cross-referencing within the footnotes. ASC 815-10-65 was effective for us, on a prospective basis, on January 4, 2009. The adoption of ASC 815-10-65did not have a material impact on our Condensed Consolidated Financial Statements. For additional information, refer to Note 8 of the Notes to CondensedConsolidated Financial Statements.

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In December 2007, the FASB issued ASC 805-10 “Business Combinations — Overall” (“ASC 805-10”). ASC 805-10 establishes principles andrequirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed,and any non-controlling interest in the acquiree. ASC 805-10 also provides guidance for recognizing and measuring the goodwill acquired in the businesscombination and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of thebusiness combination. ASC 805-10 was effective for us, on a prospective basis, on January 4, 2009. We expect ASC 805-10 will have an impact on ouraccounting for business combinations, but the effect is dependent upon the acquisitions that are made in the future.

16. Unaudited Supplemental Condensed Consolidating Financial Statements

The unaudited condensed consolidating financial information as of October 3, 2009 and January 3, 2009 and for the periods from July 5, 2009 toOctober 3, 2009 and June 29, 2008 to September 27, 2008 is provided due to restrictions in our revolving credit facility that limit distributions by BlueLinxCorporation, our wholly-owned operating subsidiary, to us, which, in turn, may limit our ability to pay dividends to holders of our common stock (see ourAnnual Report on Form 10-K for the year ended January 3, 2009, for a more detailed discussion of these restrictions and the terms of the facility). Alsoincluded in the supplemental Condensed Consolidated financial statements are sixty-three single member limited liability companies, which are whollyowned by us (the “LLC subsidiaries”). The LLC subsidiaries own certain warehouse properties that are occupied by BlueLinx Corporation, each under theterms of a master lease agreement. Certain of the warehouse properties collateralize a mortgage loan and none of the properties are available to satisfy thedebts and other obligations of either BlueLinx Corporation or us.

The condensed consolidating statement of operations for BlueLinx Holdings Inc. for the period from July 5, 2009 to October 3, 2009 follows (inthousands): BlueLinx Holdings BlueLinx LLC Inc. Corporation Subsidiaries Eliminations Consolidated Net sales $ — $ 449,363 $ 7,457 $ (7,457) $ 449,363 Cost of sales — 394,058 — — 394,058 Gross profit — 55,305 7,457 (7,457) 55,305 Operating expenses (income):

Selling, general and administrative 1,399 61,035 47 (7,457) 55,024 Depreciation and amortization — 2,922 960 — 3,882

Total operating expenses 1,399 63,957 1,007 (7,457) 58,906 Operating (loss) income (1,399) (8,652) 6,450 — (3,601)Non-operating expenses:

Interest expense — 3,364 4,623 — 7,987 Charges associated with ineffective interest rate swap — 1,431 — — 1,431 Other expense (income), net — 386 (62) — 324

(Loss) income before (benefit from) provision for incometaxes (1,399) (13,833) 1,889 — (13,343)

(Benefit from) provision for income taxes (720) 104 736 — 120 Equity in (loss) income of subsidiaries (12,784) — — 12,784 — Net income (loss) $ (13,463) $ (13,937) $ 1,153 $ 12,784 $ (13,463)

The condensed consolidating statement of operations for BlueLinx Holdings Inc. for the period from June 29, 2008 to September 27, 2008 follows (inthousands): BlueLinx Holdings BlueLinx LLC Inc. Corporation Subsidiaries Eliminations Consolidated Net sales $ — $ 726,756 $ 7,617 $ (7,617) $ 726,756 Cost of sales — 643,507 — — 643,507 Gross profit — 83,249 7,617 (7,617) 83,249 Operating expenses:

Selling, general and administrative 2,189 79,016 205 (7,617) 73,793 Depreciation and amortization — 3,869 1,071 — 4,940

Total operating expenses 2,189 82,885 1,276 (7,617) 78,733

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BlueLinx Holdings BlueLinx LLC Inc. Corporation Subsidiaries Eliminations Consolidated Operating (loss) income (2,189) 364 6,341 — 4,516 Non-operating expenses:

Interest expense — 3,899 4,892 — 8,791 Other expense (income), net — 80 (15) — 65


(Benefit from) provision for income taxes (854) (1,463) 571 — (1,746)Equity in (loss) income of subsidiaries (1,259) — — 1,259 — Net (loss) income $ (2,594) $ (2,152) $ 893 $ 1,259 $ (2,594)

The condensed consolidating statement of operations for BlueLinx Holdings Inc. for the period from January 4, 2009 to October 3, 2009 follows (inthousands): BlueLinx Holdings BlueLinx LLC Inc. Corporation Subsidiaries Eliminations Consolidated Net sales $ — $1,280,000 $ 22,460 $ (22,460) $ 1,280,000 Cost of sales — 1,132,119 — — 1,132,119 Gross profit — 147,881 22,460 (22,460) 147,881 Operating expenses (income):

Selling, general and administrative 4,466 185,851 (4,113) (22,460) 163,744 Net gain from terminating the Georgia-Pacific supply

agreement — (17,554) — — (17,554)Depreciation and amortization — 10,189 2,964 — 13,153

Total operating expenses (income) 4,466 178,486 (1,149) (22,460) 159,343 Operating (loss) income (4,466) (30,605) 23,609 — (11,462)Non-operating expenses:

Interest expense — 10,042 14,568 — 24,610 Charges associated with ineffective interest rate swap — 7,341 — — 7,341 Write-off of debt issuance costs — 1,407 — — 1,407 Other expense (income), net — 616 (134) — 482


(Benefit from) provision for income taxes (3,679) 28,287 3,578 — 28,186 Equity in (loss) income of subsidiaries (72,701) — — 72,701 — Net (loss) income $ (73,488) $ (78,298) $ 5,597 $ 72,701 $ (73,488)

The condensed consolidating statement of operations for BlueLinx Holdings Inc. for the period from December 29, 2007 to September 27, 2008 follows(in thousands): BlueLinx Holdings BlueLinx LLC Inc. Corporation Subsidiaries Eliminations Consolidated Net sales $ — $2,278,185 $ 22,852 $ (22,852) $ 2,278,185 Cost of sales — 2,009,698 — — 2,009,698 Gross profit — 268,487 22,852 (22,852) 268,487 Operating expenses:

Selling, general and administrative 2,835 255,227 445 (22,852) 235,655 Depreciation and amortization — 11,800 3,211 — 15,011

Total operating expenses 2,835 267,027 3,656 (22,852) 250,666 Operating (loss) income (2,835) 1,460 19,196 — 17,821 Non-operating expenses:

Interest expense — 12,854 14,676 — 27,530 Other expense (income), net — 413 (28) — 385


(Benefit from) provision for income taxes (1,106) (4,176) 1,774 — (3,508)Equity in (loss) income of subsidiaries (4,857) — — 4,857 — Net (loss) income $ (6,586) $ (7,631) $ 2,774 $ 4,857 $ (6,586)

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The condensed consolidating balance sheet for BlueLinx Holdings Inc. as of October 3, 2009 follows (in thousands): BlueLinx BlueLinx Corporation Holdings and LLC Inc. Subsidiaries Subsidiaries Eliminations Consolidated Assets: Current assets:

Cash $ 32 $ 25,008 $ 458 $ — $ 25,498 Receivables — 168,656 — — 168,656 Inventories — 173,123 — — 173,123 Deferred income tax assets 602 275 — (299) 578 Other current assets 1,060 31,393 1,903 — 34,356 Intercompany receivable 65,523 7,809 — (73,332) —

Total current assets 67,217 406,264 2,361 (73,631) 402,211 Property, plant and equipment:

Land and land improvements — 3,144 49,575 — 52,719 Buildings — 7,317 88,651 — 95,968 Machinery and equipment — 68,906 — — 68,906 Construction in progress — 1,150 — — 1,150

Property, plant and equipment, at cost — 80,517 138,226 — 218,743 Accumulated depreciation — (56,715) (22,151) — (78,866)Property, plant and equipment, net — 23,802 116,075 — 139,877 Investment in subsidiaries (19,918) — — 19,918 — Other non-current assets — 14,141 28,296 — 42,437

Total assets $ 47,299 $ 444,207 $ 146,732 $ (53,713) $ 584,525 Liabilities : Current liabilities:

Accounts payable $ 113 $ 108,424 $ — $ — $ 108,537 Bank overdrafts — 20,016 — — 20,016 Accrued compensation 49 5,196 — — 5,245 Deferred income tax liabilities 299 — — (299) — Other current liabilities — 23,256 3,440 — 26,696 Intercompany payable 7,809 61,844 3,679 (73,332) —

Total current liabilities 8,270 218,736 7,119 (73,631) 160,494 Non-current liabilities :

Long-term debt — 56,000 285,669 — 341,669 Non-current deferred income tax liabilities — 149 429 — 578 Other non-current liabilities — 36,455 6,300 — 42,755 Total liabilities 8,270 311,340 299,517 (73,631) 545,496

Shareholders’ Equity/Parent’s Investment 39,029 132,867 (152,785) 19,918 39,029 Total liabilities and equity $ 47,299 $ 444,207 $ 146,732 $ (53,713) $ 584,525

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The condensed consolidating balance sheet for BlueLinx Holdings Inc. as of January 3, 2009 follows (in thousands): BlueLinx BlueLinx Corporation LLC Holdings Inc. and Subsidiaries Subsidiaries Eliminations Consolidated Assets: Current assets:

Cash $ 32 $ 150,259 $ 62 $ — $ 150,353 Receivables — 130,653 — — 130,653 Inventories — 189,482 — — 189,482 Deferred income tax assets 290 11,578 — 11,868 Other current assets 371 33,678 3,302 — 37,351 Intercompany receivable 40,146 6,041 — (46,187) —

Total current assets 40,839 521,691 3,364 (46,187) 519,707 Property and equipment:

Land and land improvements — 3,103 50,323 — 53,426 Buildings — 7,497 88,662 — 96,159 Machinery and equipment — 70,491 — — 70,491 Construction in progress — 2,035 — — 2,035

Property and equipment, at cost — 83,126 138,985 — 222,111 Accumulated depreciation — (50,150) (19,186) — (69,336)

Property and equipment, net — 32,976 119,799 — 152,775 Investment in subsidiaries 68,858 — — (68,858) — Non-current deferred income tax assets — 18,045 — (577) 17,468 Other non-current assets — 22,168 20,289 — 42,457

Total assets $ 109,697 $ 594,880 $ 143,452 $ (115,622) $ 732,407 Liabilities: Current liabilities:

Accounts payable $ 117 $ 78,250 $ — $ — 78,367 Bank overdrafts — 24,715 — — 24,715 Accrued compensation 687 10,865 — — 11,552 Current maturities of long-term debt 60,000 — — 60,000 Other current liabilities — 20,934 3,612 — 24,546 Intercompany payable 6,041 38,924 1,222 (46,187) —

Total current liabilities 6,845 233,688 4,834 (46,187) 199,180 Non-current liabilities:

Long-term debt — 96,000 288,870 — 384,870 Non-current deferred income tax liabilities — — 577 (577) — Other non-current liabilities — 39,205 6,300 — 45,505 Total liabilities 6,845 368,893 300,581 (46,764) 629,555

Shareholders’ Equity/Parent’s Investment 102,852 225,987 (157,129) (68,858) 102,852 Total liabilities and equity $ 109,697 $ 594,880 $ 143,452 $ (115,622) $ 732,407

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The condensed consolidating statement of cash flows for BlueLinx Holdings Inc. for the period from January 4, 2009 to October 3, 2009 follows (inthousands): BlueLinx Holdings BlueLinx LLC Inc. Corporation Subsidiaries Eliminations Consolidated Cash flows from operating activities: Net (loss) income $ (73,488) $ (78,298) $ 5,597 $ 72,701 $ (73,488)Adjustments to reconcile net (loss) income to cash (used in)

provided by operations: Depreciation and amortization — 10,189 2,964 — 13,153 Amortization of debt issue costs — 1,354 489 — 1,843 Net gain from terminating the Georgia-Pacific supply

agreement — (17,554) — — (17,554)Payments from terminating the Georgia-Pacific supply

agreement — 9,412 — — 9,412 Gain from sale properties — (169) (4,237) — (4,406)Prepayment penalty associated with sale of facility — — 616 — 616 Charges associated with ineffective interest rate swap — 7,341 — — 7,341 Write-off of debt issuance costs — 1,407 — — 1,407 Vacant property charges, net — 457 — — 457 Deferred income tax (benefit) provision (13) 27,389 (148) — 27,228 Share-based compensation expense 1,344 826 — — 2,170 Decrease in restricted cash — 3,380 — — 3,380 Equity in earnings of subsidiaries 72,701 — — (72,701) — Changes in assets and liabilities:

Receivables — (38,003) — — (38,003)Inventories — 16,359 — — 16,359 Accounts payable (4) 30,174 — — 30,170 Changes in other working capital (1,327) 8,173 (235) — 6,611 Intercompany receivable (1,758) (1,768) — 3,526 — Intercompany payable 1,768 (699) 2,457 (3,526) — Other 1 (210) 17 — (192)

Net cash (used in) provided by operating activities (776) ( (20,240) 7,520 — (13,496) Cash flows from investing activities: Investment in subsidiaries 26,251 — — (26,251) — Property, plant and equipment investments — (952) — — (952)Proceeds from sale of assets — 2,019 6,435 — 8,454 Net cash provided by (used in) investing activities 26,251 1,067 6,435 (26,251) 7,502 Cash flows from financing activities: Net transactions with Parent — (24,998) (1,253) 26,251 — Repurchase of common stock (1,862) — — — (1,862)Net decrease in revolving credit facility — (100,000) — — (100,000)Payment of principal on mortgage — — (3,201) — (3,201)Prepayment fees associated with sale of facility — — (616) — (616)Decrease in bank overdrafts — (4,699) — — (4,699)Increase in restricted cash related to the mortgage — — (8,442) (8,442)Intercompany receivable (23,619) — — 23,619 — Intercompany payable — 23,619 — (23,619) — Other 6 — (47) — (41)Net cash (used in) provided by financing activities (25,475) (106,078) (13,559) 26,251 (118,861) (Decrease) increase in cash — (125,251) 396 — (124,855)Balance, beginning of period 32 150,259 62 — 150,353 Balance, end of period $ 32 $ 25,008 $ 458 $ — $ 25,498

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The condensed consolidating statement of cash flows for BlueLinx Holdings Inc. for the period from from December 29, 2007 to September 27, 2008follows (in thousands): BlueLinx Holdings BlueLinx LLC Inc. Corporation Subsidiaries Eliminations Consolidated Cash flows from operating activities: Net (loss) income $ (6,586) $ (7,631) $ 2,774 $ 4,857 $ (6,586)Adjustments to reconcile net (loss) income to cash (used in)

provided by operations: Depreciation and amortization — 11,801 3,210 — 15,011 Amortization of debt issue costs — 1,353 470 — 1,823 Vacant property charges — 1,640 — — 1,640 Deferred income tax benefit (75) (3,007) (424) — (3,506)Share-based compensation expense — 2,163 — — 2,163 Excess tax benefits from share-based compensation

arrangements — (76) — — (76)Decrease in restricted cash — 5,970 — — 5,970 Equity in earnings of subsidiaries 4,857 — — (4,857) — Changes in assets and liabilities:

Receivables — 18,698 — — 18,698 Inventories — 74,910 — — 74,910 Accounts payable 64 (35,939) — — (35,875)Changes in other working capital 382 33,370 (4,857) — 28,895 Intercompany receivable (635) 337 — 298 — Intercompany payable (337) — 635 (298) — Other — (3,745) 5,713 — 1,968

Net cash (used in) provided by operating activities (2,330) 99,844 7,521 — 105,035 Cash flows from investing activities: Investment in subsidiaries (15,684) — — 15,684 — Property, plant and equipment investments — (2,614) — — (2,614)Proceeds from sale of assets — 848 — — 848 Net cash used in investing activities (15,684) (1,766) — 15,684 (1,766)Cash flows from financing activities: Net transactions with Parent — 238 15,446 (15,684) — Proceeds from stock options exercised 434 — — — 434 Excess tax benefits from share-based compensation

arrangements 76 — — — 76 Net decrease in revolving credit facility — (27,535) — — (27,535)Decrease in bank overdrafts — (15,450) — — (15,450)Increase in restricted cash related to the mortgage — — (5,461) — (5,461)Intercompany receivable 17,499 — — (17,499) — Intercompany payable — (17,499) — 17,499 — Other 6 — — — 6 Net cash provided by (used in) financing activities 18,015 (60,246) 9,985 (15,684) (47,930)Increase in cash 1 37,832 17,506 — 55,339 Balance, beginning of period 3 15,699 57 — 15,759 Balance, end of period $ 4 $ 53,531 $ 17,563 $ — $ 71,098

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information contained in this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) has been derivedfrom our historical financial statements and is intended to provide information to assist you in better understanding and evaluating our financial conditionand results of operations. We recommend that you read this MD&A section in conjunction with our Unaudited Condensed Consolidated FinancialStatements and notes to those statements included in Item 1 of this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K for the yearended January 3, 2009 as filed with the U.S. Securities and Exchange Commission (the “SEC”). This MD&A section is not a comprehensive discussion andanalysis of our financial condition and results of operations, but rather updates disclosures made in the aforementioned filing. The discussion below containsforward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of1934, as amended. These forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results,performance or achievements, and may contain the words “believe,” “anticipate,” “expect,” “estimate,” “intend,” “project,” “plan,” “will be,” “will likelycontinue,” “will likely result” or words or phrases of similar meaning. All of these forward-looking statements are based on estimates and assumptions madeby our management that, although believed by us to be reasonable, are inherently uncertain. Forward-looking statements involve risks and uncertainties,including, but not limited to, economic, competitive, governmental and technological factors outside of our control, that may cause our business, strategy oractual results to differ materially from the forward-looking statements. These risks and uncertainties may include those discussed under the heading “FactorsAffecting Future Results” in our Annual Report on Form 10-K for the year ended January 3, 2009 as filed with the SEC and other factors, some of which maynot be known to us. We operate in a changing environment in which new risks can emerge from time to time. It is not possible for management to predict allof these risks, nor can it assess the extent to which any factor, or a combination of factors, may cause our business, strategy or actual results to differ materiallyfrom those contained in forward-looking statements. Factors you should consider that could cause these differences include, among other things:

• changes in the prices, supply and/or demand for products which we distribute, especially as a result of conditions in the residential housing market;

• inventory levels of new and existing homes for sale;

• general economic and business conditions in the United States;

• the financial condition and credit worthiness of our customers;

• the activities of competitors;

• changes in significant operating expenses;

• fuel costs;

• risk of losses associated with accidents;

• exposure to product liability claims;

• changes in the availability of capital and interest rates;

• immigration patterns and job and household formation;

• our ability to identify acquisition opportunities and effectively and cost-efficiently integrate acquisitions;

• adverse weather patterns or conditions;

• acts of war or terrorist activities;

• variations in the performance of the financial markets, including the credit markets; and

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• the other factors described herein under “Factors Affecting Future Results” in our Annual Report on Form 10-K for the year ended January 3, 2009as filed with the SEC.

Given these risks and uncertainties, we caution you not to place undue reliance on forward-looking statements. We undertake no obligation to publiclyupdate or revise any forward-looking statement as a result of new information, future events or otherwise, except as required by law.

Overview

Background

We are a leading distributor of building products in the United States. We distribute approximately 10,000 products to more than 11,500 customersthrough our network of more than 70 warehouses and third-party operated warehouses which serve all major metropolitan markets in the United States. Wedistribute products in two principal categories: structural products and specialty products. Structural products include plywood, oriented strand board(“OSB”), rebar and remesh, lumber and other wood products primarily used for structural support, walls and flooring in construction projects. Structuralproducts represented approximately 44% of our third quarter of fiscal 2009 gross sales. Specialty products include roofing, insulation, moulding, engineeredwood, vinyl products (used primarily in siding) and metal products (excluding rebar and remesh). Specialty products accounted for approximately 56% of ourthird quarter of fiscal 2009 gross sales.

Industry Conditions

As noted above, we operate in a changing environment in which new risks can emerge from time to time. A number of factors cause our results ofoperations to fluctuate from period to period. Many of these factors are seasonal or cyclical in nature. Conditions in the United States housing market are athistorically low levels. Our operating results have declined during the past two years as they are closely tied to U.S. housing starts. Additionally, themortgage markets have experienced substantial disruption due to a rising number of defaults in the “subprime” market. This disruption and the relateddefaults increased the inventory of homes for sale and also caused lenders to tighten mortgage qualification criteria which further reduced demand for newhomes. Forecasters continue to have a bearish outlook for the housing market and we expect the downturn in new housing activity will continue tonegatively impact our operating results for the foreseeable future. We continue to prudently manage our inventories, receivables and spending in thisenvironment. However, along with many forecasters, we believe U.S. housing demand will improve in the long term based on population demographics and avariety of other factors.

Supply Agreement with G-P

On April 27, 2009, we entered into a Termination and Modification Agreement (“Modification Agreement”) related to our Supply Agreement with GeorgiaPacific (“G-P”). The Modification Agreement effectively terminates the existing Supply Agreement with respect to the distribution of G-P plywood, orientedstrand board and lumber by us. We will continue to distribute a variety of G-P building products, including engineered lumber, which is covered under athree-year purchase agreement dated February 12, 2009. As a result of terminating this agreement, we are no longer contractually obligated to make minimumpurchases of products from G-P. As of January 3, 2009, our minimum purchases requirement had totaled $31.9 million.

G-P agreed to pay us $18.8 million in exchange for our agreement to terminate the Supply Agreement one-year earlier than the originally agreed uponMay 7, 2010 termination date. Under the terms of the Modification Agreement, we will receive four quarterly cash payments of $4.7 million, which began onMay 1, 2009 and will end on February 1, 2010. As a result of the termination, we recognized a net gain of $17.6 million in the first nine months of fiscal 2009as a reduction to operating expense. The gain was net of a discount of $0.2 million and a $1.0 million write-off of an intangible asset associated with theSupply Agreement. We believe the early termination of the Supply Agreement contributed to the decline in our structural panel sales volume during thesecond and third quarters of fiscal 2009. However, since the majority of these sales go through the direct sales channel, the lower structural panel salesvolume had an insignificant impact on our gross profit during for these periods. To the extent we are unable to replace these volumes with structural productfrom G-P or other suppliers, the early termination of the Supply Agreement may continue to negatively impact our sales of structural products which wouldimpact our net sales and our costs, which in turn could impact our gross profit, net income, and cash flows. For more information on structural unit volumechanges, refer to the tables under “Selected Factors Affecting Our Operating Results” in our Management, Discussion Analysis. For further discussion of therisks associated with the termination of the Master Supply Agreement, please also refer to our risk factors disclosed in our Annual Report on Form 10-K forthe year ended

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January 3, 2009, as further supplemented in our Quarterly Report on Form 10-Q for the period ended April 4, 2009, as filed with the SEC.

Selected Factors Affecting Our Operating Results

Our operating results are affected by housing starts, mobile home production, industrial production, repair and remodeling spending and non-residentialconstruction. Our operating results are also impacted by changes in product prices. Structural product prices can vary significantly based on short-term andlong-term changes in supply and demand. The prices of specialty products can also vary from time to time, although they are generally significantly lessvariable than structural products.

The following table sets forth changes in net sales by product category, sales variances due to changes in unit volume and dollar and percentage changesin unit volume and price versus comparable prior periods, in each case for the third quarter of fiscal 2009, the third quarter of fiscal 2008, the first ninemonths of fiscal 2009, the first nine months of fiscal 2008, fiscal 2008 and fiscal 2007. Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Q3 2009 Q3 2008 2009 YTD 2008 YTD 2008 2007 (Dollars in millions) Sales by Category Structural Products $ 202 $ 366 $ 567 $ 1,181 $ 1,422 $ 2,098 Specialty Products 258 376 742 1,133 1,412 1,802 Other(1) (11) (15) (29) (36) (54) (66)Total Sales $ 449 $ 727 $ 1,280 $ 2,278 $ 2,780 $ 3,834 Sales Variances Unit Volume $ Change $ (235) $ (337) $ (917) $ (868) $ (1,161) $ (896)Price/Other(1) (43) 48 (81) 91 107 (169)Total $ Change $ (278) $ (289) $ (998) $ (777) $ (1,054) $ (1,065)Unit Volume % Change (31.7)% (32.6)% (39.6)% (27.9)% (29.7)% (18.0)%Price/Other(1) (6.5)% 4.1% (3.8)% 2.5% 2.2% (3.7)%Total % Change (38.2)% (28.5)% (43.8)% (25.4)% (27.5)% (21.7)%

(1) Other includes unallocated allowances and discounts.

The following table sets forth changes in gross margin dollars and percentages by product category, and percentage changes in unit volume growth byproduct, in each case for the third quarter of fiscal 2009, the third quarter of fiscal 2008, the first nine months of fiscal 2009, the first nine months of fiscal2008, fiscal 2008 and fiscal 2007. Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Q3 2009 Q3 2008 2009 YTD 2008 YTD 2008 2007 (Dollars in millions) Gross Margin $’s by Category

Structural Products $ 21 $ 36 $ 58 $ 121 $ 134 $ 173 Specialty Products 39 54 102 162 200 238 Other (1) (5) (7) (12) (15) (19) (19)

Total Gross Margin $’s $ 55 $ 83 $ 148 $ 268 $ 315 $ 392 Gross Margin %’s by Category

Structural Products 10.4% 9.9% 10.2% 10.2% 9.4% 8.2%Specialty Products 15.1% 14.3% 13.7% 14.2% 14.2% 13.2%

Total Gross Margin %’s 12.3% 11.5% 11.6% 11.8% 11.3% 10.2%Unit Volume Change by Product

Structural Products (33.7)% (40.3)% (43.9)% (32.9)% (34.6)% (19.2)%Specialty Products (29.8)% (23.1)% (35.2)% (22.0)% (24.0)% (16.4)%

Total Change in Unit Volume %’s (31.7)% (32.6)% (39.6)% (27.9)% (29.7)% (18.0)%

(1) Other includes unallocated allowances and discounts.

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The following table sets forth changes in net sales and gross margin by channel and percentage changes in gross margin by channel, in each case for thethird quarter of fiscal 2009, the third quarter of fiscal 2008, the first nine months of fiscal 2009, the first nine months of fiscal 2008, fiscal 2008 and fiscal2007. Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Q3 2009 Q3 2008 2009 YTD 2008 YTD 2008 2007 (Dollars in millions) Sales by Channel

Warehouse/Reload $ 345 $ 540 $ 959 $ 1,673 $ 2,044 $ 2,763 Direct 115 202 350 641 790 1,137 Other(1) (11) (15) (29) (36) (54) (66)Total $ 449 $ 727 $ 1,280 $ 2,278 $ 2,780 $ 3,834

Gross Margin by Channel Warehouse/Reload $ 53 $ 77 $ 137 $ 243 $ 284 $ 344 Direct 7 13 23 40 50 67 Other(1) (5) (7) (12) (15) (19) (19)Total $ 55 $ 83 $ 148 $ 268 $ 315 $ 392

Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Q3 2009 Q3 2008 2009 YTD 2008 YTD 2008 2007 (Dollars in millions) Gross Margin % by Channel

Warehouse/Reload 15.4% 14.3% 14.3% 14.5% 13.9% 12.5%Direct 6.1% 6.4% 6.6% 6.2% 6.3% 5.9%Total 12.3% 11.5% 11.6% 11.8% 11.3% 10.2%

(1) Other includes unallocated allowances and adjustments.

Fiscal Year

Our fiscal year is a 52- or 53-week period ending on the Saturday closest to the end of the calendar year. Fiscal year 2009 and fiscal year 2008 contain52 weeks and 53 weeks, respectively.

Results of Operations

Third Quarter of Fiscal 2009 Compared to Third Quarter of Fiscal 2008

The following table sets forth our results of operations for the third quarter of fiscal 2009 and third quarter of fiscal 2008. Period Period from from July 5, 2009 % of June 29, 2008 % of to Net to Net October 3, 2009 Sales September 27, 2008 Sales (Dollars in thousands) Net sales $ 449,363 100.0% $ 726,756 100.0%Gross profit 55,305 12.3% 83,249 11.5%Selling, general & administrative 55,024 12.2% 73,793 10.2%Depreciation and amortization 3,882 0.9% 4,940 0.7%Operating (loss) income (3,601) (0.8)% 4,516 0.6%Interest expense 7,987 1.8% 8,791 1.2%Charges associated with ineffective interest rate swap 1,431 0.3% — 0.0%Other expense, net 324 0.1% 65 0.0%Loss before provision for (benefit from) income taxes (13,343) (3.0)% (4,340) (0.6)%Provision for (benefit from) income taxes 120 0.0% (1,746) (0.2)%Net income $ (13,463) (3.0)% $ (2,594) (0.4)%

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Net Sales. For the third quarter of fiscal 2009, net sales decreased by 38.2%, or $277.4 million, to $449.4 million compared to $726.8 million in the prioryear period. Sales during the quarter were negatively impacted by a 31.2% decline in housing starts. New home construction has a significant impact on oursales. Specialty sales, primarily consisting of roofing, specialty panels, insulation, moulding, engineered wood products, vinyl siding, composite decking andmetal products (excluding rebar and remesh) decreased by $118.0 million or 31.4% compared to the third quarter of fiscal 2008, reflecting a 29.8% decline inunit volume. Structural sales, including plywood, OSB, lumber and metal rebar, decreased by $163.7 million, or 44.8% from a year ago, also primarily as aresult of a 33.7% decrease in unit volume and 21.4% decrease in average structural product prices.

Gross Profit. Gross profit for the third quarter of fiscal 2009 was $55.3 million, or 12.3% of sales, compared to $83.2 million, or 11.5% of sales, in the prioryear period. The decrease in gross profit dollars compared to the third quarter of fiscal 2008 was driven primarily by a decrease in specialty and structuralproduct volumes of 29.8% and 33.7%, respectively, due to the continued decline in the housing market. Gross margin percentage increased by 0.8% to12.3% primarily due an increase in higher margin specialty sales as a percentage of total sales and the impact of a lower of cost or market reserve charge of$2.6 million recorded during the third quarter of fiscal 2008.

Selling, General, and Administrative Expenses. Selling, general and administrative expenses for the third quarter of fiscal 2009 were $55.0 million, or12.2% of net sales, compared to $73.8 million, or 10.2% of net sales, during the third quarter of fiscal 2008. The decline in selling, general and administrativeexpenses included a $11.2 million decrease in payroll and payroll related costs from a decline in headcount; a $2.2 million decrease in fuel expense due to adecline in business volume and fuel prices; a $1.5 million decrease in facility consolidation charges due to a $1.3 million charge recorded in the prior yearperiod related to exiting our custom milling operations in California; and a $3.9 million decrease in other operating expense due to our cost reductioninitiatives.

Depreciation and Amortization. Depreciation and amortization expense totaled $3.9 million for the third quarter of fiscal 2009, compared with$4.9 million for the third quarter of fiscal 2008. The $1.0 million decrease in depreciation and amortization is primarily due to a portion of our property andequipment becoming fully depreciated.

Operating (Loss) Income. Operating loss for the third quarter of fiscal 2009 was $(3.6) million, or (0.8)% of sales, versus operating income of $4.5 million,or 0.6% of sales, in the third quarter of fiscal 2008, reflecting a $27.9 million decrease in gross profit that was partially offset by a $19.8 million decrease inoperating expenses.

Interest Expense, net. Interest expense for the third quarter of fiscal 2009 totaled $8.0 million, down $0.8 million from the prior year because of the$110 million decrease in debt. Interest expense related to our revolving credit facility and mortgage was $2.8 million and $4.6 million, respectively, duringthis period. Interest expense totaled $8.8 million for the third quarter of fiscal 2008. Interest expense related to our revolving credit facility and mortgage was$3.5 million and $4.7 million, respectively, during this period. In the third quarter of fiscal 2009 and the third quarter of fiscal 2008, interest expenseincluded $0.6 million of debt issue cost amortization.

Charges associated with ineffective interest rate swap. Charges associated with the ineffective interest rate swap for the third quarter of fiscal 2009 were$1.4 million and are comprised of a $1.9 million charged on the date we reduced our borrowings outstanding by $25.0 million; $0.5 million of amortizationof the unrealized losses remaining in accumulated other comprehensive loss; and $1.0 million of income related to fair value changes since the date ofreduction. Due to our interest rate swap becoming ineffective, as well as our decision to record a full valuation allowance against our deferred tax assets, wewill recognize the income tax effect associated with unrealized losses initially recorded in other comprehensive income as a charge to earnings when theinterest rate swap terminates.

Provision for (Benefit from) Income Taxes. The effective tax rate was (0.9)% and 40.2% for the third quarter of fiscal 2009 and the third quarter of fiscal2008, respectively. The change in our effective tax rate for the third quarter of fiscal 2009 is due to a $5.1 million valuation allowance.

Net Loss. Net loss for the third quarter of fiscal 2009 was $(13.5) million compared to $(2.6) million for the third quarter of fiscal 2008 as a result of theabove factors.

On a per-share basis, basic and diluted loss applicable to common shareholders for the third quarter of fiscal 2009 and the third quarter of fiscal 2008 were$(0.44) and $(0.08), respectively.

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Year-to-Date Fiscal 2009 Compared to Year-to-Date Fiscal 2008

The following table sets forth our results of operations for the first nine months of fiscal 2009 and the first nine months of fiscal 2008. Period Period from from January 4, 2009 % of December 29, 2007 % of to Net to Net October 3, 2009 Sales September 27, 2008 Sales (Unaudited) (Unaudited) (Dollars in thousands) Net sales $ 1,280,000 100.0% $ 2,278,185 100.0%Gross profit 147,881 11.6% 268,487 11.8%Selling, general & administrative 163,744 12.8% 235,655 10.3%Net gain from terminating the Georgia-Pacific supply agreement (17,554) (1.4)% — 0.0%Depreciation and amortization 13,153 1.0% 15,011 0.7%Operating (loss) income (11,462) (0.9)% 17,821 0.8%Interest expense 24,610 1.9% 27,530 1.2%Charges associated with ineffective interest rate swap 7,341 0.6% — 0.0%Write-off of debt issuance costs 1,407 0.1% — 0.0%Other expense, net 482 0.0% 385 0.0%Loss before provision for (benefit from) income taxes (45,302) (3.5)% (10,094) (0.4)%Provision for (benefit from) income taxes 28,186 2.2% (3,508) (0.2)%Net loss $ (73,488) (5.7)% $ (6,586) (0.3)%

Net Sales. For the first nine months of fiscal 2009, net sales decreased by 43.8%, or $998.2 million, to $1.3 billion compared to $2.3 billion in the prioryear period. Sales during this period were negatively impacted by a 42.7% decline in housing starts. New home construction has a significant impact on oursales. Specialty sales, primarily consisting of roofing, specialty panels, insulation, moulding, engineered wood products, vinyl siding, composite decking andmetal products (excluding rebar and remesh) decreased by $390.9 million or 34.5% compared to the first nine months of fiscal 2008, reflecting a 35.2%decline in unit volume. Structural sales, including plywood, OSB, lumber and metal rebar, decreased by $613.6 million, or 52.0% from a year ago, alsoprimarily as a result of a 43.9% decrease in unit volume and 20.4% decrease in average structural product prices.

Gross Profit. Gross profit for the first nine months of fiscal 2009 was $147.9 million, or 11.6% of sales, compared to $268.5 million, or 11.8% of sales, inthe prior year period. The decrease in gross profit dollars compared to the first nine months of fiscal 2008 was driven primarily by a decrease in specialty andstructural product volumes of 35.2% and 43.9%, respectively, due to the ongoing slowdown in the housing market. Gross margin percentage decreased by0.2% to 11.6% primarily due to decreases in structural metal and plywood product prices of 10.6% and 14.0%, respectively. These decreases were offset by anincrease in specialty roofing product prices of 10.9%.

Selling, General, and Administrative Expenses. Selling, general and administrative expenses for the first nine months of fiscal 2009 were $163.5 million,or 12.8% of net sales, compared to $235.7 million, or 10.3% of net sales, during the first nine months of fiscal 2008. The decline in selling, general, andadministrative expenses included a $41.9 million decrease in payroll and payroll related cost due to a decrease in headcount; a $8.7 million decrease in fuelexpense due to a decline in business volume and fuel prices; a $4.4 million gain associated with the sale of certain real properties; a $1.7 million chargerecorded in the prior year period related to exiting our custom milling operations in California; and a $17.0 million decrease in other operating expenses as aresult of our cost reduction initiatives.

Net Gain From Terminating the Georgia-Pacific Supply Agreement. During the first nine months of fiscal 2009, G-P agreed to pay us $18.8 million inexchange for our agreement to enter into the Modification Agreement one-year earlier than the originally agreed upon May 7, 2010 termination date of theSupply Agreement. As a result of the termination, we recognized a net gain of $17.6 million during the first nine months of fiscal 2009 as a reduction tooperating expense. The gain was net of a discount of $0.2 million and a $1.0 million write-off of an intangible asset associated with the Supply Agreement.

Depreciation and Amortization. Depreciation and amortization expense totaled $13.2 million for the first nine months of fiscal 2009, compared with$15.0 million for the first nine months of fiscal 2008. The $1.8 million decrease in depreciation and amortization is primarily related to a portion of ourproperty and equipment becoming fully depreciated.

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Operating (Loss) Income. Operating loss for the first nine months of fiscal 2009 was $(11.5) million, or (0.9)% of sales, versus operating income of$17.8 million, or 0.8% of sales, in the first nine months of fiscal 2008, reflecting the $120.6 million decline in gross profit that was partially offset by a$91.3 million decrease in operating expenses.

Interest Expense, net. Interest expense for the first nine months of fiscal 2009 totaled $24.6 million, down $2.9 million from the prior year because of the$110.0 million decrease in debt. Interest expense related to our revolving credit facility and mortgage was $8.3 million and $14.5 million (includes the$0.6 million prepayment penalty), respectively, during this period. Interest expense totaled $27.5 million for the first nine months of fiscal 2008. Interestexpense related to our revolving credit facility and mortgage was $11.5 million and $14.2 million, respectively, during this period. In addition, interestexpense included $1.8 million of debt issue cost amortization for the first nine months of fiscal 2009 and for the first nine months of fiscal 2008, respectively.

Charges associated with ineffective interest rate swap. Charges associated with the ineffective interest rate swap recognized for the first nine months offiscal 2009 were $7.3 million and are comprised of a $9.0 million charge related to the reduction of our borrowings outstanding under the revolving creditfacility below the interest rate swap’s notional amount; $2.4 million of amortization of accumulated other comprehensive loss; and a $4.1 million of incomerelated to fair value changes since the date of the reduction.

Write-off debt issue costs. During the first nine months of fiscal 2009, we elected to permanently reduce our revolving loan threshold limit from$800.0 million to $500.0 million effective March 30, 2009. As a result of this action, we recorded expense of $1.4 million for the write-off of deferredfinancing costs that had been capitalized associated with the portion of the revolver that was reduced in the first quarter of fiscal 2009.

Provision for Income Taxes. The effective tax rate was (62.2)% and 34.8% for the first nine months of fiscal 2009 and the first nine months of fiscal 2008,respectively. The change in our effective tax rate for the first nine months of fiscal 2009 is due to a $45.7 million valuation allowance.

Net loss. Net loss for the first nine months of fiscal 2009 was $(73.5) million compared to $(6.6) million for the first nine months of fiscal 2008. Net loss forthe first nine months of fiscal 2009 was negatively impacted by a tax valuation allowance of $40.2 million recorded in the first quarter as a result of the abovefactors.

On a per-share basis, basic and diluted loss applicable to common shareholders for the first nine months of fiscal 2009 were each $(2.37). Basic and dilutedloss per share for the first nine months of fiscal 2008 were each $(0.21).

Seasonality

We are exposed to fluctuations in quarterly sales volumes and expenses due to seasonal factors. These seasonal factors are common in the buildingproducts distribution industry. The first and fourth quarters are typically our slowest quarters due primarily to the impact of poor weather on the constructionmarket. Our second and third quarters are typically our strongest quarters, reflecting a substantial increase in construction due to more favorable weatherconditions. Our working capital and accounts receivable and payable generally peak in the third quarter, while inventory generally peaks in the secondquarter in anticipation of the summer building season. Although we generally expect these trends to continue for the foreseeable future, inventory levelsreached a low point in the second quarter of fiscal 2009 due to our efforts to manage to the current demand environment in the housing market. However, inthe third quarter we have increased inventory in certain items as part of our effort to gain market share.

Liquidity and Capital Resources

We depend on cash flow from operations and funds available under our revolving credit facility to finance working capital needs, capital expenditures,and acquisitions. We believe that the amounts available from this and other sources will be sufficient to fund our routine operations and capital requirementsfor the foreseeable future.

The credit markets have recently experienced adverse conditions, which may adversely affect our lenders’ ability to fulfill their commitment under ourrevolving credit facility. Based on information available to us as of the filing date of this Quarterly Report on Form 10-Q, we have no indications that thefinancial institutions included in our revolving credit facility would be unable to fulfill their commitments.

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We may elect to selectively pursue acquisitions. Accordingly, depending on the nature of the acquisition, we may use cash or stock, or a combination ofboth, as acquisition currency. Our cash requirements may significantly increase and incremental cash expenditures will be required in connection with theintegration of the acquired company’s business and to pay fees and expenses in connection with any acquisitions. To the extent that significant amounts ofcash are expended in connection with acquisitions, our liquidity position may be adversely impacted. In addition, there can be no assurance that we will besuccessful in completing acquisitions in the future. For a discussion of the risks associated with acquisitions, see the risk factor “Integrating acquisitions maybe time-consuming and create costs that could reduce our net income and cash flows” set forth under Item 1A — Risk Factors in our Annual Report on Form10-K for the year ended January 3, 2009 as filed with the SEC.

The following tables indicate our working capital and cash flows for the periods indicated. October 3, 2009 January 3, 2009 (Dollars in thousands) (Unaudited)Working capital $ 241,717 $ 320,527 Period from Period from January 4, December 29, 2009 to 2007 to October 3, 2009 September 27, 2008 (Dollars in thousands) (Unaudited)Cash flows (used in) provided by operating activities $ (13,496) $ 105,035 Cash flows provided by (used in) investing activities 7,502 (1,766)Cash flows used in financing activities (118,861) (47,930)

Working Capital

Working capital decreased by $78.8 million to $241.7 million at October 3, 2009 from $320.5 million at January 3, 2009. The reduction in workingcapital primarily reflects a $16.4 million reduction in inventory offset by $103.2 million of debt reductions. We have reduced inventory levels to meetexisting demand and have used excess cash to reduce debt.

Operating Activities

During the first nine months of fiscal 2009, cash flows used in operating activities totaled $13.5 million. The primary driver of cash flow used inoperations was a $38.0 million increase in receivables due to cyclical payment patterns related to the seasonality of the building products market. These cashoutflows were offset by an increase in cash flow from operations related to reductions in inventory of $16.4 million to meet existing demand and an increasein accounts payable of $30.2 million due to the seasonality of our business. In addition, we had $22.1 million increase in cash flows used in operatingactivities due to our net loss of $73.5 million partially offset by $51.4 million of changes in other balance sheet accounts.

During the first nine months of fiscal 2008, cash flows provided by operating activities totaled $105.0 million. The primary driver of cash flow fromoperations was an increase in cash flow from operations related to decreases in inventories of $74.9 million to meet existing demand and a decrease inreceivables of $18.7 million due to decline in the building products market. In addition, we had $11.4 million increase in cash flows provided by operatingactivities due to our net loss of $6.6 million offset by $18.0 million of changes in other balance sheet accounts.

Investing Activities

During the first nine months of fiscal 2009 and fiscal 2008, cash flows provided by (used in) investing activities totaled $7.5 million and $(1.8) million,respectively.

During the first nine months of fiscal 2009 and fiscal 2008, our expenditures for property and equipment were $1.0 million and $2.6 million, respectively.Our capital expenditures for fiscal 2009 are anticipated to be paid from cash on hand. Proceeds from the disposition of property totaled $8.5 million and$0.8 million for the first nine months of fiscal 2009 and fiscal 2008, respectively. The

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proceeds of $8.5 million during the first nine months of fiscal 2009 included $7.7 million of proceeds related to the sale of certain real properties.

Financing Activities

Net cash used in financing activities was $118.9 million during the first nine months of fiscal 2009 compared to $47.9 million during the first nine monthsof fiscal 2008. The net cash used in financing activities in the first nine months of fiscal 2009 reflected payments on our revolving credit facility of$100.0 million, principal payments on our mortgage of $3.2 million, an increase in restricted cash related to our mortgage of $8.4 million, and a decrease inbank overdrafts of $4.6 million. The net cash used in financing activities for the first nine months of fiscal 2008 primarily reflected payments of $27.5 millionon our revolving credit facility and a decrease in bank overdrafts of $15.5 million.

Debt and Credit Sources

As of October 3, 2009, we had outstanding borrowings of $56.0 million and excess availability of $190.6 million under the terms of our revolving creditfacility. We classify the lowest projected balance of the credit facility over the next twelve months of $56.0 million as long-term debt. As of October 3, 2009and January 3, 2009, we had outstanding letters of credit totaling $13.5 million and $12.9 million, respectively, primarily for the purposes of securingcollateral requirements under our interest rate swap, insurance programs and for guaranteeing payment of international purchases based on the fulfillment ofcertain conditions. Our revolving credit facility contains customary negative covenants and restrictions for asset based loans. The most significant restrictionis a requirement that we maintain a fixed charge ratio of 1.1 to 1.0 in the event our excess availability falls below $40.0 million. The fixed charge ratio iscalculated as EBITDA over the sum of cash payments for income taxes, interest expense, cash dividends, principal payments on debt, and capitalexpenditures. EBITDA is defined in our credit agreement as BlueLinx Corporation’s net income before interest and tax expense, depreciation andamortization expense, and other non-cash charges. The fixed charge ratio requirement only applies to us when excess availability under our revolving creditfacility is less than $40.0 million for three consecutive business days. As of October 3, 2009, we were in compliance with all covenants

Under our revolving credit facility agreement, we are required to maintain a springing lock-box arrangement where customer remittances go directly to alock-box maintained by our lenders and then are forwarded to our general bank accounts. Our outstanding borrowings are not reduced by these paymentsunless our excess availability is less than $40.0 million for three consecutive business days or in the event of default. Due to this objective criteriaestablished in our agreement, our revolving credit facility does not contain a subjective acceleration clause which would allow our lenders to accelerate thescheduled maturities of our debt or to cancel our agreement.

Effective March 30, 2009, we elected to permanently reduce our revolving loan threshold limit from $800 million to $500 million. This reduction doesnot impact our available borrowing capacity under our revolving credit facility as our current eligible accounts receivable and inventory (our “borrowingbase”) do not support up to $800.0 million in borrowings. We do not anticipate our borrowing base will support borrowings in excess of $500.0 million atany point during the remaining life of the credit facility. This cost-saving initiative will allow us to reduce our interest expense by $0.8 million annually bylowering our unused line fees. As a result of this action, we recorded expense of $1.4 million for the write-off of deferred financing costs that had beencapitalized associated with the reduced borrowing capacity that was reduced during the first quarter of fiscal 2009.

On June 12, 2006, we entered into an interest rate swap agreement with Goldman Sachs Capital Markets, to hedge against interest rate risks related to ourvariable rate revolving credit facility. The interest rate swap has a notional amount of $150.0 million and the terms call for us to receive interest monthly at avariable rate equal to the 30-day LIBOR and to pay interest monthly at a fixed rate of 5.4%. This interest rate swap was designated as a cash flow hedge.

Through January 3, 2009, the hedge was highly effective in offsetting changes in expected cash flows. Fluctuations in the fair value of the ineffectiveportion, if any, of the cash flow hedge were reflected in earnings. For the first quarter of fiscal 2008, we recognized immaterial amounts of expense related tothe ineffective portion of the hedge.

On January 9, 2009, we reduced our borrowings under the revolving credit facility by $60.0 million, which reduced outstanding debt below the interestrate swap’s notional amount of $150.0 million, at which point the hedge became ineffective in offsetting future changes in expected cash flows during theremaining term of the interest rate swap. We used cash on hand to pay down this portion of our revolving credit debt during the first quarter of fiscal 2009. Asa result, any prospective changes in fair value of the instrument will be recorded through earnings. Charges associated with the ineffective interest rate swaprecognized in the Condensed

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Consolidated Statement of Operations for the first quarter of fiscal 2009 were approximately $4.8 million and are comprised of a $5.9 million non-cashcharge on the date we reduced our borrowings outstanding under the revolving credit facility below the interest rate swap’s notional amount, $1.0 million ofamortization of accumulated other comprehensive loss and $2.1 million of income related to fair value changes since the date of the reduction.

During the second quarter of fiscal 2009, we further reduced our borrowings under the revolving credit by $15.0 million. Charges associated with theineffective interest rate swap during the second quarter of fiscal 2009 were $1.3 million on the date we reduced our borrowings outstanding by $15.0 million,$0.9 million of amortization of accumulated other comprehensive loss, and $1.1 million of income related to fair value changes since the date of reduction.

During the third quarter of fiscal 2009, we used cash on hand to reduce our borrowings under the revolving credit facility by an additional $25.0 million.This payment resulted in a third quarter non-cash charge of approximately $1.9 million recorded in interest expense on the payment date. In addition, therewas $0.5 million of amortization of accumulated other comprehensive loss, and $1.0 million of income related to fair value changes since the date ofreduction. The remaining $3.2 million of accumulated other comprehensive loss will be amortized over the remaining 19 month term of the interest rate swapand recorded as interest expense. Approximately $2.1 million will be amortized over the next 12 months and recorded as interest expense. Any furtherreductions in borrowings under our revolving credit facility will result in a pro-rata reduction in accumulated other comprehensive loss at the payment datewith a corresponding charge recorded to interest expense. Due to our interest rate swap becoming ineffective, as well as our decision to record a full valuationallowance against deferred tax assets, we will recognize the income tax effect associated with unrealized losses initially recorded in other comprehensiveincome when the interest rate swap terminates.

The following table presents a reconciliation of the unrealized losses related to our interest rate swap measured at fair value in accumulated othercomprehensive loss as of October 3, 2009 (in thousands): Balance at January 3, 2009 $ 13,229 Unrealized losses in accumulated other comprehensive loss 1,533 Charges associated with ineffective interest rate swap recorded to interest expense (11,556)Balance at October 3, 2009 $ 3,206

On June 9, 2006, certain special purpose entities that are wholly-owned subsidiaries of ours entered into a $295 million mortgage loan. During the firstnine months of fiscal 2009 and the fourth of fiscal 2008, we made principal payments on our mortgage loan of $3.2 million and $6.1 million, respectively.The mortgage has a term of ten years and is now secured by 55 distribution facilities and 1 office building owned by the special purpose entities. The statedinterest rate on the mortgage is fixed at 6.35%. The mortgage loan requires interest-only payments for the first five years followed by level monthly paymentsof principal and interest based on an amortization period of thirty years. The balance of the loan outstanding at the end of ten years will then become due andpayable.

Contractual Obligations

On April 27, 2009, we executed an agreement with G-P to terminate our Supply Agreement with respect to the distribution of Georgia-Pacific plywood,OSB, and lumber by us. As of January 3, 2009, our minimum purchases requirement, related to the terminated agreement, had totaled $31.9 million. As aresult of terminating this agreement, we are no longer contractually obligated to make minimum purchases of products from Georgia-Pacific. There have beenno other changes to our contractual obligations since the filing of our 2008 Form 10-K.

Critical Accounting Policies

The preparation of our consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the UnitedStates requires our management to make judgments and estimates that affect the amounts reported in our consolidated financial statements andaccompanying notes. Our management believes that we consistently apply these judgments and estimates and the consolidated financial statements andaccompanying notes fairly represent all periods presented. However, any differences between these judgments and estimates and actual results could have amaterial impact on our consolidated statements of operations and financial position. Critical accounting estimates, as defined by the Securities and ExchangeCommission (“SEC”), are

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those that are most important to the portrayal of our financial condition and results of operations and require our management’s most difficult and subjectivejudgments and estimates of matters that are inherently uncertain. Our critical accounting estimates include those regarding (1) revenue recognition;(2) allowance for doubtful accounts and related reserves; (3) inventory valuation; (4) stock-based compensation; (5) consideration received from vendors andpaid to customers; (6) fair value measurements; (7) impairment of long-lived assets; (8) income taxes; (9) restructuring charges; and (10) self-insurance.

Revenue Recognition

We recognize revenue when the following criteria are met: persuasive evidence of an agreement exists, delivery has occurred or services have beenrendered, our price to the buyer is fixed and determinable and collectibility is reasonably assured. Delivery is not considered to have occurred until thecustomer takes title and assumes the risks and rewards of ownership. The timing of revenue recognition is largely dependent on shipping terms. Revenue isrecorded at the time of shipment for terms designated as FOB (free on board) shipping point. For sales transactions designated FOB destination, revenue isrecorded when the product is delivered to the customer’s delivery site.

All revenues are recorded at gross in accordance with the guidance outlined by Accounting Standards Codification (“ASC”) 605-45, “Principal AgentConsiderations” (“ASC 605-45”), and in accordance with standard industry practice. The key indicators used to determine when and how revenue are asfollows:

• We are the primary obligor responsible for fulfillment and all other aspects of the customer relationship.

• Title passes to BlueLinx, and we carry all risk of loss related to warehouse, reload and inventory shipped directly from vendors to our customers.

• We are responsible for all product returns.

• We control the selling price for all channels.

• We select the supplier.

• We bear all credit risk.

In addition, we provide inventory to certain customers through pre-arranged agreements on a consignment basis. Customer consigned inventory ismaintained and stored by certain customers; however, ownership and risk of loss remains with us. When the inventory is sold by the customer, we recognizerevenue. We record revenue on a gross basis due to the guidance outlined above relative to ASC 605-45.

All revenues recognized are net of trade allowances, cash discounts and sales returns. Cash discounts and sales returns are estimated using historicalexperience. Trade allowances are based on the estimated obligations and historical experience. Adjustments to earnings resulting from revisions to estimateson discounts and returns have been insignificant for each of the reported periods.

Allowance for Doubtful Accounts and Related Reserves

We evaluate the collectibility of accounts receivable based on numerous factors, including past transaction history with customers and theircreditworthiness. We maintain an allowance for doubtful accounts for each aging category on our aged trial balance based on our historical loss experience.This estimate is periodically adjusted when we become aware of specific customers’ inability to meet their financial obligations (e.g., bankruptcy filing orother evidence of liquidity problems). As we determine that specific balances will ultimately be uncollectible, we remove them from our aged trial balance.Additionally, we maintain reserves for cash discounts that we expect customers to earn as well as expected returns.

Inventory Valuation

Inventories are carried at the lower of cost or market. The cost of all inventories is determined by the moving average cost method. We evaluate ourinventory value at the end of each quarter to ensure that first quality, actively moving inventory, when viewed by category, is carried at the lower of cost ormarket.

Additionally, we maintain a reserve for the estimated value impairment associated with damaged, excess and obsolete inventory. The damaged, excess andobsolete reserve generally includes discontinued items or inventory that has turn days in excess of 270 days, excluding new items during their productlaunch.

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We have included all charges directly or indirectly incurred in inventory to its existing condition and location.

Stock-Based Compensation

We recognize compensation expense equal to the grant-date fair value for all share-based payment awards that are expected to vest. This expense isrecorded on a straight-line basis over the requisite service period of the entire award, unless the awards are subject to market or performance conditions, inwhich case we recognize compensation expense over the requisite service period of each separate vesting tranche. All compensation expense related to ourshare-based payment awards is recorded in “Selling, general and administrative” expense in the Condensed Consolidated Statements of Operations.

Consideration Received from Vendors and Paid to Customers

Each year, we enter into agreements with many of our vendors providing for inventory purchase rebates, generally based on achievement of specifiedvolume purchasing levels and various marketing allowances that are common industry practice. We accrue for the receipt of vendor rebates based onpurchases, and also reduce inventory value to reflect the net acquisition cost (purchase price less expected purchase rebates).

In addition, we enter into agreements with many of our customers to offer customer rebates, generally based on achievement of specified volume saleslevels and various marketing allowances that are common industry practice. We accrue for the payment of customer rebates based on sales to the customer,and also reduce sales value to reflect the net sales (sales price less expected customer rebates).

Fair Value Measurements

We are exposed to market risks from changes in interest rates, which may affect our operating results and financial position. When deemed appropriate, weminimize our risks from interest rate fluctuations through the use of an interest rate swap. This derivative financial instrument is used to manage risk and isnot used for trading or speculative purposes. The swap is valued using a valuation model that has inputs other than quoted market prices that are bothobservable and unobservable.

We endeavor to utilize the best available information in measuring the fair value of the interest rate swap. The interest rate swap is classified in its entiretybased on the lowest level of input that is significant to the fair value measurement. To determine fair value of the interest rate swap we used the discountedestimated future cash flows methodology. Assumptions critical to our fair value in the period were: (i.) the present value factors used in determining fair value(ii.) projected LIBOR, and (iii.) the risk of counterparty non-performance risk. These and other assumptions are impacted by economic conditions andexpectations of management. We have determined that the fair value of our interest rate swap is a level 3 measurement in the fair value hierarchy. The level 3measurement is the risk of counterparty non-performance on the interest rate swap liability that is not secured by cash collateral.

To determine the fair value of our mortgage, we used a discounted cash flow model. Assumptions critical to our fair value in the period were present valuefactors used in determining fair value and an interest rate.

Impairment of Long-Lived Assets

Long-lived assets, including property and equipment and intangible assets with definite useful lives, are reviewed for possible impairment wheneverevents or circumstances indicate that the carrying amount of an asset may not be recoverable.

We evaluate our long-lived assets each quarter for indicators of potential impairment. Indicators of impairment include current period losses combinedwith a history of losses, management’s decision to exit a facility, reductions in the fair market value of real properties and changes in other circumstances thatindicate the carrying amount of an asset may not be recoverable.

Our evaluation of long-lived assets is performed at the lowest level of identifiable cash flows, which is generally the individual distribution facility. In theevent of indicators of impairment, the assets of the distribution facility are evaluated by the facility’s undiscounted cash flows over the estimated useful lifeof the asset, which ranges between 5-20 years, to its carrying value. If the carrying value is greater than the undiscounted cash flows, an impairment loss isrecognized for the difference between the carrying

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value of the asset and the estimated fair market value. Impairment losses are recorded as a component of “Selling, general and administrative” in theCondensed Consolidated Statements of Operations.

Our estimate of undiscounted cash flows is subject to assumptions that affect estimated operating income at a distribution facility level. These assumptionsare related to future sales, margin growth rates, economic conditions, market competition and inflation. Our estimates of fair market value are generally basedon market appraisals and our experience with related market transactions. We use a historical average of income, with no growth factor assumption, toestimate undiscounted cash flows. These assumptions used to determine impairment are considered to be level 3 measurements in the fair value hierarchy asdefined in Note 10 in our Annual Report on Form 10-K for the year ended January 3, 2009.

Currently, we are experiencing a reduction in operating income at the distribution facility level due to the ongoing downturn in the housing market. Tothe extent that reductions in volume and operating income have resulted in impairment indicators, in most cases our carrying values continue to be less thanour projected undiscounted cash flows. As of January 3, 2009, we had $152.8 million in net book value of fixed assets. The undiscounted cash flows were lessthan the carrying values for approximately $24.0 million of these assets. The fair value of these assets, primarily real estate, exceeded the carrying value byapproximately $23.8 million. As such, we have not identified significant known trends impacting the fair value of long-lived assets to an extent that wouldindicate impairment.

Income Taxes

Our financial statements contain certain deferred tax assets which have arisen primarily as a result of tax benefits associated with the loss before incometaxes incurred during fiscal 2008 and fiscal 2009, as well as deferred income tax assets resulting from temporary differences. We considered a valuationallowance to reflect the likelihood that deferred tax assets would be realized. Significant management judgment is required in determining any valuationallowance recorded against net deferred tax assets. In evaluating our ability to recover our deferred income tax assets, we considered available positive andnegative evidence, including our past operating results, our ability to carryback losses against prior taxable income, the existence of cumulative losses in themost recent years, our forecast of future taxable income and an excess of appreciated assets over the tax basis of our net assets. In estimating future taxableincome, we developed assumptions including the amount of future state and federal pretax operating and non-operating income, the reversal of temporarydifferences and the implementation of feasible and prudent tax planning strategies. These assumptions required significant judgment about the forecasts offuture taxable income, including, but not limited to, projected cost savings, changes in housing starts as well as projected gains on the sale of real estate.

If the realization of deferred tax assets in the future is considered more likely than not, a reduction to the valuation allowance related to the deferred taxassets would increase net income in the period such determination is made. Such a determination would be based on the consideration of all availableevidence and the weight of such evidence.

Restructuring Charges

During fiscal 2008 and fiscal 2007, we vacated leased office space. We accounted for these exit activities in accordance with ASC 420-10, “Exit orDisposal Cost Obligations- Overall”, which requires that a liability be recognized for a cost associated with an exit or disposal activity at fair value in theperiod in which it is incurred or when the entity ceases using the right conveyed by a contract (i.e. the right to use a leased property). Our restructuringcharges included accruals for estimated losses on facility costs based on our contractual obligations net of estimated sublease income based on currentcomparable market rates for leases. We will reassess this liability periodically based on market conditions. Revisions to our estimates of this liability couldmaterially impact our operating results and financial position in future periods if anticipated events and key assumptions, such as the timing and amounts ofsublease rental income, either do not materialize or change.

Self-Insurance

It is our policy to self-insure, up to certain limits, traditional risks including workers’ compensation, comprehensive general liability, and auto liability.Insurance coverage is maintained for catastrophic property and casualty exposures as well as those risks required to be insured by law or contract. A provisionfor claims under this self-insured program, based on our estimate of the aggregate liability for claims incurred, is revised and recorded annually. The estimateis derived from both internal and external sources including but not limited to actuarial estimates. The actuarial estimates are subject to uncertainty fromvarious sources, including, among others, changes in claim reporting patterns, claim settlement patterns, judicial decisions, legislation, and economic

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conditions. Although, we believe that the actuarial estimates are reasonable, significant differences related to the items noted above could materially affectour self-insurance obligations, future expense and cash flow.

Recently Issued Accounting Pronouncements

Effective July 5, 2009, we adopted the Financial Accounting Standards Board (FASB) ASC 105-10, “Generally Accepted Accounting Principles —Overall” (ASC 105-10). ASC 105-10 establishes the FASB Accounting Standards Codification (the “Codification”) as the source of authoritative accountingprinciples recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP. TheCodification does not change current U.S. GAAP, but is intended to simplify user access to all authoritative U.S. GAAP by providing all the authoritativeliterature related to a particular topic in one place. This Form 10-Q for the quarter ending October 3, 2009 and all subsequent public filings will reference theCodification as the sole source of authoritative literature.

In May 2009, the FASB issued ASC 855, “Subsequent Events” (“ASC 855”). ASC 855 establishes authoritative accounting and disclosure guidance forrecognized and non-recognized subsequent events that occur after the balance sheet date but before financial statements are issued. ASC 855 also requiresdisclosure of the date through which an entity has evaluated subsequent events and the basis for that date. ASC 855 was effective for us beginning with ourQuarterly Report on Form 10-Q for the second quarter and first six months of fiscal 2009, and will be applied prospectively. The adoption of ASC 855 had noimpact on our Condensed Consolidated Financial Statements.

In April 2009, the FASB issued ASC 825-10, “Financial Instruments — Overall” (“ASC 825-10”), which will require that the fair value disclosures requiredfor all financial instruments be included in interim financial statements. ASC 825-10 also requires entities to disclose the method and significant assumptionsused to estimate the fair value of financial instruments on an interim and annual basis and to highlight any changes from prior periods. ASC 825-10 waseffective for us during the third quarter of fiscal 2009.

In December 2008, the FASB issued ASC 715, “Compensation — Retirement Benefits” (“ASC 715”). ASC 715 requires enhanced disclosures about theplan assets of our defined benefit pension and other postretirement plans. The enhanced disclosures required by ASC 715 are intended to provide users offinancial statements with a greater understanding of: (1) how investment allocation decisions are made, including the factors that are pertinent to anunderstanding of investment policies and strategies; (2) the major categories of plan assets; (3) the inputs and valuation techniques used to measure the fairvalue of plan assets; (4) the effect of fair value measurements using significant unobservable inputs (Level 3) on changes in plan assets for the period; and (5)significant concentrations of risk within plan assets. ASC 715 is effective for us for the year ending January 2, 2010.

In June 2008, the FASB issued ASC 260-10, “Earnings Per Share — Overall” (“ASC 260-10”). Per ASC 260-10 unvested share-based payment awards thatcontain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are to be included in thecomputation of earnings per share under the two-class method described in ASC 260-10. ASC 260-10 was effective for us on January 4, 2009 and requires allpresented prior-period earnings per share data to be adjusted retrospectively. For additional information, refer to Note 2 of the Notes to CondensedConsolidated Financial Statements.

In April 2008, the FASB issued ASC 350-30, “General Intangibles Other than Goodwill” (“ASC 350-30”). ASC 350-30 amends the factors to be consideredin developing renewal or extension assumptions used to determine the useful life of intangible assets under ASC 350, “Intangibles — Goodwill and Other.”Its intent is to improve the consistency between the useful life of an intangible asset and the period of expected cash flows used to measure its fair value. ASC350-30 was effective for us on January 4, 2009. We do not expect ASC 350-30 to have a material impact on our Condensed Consolidated FinancialStatements; however, it could have an impact in the future if acquisitions are made.

In March 2008, the FASB issued ASC 815-10-65, “Derivatives and Hedging — Overall — Transition and Open Effective Date Information” (“ASC 815-10-65”). ASC 815-10-65 seeks to improve financial reporting for derivative instruments and hedging activities by requiring enhanced disclosures regardingthe impact on financial position, financial performance, and cash flows. To achieve this increased transparency, ASC 815-10-65 requires (1) the disclosure ofthe fair value of derivative instruments and gains and losses in a tabular format; (2) the disclosure of derivative features that are credit risk-related; and(3) cross-referencing within the footnotes. ASC 815-10-65 was effective for us, on a prospective basis, on January 4, 2009. The adoption of ASC 815-10-65did not have a material impact on our Condensed Consolidated Financial Statements. For additional information, refer to Note 8 of the Notes to CondensedConsolidated Financial Statements.

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In December 2007, the FASB issued ASC 805-10 “Business Combinations — Overall” (“ASC 805-10”). ASC 805-10 establishes principles andrequirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed,and any non-controlling interest in the acquiree. ASC 805-10 also provides guidance for recognizing and measuring the goodwill acquired in the businesscombination and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of thebusiness combination. ASC 805-10 was effective for us, on a prospective basis, on January 4, 2009. We expect ASC 805-10 will have an impact on ouraccounting for business combinations, but the effect is dependent upon the acquisitions that are made in the future.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in market risk from the information provided in Part II, Item 7A “Quantitative and Qualitative Disclosures AboutMarket Risk” in our Annual Report on Form 10-K for the fiscal year ended January 3, 2009, other than those discussed below.

Our revolving credit facility accrues interest based on a floating benchmark rate (the prime rate or LIBOR rate), plus an applicable margin. A change ininterest rates under the revolving credit facility would have an impact on our results of operations. A change of 100 basis points in the market rate of interestwould have an immaterial impact based on borrowings outstanding at October 3, 2009. Additionally, to the extent changes in interest rates impact thehousing market, demand for our products would be impacted by such changes.

ITEM 4. CONTROLS AND PROCEDURES

Our management performed an evaluation, as of the end of the period covered by this Quarterly Report on Form 10-Q, under the supervision of our chiefexecutive officer and chief financial officer of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in rule 13a-15(e) and 15d-15(e) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, our chief executive officer andchief financial officer have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us inreports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rulesand forms, and is accumulated and communicated to our management including our chief executive officer and chief financial officer, to allow timelydecisions regarding required disclosure.

There were no changes in our internal control over financial reporting during the period covered by this report that have materially affected, or arereasonably likely to materially affect our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

During the third quarter of fiscal 2009, there were no material changes to our previously disclosed legal proceedings. Additionally, we are, and from timeto time may be, a party to routine legal proceedings incidental to the operation of our business. The outcome of any pending or threatened proceedings is notexpected to have a material adverse effect on our financial condition, operating results or cash flows, based on our current understanding of the relevant facts.Legal expenses incurred related to these contingencies are generally expensed as incurred.

ITEM 1A. RISK FACTORS

There have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10-K for the year ended January 3, 2009, asfurther supplemented in our Quarterly Report on Form 10-Q for the period ended April 4, 2009, as filed with the SEC.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On December 22, 2008, our Board of Directors (the “Board”) approved a stock repurchase program to acquire up to $10,000,000 of our outstandingcommon stock through December 22, 2010. The share repurchases will be made from time to time at our discretion in the open market or privately negotiatedtransactions as permitted by securities laws and other legal requirements, and subject to market conditions and other factors. The Board may modify, suspend,extend or terminate the program at any time.

The table below sets forth repurchases made pursuant to the program for the periods indicated during the third quarter of fiscal 2009. Total Number of Approximate Shares Purchased Dollar Value of Total Average as Part of Publicly Shares that May Number of Price Paid Announced Yet Be Purchased

Period Shares Per Share Program Under the ProgramJuly 5 – August 3 75,547 $ 3.16 711,852 $ 8,136,649 August 4 – September 2 — — 711,852 $ 8,136,649 September 3 – October 3 — — 711,852 $ 8,136,649 Total 75,547 $ 3.16 711,852 $ 8,136,649

ITEM 6. EXHIBITS

Exhibit Number Description

10.1* Loan and Security Agreement, dated as of June 9, 2006, between the entities set forth therein collectively as borrower and German

American Capital Corporation as Lender

10.2*

Amended and Restated Loan and Security Agreement, dated August 4, 2006, by and between, BlueLinx Corporation, Wachovia, and othersignatories listed therein

31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.



* Portions of this document are omitted and filed separately with the SEC pursuant to a request for confidential treatment in accordance with Rule 24b-2of the Exchange Act.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by theundersigned hereunto duly authorized. BlueLinx Holdings Inc.

(Registrant)

Date: November 6, 2009 /s/ H. Douglas Goforth H. Douglas Goforth Chief Financial Officer and Treasurer

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EXHIBIT INDEX

Exhibit Number Description

10.1*

Loan and Security Agreement, dated as of June 9, 2006, between the entities set forth therein collectively as borrower and GermanAmerican Capital Corporation as Lender

10.2*

Amended and Restated Loan and Security Agreement, dated August 4, 2006, by and between, BlueLinx Corporation, Wachovia, and othersignatories listed therein





* Portions of this document are omitted and filed separately with the SEC pursuant to a request for confidential treatment in accordance with Rule 24b-2of the Exchange Act.

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*** Portions hereof have been omitted and filed separately with the Securities and Exchange Commission pursuant to a requestfor confidential treatment in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

EXHIBIT 10.1

LOAN AND SECURITY AGREEMENT

Dated as of June 9, 2006

between

The Borrowers Signatory Hereto,

as Borrower,

ABP MD (BALTIMORE) LLC,

as Maryland Loan Guarantor

and

GERMAN AMERICAN CAPITAL CORPORATION,on behalf of the holders of the Notes,

as Lender

TABLE OF CONTENTS Page I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION 1

1.1 Definitions 1 1.2 Principles of Construction 26

II. GENERAL TERMS 26

2.1 Loan; Disbursement to Borrower 26 2.1.1 The Loan 26 2.1.2 Disbursement to Borrower 26 2.1.3 The Notes, Security Instrument and Loan Documents 27 2.1.4 Use of Proceeds 27

2.2 Interest; Loan Payments; Late Payment Charge 27

2.2.1 Payment of Principal and Interest 27 2.2.2 Method and Place of Payment 27 2.2.3 Late Payment Charge 28 2.2.4 Usury Savings 28

2.3 Prepayments 28

2.3.1 Prepayments 28 2.3.2 Prepayments After Event of Default; Application of Amounts Paid 28 2.3.3 Release of Property upon Repayment or Defeasance of Loan in Full 29 2.3.4 Release of Individual Properties 29 2.3.5 Defeasance 30 2.3.6 Substitution of Properties 34 2.3.7 Release of Outparcels 39 2.3.8 Excess Account Collateral 39 2.3.9 Reserve Requirements 40

2.4 Regulatory Change; Taxes 40

2.4.1 Increased Costs 40 2.4.2 Special Taxes 40 2.4.3 Other Taxes 41 2.4.4 Indemnity 41 2.4.5 Change of Office 41 2.4.6 Survival 41

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5 Conditions Precedent to Closing 41 2.5.1 Representations and Warranties; Compliance with Conditions 41 2.5.2 Delivery of Loan Documents; Title Policy; Reports; Leases 41 2.5.3 Related Documents 43 2.5.4 Delivery of Organizational Documents 43 2.5.5 Counsel Opinions 43 2.5.6 Annual Budget 43 2.5.7 Completion of Proceedings 44 2.5.8 Payments 44 2.5.9 Account Agreement 44 2.5.10 Master Lease SNDA 44 2.5.11 Reserved 44 2.5.12 Reserved 44 2.5.13 Independent Manager/Member Certificate 44 2.5.14 Transaction Costs 44 2.5.15 Material Adverse Effect 44 2.5.16 Insolvency 44 2.5.17 Leases 44 2.5.18 Master Lease; Master Lease SNDA 44 2.5.19 Tax Lot 44 2.5.20 Physical Conditions Reports 45 2.5.21 Appraisals 45 2.5.22 Financial Statements 45 2.5.23 Flood Certifications 45 2.5.24 Intercreditor Agreement 45

III. CASH MANAGEMENT 45

3.1 Cash Management 45 3.1.1 Establishment of Accounts 45 3.1.2 Pledge of Account Collateral 46 3.1.3 Maintenance of Collateral Accounts 47 3.1.4 Eligible Accounts 47 3.1.5 Deposits into Sub-Accounts 48 3.1.6 Monthly Funding of Sub-Accounts; Master Lease Rent Shortfalls; Master Lease Variable

Additional Rent Reserve; Sub-Account Shortfalls 48 3.1.7 Required Payments from Sub-Accounts 50 3.1.8 Cash Management Bank 50 3.1.9 Borrower’s and Maryland Loan Guarantor’s Account Representations, Warranties and Covenants 51 3.1.10 Account Collateral and Remedies 51 3.1.11 Transfers and Other Liens 52 3.1.12 Reasonable Care 52 3.1.13 Lender’s Liability 52 3.1.14 Continuing Security Interest 53

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Page IV. REPRESENTATIONS AND WARRANTIES 53

4.1 Borrower Representations 53 4.1.1 Organization 53 4.1.2 Proceedings 54 4.1.3 No Conflicts 54 4.1.4 Litigation 54 4.1.5 Agreements 55 4.1.6 Title 55 4.1.7 No Bankruptcy Filing 55 4.1.8 Full and Accurate Disclosure 56 4.1.9 All Property 56 4.1.10 No Plan Assets 56 4.1.11 Compliance 57 4.1.12 Financial Information 57 4.1.13 Condemnation 57 4.1.14 Federal Reserve Regulations 57 4.1.15 Utilities and Public Access 57 4.1.16 Not a Foreign Person 58 4.1.17 Separate Lots 58 4.1.18 Subdivision 58 4.1.19 Enforceability 58 4.1.20 Assessments 58 4.1.21 Insurance 58 4.1.22 Use of Property 58 4.1.23 Certificate of Occupancy; Licenses 58 4.1.24 Flood Zone 59 4.1.25 Physical Condition 59 4.1.26 Boundaries 59 4.1.27 Leases and Subleases 59 4.1.28 Filing and Recording Taxes 60 4.1.29 Single Purpose Entity/Separateness 60 4.1.30 Illegal Activity 60 4.1.31 No Change in Facts or Circumstances; Disclosure 60 4.1.32 Tax Filings 61 4.1.33 Solvency/Fraudulent Conveyance 61 4.1.34 Investment Company Act 61 4.1.35 Labor 61 4.1.36 Brokers 62 4.1.37 No Other Debt 62 4.1.38 Taxpayer Identification Number 62 4.1.39 Compliance with Anti-Terrorism, Embargo and Anti-Money Laundering Laws 62 4.1.40 Rights of First Refusal or First Offer to Lease or Purchase 62

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2 Survival of Representations 63

4.3 Borrower’s or Maryland Loan Guarantor’s Knowledge 63 V. BORROWER AND MARYLAND LOAN GUARANTOR COVENANTS 63

5.1 Affirmative Covenants 63 5.1.1 Performance by Borrower and Maryland Loan Guarantor 63 5.1.2 Existence; Compliance with Legal Requirements; Insurance 64 5.1.3 Litigation 64 5.1.4 Single Purpose Entity 64 5.1.5 Consents 65 5.1.6 Access to Property 66 5.1.7 Notice of Default 66 5.1.8 Cooperate in Legal Proceedings 66 5.1.9 Insurance 66 5.1.10 Further Assurances; Severance of Notes and Mezzanine Loan 66 5.1.11 Mortgage Taxes 68 5.1.12 Business and Operations 68 5.1.13 Title to the Property 68 5.1.14 Costs of Enforcement 69 5.1.15 Estoppel Statements 69 5.1.16 Loan Proceeds 69 5.1.17 No Joint Assessment 69 5.1.18 No Further Encumbrances 70 5.1.19 Leases and Material Subleases 70 5.1.20 Management 70 5.1.21 Master Lease 70

5.2 Negative Covenants 72

5.2.1 Incur Debt 72 5.2.2 Encumbrances 72 5.2.3 Engage in Different Business 72 5.2.4 Make Advances 72 5.2.5 Partition 72 5.2.6 Commingle 72 5.2.7 Guarantee Obligations 73 5.2.8 Transfer Assets 73 5.2.9 Amend Organizational Documents 73 5.2.10 Dissolve 73 5.2.11 Bankruptcy 73 5.2.12 ERISA 73 5.2.13 Distributions 73 5.2.14 Management 73 5.2.15 Reserved 74 5.2.16 Modify Account Agreement 74 5.2.17 Zoning Reclassification 74 5.2.18 Change of Principal Place of Business 74 5.2.19 Debt Cancellation 74 5.2.20 Misapplication of Funds 74 5.2.21 Single Purpose Entity 75

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Page VI. INSURANCE; CASUALTY; CONDEMNATION; RESTORATION 75

6.1 Insurance Coverage Requirements 75 6.1.1 Property Insurance 75 6.1.2 Liability Insurance 75 6.1.3 Workers’ Compensation Insurance 75 6.1.4 Business Interruption Insurance 76 6.1.5 Builder’s All-Risk Insurance 76 6.1.6 Boiler and Machinery Insurance 76 6.1.7 Flood Insurance and Earthquake Insurance 76 6.1.8 Terrorism Insurance 77 6.1.9 Storage Tank System Third Party Liability and Cleanup Insurance 78 6.1.10 Other Insurance 78 6.1.11 Ratings of Insurers 78 6.1.12 Form of Insurance Policies; Endorsements 78 6.1.13 Evidence of Insurance 79 6.1.14 Separate Insurance 79 6.1.15 Blanket Policies 79

6.2 Condemnation and Insurance Proceeds 79

6.2.1 Notification 79 6.2.2 Proceeds 80 6.2.3 Lender to Take Proceeds 81 6.2.4 Borrower to Restore 82 6.2.5 Disbursement of Proceeds 83

VII. IMPOSITIONS, OTHER CHARGES, LIENS AND OTHER ITEMS 84

7.1 Borrower or Maryland Loan Guarantor to Pay Impositions and Other Charges 84

7.2 No Liens 84

7.3 Contest 85 VIII. TRANSFERS, INDEBTEDNESS AND SUBORDINATE LIENS 85

8.1 General Restriction on Transfers and Debt 85

8.2 Sale of Building Equipment 86

8.3 Immaterial Transfers and Easements, etc. 86

8.4 Permitted Equity Transfers 87

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5 Deliveries to Lender 88

8.6 Loan Assumption 88

8.7 Leases and Subleases 89 8.7.1 Leasing Conditions 89 8.7.2 Delivery of New Sublease or Sublease Modification 89 8.7.3 Security Deposits 89 8.7.4 No Default Under Subleases 89 8.7.5 Subordination 89 8.7.6 Attornment 90 8.7.7 Non-Disturbance Agreements 90

IX. RESERVED 90 X. MAINTENANCE OF PROPERTY; ALTERATIONS 90

10.1 Maintenance of Property 90 10.2 Conditions to Alteration 91 10.3 Costs of Alteration 91

XI. BOOKS AND RECORDS, FINANCIAL STATEMENTS, REPORTS AND OTHER INFORMATION 93

11.1 Books and Records 93 11.2 Financial Statements 93

11.2.1 Quarterly Reports 93 11.2.2 Annual Reports 94 11.2.3 Capital Expenditures Summaries 94 11.2.4 Master Lease 94 11.2.5 Annual Budget 94 11.2.6 Other Information 94

XII. ENVIRONMENTAL MATTERS 95

12.1 Representations 95 12.2 Covenants 95

12.2.1 Compliance with Environmental Laws 95 12.3 Environmental Reports 96 12.4 Environmental Indemnification 96 12.5 Recourse Nature of Certain Indemnifications 97

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Page XIII. RESERVED 97 XIV. SECURITIZATION 97

14.1 Sale of Notes and Securitization 97 14.2 Securitization Financial Statements 98 14.3 Securitization Indemnification 98

14.3.1 Disclosure Documents 98 14.3.2 Indemnification Certificate 99

XV. ASSIGNMENTS AND PARTICIPATIONS 101

15.1 Assignment and Acceptance 101 15.2 Effect of Assignment and Acceptance 101 15.3 Content 101 15.4 Register 102 15.5 Substitute Notes 102 15.6 Participations 103 15.7 Disclosure of Information 103 15.8 Security Interest in Favor of Federal Reserve Bank 103

XVI. RESERVE ACCOUNTS 103

16.1 Tax Reserve Account 103 16.2 Insurance Reserve Account 104 16.3 Structural Repair Reserve Account 105 16.4 Immediate Repair and Remediation Reserve Account 106 16.5 Master Lease Variable Additional Rent Reserve Account and LCR Deterioration Reserve Account 107

XVII. DEFAULTS 108

17.1 Event of Default 108 17.2 Remedies 111 17.3 Remedies Cumulative; Waivers 112 17.4 Costs of Collection 113

XVIII. SPECIAL PROVISIONS 113

18.1 Exculpation 113 18.1.1 Exculpated Parties 113 18.1.2 Carveouts From Non-Recourse Limitations 114

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Page XIX. MISCELLANEOUS 116

19.1 Survival 116 19.2 Lender’s Discretion 116 19.3 Governing Law 116 19.4 Modification, Waiver in Writing 117 19.5 Delay Not a Waiver 117 19.6 Notices 118 19.7 TRIAL BY JURY 119 19.8 Headings 119 19.9 Severability 119 19.10 Preferences 119 19.11 Waiver of Notice 120 19.12 Expenses; Indemnity 120 19.13 Exhibits and Schedules Incorporated 122 19.14 Offsets, Counterclaims and Defenses 122 19.15 Liability of Assignees of Lender 122 19.16 No Joint Venture or Partnership; No Third Party Beneficiaries 122 19.17 Publicity 123 19.18 Waiver of Marshalling of Assets 123 19.19 Waiver of Counterclaim and other Actions 123 19.20 Conflict; Construction of Documents; Reliance 123 19.21 Prior Agreements 124 19.22 Counterparts 124

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EXHIBITS AND SCHEDULES EXHIBIT A TITLE INSURANCE REQUIREMENTS, ENDORSEMENTS AND AFFIRMATIVE COVERAGESEXHIBIT B SURVEY REQUIREMENTSEXHIBIT C SINGLE PURPOSE ENTITY PROVISIONSEXHIBIT D ENFORCEABILITY OPINION REQUIREMENTSEXHIBIT E INTENTIONALLY DELETEDEXHIBIT F INTENTIONALLY DELETEDEXHIBIT G INTENTIONALLY DELETEDEXHIBIT H INTENTIONALLY DELETEDEXHIBIT I INTENTIONALLY DELETEDEXHIBIT J INTENTIONALLY DELETEDEXHIBIT K BORROWER ORGANIZATIONAL STRUCTUREEXHIBIT L INTENTIONALLY DELETEDEXHIBIT M FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENTEXHIBIT N FORM OF SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENTEXHIBIT O INTENTIONALLY DELETEDEXHIBIT P FORM OF MASTER LEASE RENT PAYMENT DIRECTION LETTEREXHIBIT Q INTENTIONALLY DELETEDEXHIBIT R INTENTIONALLY DELETEDEXHIBIT S INTENTIONALLY DELETEDEXHIBIT T FORM OF INDEPENDENT MANAGER/MEMBER CERTIFICATE SCHEDULE I ALLOCATED LOAN AMOUNTSSCHEDULE II GEOGRAPHIC QUADRANTSSCHEDULE III IMMEDIATE REPAIRS AND REMEDIATIONSCHEDULE IV LEASESSCHEDULE V INTENTIONALLY DELETEDSCHEDULE VI LITIGATION SCHEDULESCHEDULE VII OUTPARCEL LEGAL DESCRIPTIONSSCHEDULE VIII BORROWER TAXPAYER IDENTIFICATION NUMBERS

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LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT, dated as of June 9, 2006 (as amended, restated, replaced, supplementedor otherwise modified from time to time, this “Agreement”), by and among ABP MD (BALTIMORE) LLC, a Delaware limitedliability company (“Maryland Loan Guarantor”), the borrowers signatory hereto (each an “Individual Borrower” andcollectively, “Borrower”) having an office c/o BlueLinx Holdings Inc., 4300 Wildwood Parkway, Atlanta, Georgia 30339, andGERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, on behalf of the holders of the Notes, having anaddress at 60 Wall Street, New York, New York 10005 (together with its successors and assigns, “Lender”).

RECITALS:

WHEREAS, Borrower desires to obtain the Loan (as hereinafter defined) from Lender;

WHEREAS, Lender is willing to make the Loan to Borrower, subject to and in accordance with the terms of thisAgreement and the other Loan Documents (as hereinafter defined).

NOW, THEREFORE, in consideration of the making of the Loan by Lender and the covenants, agreements,representations and warranties set forth in this Agreement, the parties hereto hereby covenant, agree, represent and warrant asfollows:

I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION

1.1 Definitions. For all purposes of this Agreement, except as otherwise expressly required or unless the context clearlyindicates a contrary intent:

“Account Agreement” shall mean the Account and Control Agreement, dated the date hereof, among Lender,Borrower (other than Maryland Borrower), Maryland Loan Guarantor and Cash Management Bank.

“Account Collateral” shall have the meaning set forth in Section 3.1.2.

“Additional Non-Consolidation Opinion” shall have the meaning set forth in Section 4.1.29(b).

“Affiliate” shall mean, with respect to any specified Person, any other Person that (i) directly or indirectly Controls, isControlled by or under direct or indirect Common Control with such specified Person, (ii) is a general partner or managingmember of such specified Person, or (iii) is an officer or director of such specified Person.

“Aggregate Appraised Value ” shall mean the sum of (a) the aggregate Appraised Values (as indicated in theAppraisals delivered by Borrower pursuant to Section 2.5.21) of all Individual Properties which were subject to the Lien of theSecurity Instrument on the Closing Date and remain subject to the Lien of the Security Instrument on the date suchdetermination is made and (b) the aggregate Appraised Value of the Substitute Properties, as reflected in the Appraisalsdelivered in accordance with Section 2.3.6(c).

“Agreement” shall mean this Agreement, as the same may be amended, restated, replaced, supplemented or otherwisemodified from time to time.

“Allocated Loan Amount” shall mean with respect to each Individual Property, the designated allocated portion ofthe Loan applicable to such Individual Property that is set forth on Schedule I attached hereto. For the avoidance of doubt, noportion of the Loan shall be allocated to any of the Outparcels.

“ALTA” shall mean American Land Title Association, or any successor thereto.

“Alteration” shall have the meaning set forth in Section 10.2.

“Annual Budget” shall mean the operating budget for the Property prepared by or on behalf of Borrower for theapplicable Fiscal Year or other period setting forth, in reasonable detail, Borrower’s or Guarantor’s good faith estimates of theanticipated results of operation of the Property, including, but not limited to, revenue from all sources, Master Lease VariableAdditional Rent, Master Lease Recurrent Additional Rent and Capital Expenditures.

“Appraisals” shall mean FIRREA appraisals conducted by CB Richard Ellis (or another Independent appraiserreasonably acceptable to Lender) which establish the Appraised Value of each Individual Property (or, as applicable, eachSubstitute Property).

“Appraised Value” shall mean, for an Individual Property or, as applicable, a Substitute Property, the value of suchIndividual Property or Substitute Property as determined by the Appraisal for such Individual Property or Substitute Property.

“Approved Bank” shall have the meaning provided in the Account Agreement.

“Architect” shall mean an architect, engineer or construction consultant selected by Borrower, licensed to practice inthe relevant State, having at least five (5) years of architectural experience and which is selected by an Individual Borrower andreasonably acceptable to Lender.

“Assignment and Acceptance” shall mean an assignment and acceptance entered into by Lender and an assignee, andaccepted by Lender in accordance with Article XV and in substantially the form of Exhibit M or such other form customarilyused by Lender in connection with the participation or syndication of mortgage loans at the time of such assignment.

“Assignment of Leases” shall mean, with respect to each Individual Property, that certain first priority Assignment ofMaster Lease, Leases, Rents and Security Deposits, dated as of the date hereof, from each Individual Borrower (or in the case ofthe Maryland Property, the Maryland Loan Guarantor), as assignor, to Lender, as assignee, assigning to Lender all of suchIndividual Borrower’s (or Maryland Loan Guarantor’s) interest in and to the Master Lease, the Leases and the Rents of suchIndividual Property, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

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“Bankruptcy Code” shall mean Title 11, U.S.C.A., as amended from time to time and any successor statute thereto.

“Blanket Policy” shall have the meaning provided in Section 6.1.14.

“Borrower” shall have the meaning set forth in the first paragraph of this Agreement.

“Borrower’s Account ” shall mean an account or accounts maintained by Borrower for its own account at such bankand with such account number as may be designated in writing by Borrower to Lender and Cash Management Bank from timeto time.

“Broker” shall mean CB Richard Ellis/L.J. Melody.

“Building Equipment” shall have the meaning set forth in the Security Instrument.

“Business Day” shall mean any day other than a Saturday, Sunday or any other day on which national banks in NewYork are not open for business.

“Capital Expenditures” shall mean, for any period, the amount expended for items capitalized under GAAP, includingexpenditures for building improvements or major repairs, leasing commissions and tenant improvements.

“Cash” shall mean the legal tender of the United States of America.

“Cash and Cash Equivalents” shall mean any one or a combination of the following: (i) Cash, and (ii) U.S.Government Obligations.

“Cash Management Bank” shall mean Wachovia Bank, National Association or any successor Approved Bank actingas Cash Management Bank under the Account Agreement or other financial institution approved by the Lender and, if aSecuritization has occurred, the Rating Agencies.

“Casualty Amount” shall mean ten percent (10%) of the Allocated Loan Amount of the affected Individual Property.

“Casualty/Condemnation Property Release” shall mean any Property Release obtained in connection with a ProceedsPrepayment or other principal prepayment made pursuant to Section 6.2.3 or Section 4(b) of the Note.

“Close Affiliate” shall mean, with respect to any Person (the “First Person”), any other Person (each, a “SecondPerson”) which is an Affiliate of the First Person and in respect of which any of the following are true: (a) the Second Personowns, directly or indirectly, at least seventy-five percent (75%) of all of the legal, beneficial and/or equitable interest in suchFirst Person, (b) the First Person owns, directly or indirectly, at least seventy-five percent (75%) of all of the legal, beneficialand/or equitable interest in such Second Person, or (c) a third (3rd) Person owns, directly or indirectly, at least seventy-fivepercent (75%) of all of the legal, beneficial and/or equitable interest in both the First Person and the Second Person.

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“Closing Date” shall mean the date of this Agreement set forth in the first paragraph hereof.

“Closing Date LCR Ratio” shall mean 5.18x.

“Closing Date LTV Ratio” shall mean 79.22%.

“Code” shall mean the Internal Revenue Code of 1986, as amended, as it may be further amended from time to time,and any successor statutes thereto, and applicable U.S. Department of Treasury regulations issued pursuant thereto in temporaryor final form.

“Collateral Accounts” shall have the meaning set forth in Section 3.1.1.

“Completion” shall have the meaning set forth in Section 16.4.

“Control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of themanagement and policies of a Person, whether through ownership of voting securities, by contract or otherwise, and the terms“Controlled,” “Controlling” and “Common Control” shall have correlative meanings.

“Cut-Off Date” shall have the meaning set forth in Section 6.2.3(a).

“DBS” shall have the meaning set forth in Section 14.3.2(b).

“Debt” shall mean, with respect to any Person at any time, (a) indebtedness or liability of such Person for borrowedmoney whether or not evidenced by bonds, debentures, notes or other instruments, or for the deferred purchase price of propertyor services; (b) obligations of such Person as lessee under leases which should have been or should be, in accordance withGAAP, recorded as capital leases; (c) obligations issued for, or liabilities incurred on the account of, such Person; (d) obligationsor liabilities of such Person arising under letters of credit, credit facilities or other acceptance facilities; (e) obligations of suchPerson under any guarantees or other agreement to become secondarily liable for any obligation of any other Person,endorsements (other than for collection or deposit in the ordinary course of business) and other contingent obligations toprovide funds for payment, to supply funds to invest in any Person or otherwise to assure a creditor against loss; (f) subject toSection 7.3, obligations of such Person secured by any Lien on any property of such Person; or (g) obligations of such Personunder any interest rate or currency exchange agreement.

“Debt Service” shall mean, with respect to any particular period of time, scheduled interest and/or principal paymentsunder the Notes.

“Debt Service Reserve Account” shall have the meaning set forth in Section 3.1.1.

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“Default” shall mean the occurrence of any event hereunder or under any other Loan Document which, but for thegiving of notice or passage of time, or both, would be an Event of Default.

“Default Rate” shall have the meaning set forth in the Note.

“Defeasance Collateral” shall mean obligations or securities that (a) are not subject to prepayment, call or earlyredemption, (b) provide for interest at a fixed rate, (c) have a principal amount due at maturity that cannot vary or change, (d) arerated “AAA” or better by S&P and Aaa or better by Moody’s (or, if not rated by S&P, are eligible under S&P’s published criteriain paragraphs 1, 2 or 3 of its Eligible Investment Criteria for “AAA” Rated Structured Transactions), and (e) constitute“government securities” as defined in Section 2(a)(16) of the Investment Company Act of 1940 as amended (15 U.S.C. 80a-1).

“Defeasance Date” shall have the meaning set forth in Section 2.3.5(a).

“Defeasance Deposit” shall mean an amount equal to the Release Price for the applicable Individual Property orIndividual Properties subject to the Defeasance Event plus any costs and expenses incurred or to be incurred in the purchase ofDefeasance Collateral necessary to meet the Scheduled Defeasance Payments.

“Defeasance Event” shall have the meaning set forth in Section 2.3.5(a).

“Defeasance Lockout Period” shall have the meaning set forth in the Note.

“Deficiency” shall have the meaning set forth in Section 6.2.4(b).

“Disclosure Documents” shall have the meaning set forth in Section 14.3.1.

“Disqualified Transferee” shall mean any proposed transferee that, (i) has (within the past ten (10) years) defaulted, oris now in default, beyond any applicable cure period, of its material obligations, under any written agreement with Lender, anyaffiliate of Lender or any financial institution; (ii) has a principal that has been convicted in a criminal proceeding for a felonyor a crime involving moral turpitude or that is an organized crime figure or is reputed (as determined by Lender in its solediscretion) to have substantial business or other affiliations with an organized crime figure; (iii) has at any time filed a voluntarypetition under the Bankruptcy Code or any other federal or state bankruptcy or insolvency law; (iv) as to which an involuntarypetition has at any time been filed under the Bankruptcy Code or any other federal or state bankruptcy or insolvency law;(v) has at any time filed an answer consenting to or acquiescing in any involuntary petition filed against it by any other personunder the Bankruptcy Code or any other federal or state bankruptcy or insolvency law; (vi) has at any time consented to oracquiesced in or joined in an application for the appointment of a custodian, receiver, trustee or examiner for itself or any of itsproperty; (vii) has at any time made an assignment for the benefit of creditors, or has at any time admitted its insolvency orinability to pay its debts as they become due; or (viii) has been found by a court of competent jurisdiction or othergovernmental authority in a comparable proceeding to have violated any federal or state securities laws or regulationspromulgated thereunder.

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“EBITDAR” shall mean earnings from operations before interest expense/income, federal, state and local incometaxes, depreciation and amortization, any rental expense on real property, restructuring costs, unusual severance costs, debtissuance or stock offering costs, legal loss reserve, casualty losses and/or related reserves, stock option expense and merger andacquisition related expenses.

“Eligible Account” shall mean (i) a segregated trust account or accounts maintained with the corporate trustdepartment of a federal depository institution or state-chartered depository institution subject to regulations regarding fiduciaryfunds on deposit such as or similar to Title 12 of the Code of Federal Regulations Section 9.10(b) which, in either case, hascorporate trust powers, acting in its fiduciary capacity or (ii) a segregated account maintained at an Approved Bank. An EligibleAccount will not be evidenced by a certificate of deposit, passbook or other instrument.

“Environmental Certificate” shall have the meaning set forth in Section 12.2.1.

“Environmental Claim” shall mean any claim, action, cause of action, investigation or written notice by any Personalleging potential liability (including potential liability for investigatory costs, cleanup costs, natural resource damages,property damages, personal injuries or penalties) arising out of, based upon or resulting from (a) the presence or release into theenvironment of any Hazardous Materials from or at the Property, or (b) the violation, or alleged violation, of any EnvironmentalLaw relating to the Property.

“Environmental Event” shall have the meaning set forth in Section 12.2.1.

“Environmental Indemnity” shall mean the Environmental Indemnity, dated the date hereof, made by Guarantor infavor of Lender.

“Environmental Insurance Policy” shall mean any environmental insurance policy maintained by or for the benefit ofBorrower with respect to the Property on the date hereof and any environmental insurance policy hereafter obtained andmaintained with respect to the Property and acceptable to Lender.

“Environmental Law” shall have the meaning provided in the Environmental Indemnity.

“Environmental Reports” shall have the meaning set forth in Section 12.1.

“ERISA” shall mean the United States Employee Retirement Income Security Act of 1974, as amended from time totime, and the regulations promulgated and the rulings issued thereunder.

“Event of Default” shall have the meaning set forth in Section 17.1(a).

“Excess Account Collateral” shall have the meaning set forth in Section 2.3.8.

“Excess Cash Flow” shall have the meaning set forth in Section 3.1.6.

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“Exchange Act” shall have the meaning set forth in Section 14.3.1.

“Excluded Personal Property” shall mean all personal property of the Master Lessee or any other Tenants underLeases; provided, however, that Excluded Personal Property shall not include walls or ceilings or any items that constitutefixtures (specifically including, but not limited to plumbing and electrical fixtures, heating, ventilation and air conditioning,wall and floor coverings, elevators and escalators). Excluded Personal Property shall include, without limitation, any equipmentattached to or installed at an Individual Property which is unique to and used to further the business of Master Lessee or suchTenants at such Individual Property, including, but not limited to, steel racking, dust collection systems, generators, orderpickers and other similar items. For purposes of this definition, the terms “equipment” and “fixtures” shall have the meaning setforth in the Uniform Commercial Code in effect in the State of New York.

“Exculpated Parties” shall have the meaning set forth in Section 18.1.1.

“Excusable Delay” shall mean a delay solely due to acts of God, governmental restrictions, regulations or controls,stays, judgments, orders, decrees, enemy or hostile governmental actions, terrorist acts, civil commotion, fire, casualty, strikes,work stoppages, shortages of labor or materials or other causes beyond the reasonable control of Borrower, but Borrower’s lackof funds in and of itself shall not be deemed a cause beyond the control of Borrower.

“Fiscal Year” shall mean the fifty-two (52) or fifty-three (53) week period ending on the Saturday immediatelypreceding the last day of each calendar year of the term of the Loan or the portion of any such period falling within the term ofthe Loan in the event that such a period occurs partially before or after, or partially during, the term of the Loan.

“Fiscal Quarter” shall mean each quarter within a Fiscal Year in accordance with GAAP.

“Fitch” shall mean Fitch Ratings Inc.

“GAAP” shall mean the generally accepted accounting principles set forth in the opinions and pronouncements of theAccounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements ofthe Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within theaccounting profession), or in such other statements by such entity as may be in general use by significant segments of the U.S.accounting profession, to the extent such principles are applicable to the facts and circumstances on the date of determination.

“General Release Conditions” shall have the meaning set forth in Section 2.3.4.

“Geographic Quadrant” shall mean any geographic quadrant identified on Schedule II attached hereto.

“Governmental Authority” shall mean any court, board, agency, commission, office or other authority of any naturewhatsoever for any governmental unit (federal, state, county, district, municipal, city or otherwise) whether now or hereafter inexistence.

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“Guarantor” shall mean BlueLinx Holdings Inc., a Delaware corporation.

“Hazardous Materials” shall have the meaning provided in the Environmental Indemnity.

“Holding Account” shall have the meaning set forth in Section 3.1.1.

“Immediate Repairs and Remediation Completion Deadline” shall have the meaning set forth in Section 16.4.

“Immediate Repair and Remediation Reserve Account” shall have the meaning set forth in Section 3.1.1.

“Immediate Repairs and Remediation” shall mean, collectively, the immediate repairs and environmental remediationrequired to be made to the Property (other than immediate repairs required to be made to the portion of the Improvements thatconstitutes shed space) described in Schedule III attached hereto.

“Impositions” shall mean all taxes (including all ad valorem, sales (including those imposed on lease rentals), use,single business, gross receipts, value added, intangible transaction, privilege or license or similar taxes), governmentalassessments (including all assessments for public improvements or benefits, whether or not commenced or completed prior tothe date hereof and whether or not commenced or completed within the term of this Agreement), water, sewer or other rents andcharges, excises, levies, fees (including license, permit, inspection, authorization and similar fees), and all other governmentalcharges, in each case whether general or special, ordinary or extraordinary, or foreseen or unforeseen, of every character inrespect of the Property and/or any Rents (including all interest and penalties thereon), which at any time prior to, during or inrespect of the term hereof may be assessed or imposed on or in respect of or be a Lien upon (a) Borrower or Maryland LoanGuarantor (including all franchise or other taxes imposed on Borrower or Maryland Loan Guarantor for the privilege of doingbusiness in the jurisdiction in which the Property is located), (b) the Property, or any other collateral delivered or pledged toLender in connection with the Loan, or any part thereof, or any Rents therefrom or any estate, right, title or interest therein, or(c) any occupancy, operation, use or possession of, or sales from, or activity conducted on, or in connection with the Property orthe leasing or use of all or any part thereof by Borrower or Maryland Loan Guarantor. Nothing contained in this Agreement shallbe construed to require Borrower or Maryland Loan Guarantor to pay any tax, assessment, levy or charge imposed on (i) anyTenant occupying any portion of the Property or (ii) Lender in the nature of a capital levy, estate, inheritance, succession,income or net revenue tax.

“Improvements” shall have the meaning set forth in the Security Instrument.

“Increased Costs” shall have the meaning set forth in Section 2.4.1.

“Indebtedness” shall mean, at any given time, the Principal Amount, together with all accrued and unpaid interestthereon and all other obligations and liabilities due or to become due to Lender pursuant hereto, under the Notes or inaccordance with the other Loan Documents and all other amounts, sums and expenses paid by or payable to Lender hereunderor pursuant to the Notes or the other Loan Documents.

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“Indemnified Parties” shall have the meaning set forth in Section 19.12(b).

“Independent” shall mean, when used with respect to any Person, a Person who: (i) does not have any direct financialinterest or any material indirect financial interest in any Borrower or in any Affiliate of any Borrower, (ii) is not connected withany Borrower or any Affiliate of any Borrower as an officer, employee, promoter, underwriter, trustee, partner, member, manager,creditor, director, supplier, customer or person performing similar functions and (iii) is not a member of the immediate family ofa Person defined in clause (i) or (ii) above.

“Independent Accountant” shall mean a firm of nationally recognized, certified public accountants which isIndependent and which is selected by Borrower and reasonably acceptable to Lender. Lender acknowledges that Ernst & YoungLLP constitutes an approved Independent Accountant.

“Independent Architect” shall mean an architect, engineer or construction consultant selected by Borrower which isIndependent, licensed to practice in the State (if an architect), has at least five (5) years of applicable experience and which isreasonably acceptable to Lender. Lender acknowledges that, for purposes of the Physical Condition Reports, ATC Associates,Inc. and Land America Assessment Corp. are each an approved Independent Architect.

“Independent Director,” “Independent Manager,” or “Independent Member” shall mean a Person who is not and willnot be while serving and has never been (i) a member (other than an Independent Member), manager (other than an IndependentManager), director, (other than an Independent Director), employee, attorney, or counsel of Borrower or its Affiliates, (ii) acustomer, supplier or other Person who derives more than one percent (1%) of its purchases or revenues from its activities withBorrower or its Affiliates, (iii) a direct or indirect legal or beneficial owner in any entity referred to in clause (i) or (ii) above orany of its Affiliates, (iv) a member of the immediate family of any member, manager, employee, attorney, customer, supplier orother Person referred to in clause (i), (ii) or (iii) above, or (v) a person Controlling or under the common Control of anyone listedin clauses (i) through (iv) above. A Person that otherwise satisfies the foregoing shall not be disqualified from serving as anIndependent Director or Independent Manager or Independent Member if such individual is at the time of initial appointment,or at any time while serving as such, is an Independent Director or Independent Manager or Independent Member, as applicable,of a Single Purpose Entity affiliated with Borrower.

“Individual Parcel” shall have the meaning set forth in the Security Instrument.

“Individual Borrower” shall have the meaning set forth in the first paragraph of this Agreement.

“Individual Property” shall have the meaning set forth in the Security Instrument.

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“Insurance Requirements” shall mean, collectively, (i) all material terms of any insurance policy required pursuant tothis Agreement and (ii) all material regulations and then-current standards applicable to or affecting the Property or any partthereof or any use or condition thereof.

“Insurance Reserve Account” shall have the meaning set forth in Section 3.1.1.

“Insurance Reserve Amount” shall have the meaning set forth in Section 16.2.

“Intangible” shall have the meaning set forth in the Security Instrument.

“Intercreditor Agreement” shall mean that certain Mortgagee Agreement between Wachovia, as agent for the lendersunder the Revolving Loan, and Lender and Wachovia, as holders of the Notes.

“Interest Period” shall have the meaning set forth in the Notes.

“Interest Rate” shall have the meaning set forth in the Notes.

“Key Properties” shall mean, collectively, (i) any Individual Property which contains greater than 200,000 square feetof main distribution building space and (ii) the Individual Property located in Englewood, Colorado and containing 68,721square feet of space, which Individual Property is used by the Borrower for office purposes.

“Land” shall have the meaning set forth in the Security Instrument.

“Late Payment Charge” shall have the meaning set forth in Section 2.2.3.

“Lease” shall mean any lease (including the Master Lease), sublease or subsublease, letting, license, concession orother agreement (whether written or oral and whether now or hereafter in effect), pursuant to which any Person is granted apossessory interest in, or right to use or occupy all or any portion of any space in any Individual Property, and everymodification, amendment or other agreement relating to such lease, sublease, subsublease, or other agreement entered into inconnection with such lease, sublease, subsublease, or other agreement and every guarantee of the performance and observanceof the covenants, conditions and agreements to be performed and observed by the other party thereto. Notwithstanding theforegoing, the term “Lease” shall exclude all of the Subleases at all times prior to a termination of the Master Lease.

“LCR” shall mean a ratio, as determined by Lender, in which: (i) the numerator is Master Lessee’s EBITDAR, appliedconsistently, as stated on Master Lessee’s four (4) most recent quarterly financial statements delivered to Lender by Borrower orMaster Lessee pursuant to Section 11.2.1, for the trailing twelve (12) month period immediately prior to the applicablecalculation date; and (ii) the denominator is Master Lease Base Rent for the trailing twelve (12) month period immediately priorto the applicable calculation date (and, in the event that the calculation date occurs prior to the first anniversary of the date ofthe Master Lease, Master Lease Base Rent applicable to any month prior to the date of the Master Lease shall be deemed to beequal to one-twelfth (1/12) of the Master Lease Base Rent payable during the first year of the term of the Master Lease).

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“LCR Deterioration Reserve Account” shall have the meaning set forth in Section 3.1.1.

“LCR Test” shall mean the test performed by Lender on a trailing four (4) Fiscal Quarter basis pursuant to the terms ofSection 16.5 hereof following the end of each Fiscal Quarter after the Closing Date to determine whether a Low LCR CashSweep Period has occurred and is continuing.

“Legal Requirements” shall mean all present and future laws, statutes, codes, ordinances, orders, judgments, decrees,injunctions, rules, regulations and requirements, and irrespective of the nature of the work to be done, of every GovernmentalAuthority including, without limitation, Environmental Laws and all covenants, restrictions and conditions now or hereafter ofrecord which may be applicable to Borrower, Maryland Loan Guarantor or to the Property and the Improvements and theBuilding Equipment thereon, or to the use, manner of use, occupancy, possession, operation, maintenance, alteration, repair orreconstruction of the Property and the Improvements and the Building Equipment thereon, including, without limitation,building and zoning codes and ordinances and laws relating to handicapped accessibility.

“Lender” shall have the meaning set forth in the first paragraph of this Agreement.

“Lender’s Consultant” shall mean an environmental and engineering consulting firm selected by Lender andreasonably acceptable to Borrower having experience (i) conducting environmental and engineering assessments for propertiessimilar to the Property and (ii) preparing and supervising remediation plans for properties similar to the Property.

“Lender Group” shall have the meaning set forth in Section 14.3.2(b).

“Letter of Credit” shall mean an irrevocable, unconditional, transferable, clean sight draft letter of credit (either anevergreen letter of credit or one which does not expire until at least sixty (60) days after the Maturity Date (the “LC ExpirationDate”)), in favor of Lender and entitling Lender to draw thereon in New York, New York, based solely on delivery or a sightdraft containing a statement executed by an officer or authorized signatory of Lender and issued by an Approved Bank. If at anytime (a) the institution issuing any such Letter of Credit shall cease to be an Approved Bank or (b) the Letter of Credit is due toexpire prior to the LC Expiration Date, Lender shall have the right immediately to draw down the same in full and hold theproceeds thereof in accordance with the provisions of this Agreement, unless Borrower shall deliver a replacement Letter ofCredit from an Approved Bank within (i) as to (a) above, thirty (30) days after Lender delivers written notice to Borrower thatthe institution issuing the Letter of Credit has ceased to be an Approved Bank or (ii) as to (b) above, at least ten (10) BusinessDays prior to the expiration date of said Letter of Credit.

“Liabilities” shall have the meaning set forth in Section 14.3.2(b).

“License” shall have the meaning set forth in Section 4.1.23.

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“Lien” shall mean any mortgage, deed of trust, lien, pledge, hypothecation, assignment, security interest, or any otherencumbrance or charge on or affecting Borrower, Maryland Loan Guarantor, the Property, any portion thereof or any interesttherein, including, without limitation, any conditional sale or other title retention agreement, any financing lease havingsubstantially the same economic effect as any of the foregoing, the filing of any financing statement, and the filing ofmechanic’s, materialmen’s and other similar liens and encumbrances, excluding any such items solely affecting the ExcludedPersonal Property.

“Loan” shall mean the loan in the amount of the Loan Amount made by Lender to Borrower pursuant to thisAgreement.

“Loan Amount” shall mean the original principal amount of the Loan equal to $295,000,000.

“Loan Documents” shall mean, collectively, this Agreement, the Notes, the Security Instrument, the Assignment ofLeases, the Environmental Indemnity, the Master Lease, the Master Lease SNDA, the Account Agreement, the RecourseGuaranty, the Maryland Loan Guaranty and all other documents executed and/or delivered by Borrower, Maryland LoanGuarantor, Master Lessee or Guarantor, as applicable, to Lender in connection with the Loan or in connection with anySubstitution, including any opinion certificates or other certifications or representations delivered by or on behalf of Borroweror any Affiliate of Borrower to Lender.

“Low LCR Cash Sweep Period” shall mean any period (a) commencing on the Payment Date following theconclusion of any two (2) consecutive Fiscal Quarters for which the LCR is less than 2.50:1.00, as determined by an LCR Testin accordance with Section 16.5 hereof, and (ii) ending on the day immediately preceding the Payment Date following theconclusion of any two (2) consecutive Fiscal Quarters for which the LCR equals or exceeds 2.50:1.00, as determined by an LCRTest in accordance with Section 16.5 hereof.

“LTV Ratio” shall mean the ratio, expressed as a percentage, of the Principal Amount, as of the date of determination,to the Aggregate Appraised Value, as of the date of determination.

“Maryland Borrower” shall mean ABP MD (Baltimore) Subsidiary LLC, a Delaware limited liability company and awholly owned subsidiary of the Maryland Loan Guarantor.

“Maryland Loan Guarantor” shall have the meaning provided in the first paragraph hereof.

“Maryland Loan Guaranty” shall mean that certain guaranty delivered by Maryland Loan Guarantor in favor ofLender.

“Maryland Property” shall mean the Individual Property located in Maryland.

“Master Lease” shall mean that certain Amended and Restated Master Lease Agreement for the Individual Propertiesby and between each Individual Borrower (or in the case of the Maryland Property, the Maryland Loan Guarantor), as lessor, andMaster Lessee, as lessee, dated as of the date hereof, as more particularly described in Section 5.1.23.

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“Master Lease Base Rent” shall mean monthly payments under the Master Lease of scheduled base rent.

“Master Lease Recurrent Additional Rent” shall mean monthly payments under the Master Lease of additional rentfor scheduled pass-through expenses, including, without limitation, taxes and insurance.

“Master Lease Rent” shall mean, collectively, the Master Lease Scheduled Rent and the Master Lease VariableAdditional Rent.

“Master Lease Rent Payment Direction Letter” shall mean a letter in the form of Exhibit P pursuant to which Borrower(or in the case of the Maryland Property, the Maryland Loan Guarantor) instructs Master Lessee to make payments of MasterLease Scheduled Rent and, during the continuance of an Event of Default and during a Low LCR Cash Sweep Period, MasterLease Variable Additional Rent directly to the Holding Account as more particularly set forth in Section 3.1.9(a).

“Master Lease Rent Shortfall” shall mean a shortfall in the Holding Account with respect to all or any portion of theMaster Lease Rent required to be deposited therein by Master Lessee pursuant to the Master Lease Rent Payment DirectionLetter.

“Master Lease Scheduled Rent” shall mean, collectively, the Master Lease Base Rent and the Master Lease RecurrentAdditional Rent.

“Master Lease SNDA” shall mean that certain Subordination, Non-Disturbance and Attornment agreement amongBorrower (or in the case of the Maryland Property, the Maryland Loan Guarantor), Master Lessee and Lender dated of even dateherewith.

“Master Lease Variable Additional Rent ” shall mean with respect to any month, payments payable by the MasterLessee under the Master Lease of variable operating and occupancy expenses in such month, including, without limitation,common area maintenance expenses, but excluding Master Lease Recurrent Additional Rent.

“Master Lessee” shall mean BlueLinx Corporation, a Georgia corporation.

“Master Lessee Officer’s Certificate” shall mean a certificate executed by an authorized signatory of Master Lesseethat is familiar with the financial condition of Master Lessee and the operation of the Property.

“Material Adverse Effect” shall mean any event or condition that has a material adverse effect on (i) the Propertytaken as a whole, (ii) the use, operation, or value of any Key Property or the use, operation or value of the Property taken as awhole, (iii) the business, profits, operations or financial condition of Borrower or the Maryland Loan Guarantor, (iv) the abilityof Maryland Loan Guarantor to satisfy any of Maryland Loan Guarantor’s obligations under the Loan Documents or (v) theability of Borrower to repay the principal and/or interest of the Loan as it becomes due or to satisfy any of Borrower’sobligations under the Loan Documents.

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“Material Alteration” shall mean any Alteration which, when aggregated with all related Alterations (other thandecorative work such as painting, wall papering and carpeting and the replacement of fixtures, furnishings and equipment to theextent being of a routine and recurring nature and performed in the ordinary course of business) constituting a single project, isestimated to cost in excess of forty percent (40%) of the Allocated Loan Amount for the Individual Property to which suchAlteration is to be made; provided, however, that the term “Material Alteration” shall not include Alterations being undertakenat the sole cost and expense of (a) the Master Lessee pursuant to the Master Lease so long as any security required for any suchmaterial alteration under the Master Lease is deposited with Lender (or any related guaranty permitted hereunder in lieu of suchdeposit runs to the benefit of Lender and is delivered to Lender) or (b) a Tenant pursuant to a Lease.

“Material Sublease” shall mean, during any Low LCR Cash Sweep Period, any Sublease to a single Tenant coveringmore than 50,000 rentable square feet at any Individual Property.

“Maturity Date” shall have the meaning set forth in the Notes.

“Maturity Date Payment” shall have the meaning set forth in the Notes.

“Maximum Legal Rate” shall mean the maximum non-usurious interest rate, if any, that at any time or from time totime may be contracted for, taken, reserved, charged or received on the indebtedness evidenced by the Notes and as provided forherein or the other Loan Documents, under the laws of such state or states whose laws are held by any court of competentjurisdiction to govern the interest rate provisions of the Loan.

“Mezzanine Borrower” shall have the meaning set forth in Section 5.1.11.

“Mezzanine Loan” shall have the meaning set forth in Section 5.1.11.

“Mezzanine Loan Documents” shall have the meaning set forth in Section 5.1.11.

“Monetary Default” shall mean a Default (i) that can be cured with the payment of money or (ii) arising pursuant toSection 17.1(a)(vi) or (vii).

“Monthly Debt Service Payment Amount” shall have the meaning set forth in the Notes.

“Monthly Insurance Reserve Amount” shall have the meaning set forth in Section 16.2.

“Monthly Structural Repair Reserve Amount” shall mean an amount determined by Lender equal to one-twelfth(1/12) of the product of (i) $0.05 and (ii) the aggregate square footage of the portion of the Improvements that constitutesdistribution center space that is subject to a Sublease; provided, however, that in the event that, at the time of determination,less than ten percent (10%) the aggregate net rentable square footage of the Improvements is subject to Subleases, the MonthlyStructural Repair Reserve Amount shall be $0.00.

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“Monthly Tax Reserve Amount” shall have the meaning set forth in Section 16.1.

“Moody’s” shall mean Moody’s Investors Service, Inc.

“Mortgage Tax States” shall mean, collectively, Alabama, Florida, Kansas, Georgia, Minnesota, New York,Oklahoma, Tennessee, Virginia and any other State in which an Individual Property or any Substitute Property may be locatedwhich imposes a mortgage recording or other mortgage tax.

“New Sublease” shall have the meaning set forth in Section 8.7.1.

“Non-Consolidation Opinion” shall have the meaning provided in Section 2.5.5.

“Non-Disqualification Opinion” shall mean an opinion of outside tax counsel reasonably acceptable to the Lender orthe Rating Agencies to whom such opinion is addressed that a contemplated action will neither cause any trust formed as aREMIC pursuant to a Securitization to fail to qualify as a “real estate mortgage investment conduit” within the meaning ofSection 860D of the Code at any time that any “regular interests” in the REMIC are outstanding nor cause a “prohibitedtransaction” tax (within the meaning of Section 860F(a)(2) of the Code) or “prohibited contribution” tax (within the meaning ofSection 860G(d) of the Code) to be imposed on any such REMIC.

“Non-Disturbance Agreement” shall have the meaning set forth in Section 8.7.7.

“Notes” shall mean, collectively, (a) that certain Amended, Restated and Consolidated Note A-1, dated the datehereof, made by Borrower, as maker, in favor of Lender, as payee, in the principal amount of $147,500,000 and (b) that certainAmended, Restated and Consolidated Note A-2, dated the date hereof, made by Borrower, as maker, in favor of Lender, as payee,in the principal amount of $147,500,000, as the same may be amended, restated, replaced, supplemented or otherwise modifiedfrom time to time.

“Obligations” shall have meaning set forth in the recitals of the Security Instrument.

“OFAC” List means the list of specially designated nationals and blocked persons subject to financial sanctions thatis maintained by the U.S. Treasury Department, Office of Foreign Assets Control and accessible through the internet websitewww.treas.gov/ofac/t11sdn.pdf.

“Officer’s Certificate” shall mean a certificate executed by an authorized signatory of Borrower that is familiar withthe financial condition of Borrower and the operation of the Property, provided that the Officer’s Certificate required underArticle XI shall be executed by the Chief Financial Officer of Borrower.

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“Opinion of Counsel” shall mean an opinion of counsel of a law firm selected by Borrower and reasonably acceptableto Lender.

“Other Charges” shall mean, collectively, (i) all sums, charges, fees, costs, expenses, common area maintenancecharges and other charges or assessments reserved in or payable under any reciprocal easement agreements, if any, and(ii) maintenance charges, impositions other than Impositions, and any other charges, including, without limitation, vaultcharges and license fees for the use of vaults, chutes and similar areas adjoining the Property, now or hereafter levied or assessedor imposed against the Property or any part thereof by any Governmental Authority, other than those required to be paid byMaster Lessee or any other Tenant pursuant to its Lease.

“Other Taxes” shall have the meaning set forth in Section 2.4.3.

“Outparcel” shall mean each parcel of Land legally described in Schedule VII attached hereto.

“Outparcel Release Instruments” shall have the meaning set forth in Section 2.3.7.

“Payment Date” shall have the meaning set forth in the Notes.

“Permitted Debt” shall mean collectively, (a) the Notes and the other obligations, indebtedness and liabilitiesspecifically provided for in any Loan Document and secured by this Agreement, the Security Instrument and the other LoanDocuments and (b) trade payables incurred in the ordinary course of Borrower’s (or in the case of the Maryland Property,Maryland Loan Guarantor’s) business, not secured by Liens on the Property (other than Permitted Encumbrances and other thanliens being properly contested in accordance with the provisions of this Agreement or the Security Instrument), not to exceedtwo percent (2%) of the aggregate Principal Amount for the Property at any one time outstanding, payable by or on behalf ofBorrower (or Maryland Loan Guarantor, as applicable) for or in respect of the operation of the Property in the ordinary course ofoperating Borrower’s (or Maryland Loan Guarantor, as applicable) business, provided that (but subject to the remaining terms ofthis definition) each such amount shall be paid within sixty (60) days following the date on which each such amount isincurred. Nothing contained herein shall be deemed to require Borrower or Maryland Loan Guarantor to pay any amount, solong as Borrower (or Maryland Loan Guarantor, as applicable) is in good faith, and by proper legal proceedings, diligentlycontesting the validity, amount or application thereof, provided that in each case, at the time of the commencement of any suchaction or proceeding, and during the pendency of such action or proceeding (i) no Event of Default shall exist and becontinuing hereunder, (ii) adequate reserves with respect thereto are maintained on the books of Borrower (or Maryland LoanGuarantor, as applicable) in accordance with GAAP (as determined by Borrower (or Maryland Loan Guarantor, as applicable) or,at its option, an Independent Accountant), and (iii) such contest operates to suspend collection or enforcement, as the case maybe, of the contested amount and such contest is maintained and prosecuted continuously and with diligence. Notwithstandinganything set forth herein, in no event shall Borrower or Maryland Loan Guarantor be permitted under this provision to enterinto a note (other than the Notes and the other Loan Documents) or other instrument for borrowed money.

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“Permitted Encumbrances” shall mean collectively, (a) the Liens and security interests created or permitted by theLoan Documents, (b) all Liens, encumbrances and other matters disclosed in the Title Policy or the Survey relating to suchIndividual Property or any part thereof, (c) Liens, if any, for Impositions imposed by any Governmental Authority not yet due ordelinquent (d) Liens arising after the date hereof which are being contested in good faith by appropriate proceedings promptlyinstituted and diligently conducted in accordance with Section 7.3 hereof, (e) easements and encumbrances permitted pursuantto Section 8.3(ii) and (f) such other Liens as Lender may approve in writing in Lender’s sole discretion.

“Permitted Fund Manager” means any Person that on the date of determination is (i) a nationally-recognized managerof investment funds investing in debt or equity interests (including debt and equity interests relating to commercial real estate)and (ii) not subject to a bankruptcy proceeding.

“Permitted Investments” shall have the meaning set forth in the Account Agreement.

“Person” shall mean any individual, corporation, partnership, joint venture, limited liability company, estate, trust,unincorporated association, any federal, state, county or municipal government or any bureau, department or agency thereofand any fiduciary acting in such capacity on behalf of any of the foregoing.

“Personal Property” shall have the meaning set forth in the Security Instrument.

“Physical Conditions Reports” shall mean the structural engineering reports with respect to the Individual Properties(i) prepared by an Independent Architect, (ii) addressed to Lender, (iii) prepared based on a scope of work determined by Lenderin Lender’s reasonable discretion, and (iv) in form and content acceptable to Lender, in Lender’s reasonable discretion, togetherwith any amendments or supplements thereto. The Physical Conditions Reports may consist of updates to the existing structuralengineering reports, provided that (A) such updated reports are in form and content acceptable to Lender in Lender’s reasonablediscretion and (B) the Independent Architect preparing such updated reports shall provide to Lender a reliance letter satisfactoryto Lender.

“Plan” shall have the meaning set forth in Section 4.1.10.

“Principal Amount” shall mean, collectively, the aggregate “Principal Amount” under each of the Notes, as such termis defined in each of the Notes.

“Prohibited Person” means any Person identified on the OFAC List or any other Person with whom a U.S. Person maynot conduct business or transactions by prohibition of Federal law or Executive Order of the President of the United States orAmerica.

“Proceeds” shall have the meaning set forth in Section 6.2.2.

“Proceeds Prepayments” shall mean Proceeds applied by Lender as a prepayment of principal in accordance withSection 6.2.3 hereof.

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“Proceeds Reserve Account” shall have the meaning set forth in Section 3.1.1.

“Project” shall have the meaning set forth in Section 16.3.

“Property” shall have the meaning set forth in the Security Instrument.

“Property Release” shall have the meaning set forth in Section 2.3.4.

“Property Release Notice” shall have the meaning set forth in Section 2.3.4.

“Provided Information” shall have the meaning set forth in Section 14.1.

“PZR” shall mean The Planning Zoning Resource Corporation.

“Qualified Transferee” shall mean any entity (a) that together with its Close Affiliates (i) has a net worth of at least$250,000,000 (calculated exclusive of the Property) as of a date no more than six (6) months prior to the date of the transfer and(ii) manages or owns at the time of the transfer assets of at least $600,000,000 (calculated exclusive of the Property); provided,however, that if such transferee has experience in operating warehouse or distribution facilities, properties (excluding theProperty) containing not fewer than 4,000,000 rentable square feet of warehouse space in the aggregate, then such transfereeshall meet the requirements of this clause (a) if it, together with its Close Affiliates (1) has a net worth of at least $150,000,000(calculated exclusive of the Property) as of a date no more than six (6) months prior to the date of the transfer and (2) manages orowns at the time of the transfer assets of at least $400,000,000 (calculated exclusive of the Property), and (b) that is not aDisqualified Transferee.

“Rating Agencies” shall mean (a) prior to a Securitization, each of S&P, Moody’s and Fitch and any other nationally-recognized statistical rating agency which has been approved by Lender and (b) after a Securitization has occurred, each suchRating Agency which has rated the Securities in the Securitization.

“Rating Agency Confirmation” shall mean, collectively, a written affirmation from each of the Rating Agencies thatthe credit rating of the Securities given by such Rating Agency immediately prior to the occurrence of the event with respect towhich such Rating Agency Confirmation is sought will not be qualified, downgraded or withdrawn as a result of the occurrenceof such event, which affirmation may be granted or withheld in such Rating Agency’s sole and absolute discretion. In the eventthat, at any given time, no such Securities shall have been issued and are then outstanding, then the term Rating AgencyConfirmation shall be deemed instead to require the written approval of Lender based on its good faith determination ofwhether the Rating Agencies would issue a Rating Agency Confirmation if any such Securities were outstanding.

“Recourse Guaranty” shall mean that certain Guaranty of Recourse Obligations of Borrower, dated as of the datehereof, by Guarantor in favor of Lender, as the same may be amended, supplemented, restated or otherwise modified from timeto time.

“Register” shall have the meaning set forth in Section 15.4.

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“Regulatory Change” shall mean any change after the date of this Agreement in federal, state or foreign laws orregulations or the adoption or the making, after such date, of any interpretations, directives or requests applying to Lender, orany Person Controlling Lender or to a class of banks or companies Controlling banks of or under any federal, state or foreignlaws or regulations (whether or not having the force of law) by any court or Governmental Authority or monetary authoritycharged with the interpretation or administration thereof.

“Related Remaining Property” shall have the meaning set forth in Section 2.3.7.

“Release Date” shall have the meaning provided in Section 2.3.4(a).

“Release Instruments” shall have the meaning provided in Section 2.3.4(c).

“Release Price” shall mean the product of (a) the Allocated Loan Amount for the Release Property and (b) either(1) with respect to any Release Property that is a Key Property, one hundred twenty-five percent (125%) or (2) with respect toany Release Property that is not a Key Property, the applicable Release Price Percentage. The amount of any ProceedsPrepayments with respect to an Individual Property shall (after calculating such Release Price based upon the original AllocatedLoan Amount for such Property without deduction, for purposes of such calculation, for any such prepayments) be deductedfrom the Release Price for such Property.

“Release Price Percentage” shall mean, as of any Release Date, (i) if the Principal Amount that would be outstandingimmediately following the release of the applicable Release Property is from $295,000,000 to and including $265,500,000, onehundred percent (100%) or (ii) if the Principal Amount that would be outstanding immediately following the release of theapplicable Release Property is less than $265,500,000, one hundred ten percent (110%), provided that, in the case of each ofclause (i) and clause (ii), any prior reductions in the Principal Amount outstanding as a result of payments of Release Prices inrespect of Key Properties and any mandatory prepayment made pursuant to the provisions of Section 6.2.3 and Section 4(b) ofthe Note shall be disregarded in determining the Principal Amount that would be outstanding immediately following the releaseof the applicable Release Property.

“Release Property” shall have the meaning provided in Section 2.3.4.

“Rents” shall mean all rents, rent equivalents, moneys payable as damages or in lieu of rent or rent equivalents,royalties (including, without limitation, all oil and gas or other mineral royalties and bonuses), income, receivables, receipts,revenues, deposits (including, without limitation, security, utility and other deposits), accounts, cash, issues, profits, charges forservices rendered, and other consideration of whatever form or nature received by or paid to or for the account of or benefit ofBorrower or Maryland Loan Guarantor from any and all sources arising from or attributable to the Property, including, but notlimited to the Master Lease and the Leases, and Proceeds, if any, from business interruption or other loss of income insurance.Notwithstanding the foregoing, Rents shall not include any sums payable under (i) the Oil, Gas and Mineral Lease, dated as ofJune 17, 2003, between Georgia-Pacific Corporation, as landlord, and Eagle Oil & Gas Co., as tenant, as amended by that certainAmendment to Oil, Gas and Mineral Lease, dated as of May 31, 2005, by and between ABP TX (FORT WORTH) LLC, aslandlord, and Antero Resources I, LP and Eagle Oil & Gas Co., as tenant and (ii) the Oil and Gas Lease, dated November 7, 1988,between Georgia-Pacific Corporation, as landlord, and GonzOil, Inc., successor by assignment to Weinsz Oil & Gas, as successorby assignment to Spenser Petroleum Corporation.

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“Replaced Property” shall have the meaning provided in Section 2.3.6.

“Revolving Loan” shall mean the loan made by Wachovia pursuant to the Revolving Loan Agreement (as such termis defined in the Intercreditor Agreement).

“S&P” shall mean Standard & Poor’s Ratings Services, a division of The McGraw-Hill.

“Scheduled Defeasance Payments” shall have the meaning provided in Section 2.3.5(b).

“Securities” shall have the meaning set forth in Section 14.1.

“Securities Act” shall have the meaning set forth in Section 14.3.1.

“Securitization” shall have the meaning set forth in Section 14.1.

“Security Agreement” shall have the meaning set forth in Section 2.3.5(a).

“Security Deposits” shall have the meaning provided in the Assignment of Leases.

“Security Instrument” shall mean that, collectively, those certain Amended, Restated and Consolidated Mortgages,Security Agreements, Financing Statements, Fixture Filings and Assignments of Master Lease, Leases, Rents and SecurityDeposits or similarly entitled instruments, dated the date hereof, executed and delivered by the applicable Borrower (or in thecase of the Maryland Property, the Maryland Loan Guarantor) to Lender (or to a trustee for the benefit of lender, as applicable)and encumbering, in each case, its Individual Property, as any of the foregoing may be amended, restated, replaced,supplemented or otherwise modified from time to time.

“Servicer” shall mean such Person designated in writing with an address for such Person by Lender, in its solediscretion, to act as Lender’s agent hereunder with such powers as are specifically delegated to the Servicer by Lender, whetherpursuant to the terms of this Agreement, the Account Agreement or otherwise, together with such other powers as are reasonablyincidental thereto.

“Single Purpose Entity” shall mean a Person, other than an individual, which

(i) is formed or organized solely for the purpose of (1) owning, holding, developing, using, operating and financingan ownership interest in the Property or its Individual Property, entering into this Agreement with the Lender, refinancing itsIndividual Property in connection with a permitted repayment of the Loan or portion thereof, and transacting lawful businessthat is incident, necessary and appropriate to accomplish the foregoing, or (2) acting as a general partner of a limited partnershipthat owns the Property or an Individual Property or the sole or managing member of a limited liability company that owns theProperty or an Individual Property, as applicable;

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(ii) does not engage in any business unrelated to (1) the Property or its Individual Property and the ownership,development, use, operation and financing thereof, or (2) acting as general partner of a limited partnership that owns theProperty or an Individual Property or the sole or managing member of a limited liability company that owns the Property or anIndividual Property, as applicable;

(iii) has not and will not have (1) any material assets other than the Property or its Individual Property and personalproperty necessary or incidental to its interest in the Property or its Individual Property, or the operation, management andfinancing thereof, or its partnership interest in a limited partnership, or the member interest in a limited liability company thatowns the Property or an Individual Property, or acts as the general partner or managing member thereof (or, in the case ofMaryland Borrower, acts as the Subsidiary of Maryland Loan Guarantor), as applicable; or (2) any indebtedness other than thePermitted Debt;

(iv) maintains its own separate books and records and its own accounts, in each case which are separate and apart fromthe books and records and accounts of any other Person;

(v) holds itself out as being a Person, separate and apart from any other Person;

(vi) does not and will not commingle its funds or assets with those of any other Person;

(vii) conducts its own business in its own name;

(viii) maintains separate financial statements and will not permit its assets to be listed as assets on the financialstatement of any other Person; provided, however, that any such consolidated financial statement shall contain a noteindicating that its separate assets and liabilities are neither available to pay the debts of the consolidated entity nor constituteobligations of the consolidated entity;

(ix) pays its own liabilities out of its own funds;

(x) observes in all material respects all partnership, corporate or limited liability company formalities, as applicable;

(xi) pays the salaries of its own employees, if any, and maintains a sufficient number of employees, if any, in light ofits contemplated business operations;

(xii) except pursuant to the Loan Documents, does not guarantee or otherwise obligate itself with respect to the debtsof any other Person or hold out its credit as being available to satisfy the obligations of any other Person;

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(xiii) does not acquire obligations or securities of its partners, members or shareholders;

(xiv) allocates fairly and reasonably shared expenses, including, without limitation, any overhead for shared officespace, if any;

(xv) uses separate stationary, invoices, and checks;

(xvi) maintains an arms-length relationship with its Affiliates;

(xvii) except pursuant to the Loan Documents, does not and will not pledge its assets for the benefit of any otherPerson or make any loans or advances to any other Person;

(xviii) does and will continue to use commercially reasonable efforts to correct any known misunderstandingregarding its separate identity;

(xix) maintains adequate capital in light of its contemplated business operations; and

(xx) has not and will not engage in, seek, or consent to the dissolution, winding up, liquidation, consolidation ormerger and except as otherwise permitted in this Agreement, has not and will not engage in, seek or consent to any asset sale,transfer of its partnership, membership or shareholder interests (if such entity is a general partner in a limited partnership or themanaging member in a limited liability company), or amendments of its partnership or operating agreement, certificate ofincorporation, articles of organization or other organizational document. In addition, if such Person is a partnership, (1) allgeneral partners of such Person shall be Single Purpose Entities; and (2) if such Person has more than one general partner, thenthe organizational documents shall provide that such Person shall continue (and not dissolve) for so long as a solvent generalpartner exists. In addition, if such Person is a corporation, then, at all times: (a) such Person shall have at least two(2) Independent Directors and (b) the board of directors of such Person may not take any action requiring the unanimousaffirmative vote of one hundred percent (100%) of the members of the board of directors unless all of the directors, including theIndependent Directors, shall have participated in such vote. In addition, if such Person is a limited liability company, (a) withonly one (1) member, then, such Person shall be organized in the State of Delaware, have as its only member a non-managingmember, and be managed by a board of managers, (b) shall have at least two (2) Independent Managers or IndependentMembers, (c) if such Person is managed by a board of managers, the board of managers of such Person may not take any actionrequiring the unanimous affirmative vote of one hundred percent (100%) of the members of the board of managers unless all ofthe managers, including the Independent Managers, shall have participated in such vote, (c) if such Person is not managed by aboard of managers, the members of such Person may not take any action requiring the affirmative vote of one hundred percent(100%) of the members of such Person unless all of the members, including the Independent Members, shall have participated insuch vote, (d) with more than one member, each managing member shall be a Single Purpose Entity, and (e) its articles oforganization, certificate of formation and/or operating agreement, as applicable, shall provide that until all of the Indebtednessand Obligations are paid in full such entity will not dissolve. In addition, the organizational documents of such Person shall

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provide that such Person (1) without the unanimous consent of all of the partners, directors or members, as applicable, shall notwith respect to itself or to any other Person in which it has a direct or indirect legal or beneficial interest (a) seek or consent tothe appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or other similar official for the benefit of thecreditors of such Person or all or any portion of such Person’s properties, or (b) take any action that might cause such Person tobecome insolvent, petition or otherwise institute insolvency proceedings or otherwise seek any relief under any laws relating tothe relief from debts or the protection of debtors generally, (2) has and will maintain its books, records, resolutions andagreements as official records, (3) has held and will hold its assets in its own name, (4) has and will maintain its financialstatements, accounting records and other organizational documents, books and records separate and apart from any otherPerson, and will not permit its assets to be listed as assets on the financial statement of any other Person; provided, however, thatany such consolidated financial statement shall contain a note indicating that its separate assets and liabilities are neitheravailable to pay the debts of the consolidated entity nor constitute obligations of the consolidated entity, (5) will file its owntax returns to the extent required by applicable law, (6) has not and will not identify its partners, members or shareholders, orany affiliates of any of them as a division or part of it, (7) has and will maintain an arms-length relationship with its Affiliates,and (8) has not and will not enter into or be a party to any transaction with its partners, members, shareholders, or its Affiliatesexcept in the ordinary course of business and on terms which are intrinsically fair and are no less favorable to it than would beobtained in a comparable arms-length transaction with a third party.

“Special Taxes” shall mean any and all present or future taxes, levies, imposts, deductions, charges or withholdings,or any liabilities with respect thereto, including those arising after the date hereof as result of the adoption of or any change inlaw, treaty, rule, regulation, guideline or determination of a Governmental Authority or any change in the interpretation orapplication thereof by a Governmental Authority but excluding, in the case of Lender, such taxes (including income taxes,franchise taxes and branch profit taxes) as are imposed on or measured by Lender’s net income by the United States of Americaor any Governmental Authority of the jurisdiction under the laws under which Lender is organized or maintains a lendingoffice.

“SPE Entity” shall mean Borrower, Maryland Loan Guarantor and any other Person which is required by thisAgreement to be, as long as the Loan is outstanding, a Single Purpose Entity.

“State” shall mean, with respect to each Individual Property, the State in which such Individual Property or any partthereof is located.

“Structural Repair Reserve Account” shall have the meaning set forth in Section 3.1.1.

“Structural Repairs” shall mean structural repairs and replacements with respect to the Improvements approved byLender or for which disbursement is otherwise permitted in accordance with Section 16.3.

“Sub-Account(s)” shall have the meaning set forth in Section 3.1.1.

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“Sublease” shall mean any lease (other than the Master Lease), sublease or subsublease, letting, license, concession orother agreement (whether written or oral and whether now or hereafter in effect), pursuant to which any Person is granted byMaster Lessee a possessory interest in, or right to use or occupy all or any portion of any space in any Individual Property, andevery modification, amendment or other agreement relating to such lease, sublease, subsublease, or other agreement entered intoin connection with such lease, sublease, subsublease, or other agreement and every guarantee of the performance andobservance of the covenants, conditions and agreements to be performed and observed by the other party thereto.

“Sublease Modification” shall have the meaning set forth in Section 8.7.1.

“Substitute Property” shall have the meaning provided in Section 2.3.6(a).

“Substitute Property Mortgage Spreader Agreement” shall have the meaning provided in Section 2.3.6(a).

“Substitution” shall have the meaning provided in Section 2.3.6(a).

“Substitution Date” shall have the meaning provided in Section 2.3.6(c).

“Substitution Due Diligence Package” shall have the meaning provided in Section 2.3.6(c).

“Substitution Notice” shall have the meaning provided in Section 2.3.6(c).

“Successor Borrower” shall have the meaning set forth in Section 2.3.5(d).

“Survey” shall mean a survey of each parcel of each Individual Property prepared by a surveyor licensed in the Stateselected by Borrower and reasonably satisfactory to Lender and the Title Company, and containing a certification of suchsurveyor satisfactory to Lender.

“Taking” shall mean a temporary or permanent taking by any Governmental Authority as the result or in lieu or inanticipation of the exercise of the right of condemnation or eminent domain, of all or any part of the Property, or any interesttherein or right accruing thereto, including any right of access thereto or any change of grade affecting the Property or any partthereof.

“Tax Reserve Account” shall have the meaning set forth in Section 3.1.1.

“Tax Reserve Amount” shall have the meaning set forth in Section 16.1.

“Tenant” shall mean any Person other than the Master Lessee leasing, subleasing or otherwise occupying any portionof any Individual Property, and its permitted successors and assigns.

“Terrorism Insurance” shall have the meaning set forth in Section 6.1.8.

“Threshold Amount” shall mean two percent (2%) of the Loan Amount.

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“Title Company” shall mean, collectively, Fidelity National Title Insurance Company (as to fifty-five percent (55%)of coverage) and Lawyers Title Insurance Corporation (as to forty-five percent (45%) of coverage), or, with respect toSubstitutions from and after the date hereof, any one of the foregoing subject to delivery of co-insurance endorsements from theother Title Companies and, in states where available, tie-in endorsements from all of the Title Companies with respect to suchcoverage.

“Title Policy” shall mean an ALTA mortgagee title insurance policy or policies in a form acceptable to Lender (or, ifan Individual Property is in a State which does not permit the issuance of such ALTA policy, such form as shall be permitted insuch State and acceptable to Lender) issued by the Title Company with respect to the Property and insuring the Lien of theSecurity Instrument.

“Total Loss” shall mean, with respect to each Individual Property, (i) a casualty, damage or destruction of anIndividual Property which, in the reasonable judgment of Lender, (A) involves an actual or constructive loss of more than fiftypercent (50%) (or, in the case of a Key Property, twenty-five percent (25%)) of the Allocated Loan Amount for such IndividualProperty, or (B) results in the cancellation of the Master Lease or of Leases comprising more than forty percent (40%) of therentable area of such Individual Property, and in either case with respect to which the Master Lease and the Leases do notrequire Proceeds to be applied to the restoration of such Individual Property or (ii) a permanent Taking which, in the reasonablejudgment of Lender, (A) involves an actual or constructive loss of more than thirty-five percent (35%) (or, in the case of a KeyProperty, fifteen percent (15%)) of the Allocated Loan Amount for an Individual Property, or (B) renders untenantable eithermore than thirty-five percent (35%) (or, in the case of a Key Property, fifteen percent (15%)) of the rentable area of suchIndividual Property, or (iii) a casualty, damage, destruction or Taking that affects so much of an Individual Property such that itwould be impracticable, in Lender’s reasonable discretion, even after restoration, to operate such Individual Property as aneconomically viable whole. Notwithstanding the foregoing, in no event shall a Total Loss with respect to a particular IndividualProperty exist pursuant to clauses (i) or (ii) above unless the aggregate Allocated Loan Amounts of Individual Properties thencurrently impacted by a casualty, damage, destruction or Taking is greater than 10% of the Principal Amount.

“Transfer” shall mean to, directly or indirectly, sell, assign, convey, mortgage, transfer, pledge, hypothecate,encumber, grant a security interest in, exchange or otherwise dispose of any beneficial interest or grant any option or warrantwith respect to, or where used as a noun, a direct or indirect sale, assignment, conveyance, transfer, pledge or other dispositionof any beneficial interest by any means whatsoever whether voluntary, involuntary, by operation of law or otherwise.

“UCC” or “Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect in the State.

“Underwriter Group” shall have the meaning set forth in Section 14.3.2(b).

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“U.S. Government Obligations” shall mean any direct obligations of, or obligations guaranteed as to principal andinterest by, the United States Government or any agency or instrumentality thereof, provided that such obligations are backedby the full faith and credit of the United States. Any such obligation must be limited to instruments that have a predeterminedfixed dollar amount of principal due at maturity that cannot vary or change. If any such obligation is rated by S&P, it shall nothave an “r” highlighter affixed to its rating. Interest must be fixed or tied to a single interest rate index plus a single fixed spread(if any), and move proportionately with said index. U.S. Government Obligations include, but are not limited to: U.S. Treasurydirect or fully guaranteed obligations, Farmers Home Administration certificates of beneficial ownership, General ServicesAdministration participation certificates, U.S. Maritime Administration guaranteed Title XI financing, Small BusinessAdministration guaranteed participation certificates or guaranteed pool certificates, U.S. Department of Housing and UrbanDevelopment local authority bonds, and Washington Metropolitan Area Transit Authority guaranteed transit bonds. In no eventshall any such obligation have a maturity in excess of 365 days.

“Wachovia” shall have the meaning set forth in Section 14.3.2(b).

“Work” shall have the meaning provided in Section 6.2.4(a).

“Yield Maintenance Premium” shall have the meaning set forth in the Notes.

“Yield Maintenance Premium Release Date” shall have the meaning set forth in the Notes.

1 .2 Principles of Construction. All references to sections and schedules are to sections and schedules in or to thisAgreement unless otherwise specified. All accounting terms not specifically defined herein shall be construed in accordancewith GAAP. When used herein, the term “financial statements” shall include the notes and schedules thereto. Unless otherwisespecified herein or therein, all terms defined in this Agreement shall have the definitions given them in this Agreement whenused in any other Loan Document or in any certificate or other document made or delivered pursuant thereto. All uses of theword “including” shall mean including, without limitation unless the context shall indicate otherwise. Unless otherwisespecified, the words hereof, herein and hereunder and words of similar import when used in this Agreement shall refer to thisAgreement as a whole and not to any particular provision of this Agreement. Unless otherwise specified, all meanings attributedto defined terms herein shall be equally applicable to both the singular and plural forms of the terms so defined.

II. GENERAL TERMS

2.1 Loan; Disbursement to Borrower.

2.1.1 The Loan. Subject to and upon the terms and conditions set forth herein, Lender hereby agrees to make and Borrowerhereby agrees to accept the Loan on the Closing Date.

2.1.2 Disbursement to Borrower. Borrower may request and receive only one borrowing hereunder in respect of the Loanand any amount borrowed and repaid hereunder in respect of the Loan may not be reborrowed. Borrower acknowledges andagrees that the full proceeds of the Loan have been disbursed by Lender to Borrower on the Closing Date.

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2.1.3 The Notes, Security Instrument and Loan Documents. The Loan shall be evidenced by the Notes and secured by theSecurity Instrument, the Assignment of Leases, this Agreement and the other Loan Documents.

2.1.4 Use of Proceeds. Borrower shall use the proceeds of the Loan (a) to (i) repay and discharge any existing mortgageloans secured by the Property, (ii) make initial deposits into the Sub-Accounts as required hereunder, and (iii) pay costs andexpenses incurred in connection with the closing of the Loan, and (b) as otherwise set forth on the closing statement executedby Lender and Borrower in connection with the closing of the Loan.

2.2 Interest; Loan Payments; Late Payment Charge.

2.2.1 Payment of Principal and Interest.

(i) Except as set forth in Section 2.2.1(ii), interest shall accrue on the Principal Amount as set forth in the Notes.

(ii) Upon the occurrence and during the continuance of an Event of Default, and from and after the Maturity Date ifthe entire Principal Amount is not repaid on the Maturity Date, interest on the outstanding principal balance of the Loan and, tothe extent permitted by law, overdue interest and other amounts due in respect of the Loan shall accrue at the Default Ratecalculated from the date such payment was due without regard to any grace or cure periods contained herein. Interest at theDefault Rate shall be computed from the occurrence of the Event of Default until the actual receipt and collection of theIndebtedness (or that portion thereof that is then due). This paragraph shall not be construed as an agreement or privilege toextend the date of the payment of the Indebtedness, nor as a waiver of any other right or remedy accruing to Lender by reason ofthe occurrence of any Event of Default, and Lender retains its rights under the Notes to accelerate and to continue to demandpayment of the Indebtedness upon the happening of any Event of Default in accordance with the terms hereof.

2.2.2 Method and Place of Payment.

(a) On each Payment Date, Borrower shall pay to Lender interest accruing pursuant to the Notes for the entire InterestPeriod preceding such Payment Date.

(b) All amounts advanced by Lender pursuant to the applicable provisions of the Loan Documents, other than the PrincipalAmount, together with any interest at the Default Rate or other charges as provided therein, shall be due and payable hereunderas provided in the Loan Documents. In the event any such advance or charge is not so repaid by Borrower, Lender may, at itsoption, first apply any payments received under the Notes to repay such advances, together with any interest thereon, or othercharges as provided in the Loan Documents, and the balance, if any, shall be applied in payment of any installment of interestor principal then due and payable.

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(c) The Maturity Date Payment shall be due and payable in full on the Maturity Date.

2.2.3 Late Payment Charge. If any principal, interest or any other sums due under the Loan Documents (other than theoutstanding Principal Amount due and payable on the Maturity Date) is not paid by Borrower on or prior to the date which isfive (5) days after the date on which it is due (or if such fifth (5th) day is not a Business Day, then the Business Day immediatelypreceding such fifth (5th) day), Borrower shall pay to Lender upon demand an amount equal to the lesser of five percent (5%) ofsuch unpaid sum or the Maximum Legal Rate (the “Late Payment Charge”) in order to defray the expense incurred by Lender inhandling and processing such delinquent payment and to compensate Lender for the loss of the use of such delinquentpayment. Any such amount shall be secured by this Agreement, the Security Instrument and the other Loan Documents to theextent permitted by applicable law.

2.2.4 Usury Savings. This Agreement and the Notes are subject to the express condition that at no time shall Borrower beobligated or required to pay interest on the principal balance of the Loan at a rate which could subject Lender to either civil orcriminal liability as a result of being in excess of the Maximum Legal Rate. If, by the terms of this Agreement or the other LoanDocuments, Borrower is at any time required or obligated to pay interest on the principal balance due under the Notes at a ratein excess of the Maximum Legal Rate, then the Interest Rate or the Default Rate, as the case may be, shall be deemed to beimmediately reduced to the Maximum Legal Rate and all previous payments in excess of the Maximum Legal Rate shall bedeemed to have been payments in reduction of principal and not on account of the interest due under the Notes. All sums paidor agreed to be paid to Lender for the use, forbearance, or detention of the sums due under the Loan, shall, to the extentpermitted by applicable law, be amortized, prorated, allocated, and spread throughout the full stated term of the Loan untilpayment in full so that the rate or amount of interest on account of the Loan does not exceed the Maximum Legal Rate ofinterest from time to time in effect and applicable to the Loan for so long as the Loan is outstanding.

2.3 Prepayments.

2.3.1 Prepayments. No prepayments of the Indebtedness shall be permitted except as set forth in Section 4 of the Notes andas set forth herein.

2.3.2 Prepayments After Event of Default; Application of Amounts Paid . If after the occurrence and during the continuanceof an Event of Default, Borrower tenders payment of all or any part of the Indebtedness, or if all or any portion of theIndebtedness is recovered by Lender after such Event of Default (including through application of any reserves held by Lenderpursuant to the terms hereof), (a) on any date other than a Payment Date, then such payment shall include interest that wouldhave accrued on such amounts through the end of the Interest Period during which such payment is made, and such amountsshall be held by Lender as collateral security for the Loan in an interest bearing account at an Eligible Institution, with interestaccruing on such amounts to the benefit of Borrower, and applied to the Loan on the next occurring Payment Date, (b) suchpayment shall be deemed a voluntary prepayment by Borrower, and (c) Borrower shall pay, in addition to the Indebtedness, anamount equal to the Yield Maintenance Premium and all other fees and sums payable hereunder or under the Loan Documents,including without limitation, interest that has accrued at the Default Rate and any Late Payment Charges.

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2.3.3 Release of Property upon Repayment or Defeasance of Loan in Full. Lender shall, upon the written request and at theexpense of Borrower, upon (a) payment in full of the Principal Amount and interest on the Loan and all other amounts due andpayable under the Loan Documents in accordance with the terms and provisions of the Notes and this Agreement or (b) aDefeasance Event with respect to the Loan in whole, release the Lien of (i) this Agreement upon the Account Collateral and(ii) the Security Instrument and Assignment of Leases on the Property (or, at Borrower’s request, assign it (together with theNotes), in whole or in part, to a new lender without representation, warranty or recourse). In such event, Borrower shall submit toLender, not less than ten (10) Business Days prior to the date of such release or assignment, a release of lien or assignment oflien, as applicable, for such property for execution by Lender. Such release or assignment, as applicable, shall be in a formappropriate in each jurisdiction in which the Property is located and satisfactory to Lender in its reasonable discretion. Inaddition, Borrower shall provide all other documentation Lender reasonably requires to be delivered by Borrower in connectionwith such release or assignment, as applicable.

2.3.4 Release of Individual Properties. Subject to satisfaction of each of the conditions set forth below (collectively, the“General Release Conditions”) with respect to any Individual Property or Individual Properties (other than the portion of anyIndividual Property that that is an Outparcel, the release of which Outparcels is governed by Section 2.3.7 below), Lender shall(i) release such Individual Property or Individual Properties (each a “Release Property”) from the Lien of the Security Instrumentand related Loan Documents (or a deed of partial reconveyance, as the case may be) and the release of Borrower’s (and in thecase of the Maryland Property, the Maryland Loan Guarantor’s) obligations under the Loan Documents with respect to theReleased Property, other than those expressly stated herein or in such other Loan Documents to survive (or to the extent sorequested by Borrower, assign the Lien of the Security Instrument to a new lender without representation, warranty or recourse)(each release under this Section 2.3.4 or Section 2.3.6 or in connection with a partial defeasance of the Loan pursuant toSection 2.3.5, a “Property Release”), (ii) instruct the Cash Management Bank to return to Borrower any Excess AccountCollateral subject to and in accordance with Section 2.3.8 except to the extent otherwise provided in such Section 2.3.8,(iii) comply with Section 2.3.9 with regard to adjusting the ongoing reserve requirements hereunder and (iv) adjust the MonthlyDebt Service Payment Amount in accordance with Section 4(b)(ii) of the Notes:

(a) Borrower delivers a written notice (a “Property Release Notice”) to Lender of its desire to effect such Property Release,no later than fifteen (15) Business Days prior to the date of such desired Property Release, and setting forth the Business Day(the “Release Date”) on which Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) desires that Lenderrelease its interest in such Release Property.

(b) Borrower shall have paid to Lender (i) the Release Price, (ii) the applicable Yield Maintenance Premium, if any, and(iii) all other sums due under the Notes in connection with such prepayment. If the Release Date is not a Payment Date, then theRelease Price shall include interest that would have accrued on the Allocated Loan Amount for the Release Property throughthe end of the Interest Period during which such payment is made, and the Release Price, and the applicable Yield MaintenancePremium, if any, shall be held by Lender as collateral security for the Loan in an interest bearing account at an EligibleInstitution, with interest accruing on such amounts to the benefit of Borrower, and applied to the Loan on the next occurringPayment Date.

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(c) Borrower shall submit to Lender not less than ten (10) Business Days prior to the Release Date (which must be on aBusiness Day), a release of Liens (and related Loan Documents) for each applicable Release Property (for execution by Lender)in a form appropriate in the applicable State and otherwise satisfactory to Lender, in its reasonable discretion, and all otherdocumentation Lender reasonably requires to be delivered by Borrower in connection with such Property Release (collectively,“Release Instruments”), together with an Officer’s Certificate certifying that the requirement described in paragraph (d) below issatisfied in connection with such Property Release (together with calculations and supporting documentation demonstrating thesame in reasonable detail) and, simultaneously with the Release, Guarantor withdraws and is replaced as the managing memberof the applicable Borrower (or Maryland Loan Guarantor, as applicable) that is the owner of the Release Property or suchBorrower (or Maryland Loan Guarantor) is dissolved in connection with the release.

(d) With respect to any Property Release, after giving effect to such Property Release, the LCR as of the Release Date(calculated with reference to all of the Individual Properties then remaining subject to the Liens of the Security Instrument) shallnot be less than the greater of (A) ninety percent (90%) of the Closing Date LCR and (B) seventy-five percent (75%) of the LCRfor all of the Individual Properties subject to the Lien of the Security Instrument immediately prior to the Release Date.

(e) No Event of Default shall have occurred and then be continuing on the Release Date.

(f) The Release Property is simultaneously transferred to a party other than Borrower or Maryland Loan Guarantor or anySPE Entity.

(g) Each of Borrower and Maryland Loan Guarantor executes and delivers such other instruments, certificates, opinions ofcounsel and documentation as Lender and, if the Release Date occurs following a Securitization, the Rating Agencies shallreasonably request in order to preserve, confirm or secure the Liens and security granted to Lender by the Loan Documents,including any amendments, modifications or supplements to any of the Loan Documents and partial release endorsements to theexisting Title Policy.

(h) Borrower shall pay for any and all out-of-pocket costs and expenses incurred by Lender in connection with anyproposed Property Release, including Lender’s reasonable attorneys’ fees and disbursements and all title insurance premiumsfor any customary endorsements to any existing Title Policies required by Lender in connection with such proposed release.

Notwithstanding the foregoing, clauses (b)(ii) and (d) above shall not apply to Casualty/Condemnation Property Releases.

2.3.5 Defeasance.

(a) Generally. Borrower shall have the right, at any time following the expiration of the Defeasance Lockout Period butprior to the Yield Maintenance Premium Release Date to voluntarily defease the Loan in whole and obtain the release of theProperty, or solely in connection with a Property Release, in part, and obtain the release of the applicable Individual Property orIndividual Properties, by and upon satisfaction of the following conditions (such event being a “Defeasance Event”):

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(i) Borrower shall provide not less than thirty (30) days prior written notice to Lender specifying the date (the“Defeasance Date”) on which the Defeasance Event shall occur; provided that Borrower shall have the right to revoke suchnotice upon written notice given to Lender not Less than three (3 Business Days prior to the then scheduled Defeasance Dateprovided Borrower reimburses Lender for any actual out-of-pocket costs incurred by Lender in connection with suchrevocation;

(ii) Borrower shall pay to Lender all accrued and unpaid interest on the portion of the outstanding Principal Amountof the Loan then being defeased to and including the Defeasance Date;

(iii) Borrower shall pay to Lender all other sums, not including scheduled interest or principal payments, then due andpayable under the Note, this Agreement, the Security Instrument and the other Loan Documents;

(iv) No Event of Default shall have occurred and then be continuing on the Defeasance Date;

(v) If the Loan is defeased in whole, Borrower shall comply with the conditions set forth in Section 2.3.3, and if theLoan is defeased only in part, Borrower shall also comply with the conditions set forth in Section 2.3.4(c) with respect to therelease of the applicable Individual Property or Individual Properties;

(vi) Borrower shall deliver to Lender, at Borrower’s option, either (A) the Defeasance Deposit or (B) the DefeasanceCollateral (such Defeasance Collateral to be in an amount equal to or greater than that which could otherwise be purchased withthe Defeasance Deposit had the required Defeasance Deposit been delivered by Borrower);

(vii) Borrower (and/or, if requested by Lender in the case of the Maryland Property, the Maryland Loan Guarantor)shall execute and deliver a pledge and security agreement, in form and substance that would be reasonably satisfactory to aprudent lender, creating a first priority lien on the Defeasance Collateral, in accordance with the provisions of this Section 2.3.5(the “Security Agreement”);

(viii) Borrower shall (A) deliver an Opinion of Counsel for Borrower that is standard in commercial lendingtransactions and subject only to customary qualifications, assumptions and exceptions opining, among other things, that(1) Lender has a perfected first priority security interest in the Defeasance Collateral delivered by Borrower or the MarylandLoan Guarantor, as applicable and (2), if applicable, Borrower (and/or Maryland Loan Guarantor, as applicable, in the case ofthe Maryland Property), has duly and validly transferred and assigned to the Successor Borrower the Defeasance Collateral andall obligations, rights and duties under and to the Notes (or each Undefeased Note, as hereinafter defined) that are attributable tothe Property, and (B) if the Defeasance Event occurs after a Securitization, pay all reasonable costs of Lender obtaining a Non-Disqualification Opinion with respect to such Defeasance Event;

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(ix) With respect to any Defeasance Event occurring after a Securitization, Borrower shall obtain a Rating AgencyConfirmation to the effect that the Defeasance Collateral to be purchased qualifies and is sufficient so that the substitution ofsuch Defeasance Collateral for the Property or the Individual Property or Individual Properties being released, as applicable,will not result in a downgrade, withdrawal or qualification of the respective ratings in effect immediately prior to suchDefeasance Event for the Securities issued in connection with the Securitization which are then outstanding. If required by theapplicable Rating Agencies, Borrower shall also deliver or cause to be delivered a Non-Consolidation Opinion with respect toany Successor Borrower in form and substance (i) reasonably satisfactory to a prudent lender and (ii) satisfactory to theapplicable Rating Agencies;

(x) Borrower shall deliver a certificate (in form reasonably acceptable to Lender) of an Independent Accountantengaged by Borrower certifying that the Defeasance Collateral shall generate monthly amounts equal to or greater than theScheduled Defeasance Payments;

(xi) In the case of a defeasance of the Loan in part, Borrower shall execute and deliver all documents required by theLender to amend and restate each of the Notes with two (2) substitute Notes, (A) one Note having a principal balance equal toall sums required to be paid hereunder with respect to such Release and Defeasance Event (the “Defeased Note”), and (B) oneNote having a principal balance equal to the outstanding principal balance of the Note immediately prior to the DefeasanceEvent minus the all sums required to be paid hereunder with respect to such Release and Defeasance Event (the “UndefeasedNote”). Each Undefeased Note may be the subject of one or more further Defeasance Events in accordance with the provisions ofthis Section 2.3.5. From and after the Defeasance of the Loan in part, all references to the Note in this Agreement and the otherLoan Documents shall be deemed to refer to the Undefeased Note; and

(xii) Borrower shall pay all costs and expenses of Lender incurred in connection with the Defeasance Event, including(A) any out-of-pocket costs and expenses associated with a release (in full or in part, as applicable) of the Lien of the SecurityInstrument as provided in Section 2.3.3 or Section 2.3.4, as applicable (including, in the case of a release of an IndividualProperty or Individual Properties, all title insurance premiums for any endorsements to any existing Title Policies reasonablyrequired by Lender in connection with such proposed release), (B) reasonable attorneys’ fees and expenses incurred inconnection with the Defeasance Event, (C) the costs and expenses of the Rating Agencies, if the Defeasance Event occurs after aSecuritization, and (D) any revenue, documentary stamp or intangible taxes or any other tax or charge due in connection withthe transfer of the Notes, or otherwise required to accomplish the defeasance.

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(b ) Scheduled Defeasance Payments. In connection with any Defeasance Event, Borrower shall purchase DefeasanceCollateral (or Lender shall use the Defeasance Deposit to purchase such Defeasance Collateral) which provide payments on orprior to, but as close as possible to, all successive scheduled Payment Dates after the Defeasance Date but prior to the YieldMaintenance Premium Release Date, in amounts equal to the scheduled payments of principal, interest, and any other amountsdue on each such Payment Date under the Loan Documents (or, in the case, of a partial defeasance, the portions of suchscheduled payments due on each such Payment Date under this Agreement and the Defeased Note) but assuming, for purposeshereof, that the Maturity Date Payment shall be paid on the Yield Maintenance Premium Release Date (the aforedescribedpayments, the “Scheduled Defeasance Payments”). Borrower (and/or Maryland Loan Guarantor, as applicable, in the case of theMaryland Property) pursuant to the Security Agreement or other appropriate document, shall authorize and direct that thepayments received from the Defeasance Collateral may be made directly to the Holding Account (unless otherwise directed byLender) and applied to satisfy the obligations of Borrower (and/or Maryland Loan Guarantor, as applicable in the case of theMaryland Property) or Successor Borrower, if applicable, under this Agreement and the Notes (or each Defeased Note, in thecase of the defeasance of the Loan in part). Any portion of the Defeasance Deposit in excess of the amount necessary to purchasethe Defeasance Collateral required by this Section 2.3.5 and to satisfy Borrower’s other obligations hereunder shall be remittedto Borrower. Following the payment in full of the Notes (and each Defeased Note in the case of a defeasance of the Loan in part)and all other Obligations on the Maturity Date, any amounts remaining in the Defeasance Deposit, if any, shall be remitted toBorrower.

(c) Defeasance Collateral. The Defeasance Collateral shall be duly endorsed by the holder thereof as directed by Lender oraccompanied by a written instrument of transfer in form and substance that would be reasonably satisfactory to a prudent lenderand that does not require Borrower or Maryland Loan Guarantor, as applicable, to incur any additional obligations or liabilities,(including, without limitation, such instruments as may be reasonably required by the depository institution holding suchsecurities or by the issuer thereof, as the case may be, to effectuate book-entry transfers and pledges through the book-entryfacilities of such institution) in order to perfect, upon the delivery of the Defeasance Collateral, a first priority security interesttherein in favor of the Lender in conformity with all applicable state and federal laws governing the granting of such securityinterests.

(d) Successor Borrower. If the Defeasance Event occurs after a Securitization, Borrower (and/or Maryland Loan Guarantor,as applicable, in the case of the Maryland Property) may, at its option, or if so required by the applicable Rating Agencies, shall,establish or designate a successor entity (the “Successor Borrower”) which shall be a single purpose bankruptcy remote entityapproved by the Rating Agencies with one (1) Independent Director, and Borrower (and/or Maryland Loan Guarantor, asapplicable, in the case of the Maryland Property) shall transfer and assign all obligations, rights and duties under and to theNotes (or each Defeased Note in the case of a defeasance of the Loan in part), together with the pledged Defeasance Collateral tosuch Successor Borrower. Such Successor Borrower shall assume the obligations under the Notes (or each Defeased Note in thecase of a defeasance of the Loan in part) and the Security Agreement and Borrower (and/or Maryland Loan Guarantor, asapplicable, in the case of the Maryland Property) shall be relieved of its obligations under such documents. Borrower shall pay$1,000 to any such Successor Borrower as consideration for assuming the obligations under the Notes and the SecurityAgreement. Notwithstanding anything in this Agreement to the contrary, no other assumption fee shall be payable upon atransfer of the Note in accordance with this Section 2.3.5(d), but Borrower shall pay all costs and expenses incurred by Lenders,including Lenders’ reasonable attorneys’ fees and expenses and, if the Defeasance Event occurs after a Securitization, any feesand expenses of any Rating Agencies, incurred in connection therewith. Any Successor Borrower may be an Affiliate ofBorrower or a defeasance consultant or similar service provider.

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(e) Release of Defeased Property. If Borrower has elected to defease the Loan or any allocated portion thereof, and therequirements set forth in this Section 2.3.5 have been satisfied, the Property or the applicable Individual Property or IndividualProperties shall be released from the Lien of the Security Instrument and the Defeasance Collateral pledged pursuant to theSecurity Agreement shall be the substitute sole source of collateral securing such amounts due under the Notes (or a substitutesource of collateral securing such amounts under each Defeased Note in the case of a defeasance of the Loan in part). Further,the pledge of the related Account Collateral and other property pledged under this Agreement and the other Loan Documentsand all other obligations of Borrower (and Maryland Loan Guarantor in the case of the Maryland Property) created hereunder inrespect of such Property, Individual Property or Individual Properties, as applicable, shall be discharged, other than thoseexpressly stated to survive.

2.3.6 Substitution of Properties.

(a ) Generally. An Individual Borrower may, subject to the conditions in this Section 2.3.6, substitute one or morewarehouse or distribution facility properties (each a “Substitute Property”) for an existing Individual Property (each a“Replaced Property”) and obtain the release of the Replaced Property from the Lien of the Security Instrument and related LoanDocuments (or a deed of partial reconveyance, as the case may be) and the release of Borrower’s (and, in the case of theMaryland Property, Maryland Loan Guarantor’s) obligations under the Loan Documents with respect to the Replaced Property,other than those expressly stated to survive (each such release and substitution, a “Substitution”); provided, however, such rightof Substitution shall be limited to Individual Properties whose aggregate Allocated Loan Amounts represent not greater thanthirty percent (30%) of the Loan Amount. From and after the Substitution of a Substitute Property in accordance herewith, suchSubstitute Property shall thereafter be deemed a Property, and shall have the Allocated Loan Amount applicable to theReplaced Property. Concurrently with the completion of all steps necessary to effect a Substitution as provided in thisSection 2.3.6, Lender shall release such Replaced Property from the Lien of the Security Instrument and related LoanDocuments. In the event of a Substitution, the Notes shall remain in full force and effect, and the Lien of the Security Instrumentshall be spread to encumber the Substitute Property (each a “Substitute Property Mortgage Spreader Agreement”).

(b ) Certain Requirements. All Substitute Properties shall comply with this Section 2.3.6. To qualify as a SubstituteProperty, a property must, as of the Substitution Date (in addition to the other criteria set forth in this Section 2.3.6):

(i) be subject to the Master Lease;

(ii) be a property as to which the applicable Individual Borrower (or, in the case of the Maryland Property, MarylandLoan Guarantor) will hold insurable fee title free and clear of any Lien or other encumbrance except for exceptions notmaterially impairing the value of such property, and have an Appraised Value at least equal to the Appraised Value of theReplaced Property;

(iii) be (A) free and clear, as evidenced by the environmental report referred to in paragraph (c) below, of HazardousSubstances requiring remediation or other action under any Environmental Law and/or the presence of which violatesEnvironmental Laws and (B) in material compliance with all Environmental Laws;

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(iv) be in good repair and condition, as evidenced by the engineering report referred to in clause (c) below; and

(v) be in compliance, in all material respects, with Legal Requirements and Insurance Requirements, as evidenced bydiligence items required to be provided in paragraph (c) below.

(c) Diligence Process. The Borrower shall submit to the Lender written notice (a “Substitution Notice”) setting forth theBusiness Day no earlier than forty-five (45) days after the date of such Substitution Notice on which Borrower desires to effectsuch Substitution (the “Substitution Date”), together with the following materials (the “Substitution Due Diligence Package”)relating to the proposed Substitute Property: (i) a description of the proposed Substitute Property sufficient to obtain the TitlePolicy, (ii) two (2) years of historical cash flow operating statements, if available, (iii) true, complete and correct copies of anyLeases affecting the proposed Substitute Property, (iv) a map and site plan, including an existing Survey of the property datednot more than six (6) months prior to such submission, (v) a copy of the proposed amendment to the Master Lease and MasterLease SNDA to include the Substitute Property, (vi) copies of all permits, licenses and approvals required with respect tooperation of the Substitute Property, (vii) an environmental report issued by a recognized environmental consultant,(viii) copies of all reciprocal easement agreements, if any, affecting the Substitute Property, (ix) an engineer’s inspection report,(x) estoppel certificates from parties to any reciprocal easement agreements and tenants under any Material Subleases, in eachcase in form reasonably acceptable to Lender, together with any governmental consents required in order to subject theSubstitute Property to the Lien of the Security Instrument, (xi) a commitment from the Title Company with respect to theissuance of a Title Policy, together with copies of all exceptions referenced therein, (xii) upon the reasonable request of theLender, a “Probable Maximum Loss” study, (xiii) an Appraisal, (xiv) if such Substitute Property is not then owned by Borrower(or in the case of property located in Maryland, Maryland Guarantor) or its Affiliate, a duly executed copy of the purchase andsale agreement for such Substitute Property and copies of all proposed documentation transferring title to the SubstituteProperty to Borrower (or, in the case of property located in Maryland, the Maryland Guarantor), including any interim transfersto its Affiliates, (xv) a copy of the flood certification, (xvi) either (A) a letter or other evidence with respect to the proposedSubstitute Property from the appropriate Governmental Authorities concerning compliance with applicable zoning andbuilding laws, (B) an ALTA 3.1 zoning endorsement for the Title Policy or (C) a zoning report prepared by PZR or other similarcompany indicating that the Substitute Property is in material compliance with applicable zoning and building laws, (xvii) acopy of the valid permanent certificate of occupancy (if required by applicable law), (xviii) calculations of the LTV Ratio andthe LCR both before and after the proposed Substitution and (xix) pro formas of the insurance certificates required underArticle VI with respect to such Substitute Property, and not revealing any Liens other than Permitted Encumbrances. In addition,subject to the consent of the owner of the Substitute Property, Lender shall be permitted to make an inspection of suchSubstitute Property as a condition to such substitution.

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(d) Additional Conditions Precedent. In addition to the conditions in paragraphs (a), (b) and (c) above, each Substitutionshall be subject to the satisfaction of the following conditions precedent:

(i ) Rating Agency Confirmation; Rating Agency Requirements . For any Substitution made after a Securitization,Lender’s receipt of a Rating Agency Confirmation and Borrower’s satisfaction of such other conditions as may be required bythe Rating Agencies;

(ii) Release Conditions. Borrower’s compliance with the conditions set forth in Section 2.3.4(c), (f) and (g) withrespect to the release of the Replaced Property;

(iii) Financial and Other Tests.

(1) LCR. After giving effect to such Substitution, the LCR as of the Substitution Date (calculated with referenceto all of the Individual Properties then remaining subject to the Liens of the Security Instrument; i.e., including the SubstituteProperty and excluding the Replaced Property) shall not be less than the greater of (A) ninety percent (90%) of the Closing DateLCR and (B) seventy-five percent (75%) of the LCR for all of the Individual Properties subject to the Lien of the SecurityInstrument immediately prior to the Substitution Date.

(2) LTV Ratio. After giving effect to such Substitution, as of the Substitution Date, the LTV Ratio (as calculatedby including the Substitute Property, but excluding the Replaced Property), shall not be less than the Closing Date LTV Ratio.

(3) Geographic Diversity. The proposed Substitution does not cause the aggregate Allocated Loan Amounts withrespect to Individual Properties located in any single Geographic Quadrant to exceed fifty percent (50%) of the PrincipalAmount.

(iv) Lender’s Costs and Expenses. Borrower shall pay for any and all costs and expenses of Lender incurred inconnection with any proposed Substitution, including Lender’s reasonable attorneys’ fees and disbursements, all title insurancepremiums for any endorsements to any existing Title Policies reasonably required by Lender in connection with such proposedSubstitution, title premiums, mortgage recording taxes, transfer taxes and recording fees.

(v) Intentionally Omitted.

(vi) Opinions of Counsel. Borrower shall deliver to Lender the following favorable original Opinions of Counsel orupdates thereto in connection with the Substitute Property similar in form and substance to the opinions which were deliveredon the Closing Date in connection with the Replaced Property, reasonably satisfactory to Lender (and satisfactory to the RatingAgencies, if applicable) and addressed to the Lender on behalf of the holders of the Notes: (a) if requested by the RatingAgencies following or in connection with a Securitization, a non-consolidation opinion, (b) a local counsel enforceabilityopinion, (c) an enforceability opinion under New York law, (d) an opinion to the effect that each of Borrower, Maryland LoanGuarantor, Master Lessee and Guarantor is duly organized and validly existing under the laws of the state of its formation and isqualified or licensed to do business in each jurisdiction where the nature of its business in which it is engaged makes suchqualification or licensing necessary and (e) an opinion to the effect that the Loan Documents or amendments thereto have beenduly authorized, executed and delivered by Borrower, Maryland Loan Guarantor, Master Lessee and Guarantor and are the validand binding obligations and agreements of such party, enforceable in accordance with their terms, in each case with the sameexceptions as made on Closing Date;

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(vii) No Event of Default. No Event of Default shall have occurred and then be continuing on the Substitution Date;

(vii i ) Accuracy of Representations and Warranties. The representations and warranties set forth in the LoanDocuments shall be true and correct as to the Substitute Property on the Substitution Date in all material respects;

(ix) Officer’s Certificate . Delivery to Lender of an Officer’s Certificate certifying to the truth and accuracy of thestatements in clause (viii);

( x ) Non-Disqualification Opinion. If the Substitution Date occurs after a Securitization, delivery of a Non-Disqualification Opinion;

(xi) Organizational Documents. Delivery to Lender of (A) if required by the Rating Agencies, copies of organizationaldocuments of Borrower, Maryland Loan Guarantor, Master Lessee and Guarantor, including, but not limited to a currentcertificate of good standing, (B) if the Substitute Property is located in a state not previously covered by the SecurityInstrument, evidence of Borrower’s (or, in the case of property located in Maryland, the Maryland Loan Guarantor’s)qualification to do business in the state where the Substitute Property is located if and to the extent such qualification isrequired in the applicable jurisdiction and (C) appropriate evidence of the authorization of the Borrower, Maryland LoanGuarantor, Master Lessee and Guarantor approving the execution, delivery and performance of the Loan Documents oramendments thereto being executed and delivered in connection with the Substitution, duly adopted by the Borrower,Maryland Loan Guarantor, Master Lessee and Guarantor, as applicable, and accompanied by an Officer’s Certificate stating thatsuch authorizations have not been altered or repealed and are in full force and effect, and certifying as to the names of thePersons authorized to sign on behalf of such parties, together with the true signatures of each such Person;

(xii) Insurance Certificates. Delivery of the insurance certificates with respect to the Substitute Property requiredunder Article VI; and

(xiii) Loan Documents. Delivery to Lender of originals of the following Loan Documents or amendments thereto:

(1) a Substitute Property Mortgage Spreader Agreement, duly executed and acknowledged by Borrower (or in thecase of the Maryland Property, Maryland Loan Guarantor);

(2) a first priority Assignment of Master Lease, Leases, Rents and Security Deposits, from Borrower (or in the caseof property located in Maryland, Maryland Loan Guarantor), as assignor, to Lender, as assignee, assigning to Lender all ofBorrower’s (or Maryland Loan Guarantor’s, as applicable) interest in and to the Master Lease, the Leases, Rents and SecurityDeposits as security for the Loan with respect to the Substitute Property, or a counterpart original of the Assignment of Leases,modified as necessary, duly executed and acknowledged by Borrower or Maryland Loan Guarantor, as applicable;

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(3) UCC financing statements (Form UCC-1) (or other forms required in any jurisdiction), covering all fixturesand Building Equipment and other Personal Property (other than the Excluded Personal Property), and all proceeds thereof,naming Borrower (or in the case of property located in Maryland, Maryland Loan Guarantor) as debtor and Lender as securedparty;

(4) the Title Policy or endorsements to the Title Policy, as applicable, issued by the Title Company in an amountequal to the amount of coverage that had been provided for the Replaced Property (or, if such Substitute Property is located in aMortgage Tax State and the Replaced Property is not, an amount equal to 125% of the amount of coverage that had beenprovided for the Replaced Property), reflecting the addition of such Substitute Property and containing such affirmativecoverage similar in form and substance to the affirmative coverage provided in connection with the Replaced Property, insuringthat the Substitute Property Mortgage Spreader Agreement creates a valid first lien on Borrower’s (or in the case of propertylocated in Maryland, Maryland Loan Guarantor’s) fee title in the Substitute Property, subject to the Permitted Encumbrances,and insuring the perfected first priority interest of Lender pursuant to the Substitute Property Mortgage Spreader Agreement,together with any title insurance premiums, fees or charges due in connection therewith, and the Borrower shall cooperate withthe Lender and execute such further instruments and documents and perform such further acts as the Lender or the TitleCompany shall reasonably request to carry out the creation and perfection of the liens and security interests contemplated bythe documents described in clauses (i), (ii) and (iii) and the release, discharge and removal of any encumbrances required for theissuance of the Title Policy;

(5) an amendment to the Master Lease and to the Master Lease SNDA incorporating the Substitute Property andeliminating the Replaced Property;

(6) updates to any Exhibits and Schedules to the Loan Documents, as applicable, without disclosing mattersinconsistent with the requirements of this Section 2.3.6; and

(7) a Confirmation of Guaranty and Indemnity in customary form duly executed and delivered by Guarantor,adding the Substitute Property to, and affirming its obligations under, the Recourse Guaranty and the Environmental Indemnity.

(e) Additional Deliveries. Lender shall have received such other deliveries reasonably requested by Lender, provided suchrequests are customary and are consistent with the deliveries required with respect to the Property on the Closing Date.

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2.3.7 Release of Outparcels. Provided no Event of Default has occurred and is continuing, Borrower may request thatLender release an Outparcel from the Lien of the Security Instrument in accordance with the terms of this Section 2.3.7. Lendershall have no obligation to release any Outparcel from the Lien of the Security Instrument until Borrower shall have satisfiedthe following conditions, as reasonably determined by Lender: (1) the Outparcel to be released shall constitute a separateconveyable legal parcel in accordance with the subdivision map act or the equivalent thereof in the jurisdiction of suchOutparcel or other relevant granted government approvals in such jurisdiction; (2) to the extent any easements or restrictivecovenants benefiting or burdening such Outparcel are necessary or appropriate for the use or operation of or preservation ofvalue with respect to any remaining Individual Property that is in the vicinity of, or otherwise related to, the Outparcel (a“Related Remaining Property”), such easements shall have been granted or reserved prior to or at the time of the release orreconveyance of such Outparcel and shall have been approved by Lender, which approval shall not be unreasonably withheldor delayed; (3) each Related Remaining Property shall remain a legal parcel (or parcels) in compliance in all material respectswith all Legal Requirements, zoning, subdivision, land use and other applicable laws and regulations; (4) at the time of, but notprior to, any such release or reconveyance, such Outparcel shall be transferred to a person or entity that does not result in abreach of Borrower’s or Maryland Loan Guarantor’s obligation to be a Single Purpose Entity; (5) Lender shall have receivedsatisfactory evidence that any tax, bond or assessment that constitutes a lien against such Outparcel has (i) prior to such release,been properly allocated between the Outparcel and any Related Remaining Property and (ii) after such release, will be properlyassessed against the Outparcel and such Related Remaining Property separately; (6) Lender shall have received suchendorsements to the Title Policy (or substantially equivalent assurance) as Lender may reasonably require confirmingcontinuing title insurance and that (A) the Security Instrument constitutes a first priority lien on any Related RemainingProperty after the release of the Outparcel, (B) such Related Remaining Property constitutes a separate tax lot or tax lots and (C)such release shall not result in such Related Remaining Property ceasing to comply in all material respects with all applicableLegal Requirements, zoning, land use and subdivision laws; (7) Borrower (and in the case of Outparcels located in Maryland,Maryland Loan Guarantor) shall have executed and delivered such documents (including amendments to the Loan Documents)as Lender may reasonably require to reflect such release; (8) Borrower shall pay to Lender all costs and expenses incurred byLender (including, without limitation, reasonable attorneys fees and any applicable costs and expenses of the Rating Agencies)in connection with each such release; (9) Borrower shall have provided Lender at least fifteen (15) Business Days prior writtennotice of such requested release; and (10) Borrower shall submit to Lender, not less than fifteen (15) days prior to the date ofsuch proposed release (which must be on a Business Day), a release of Liens (and related Loan Documents) for such Outparcel,in a form appropriate in the applicable State and otherwise satisfactory to Lender in its reasonable discretion, and all otherdocumentation Lender reasonably requires to be delivered by Borrower in connection with such release (collectively,“Outparcel Release Instruments”).

2.3.8 Excess Account Collateral . Upon the occurrence of any Property Release, provided no Low LCR Cash Sweep Periodexists and no Event of Default has occurred and is continuing, Lender shall promptly perform an analysis of the AccountCollateral in order to reasonably determine the amount of the Account Collateral (including, but not limited to, Proceeds)attributable to the Release Property (the “Excess Account Collateral”), and shall promptly instruct Cash Management Bank toreturn to Borrower the Excess Account Collateral, if any, except to the extent that Lender reasonably determines that a shortfallexists in such Sub-Account with respect to the Property other than the Release Property.

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2.3.9 Reserve Requirements. Upon the occurrence of a Property Release, provided no Low LCR Cash Flow Sweep Periodexists and no Event of Default has occurred and is continuing, Lender shall promptly prepare a revised estimate of Impositionsand Other Charges and insurance premiums with respect to the remaining Individual Properties in accordance with Sections16.1 and 16.2, as applicable, and shall promptly provide Borrower and Cash Management Bank with notice of the revisedMonthly Tax Reserve Amount and Monthly Insurance Reserve Amount.

2.4 Regulatory Change; Taxes.

2.4.1 Increased Costs. If as a result of any Regulatory Change or compliance of Lender therewith, the basis of taxation ofpayments to Lender or any company Controlling Lender of the principal of or interest on the Loan is changed or Lender or thecompany Controlling Lender shall be subject to (i) any tax, duty, charge or withholding of any kind with respect to thisAgreement (excluding federal taxation of the overall net income of Lender or the company Controlling Lender); or (ii) anyreserve, special deposit or similar requirements relating to any extensions of credit or other assets of, or any deposits with orother liabilities, of Lender or any company Controlling Lender is imposed, modified or deemed applicable; or (iii) any othercondition affecting loans to borrowers subject to fixed interest rates is imposed on Lender or any company Controlling Lenderand Lender determines that, by reason thereof, the cost to Lender or any company Controlling Lender of making, maintaining orextending the Loan to Borrower is increased, or any amount receivable by Lender or any company Controlling Lenderhereunder in respect of any portion of the Loan to Borrower is reduced, in each case by an amount deemed by Lender in goodfaith to be material (such increases in cost and reductions in amounts receivable being herein called “Increased Costs”), thenLender shall provide notice thereof to Borrower and Borrower agrees that it will pay to Lender upon Lender’s written requestsuch additional amount or amounts as will compensate Lender or any company Controlling Lender for such Increased Costs tothe extent Lender reasonably determines that such Increased Costs are allocable to the Loan. If Lender requests compensationunder this Section 2.4.1, Borrower may, by notice to Lender, require that Lender furnish to Borrower a statement setting forththe basis for requesting such compensation and the method for determining the amount thereof.

2.4.2 Special Taxes. Borrower shall make all payments hereunder free and clear of and without deduction for SpecialTaxes. If Borrower shall be required by law to deduct any Special Taxes from or in respect of any sum payable hereunder orunder any other Loan Document to Lender, (i) the sum payable shall be increased as may be necessary so that after making allrequired deductions (including deductions applicable to additional sums payable under this Section 2.4.2) Lender receives anamount equal to the sum it would have received had no such deductions been made, (ii) Borrower shall make such deductions,and (iii) Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicablelaw. Notwithstanding anything to the contrary contained in this Section 2.4.2, Borrower shall not be liable for any amounts as aresult of withholding for Special Taxes or additional costs incurred as a result of the assignment of all or any portion of the Loanby Lender to any Person that is subject to Special Taxes and which is organized under or has its principal place of businessoutside of the United States of America or any political subdivision thereof.

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2.4.3 Other Taxes. In addition, Borrower agrees to pay any present or future stamp or documentary taxes or other excise orproperty taxes, charges, or similar levies which arise from any payment made hereunder, or from the execution, delivery orregistration of, or otherwise with respect to, this Agreement, the other Loan Documents or the Loan (hereinafter referred to as“Other Taxes”).

2.4.4 Indemnity. Borrower shall indemnify Lender for the full amount of Special Taxes and Other Taxes (including anySpecial Taxes or Other Taxes imposed by any Governmental Authority on amounts payable under this Section 2.4.4) paid byLender and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto. Thisindemnification shall be made within thirty (30) days after the date Lender makes written demand therefor.

2.4.5 Change of Office. To the extent that changing the jurisdiction of Lender’s applicable office would have the effect ofminimizing Special Taxes, Other Taxes or Increased Costs, Lender shall use reasonable efforts to make such a change.

2.4.6 Survival. Without prejudice to the survival of any other agreement of Borrower hereunder, the agreements andobligations of Borrower contained in this Section 2.4 shall survive the payment in full of principal and interest hereunder, andthe termination of this Agreement.

2.5 Conditions Precedent to Closing. The obligation of Lender to make the Loan hereunder is subject to the fulfillment by,or on behalf of, Borrower or waiver by Lender of the following conditions precedent no later than the Closing Date; provided,however, that unless a condition precedent shall expressly survive the Closing Date pursuant to a separate agreement, byfunding the Loan, Lender shall be deemed to have waived any such conditions not theretofore fulfilled or satisfied.

2.5.1 Representations and Warranties; Compliance with Conditions. The representations and warranties of Borrower andMaryland Loan Guarantor contained in this Agreement and the other Loan Documents shall be true and correct in all materialrespects on and as of the Closing Date with the same effect as if made on and as of such date, and no Default or Event of Defaultshall have occurred and be continuing; and Borrower and Maryland Loan Guarantor shall be in compliance in all materialrespects with all terms and conditions set forth in this Agreement and in each other Loan Document on its part to be observed orperformed.

2.5.2 Delivery of Loan Documents; Title Policy; Reports; Leases.

(a) Loan Documents. Lender shall have received an original copy of this Agreement, the Notes and all of the other LoanDocuments, in each case, duly executed (and to the extent required, acknowledged) and delivered on behalf of Borrower andany other parties thereto.

(b ) Security Instrument, Assignment of Leases. Lender shall have received evidence that original counterparts of theSecurity Instrument and Assignment of Leases, in proper form for recordation, have been delivered to the Title Company forrecording, so as effectively to create, in the reasonable judgment of Lender, upon such recording valid and enforceable firstpriority Liens upon the Property, in favor of Lender (or such other trustee as may be required or desired under local law), subjectonly to the Permitted Encumbrances and such other Liens as are permitted pursuant to the Loan Documents.

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(c) UCC Financing Statements. Lender shall have received evidence that the UCC financing statements relating to theSecurity Instrument and this Agreement have been delivered to the Title Company for filing in the applicable jurisdictions.

(d) Title Insurance. Lender shall have received a Title Policy issued by the Title Company and dated as of the ClosingDate. Such Title Policy shall (i) provide coverage in an amount equal to one hundred percent (100%) of the Loan (or in the caseof the Individual Properties in the Mortgage Tax States, one hundred twenty-five percent (125%) of the Allocated LoanAmount), (ii) insure Lender that the Security Instrument creates a valid, first priority Lien on the Property, free and clear of allexceptions from coverage other than Permitted Encumbrances and standard exceptions and exclusions from coverage (asmodified by the terms of any endorsements), (iii) contain the endorsements and affirmative coverages set forth on Exhibit A andsuch additional endorsements and affirmative coverages as Lender may reasonably request to the extent available in theapplicable State, and (iv) name Lender as the insured. Lender also shall have received evidence that all premiums in respect ofsuch Title Policy have been paid and that all appropriate releases or discharges of encumbrances necessary for the delivery ofthe Title Policy have been delivered for recording.

(e) Surveys. With respect to each of the Individual Properties, Lender shall have received (i) a current Survey containingthe survey certification substantially in the form attached hereto as Exhibit B or (ii) copies of existing Surveys prepared inconnection with the financing being repaid with proceeds of the Loan, together with so called “no change affidavits” executedby Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor), each in form sufficient to enable the TitleCompany to omit the standard survey exception to title coverage and to issue the endorsements to the Title Policy required byLender (to the extent available in the applicable State), including, but not limited to, contiguity, comprehensive, subdivision,land same as survey and access endorsements. Each such Survey shall reflect the same legal description contained in the TitlePolicy referred to in paragraph (d) above and shall include, among other things, a metes and bounds description (or such otherdescription as is required by Title Company) of the applicable Individual Property, any such description to be reasonablysatisfactory to Lender. The surveyor’s seal shall be affixed to each Survey.

(f) Insurance. Lender shall have received valid certificates of insurance for the policies of insurance required hereunder,satisfactory to Lender in its sole discretion, and evidence of the payment of all insurance premiums currently due and payablefor the existing policy period.

(g) Environmental Reports. Lender shall have received the Environmental Reports in respect of the Individual Propertiessatisfactory to Lender (and Lender agrees and acknowledges that the Environmental Reports may consist of updates to theexisting environmental reports, provided that (A) such updated reports are in form and content acceptable to Lender in Lender’sreasonable discretion and (B) the environmental consultant preparing such updated reports shall provide to Lender a relianceletter satisfactory to Lender).

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(h) Zoning. Lender shall have received with respect to each Individual Property one of the following: (i) letters or otherevidence with respect to the Property from the appropriate municipal authorities (or other Persons) concerning compliance withapplicable zoning and building laws acceptable to Lender, (ii) an ALTA 3.1 zoning endorsement for the Title Policy or (iii) azoning report reasonably acceptable to Lender prepared by PZR or another nationally recognized zoning due diligence firmacceptable to Lender.

(i) Certificate of Occupancy. Lender shall have received a copy of the valid permanent certificate of occupancy for eachIndividual Property located in a jurisdiction that requires certificates of occupancy under applicable law, in each caseacceptable to Lender.

(j) Encumbrances. Borrower shall have taken or caused to be taken such actions in such a manner so that Lender has a validand perfected first Lien as of the Closing Date on the Property, subject only to Permitted Encumbrances and such other Liens asare permitted pursuant to the Loan Documents, and Lender shall have received satisfactory evidence thereof.

2.5.3 Related Documents. Each additional document not specifically referenced herein, but relating to the transactionscontemplated herein, shall have been duly authorized, executed and delivered by all parties thereto and Lender shall havereceived and approved certified copies thereof.

2 .5 .4 Delivery of Organizational Documents. On or before the Closing Date, Borrower shall deliver, or cause to bedelivered, to Lender copies, certified by an Officer’s Certificate, of all organizational documentation related to Borrower,Maryland Loan Guarantor, Master Lessee, any other SPE Entity and Guarantor as have been requested by Lender and/or theformation, structure, existence, good standing and/or qualification to do business of Borrower, Maryland Loan Guarantor, anyother SPE Entity and Guarantor as Lender may request in its sole discretion, including, without limitation, good standingcertificates, qualifications to do business in the appropriate jurisdictions, resolutions authorizing the entering into of the Loanand incumbency certificates as may be requested by Lender. Each of the organizational documents of any SPE Entity shallcontain single purpose entity provisions having a substantive effect materially similar to that of the language set forth inExhibit C.

2.5.5 Counsel Opinions.

(a) Lender shall have received a Non-Consolidation Opinion in a form approved by Lender (the “Non-ConsolidationOpinion”).

(b) Lender shall have received the Opinion of Counsel substantially in compliance with the requirements set forth inExhibit D (and including a non-contravention opinion with respect to the Revolving Loan) or in such other form approved bythe Lender (provided that Lender shall not unreasonably withhold its approval of the general form of any Opinion of Counselthat was used by the applicable counsel in connection with the financing being repaid with proceeds of the Loan).

2.5.6 Annual Budget. Borrower shall have delivered the Annual Budget for the current Fiscal Year, which Annual Budgetshall be acceptable to Lender and shall be certified by an Officer’s Certificate.

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2.5.7 Completion of Proceedings. All corporate and other proceedings taken or to be taken in connection with thetransactions contemplated by this Agreement and other Loan Documents and all documents incidental thereto shall besatisfactory in form and substance to Lender, and Lender shall have received all such counterpart originals or certified copies ofsuch documents as Lender may reasonably request.

2.5.8 Payments. All payments, deposits or escrows, if any, required to be made or established by Borrower under thisAgreement, the Notes and the other Loan Documents on or before the Closing Date shall have been paid.

2.5.9 Account Agreement . Lender shall have received the original of the Account Agreement executed by each of CashManagement Bank, Borrower (other than Maryland Borrower) and Maryland Loan Guarantor.

2.5.10 Master Lease SNDA. Borrower shall have, prior to Closing, delivered to Lender the Master Lease SNDA executed byMaster Lessee with respect to the Master Lease.

2.5.11 Reserved.

2.5.12 Reserved.

2.5.13 Independent Manager/Member Certificate. Lender shall have received an executed Independent Manager/Membercertificate substantially in the form attached as Exhibit T.

2.5.14 Transaction Costs. Borrower shall have paid or reimbursed Lender for all title insurance premiums, recording andfiling fees, costs of Environmental Reports, Physical Condition Reports, seismic reports, zoning reports, searches, floodcertifications, appraisals and other reports, the reasonable fees and costs of Lender’s counsel and all other third party out-of-pocket expenses incurred in connection with the origination of the Loan.

2.5.15 Material Adverse Effect . No change, circumstance, event or effect shall have occurred since the date of Borrower’smost recent financial statements delivered to Lender which has, or could reasonably be expected to, have a Material AdverseEffect.

2.5.16 Insolvency. None of Borrower, Master Lease Guarantor or Guarantor shall be the subject of any bankruptcy,reorganization, or insolvency proceeding.

2.5.17 Leases. Lender shall have received copies of all Leases.

2.5.18 Master Lease; Master Lease SNDA. Lender shall have received a certified copy of the Master Lease and shall havereceived the duly executed Master Lease SNDA in form and substance reasonably acceptable to Lender.

2.5.19 Tax Lot. Lender shall have received a tax lot endorsement to the Title Policy or other evidence that each IndividualProperty constitutes one (1) or more separate tax lots, which endorsement or other evidence shall be reasonably satisfactory inform and substance to Lender.

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2.5.20 Physical Conditions Reports. Lender shall have received the Physical Conditions Reports with respect to theIndividual Properties, which shall be satisfactory in form and substance to Lender.

2.5.21 Appraisals. Lender shall have received an Appraisal of each Individual Property, which shall be satisfactory in formand substance to Lender.

2.5.22 Financial Statements. Lender shall have confirmed the accuracy of all financial statements and other financialinformation with respect to the Property delivered by Borrower to Lender.

2.5.23 Flood Certifications. Lender shall have received a flood zone certification with respect to each Individual Property.

2.5.24 Intercreditor Agreement . Lender shall have received the Intercreditor Agreement as well as certified copies of theloan documents evidencing the Revolving Loan (including any amendments thereto).

III. CASH MANAGEMENT

3.1 Cash Management.

3.1.1 Establishment of Accounts. Borrower hereby confirms that, simultaneously with the execution of this Agreement andpursuant to the Account Agreement, Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) hasestablished with Cash Management Bank, in the name of Borrower (or in the case of the Maryland Property, Maryland LoanGuarantor) for the benefit of Lender, as secured party, the holding account (the “ Holding Account”), which has been establishedas a securities account. The Holding Account and each sub-account of such account and the funds deposited therein andsecurities and other assets credited thereto shall serve as additional security for the Loan. Pursuant to the Account Agreement,Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall irrevocably instruct and authorize CashManagement Bank to disregard any and all orders for withdrawal from the Collateral Accounts made by, or at the direction of,Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor). Borrower agrees that, prior to the payment in fullof the Indebtedness, the terms and conditions of the Account Agreement shall not be amended or modified without the priorwritten consent of Lender (which consent Lender may grant or withhold in its sole discretion), and if a Securitization hasoccurred, the delivery by Borrower of a Rating Agency Confirmation. In recognition of Lender’s security interest in the fundsdeposited into the Collateral Accounts, the Holding Account shall be named as follows: “BlueLinx Portfolio Holding Accountf/b/o German American Capital Corporation, as secured party, (Account Number 5000000140431).” Borrower confirms that ithas established with Cash Management Bank the following sub-accounts of the Holding Account (each, a “Sub-Account” and,collectively, the “Sub-Accounts” and together with the Holding Account, the “Collateral Accounts”), which (i) may be ledger orbook entry sub-accounts and need not be actual sub-accounts, (ii) shall each be linked to the Holding Account, (iii) shall eachbe a “Securities Account” pursuant to Article 8 of the UCC and (iv) shall each be an Eligible Account to which certain fundsshall be allocated and from which disbursements shall be made pursuant to the terms of this Agreement:

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(a) a sub-account for the retention of Account Collateral in respect of Impositions and Other Charges for the Property (the“Tax Reserve Account”);

(b) a sub-account for the retention of Account Collateral in respect of insurance premiums for the Property (the “InsuranceReserve Account”);

(c) a sub-account for the retention of Account Collateral in respect of Debt Service on the Loan (the “Debt Service ReserveAccount”);

(d) a sub-account for the retention of Account Collateral in respect of reserves relating to Master Lease Variable AdditionalRent (the “Master Lease Variable Additional Rent Reserve Account”);

(e) a sub-account for the retention of Account Collateral in respect of reserves for the Immediate Repair Conditions and theEnvironmental Remediation Conditions (the “Immediate Repair and Remediation Reserve Account”);

(f) a sub-account for the retention of Account Collateral in respect of reserves for Structural Maintenance Items (the“Structural Repair Reserve Account”);

(g) a sub-account for the retention of Account Collateral in respect of certain Proceeds, as more fully set forth in Section 6.2(the “Proceeds Reserve Account”); and

(h) a sub-account for the retention of Account Collateral in respect of reserves of Excess Cash Flow required during a LowLCR Cash Sweep Period pursuant to Section 16.5(c) (the “LCR Deterioration Reserve Account”).

3.1.2 Pledge of Account Collateral. To secure the full and punctual payment and performance of the Obligations, Borrower(or in the case of the Maryland Property, Maryland Loan Guarantor) hereby collaterally assigns, grants a security interest in andpledges to Lender, to the extent not prohibited by applicable law, a first priority continuing security interest in and to thefollowing property of Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor), whether now owned orexisting or hereafter acquired or arising and regardless of where located (all of the same, collectively, the “Account Collateral”):

(a) the Collateral Accounts and all cash, checks, drafts, securities entitlements, certificates, instruments and other property,including, without limitation, all deposits and/or wire transfers from time to time deposited or held in, credited to or made toCollateral Accounts;

(b) any and all amounts invested in Permitted Investments;

(c) subject to the provisions of Section 3.1.4, all interest, dividends, cash, instruments, securities entitlements and otherproperty from time to time received, receivable or otherwise payable in respect of, or in exchange for, any or all of the foregoingor purchased with funds from the Collateral Accounts; and

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(d) to the extent not covered by clauses (a), (b) or (c) above, all proceeds (as defined under the UCC) of any or all of theforegoing.

In addition to the rights and remedies herein set forth, Lender shall have all of the rights and remedies with respect tothe Account Collateral available to a secured party at law or in equity, including, without limitation, the rights of a securedparty under the UCC, as if such rights and remedies were fully set forth herein.

This Agreement shall constitute a security agreement for purposes of the Uniform Commercial Code and otherapplicable law.

3.1.3 Maintenance of Collateral Accounts. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor)agrees that each of the Collateral Accounts is and shall be maintained (i) as a “securities account” (as such term is defined inSection 8-501(a) of the UCC), (ii) in such a manner that Lender shall have control (within the meaning of Section 8-106(d)(2) ofthe UCC) over the Collateral Accounts, (iii) such that no Person other than Lender shall have any right of withdrawal from theCollateral Accounts and, except as provided herein, no Account Collateral shall be released to the Borrower or any Affiliate ofBorrower from the Collateral Accounts, (iv) in such a manner that the Cash Management Bank shall agree to treat all propertycredited to the Collateral Accounts as “financial assets” and (v) such that all securities or other property underlying anyfinancial assets credited to the Collateral Accounts shall be registered in the name of Cash Management Bank, indorsed to CashManagement Bank or in blank or credited to another securities account maintained in the name of Cash Management Bank andin no case will any financial asset credited to any of the Collateral Accounts be registered in the name of Borrower, payable tothe order of Borrower or specially indorsed to Borrower, except to the extent the foregoing have been specially indorsed to CashManagement Bank or in blank. Without limiting Borrower’s obligations under the immediately preceding sentence, Borrowershall only establish and maintain the Collateral Accounts with a financial institution that has executed an agreementsubstantially in the form of the Account Agreement or in such other form acceptable to Lender in its sole discretion.

3.1.4 Eligible Accounts. The Collateral Accounts shall be Eligible Accounts. The Collateral Accounts shall be subject tosuch applicable laws, and such applicable regulations of the Board of Governors of the Federal Reserve System and of any otherbanking or governmental authority, as may now or hereafter be in effect. Income and interest accruing on the CollateralAccounts or any investments held in such accounts for the benefit of Borrower (or in the case of the Maryland Property,Maryland Loan Guarantor) shall be added to the principal amount of such account on a daily basis (or with such frequency asthe Cash Management Bank can accommodate) and shall be held, disbursed and applied in accordance with the provisions ofthis Agreement and the Account Agreement. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shallbe the beneficial owner of the Collateral Accounts for federal income tax purposes and shall report all income on the CollateralAccounts.

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3.1.5 Deposits into Sub-Accounts. On the date hereof, Borrower has deposited the following amounts into the Sub-Accounts:

(i) $1,252,579.76 into the Tax Reserve Account; (ii) $1,193,316.37 into the Insurance Reserve Account; (iii) $0.00 into the Debt Service Reserve Account; (iv) $0.00 into the Master Lease Variable Additional Rent Reserve Account; (v) $0.00 into the Structural Repair Reserve Account; (vi) $404,310 into the Immediate Repair and Remediation Reserve Account; and (vii) $0.00 into the Proceeds Reserve Account; and (viii) $0.00 into the LCR Deterioration Reserve Account.

3.1.6 Monthly Funding of Sub-Accounts; Master Lease Rent Shortfalls; Master Lease Variable Additional Rent Reserve;Sub-Account Shortfalls.

(a) Monthly Funding of Sub-Accounts. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor)hereby irrevocably authorizes Lender to transfer (and, pursuant to the Account Agreement shall irrevocably authorize CashManagement Bank to execute any corresponding instructions of Lender), and Lender shall transfer, from the Holding Accountby 11:00 a.m. New York time on the date on which each payment of Master Lease Rent under the Master Lease is made to theHolding Account, or as soon thereafter as sufficient funds are in the Holding Account to make the applicable transfers,commencing on the date of the first payment of Master Lease Rent under the Master Lease following the date of this Agreement,funds in the following amounts and in the following order of priority:

(i) funds in an amount equal to the Monthly Tax Reserve Amount and any other amounts required pursuant toSection 16.1 for the month in which the transfer from the Holding Account is made to the Tax Reserve Account;

(ii) funds in an amount equal to the Monthly Insurance Reserve Amount and any other amounts required pursuant toSection 16.2 for the month in which the transfer from the Holding Account is made to the Insurance Reserve Account;

(iii) funds in an amount equal to the amount of Debt Service due on the Payment Date immediately following the datethe transfer from the Holding Account is made to the Debt Service Reserve Account;

(iv) funds in an amount equal to the Monthly Structural Repair Reserve Amount for the month in which the transferfrom the Holding Account is made to the Structural Repair Reserve Account;

(v) during the continuance of an Event of Default and during any Low LCR Cash Sweep Period, funds in an amountequal to the Master Lease Variable Additional Rent payable under the Master Lease for the month following the month inwhich the transfer from the Holding Account is made to the Master Lease Variable Additional Rent Reserve Account;

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(vi) during the continuance of an Event of Default or a Low LCR Cash Sweep Period, funds in an amount equal to thebalance (if any) remaining or deposited in the Holding Account after the foregoing transfers (such remainder being hereinafterreferred to as “Excess Cash Flow”) to the LCR Deterioration Reserve Account; and

(vii) provided no Low LCR Cash Sweep Period or Event of Default is then continuing, the Excess Cash Flow to theBorrower’s Account.

(b) Master Lease Rent Shortfalls. If there is a Master Lease Rent Shortfall, subject to the provisions of Section 3.1.6(c)below, Lender shall have the right, at its election, to direct the Cash Management Bank to transfer (but shall not be obligated toso direct the Cash Management Bank to transfer) from the LCR Deterioration Reserve Account to the Holding Account, withoutnotice to Borrower, an amount equal to such Master Lease Rent Shortfall.

(c) Master Lease Variable Additional Rent Reserve . In the event that no Low LCR Cash Sweep Period or Event of Defaultis then continuing, Lender shall direct the Cash Management Bank to transfer the funds in the Master Lease Variable AdditionalRent Reserve Account to Borrower (or, if directed by Borrower, to Master Lessee). During the continuance of any Low LCRCash Sweep Period or Event of Default, Lender shall pay or direct the Cash Management Bank to pay from the Master LeaseVariable Additional Rent Reserve Account, monthly payments of Master Lease Variable Additional Rent directly to the Personhaving the right to receive such funds on the respective due dates therefor and shall promptly notify Borrower and MasterLessee of any such payment.

(d) Sub-Account Shortfalls. If Lender shall reasonably determine that there will be insufficient amounts in the HoldingAccount to make any of the transfers required pursuant to this Section 3.1.6, Lender shall provide notice to Borrower of suchinsufficiency (it being understood that in no event shall Lender be required to notify Borrower of any deficiency in the DebtService Reserve Account, such deficiency on the fifth (5 th) day of any month (or, if such fifth (5 th) day is not a Business Daythen the immediately preceding Business Day) being an Event of Default) and, within five (5) days after receipt of said noticeand prior to the expiration of any grace period applicable to such payment, Borrower shall deposit into the Holding Account anamount equal to the shortfall of available funds in the Holding Account taking into account any funds which accumulate in theHolding Account during such five (5) day period. Notwithstanding anything to the contrary contained in this Agreement or inthe other Loan Documents, Borrower shall not be deemed to be in default hereunder or thereunder in the event funds sufficientfor a required transfer are held in an appropriate Sub-Account and Lender or Cash Management Bank fails to timely make anytransfer from such Sub-Account, as contemplated by this Agreement, unless due to the negligence or willful misconduct ofBorrower.

(e) Notwithstanding anything to the contrary contained herein or in the Security Instrument, Lender shall have the right,upon five (5) Business Days prior written notice thereof to Borrower, to withdraw from the Holding Account an amount equal toany mortgage recording tax, costs, expenses or other amounts pursuant to Section 19.12 of this Agreement then due and owingand pay such amounts to the Person(s) entitled thereto.

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3.1.7 Required Payments from Sub-Accounts. Borrower irrevocably authorizes Lender to make and, provided no Event ofDefault shall have occurred and be continuing, Lender hereby agrees to make or to direct the Cash Management Bank to make,the following payments from the Sub-Accounts to the extent of the monies on deposit therefor:

(i) funds from the Tax Reserve Account to Lender sufficient to permit Lender to pay (A) Impositions and (B) OtherCharges, on the respective due dates therefor, and Lender shall so pay such funds to the Governmental Authority having theright to receive such funds;

(ii) funds from the Insurance Reserve Account to Lender sufficient to permit Lender to pay insurance premiums for theinsurance required to be maintained pursuant to the terms of this Agreement and the Security Instrument, on the respective duedates therefor, and Lender shall so pay such funds to the insurance company having the right to receive such funds;

(iii) funds from the Debt Service Reserve Account to Lender sufficient to pay Debt Service on each Payment Date, andLender, on each Payment Date, shall apply such funds to the payment of the Debt Service payable on such Payment Date;

(iv) as provided in Section 16.3, funds from the Structural Repair Reserve Account to the Borrower’s Account to payfor Structural Repairs;

(v) as provided in Section 16.4, funds from the Immediate Repair and Remediation Reserve Account to the Borrower’sAccount to reimburse Borrower for, or to pay, the cost of the Immediate Repairs and Remediation;

(vi) as applicable, funds from the Master Lease Variable Additional Rent Reserve Account in accordance withSection 3.1.6(c) and Section 16.5(b), and Lender shall so pay such funds to the Person having the right to receive such funds;and

(vii) as applicable, funds from the LCR Deterioration Reserve Account in accordance with Section 16.5(c).

3.1.8 Cash Management Bank.

(a) Lender shall have the right at Borrower’s sole cost and expense to replace the Cash Management Bank with a financialinstitution reasonably satisfactory to Borrower in the event that (i) the Cash Management Bank fails, in any material respect, tocomply with the Account Agreement, (ii) the Cash Management Bank named herein is no longer the Cash Management Bank or(iii) the Cash Management Bank is no longer an Approved Bank. Upon the occurrence and during the continuance of an Eventof Default, Lender shall have the right at Borrower’s sole cost and expense to replace Cash Management Bank at any time, uponprior written notice to Borrower. Borrower shall cooperate with Lender in connection with the appointment of any replacementCash Management Bank and the execution by the Cash Management Bank and the Borrower of an Account Agreement anddelivery of same to Lender.

(b) So long as no Event of Default shall have occurred and be continuing, Borrower shall have the right at its sole cost andexpense to replace the Cash Management Bank with a financial institution that is an Approved Bank provided that suchfinancial institution and Borrower shall execute and deliver to Lender an Account Agreement substantially similar to theAccount Agreement executed as of the Closing Date, or in such other form reasonably required by Lender or required by theRating Agencies, with such changes therein as shall be reasonably acceptable to Lender.

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3.1.9 Borrower’s and Maryland Loan Guarantor’s Account Representations, Warranties and Covenants.

(a) Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) represents, warrants and covenants that asof the date hereof, Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) has irrevocably directed theMaster Lessee, pursuant to a letter substantially in the form of the Master Lease Rent Payment Direction Letter, to (i) make allpayments of Master Lease Scheduled Rent directly to the Holding Account at all times during the term of the Loan and(ii) make all payment of Master Lease Variable Additional Rent directly to the Holding Account at all times during thecontinuance of a Low LCR Cash Sweep Period or an Event of Default.

(b) Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) further represents, warrants and covenantsthat (i) it shall cause Master Lessee to deposit all amounts payable to it pursuant to the Master Lease directly into the HoldingAccount, (ii) it shall pay or cause to be paid all Rents, Cash and Cash Equivalents or other items of operating income notcovered by the preceding subsection (a) within one Business Day after receipt thereof by Borrower or its Affiliates directly intothe Holding Account and, until so deposited, any such amounts held by Borrower or its Affiliates shall be deemed to beAccount Collateral and shall be held in trust by it for the benefit, and as the property, of Lender and shall not be commingledwith any other funds or property of Borrower or its Affiliates, (iii) there are no accounts other than the Collateral Accountsmaintained by Borrower or any other Person with respect to the Property or the collection of Rents and (vii) so long as the Loanshall be outstanding, neither Borrower nor any other Person shall open any other operating accounts with respect to the Propertyor the collection of Rents, except for the Collateral Accounts; provided that Borrower (or in the case of the Maryland Property,Maryland Loan Guarantor) shall not be prohibited from utilizing one or more separate accounts for the disbursement orretention of funds that have been transferred to the Borrower’s Account pursuant to Section 3.1.6.

3.1.10 Account Collateral and Remedies.

(a) Upon the occurrence and during the continuance of an Event of Default, without additional notice from Lender toBorrower, (i) Lender may, in addition to and not in limitation of Lender’s other rights, make any and all withdrawals from, andtransfers between and among, the Collateral Accounts as Lender shall determine in its sole and absolute discretion to pay anyObligations, operating expenses and/or Capital Expenditures for the Property, (ii) all Excess Cash Flow shall be retained in theHolding Account or applicable Sub-Accounts and (iii) Lender may liquidate and transfer any amounts then invested inPermitted Investments to the Collateral Accounts to which they relate or reinvest such amounts in other Permitted Investmentsas Lender may reasonably determine is necessary to perfect or protect any security interest granted or purported to be grantedhereby or to enable Lender to exercise and enforce Lender’s rights and remedies hereunder with respect to any AccountCollateral or to preserve the value of the Account Collateral.

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(b) Borrower (and in the case of the Maryland Property, Maryland Loan Guarantor) hereby expressly waives, to the fullestextent permitted by law, presentment, demand, protest or any notice of any kind in connection with this Agreement or theAccount Collateral. Borrower (and in the case of the Maryland Property, Maryland Loan Guarantor) acknowledges and agreesthat twenty (20) days’ prior written notice of the time and place of any public sale of the Account Collateral or any otherintended disposition thereof shall be reasonable and sufficient notice within the meaning of the UCC.

3.1.11 Transfers and Other Liens. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) agrees thatit will not (i) sell or otherwise dispose of any of the Account Collateral or (ii) create or permit to exist any Lien upon or withrespect to all or any of the Account Collateral, except for the Lien granted to Lender under this Agreement.

3.1.12 Reasonable Care. Beyond the exercise of reasonable care in the custody thereof, Lender shall have no duty as to anyAccount Collateral in its possession or control as agent therefor or bailee thereof or any income thereon or the preservation ofrights against any person or otherwise with respect thereto. Lender shall be deemed to have exercised reasonable care in thecustody and preservation of the Account Collateral in its possession if the Account Collateral is accorded treatmentsubstantially equal to that which Lender accords its own property, it being understood that Lender shall not be liable orresponsible for any loss or damage to any of the Account Collateral, or for any diminution in value thereof, by reason of the actor omission of Lender, its Affiliates, agents, employees or bailees, except to the extent that such loss or damage results fromLender’s gross negligence or willful misconduct. In no event shall Lender be liable either directly or indirectly for losses ordelays resulting from any event which may be the basis of an Excusable Delay, computer malfunctions, interruption ofcommunication facilities, labor difficulties or other causes beyond Lender’s reasonable control or for indirect, special orconsequential damages except to the extent of Lender’s gross negligence or willful misconduct. Notwithstanding the foregoing,Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) acknowledges and agrees that (i) Lender does nothave custody of the Account Collateral, (ii) Cash Management Bank has custody of the Account Collateral, (iii) the initial CashManagement Bank was chosen by Borrower and (iv) Lender has no obligation or duty to supervise Cash Management Bank orto see to the safe custody of the Account Collateral.

3.1.13 Lender’s Liability.

(a) Lender shall be responsible for the performance only of such duties with respect to the Account Collateral as arespecifically set forth in this Section 3.1 or elsewhere in the Loan Documents, and no other duty shall be implied from anyprovision hereof. Lender shall not be under any obligation or duty to perform any act with respect to the Account Collateralwhich would cause it to incur any expense or liability or to institute or defend any suit in respect hereof, or to advance any of itsown monies. Borrower (and in the case of the Maryland Property, Maryland Loan Guarantor) shall indemnify and hold harmlessLender, its employees and officers, from and against any loss, cost or damage (including, without limitation, reasonableattorneys’ fees and disbursements) incurred by Lender in connection with the transactions contemplated hereby with respect tothe Account Collateral except as such may be caused by the gross negligence or willful misconduct of Lender, its employees,officers or agents.

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(b) Lender shall be protected in acting upon any notice, resolution, request, consent, order, certificate, report, opinion,bond or other paper, document or signature believed by it in good faith to be genuine, and, in so acting, it may be assumed thatany person purporting to give any of the foregoing in connection with the provisions hereof has been duly authorized to do so.Lender may consult with counsel, and the opinion of such counsel shall be full and complete authorization and protection inrespect of any action taken or suffered by it hereunder and in good faith in accordance therewith.

3.1.14 Continuing Security Interest. This Agreement shall create a continuing security interest in the Account Collateraland shall remain in full force and effect until payment in full of the Indebtedness. Upon payment in full of the Indebtedness, thissecurity interest shall automatically terminate without further notice from any party and Borrower shall be entitled to the returnof such of the Account Collateral as shall not have been sold or otherwise applied pursuant to the terms hereof, and Lender shallexecute such instruments and documents as may be reasonably requested by Borrower to evidence such termination and therelease and return of the Account Collateral to Borrower.

IV. REPRESENTATIONS AND WARRANTIES

4.1 Borrower Representations. Borrower (and in the case of the Maryland Property, Maryland Loan Guarantor) representsand warrants as of the Closing Date that:

4.1.1 Organization. Each Borrower and Maryland Loan Guarantor is a limited liability company and has been dulyorganized and is validly existing and in good standing pursuant to the laws of the State of Delaware with requisite power andauthority to own its properties and to transact the businesses in which it is now engaged. Guarantor is a corporation and hasbeen duly organized and is validly existing and in good standing pursuant to the laws of the State of Delaware with requisitepower and authority to own its properties and to transact the businesses in which it is now engaged. Master Lessee is acorporation and has been duly organized and is validly existing and in good standing pursuant to the laws of the State ofGeorgia with requisite power and authority to own its properties and to transact the businesses in which it is now engaged. EachBorrower, Maryland Loan Guarantor, Guarantor and Master Lessee has duly qualified to do business and is in good standing ineach jurisdiction where it is required to be so qualified in connection with its properties, businesses and operations. Each ofBorrower, Maryland Loan Guarantor and Guarantor possesses all material rights, licenses, permits and authorizations,governmental or otherwise, necessary to entitle it to own its properties and to transact the businesses in which it is now engaged,and the sole business of Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) is the ownership of theProperty. The organizational structure of Borrower is accurately depicted by the schematic diagram attached hereto asExhibit K. Neither Borrower nor Maryland Loan Guarantor shall not change its name, identity, corporate form or structure orjurisdiction of organization unless it shall have given Lender thirty (30) days prior written notice of any such change and shallhave taken all steps reasonably requested by Lender to grant, perfect, protect and/or preserve the liens and security interestgranted to Lender under the Loan Documents.

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4.1.2 Proceedings. Each of Borrower, Maryland Loan Guarantor, Guarantor and Master Lessee has full power, and has takenall necessary action, to authorize the execution, delivery and performance of the Loan Documents to which it is a party. TheLoan Documents to which such Person is a party have been duly executed and delivered by, or on behalf of, Borrower,Maryland Loan Guarantor, Guarantor and Master Lessee, as applicable, and constitute legal, valid and binding obligations ofsuch Persons, as applicable, enforceable against such Persons, as applicable, in accordance with their respective terms, subjectonly to applicable bankruptcy, insolvency and similar laws affecting rights of creditors generally, and subject, as toenforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

4 .1 .3 No Conflicts. The execution, delivery and performance of this Agreement and the other Loan Documents byBorrower, Maryland Loan Guarantor, Guarantor and Master Lessee, as applicable, will not conflict with or result in a breach ofany of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge orencumbrance (other than pursuant to the Loan Documents) upon any of the property or assets of any such Person pursuant to theterms of any indenture, mortgage, deed of trust, loan agreement, partnership agreement or other agreement or instrument towhich any such Person is a party or by which any of such Person’s property or assets is subject (unless consents from allapplicable parties thereto have been obtained), nor will such action result in any violation of the provisions of any statute orany order, rule or regulation of any Governmental Authority, and any material consent, approval, authorization, order,registration or qualification of or with any Governmental Authority required for the execution, delivery and performance byBorrower, Maryland Loan Guarantor and Guarantor of this Agreement, except for any violation that would not individually orin the aggregate reasonably be expected to result in a Material Adverse Effect, or any other Loan Documents has been obtainedand is in full force and effect.

4.1.4 Litigation. Except as set forth on Schedule VI attached hereto, there are no arbitration proceedings, governmentalinvestigations, actions, suits or proceedings at law or in equity by or before any Governmental Authority now pending or, toBorrower’s knowledge, threatened against or affecting Borrower, Maryland Loan Guarantor, Guarantor, Master Lessee or anyIndividual Property (other than (a) claims for nonpayment brought by Borrower, Maryland Loan Guarantor, Guarantor or MasterLessee as plaintiff, and (b) claims (i) which are being covered by insurance, (ii) which are being defended by the relevantinsurance company and (iii) as to which Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) has notreceived a notice from such insurance company that the claim exceeds the total amount of insurance coverage with respect tosuch claim, provided that none of such unscheduled claims could reasonably be expected to individually or in the aggregate tohave a Material Adverse Effect if adversely determined). The actions, suits or proceedings identified on Schedule VI, ifdetermined against Borrower, Maryland Loan Guarantor, Guarantor, Master Lessee or the applicable Individual Property orIndividual Properties, would not materially and adversely affect the condition (financial or otherwise) or business of any suchPerson or the condition or operation of any Individual Property.

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4.1.5 Agreements. The Master Lease and the Subleases constitute all of the agreements to which Borrower or any of itsAffiliates are party or are bound which are material to the ownership and operation of any Individual Property other than theMaster Lease. Neither Borrower nor Maryland Loan Guarantor is a party to any agreement or instrument or subject to anyrestriction which is reasonably likely to materially and adversely affect it or its business, properties or assets, operations orcondition, financial or otherwise. Neither Borrower nor Maryland Loan Guarantor is in default in any material respect in theperformance, observance or fulfillment of any of the obligations, covenants or conditions contained in any agreement orinstrument to which it is a party or by which Borrower, Maryland Loan Guarantor or the Property is bound. Neither Borrower norMaryland Loan Guarantor has any material financial obligation (contingent or otherwise) under any indenture, mortgage, deedof trust, loan agreement or other agreement or instrument to which it is a party or by which it or the Property is otherwise bound,other than (a) obligations constituting Permitted Debt which are incurred in the ordinary course of the ownership and operationof the Property and (b) obligations under the Loan Documents and the Master Lease. There are no prior sales, transfers orassignments of the Master Lease or any portion of the Rents due and payable or to become due and payable which are presentlyoutstanding following the funding of the Loan, other than those being terminated or assigned to Lender concurrently herewith.

4.1.6 Title. Borrower (or in the case of the Maryland Property, the Maryland Loan Guarantor) has good, marketable andinsurable fee simple title to the Land and the Improvements, free and clear of all Liens whatsoever except the PermittedEncumbrances, such other Liens as are permitted pursuant to the Loan Documents and the Liens created by the LoanDocuments. Borrower (or in the case of the Maryland Property, the Maryland Loan Guarantor) has good and marketable title tothe remainder of the Property, free and clear of all Liens whatsoever except the Permitted Encumbrances. The SecurityInstrument, when properly recorded in the appropriate records, together with any Uniform Commercial Code financingstatements required to be filed in connection therewith, will create (i) a valid, perfected first mortgage lien on the Land and theImprovements, subject only to Permitted Encumbrances and (ii) perfected security interests in and to, and perfected collateralassignments of, all Personal Property (including the Leases) and any leases of equipment from third parties, all in accordancewith the terms thereof, in each case subject only to any applicable Permitted Encumbrances. To Borrower’s knowledge, there areno claims for payment for work, labor or materials affecting the Property which are or may become a lien prior to, or of equalpriority with, the Liens created by the Loan Documents other than the Permitted Encumbrances. Borrower and Maryland LoanGuarantor represent and warrant that none of the Permitted Encumbrances would individually or in the aggregate reasonably beexpected to result in a Material Adverse Effect as of the Closing Date and thereafter. Borrower (or in the case of the MarylandProperty, the Maryland Loan Guarantor) shall preserve its right, title and interest in and to the Property for so long as the Notesremains outstanding and will warrant and defend same and the validity and priority of the Lien hereof from and against any andall claims whatsoever other than the Permitted Encumbrances.

4.1.7 No Bankruptcy Filing. None of Borrower, Maryland Loan Guarantor, Guarantor or Master Lessee is contemplatingeither the filing of a petition by it under any state or federal bankruptcy or insolvency laws or the liquidation of all or a majorportion of such entity’s assets or property, to Borrower’s knowledge, no Person is contemplating the filing of any such petitionagainst it or against Borrower, Maryland Loan Guarantor, Guarantor or Master Lessee, as applicable.

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4.1.8 Full and Accurate Disclosure. No statement of material fact made by Borrower or Maryland Loan Guarantor in thisAgreement or in any of the other Loan Documents contains any untrue statement of a material fact or omits to state any materialfact necessary to make statements contained herein or therein not misleading. There is no fact presently known to Borrower orMaryland Loan Guarantor which has not been disclosed which could reasonably be expected to have a Material Adverse Effect.

4.1.9 All Property. The Property constitutes all of the real property, personal property, equipment and fixtures currently(i) owned or leased by Borrower (or in the case of the Maryland Property, the Maryland Loan Guarantor) and (ii) used in theoperation of the business located on the Property, other than the Excluded Personal Property.

4.1.10 No Plan Assets.

(a) Neither Borrower nor Maryland Loan Guarantor maintains an employee benefit plan as defined by Section 3(3) ofERISA, which is subject to Title IV of ERISA, and (i) to Borrower’s knowledge, neither Borrower nor Maryland Loan Guarantorhas incurred or expect to incur any material liability which is or remains unsatisfied for any taxes or penalties with respect toany “employee benefit plan,” within the meaning of Section 3(3) of ERISA, or any “plan,” within the meaning of Section4975(e)(1) of the Internal Revenue Code or any other benefit plan (other than a multiemployer plan) maintained, contributed to,or required to be contributed to by Borrower (or in the case of the Maryland Property, the Maryland Loan Guarantor) or by anyentity that is under common control with Borrower or Maryland Loan Guarantor within the meaning of ERISA Section 4001(a)(14) (a “Plan”) or any plan that would be a Plan but for the fact that it is a multiemployer plan within the meaning of ERISASection 3(37); and (ii) Borrower (or in the case of the Maryland Property, the Maryland Loan Guarantor) has made and shallcontinue to make when due all required contributions to all such Plans, if any. Each such Plan has been and will beadministered in compliance with its terms and the applicable provisions of ERISA, the Internal Revenue Code, and any otherapplicable federal or state law; and no action shall be taken or fail to be taken that would result in the disqualification or loss oftax-exempt status of any such Plan intended to be qualified and/or tax exempt; and

(b) Neither Borrower nor Maryland Loan Guarantor is an employee benefit plan, as defined in Section 3(3) of ERISA,subject to Title I of ERISA, none of the assets of Borrower or Maryland Loan Guarantor constitutes or will constitute plan assetsof one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101 and neither Borrower nor Maryland LoanGuarantor is a governmental plan within the meaning of Section 3(32) of ERISA and transactions by or with Borrower andMaryland Loan Guarantor are not subject to state statutes regulating investment of, and fiduciary obligations with respect to,governmental plans similar to the provisions of Section 406 of ERISA or Section 4975 of the Code currently in effect, whichprohibit or otherwise restrict the transactions contemplated by this Agreement.

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4.1.11 Compliance. To Borrower’s knowledge, Borrower, Maryland Loan Guarantor and the Property and the use thereofcomply in all material respects with all applicable Legal Requirements, including, without limitation, building and zoningordinances and codes. To Borrower’s knowledge, neither Borrower nor Maryland Loan Guarantor is in default or in violation ofany order, writ, injunction, decree or demand of any Governmental Authority. To Borrower’s knowledge, there has not beencommitted by Borrower or Maryland Loan Guarantor any act or omission affording the federal government or any otherGovernmental Authority the right of forfeiture as against the Property or any part thereof or any monies paid in performance ofBorrower’s or Maryland Loan Guarantor’s obligations under any of the Loan Documents.

4.1.12 Financial Information. To Borrower’s knowledge, all financial data including, without limitation, the statements ofcash flow and income and operating expense, that have been delivered by or on behalf of Borrower to Lender in respect of theProperty (i) are true, complete and correct in all material respects, (ii) fairly represent the financial condition of the Property as ofthe date of such reports and (iii) to the extent prepared or audited by an independent certified public accounting firm, have beenprepared in accordance with GAAP throughout the periods covered, except as disclosed therein. To Borrower’s knowledge,neither Borrower nor Maryland Loan Guarantor has any contingent liabilities, liabilities for taxes, unusual forward or long-termcommitments or unrealized or anticipated losses from any unfavorable commitments that are known to Borrower and couldreasonably be expected to have a Material Adverse Effect. Since the date of such financial statements, there has been nomaterial adverse change in the financial condition, operations or business of Borrower or Maryland Loan Guarantor from thatset forth in said financial statements.

4.1.13 Condemnation. No Taking is pending or, to Borrower’s knowledge, is contemplated with respect to all or anyportion of the Property. No Taking is pending or, to Borrower’s knowledge, is contemplated for the relocation of roadwaysproviding access to the Property.

4.1.14 Federal Reserve Regulations. None of the proceeds of the Loan will be used for the purpose of purchasing orcarrying any “margin stock” as defined in Regulation U, Regulation X or Regulation T or for the purpose of reducing or retiringany Indebtedness which was originally incurred to purchase or carry “margin stock” or for any other purpose which mightconstitute this transaction a “purpose credit” within the meaning of Regulation U or Regulation X. As of the Closing Date,neither Borrower nor Maryland Loan Guarantor owns any “margin stock.”

4.1.15 Utilities and Public Access. Each Individual Property has rights of access to one or more public ways, either directlyor through a recorded easement set forth in, and insured under, the Title Policy. Each Individual Property is served by water,sewer, sanitary sewer and storm drain facilities adequate to service the Property for its intended uses. To Borrower’s knowledge,all utilities necessary to the existing use of the Property are located either in the public right-of-way abutting the Property(which are connected so as to serve the Property without passing over other property) or in recorded easements serving theProperty and such easements are set forth in and insured by the Title Policy. All roads necessary for the use of the eachIndividual Property for its current purposes have been completed and, if necessary, dedicated to public use.

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4.1.16 Not a Foreign Person. Neither Borrower nor Maryland Loan Guarantor is a foreign person within the meaning of§1445(f)(3) of the Code.

4.1.17 Separate Lots. Each Individual Property is comprised of one (1) or more contiguous parcels which constitute aseparate tax lot or lots and does not constitute or include a portion of any other tax lot not a part of such Individual Property.

4.1.18 Subdivision. The Individual Properties comply in all material respects with all applicable subdivision laws,ordinances and regulations.

4.1.19 Enforceability. The Loan Documents are not subject to any existing right of rescission, set-off, counterclaim ordefense by Borrower or Maryland Loan Guarantor, including the defense of usury, nor would the operation of any of the termsof the Loan Documents, or the exercise of any right thereunder, render the Loan Documents unenforceable (subject toapplicable bankruptcy, insolvency and similar laws affecting rights of creditors generally, and subject as to enforceability, togeneral principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law)), and neitherBorrower nor Maryland Loan Guarantor has asserted any right of rescission, set-off, counterclaim or defense with respect thereto.

4.1.20 Assessments. To Borrower’s knowledge, there are no pending or proposed special or other assessments for publicimprovements or otherwise affecting the Property, nor are there any contemplated improvements to the Property that may resultin such special or other assessments.

4.1.21 Insurance. Borrower has obtained and, to the extent requested by Lender, has delivered to Lender evidence of allinsurance policies required under this Agreement, reflecting the insurance coverages, amounts and other requirements set forthin this Agreement. Borrower has not, and to Borrower’s knowledge no Person has, done by act or omission anything whichwould impair the coverage of any such policy.

4.1.22 Use of Property. Each Individual Property is used primarily as a distribution facility, other than the IndividualProperty located in Englewood, Colorado, which Individual Property is used by the Borrower for office purposes.

4.1.23 Certificate of Occupancy; Licenses. To Borrower’s knowledge, all certifications, permits, licenses and approvals,including without limitation, certificates of completion and occupancy permits required of Borrower (or in the case of theMaryland Property, the Maryland Loan Guarantor) for the legal use, occupancy and operation of each Individual Property for itscurrent use as a distribution facility (or, in the case of the Individual Property located in Englewood, Colorado, an officebuilding) (collectively, the “Licenses”), have been obtained and are in full force and effect. Borrower (or in the case of theMaryland Property, the Maryland Loan Guarantor) shall keep and maintain all Licenses necessary for the operation of eachIndividual Property in accordance with its current use as aforesaid. To Borrower’s knowledge, the use being made of eachIndividual Property is in conformity with the certificate of occupancy issued for such Individual Property.

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4.1.24 Flood Zone. None of the Improvements on the Property are located in an area as identified by the FederalEmergency Management Agency as an area having special flood hazards, except as identified on the flood certificationsdelivered to Lender prior to the date hereof, and Borrower has obtained the insurance required under Article VI with respect toany Improvements located in any such special flood hazards.

4.1.25 Physical Condition. To Borrower’s knowledge and except as expressly disclosed in the Physical ConditionsReports, the Property, including, without limitation, all buildings, Improvements, parking facilities, sidewalks, storm drainagesystems, roofs, plumbing systems, HVAC systems, fire protection systems, electrical systems, equipment, elevators, exteriorsidings and doors, landscaping, irrigation systems and all structural components, are in good condition, order and repair in allmaterial respects; to Borrower’s knowledge and except as expressly disclosed in the Physical Conditions Reports, there existsno structural or other material defects or damages in or to the Property, whether latent or otherwise, and neither Borrower norMaryland Loan Guarantor has received any written notice from any insurance company or bonding company of any defects orinadequacies in the Property, or any part thereof, which would adversely affect the insurability of the same or cause theimposition of extraordinary premiums or charges thereon or of any termination or threatened termination of any policy ofinsurance or bond.

4.1.26 Boundaries. Except as set forth in and insured pursuant to the Title Policy, to Borrower’s knowledge and in relianceon the Surveys, (a) all of the Improvements lie wholly within the boundaries and building restriction lines of the Land relatingto the applicable Individual Property, (b) no improvements on adjoining properties encroach upon the Land, and (c) noeasements or other encumbrances upon the Land encroach upon any of the Improvements.

4.1.27 Leases and Subleases. The Property is not subject to any Leases other than the Master Lease. To Borrower’sknowledge, the Property is not subject to any Subleases other than the Subleases set forth on Schedule IV attached hereto. NoPerson has any possessory interest in the Property or right to occupy the same except under and pursuant to the provisions of theMaster Lease and the Subleases. The Master Lease and, to Borrower’s knowledge, the current Subleases are in full force andeffect and to Borrower’s knowledge, there are no material defaults thereunder by either party (other than as expressly disclosedon Schedule IV or in the estoppel certificates, if any, delivered to Lender in connection with the closing of the Loan) and thereare no conditions that, with the passage of time or the giving of notice, or both, would constitute material defaults thereunder.No Master Lease Rent has been paid more than one (1) month in advance of its due date, except as disclosed in the Master LeaseSNDA delivered to Lender in connection with the closing of the Loan. There has been no prior sale, transfer or assignment,hypothecation or pledge by Borrower (or in the case of the Maryland Property, the Maryland Loan Guarantor) or Master Lesseeof the Master Lease or of the Master Lease Rents received therein, which will be outstanding following the funding of the Loan,other than those being assigned to Lender concurrently herewith. To Borrower’s knowledge, no Tenant under any Sublease hasa right or option pursuant to such Sublease or otherwise to purchase all or any part of the Property of which the leased premisesare a part. Master Lessee does not have a right or option pursuant to the Master Lease or otherwise to purchase all or any part ofthe Property of which the leased premises are a part.

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4.1.28 Filing and Recording Taxes. To Borrower’s knowledge, all transfer taxes, deed stamps, intangible taxes or otheramounts in the nature of transfer taxes required to be paid by any Person under applicable Legal Requirements currently ineffect in connection with the transfer of the Property to Borrower (or in the case of the Maryland Property, the Maryland LoanGuarantor) have been paid and the granting and recording of the Security Instrument and the UCC financing statementsrequired to be filed in connection with the Loan. To Borrower’s knowledge, all mortgage, mortgage recording, stamp, intangibleor other similar tax required to be paid by any Person under applicable Legal Requirements currently in effect in connectionwith the execution, delivery, recordation, filing, registration, perfection or enforcement of any of the Loan Documents,including, without limitation, the Security Instrument, have been paid, and, under current Legal Requirements, the SecurityInstrument is enforceable against Borrower (or in the case of the Maryland Property, the Maryland Loan Guarantor) inaccordance with its terms by Lender (or any subsequent holder thereof) subject only to applicable bankruptcy, insolvency andsimilar laws affecting rights of creditors generally, and subject as to enforceability, to general principles of equity (regardless ofwhether enforcement is sought in a proceeding in equity or at law.

4.1.29 Single Purpose Entity/Separateness.

(a) Until the Indebtedness has been paid in full, Borrower and Maryland Loan Guarantor hereby represent, warrant andcovenant that Borrower, Maryland Loan Guarantor and each other SPE Entity is, shall be, and shall continue to be, a SinglePurpose Entity.

(b) To Borrower’s knowledge, all of the assumptions made in the Non-Consolidation Opinion, including, but not limitedto, any exhibits attached thereto, are true and correct in all respects and any assumptions made in any subsequent non-consolidation opinion delivered in connection with the Loan Documents (an “Additional Non-Consolidation Opinion”),including, but not limited to, any exhibits attached thereto, will have been and shall be true and correct in all respects. Each ofBorrower Maryland Loan Guarantor has complied and will comply with all of the assumptions made with respect to it in theNon-Consolidation Opinion. Each of Borrower and Maryland Loan Guarantor will have complied and will comply with all ofthe assumptions made with respect to it in any Additional Non-Consolidation Opinion. Each entity other than Borrower andMaryland Loan Guarantor with respect to which an assumption shall be made in any Additional Non-Consolidation Opinionwill have complied and will comply with all of the assumptions made with respect to it in any Additional Non-ConsolidationOpinion.

4.1.30 Illegal Activity. No portion of the Property has been or will be purchased with proceeds of any illegal activity.

4.1.31 No Change in Facts or Circumstances; Disclosure. To Borrower’s knowledge , all financial statements submitted byBorrower in connection with the Loan are accurate, complete and correct in all material respects. All other material writteninformation, reports, certificates and other documents submitted by Borrower to Lender in connection with the Loan are, toBorrower’s knowledge, accurate, complete and correct in all material respects except as would not have a Material AdverseEffect. Except with respect to such representations and warranties contained in this Agreement or in any other Loan Documentwhich are qualified as being made to Borrower’s knowledge, all representations and warranties made by Borrower or MarylandLoan Guarantor in this Agreement or in any other Loan Document, are accurate, complete and correct in all material respectsexcept as would not have a Material Adverse Effect. There has been no material adverse change known to Borrower in anycondition, fact, circumstance or event that would make any such information inaccurate, incomplete or otherwise misleading inany material respect or that otherwise materially and adversely affects the Property or the business operations or the financialcondition of Borrower or Maryland Loan Guarantor.

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4.1.32 Tax Filings. To the extent required by applicable law, each of Borrower and Maryland Loan Guarantor has filed (orhas obtained effective extensions for filing) all federal, state and local tax returns required to be filed and has paid or madeadequate provision for the payment of all federal, state and local taxes, charges and assessments payable by Borrower andMaryland Loan Guarantor.

4 .1 .33 Solvency/Fraudulent Conveyance. Neither Borrower nor Maryland Loan Guarantor (a) has entered into thetransaction contemplated by this Agreement or any Loan Document with the actual intent to hinder, delay, or defraud anycreditor and (b) has received reasonably equivalent value in exchange for its obligations under the Loan Documents. Aftergiving effect to the Loan, the fair saleable value of Borrower’s and Maryland Loan Guarantor’s assets exceeds and will,immediately following the making of the Loan, exceed Borrower’s and Maryland Loan Guarantor’s total liabilities, including,without limitation, subordinated, unliquidated, disputed and contingent liabilities. The fair saleable value of Borrower’s andMaryland Loan Guarantor’s assets is and will, immediately following the making of the Loan, be greater than Borrower’s andMaryland Loan Guarantor’s probable liabilities, including the maximum amount of its contingent liabilities on its Debts assuch Debts become absolute and matured. Borrower’s and Maryland Loan Guarantor’s assets do not and, immediately followingthe making of the Loan will not, constitute unreasonably small capital to carry out its business as conducted or as proposed tobe conducted. Neither Borrower nor Maryland Loan Guarantor intends to, and does not believe that it will, incur Debt andliabilities (including contingent liabilities and other commitments) beyond its ability to pay such Debt and liabilities as theymature (taking into account the timing and amounts of cash to be received by it and the amounts to be payable on or in respectof its obligations).

4.1.34 Investment Company Act . Neither Borrower nor Maryland Loan Guarantor is (a) an investment company or acompany Controlled by an investment company, within the meaning of the Investment Company Act of 1940, as amended, (b) aholding company or a subsidiary company of a holding company or an affiliate of either a holding company or a subsidiarycompany within the mean of the Public Utility Holding Company Act of 1935, as amended or (c) subject to any other federal orstate law or regulation which purports to restrict or regulate its ability to borrow money.

4.1.35 Labor. No organized work stoppage or labor strike is pending or, to Borrower’s knowledge, threatened byemployees and other laborers at the Property. Neither Borrower nor Maryland Loan Guarantor (i) is involved in or, to Borrower’sknowledge, threatened with, any labor dispute, grievance or litigation relating to labor matters involving any employees andother laborers at the Property, including, without limitation, violation of any federal, state or local labor, safety or employmentlaws (domestic or foreign) and/or charges of unfair labor practices or discrimination complaints which, if adversely determined,would have a Material Adverse Effect, (ii) has not engaged in any unfair labor practices within the meaning of the NationalLabor Relations Act or the Railway Labor Act or (iii) is not a party to, or bound by, any collective bargaining agreement orunion contract with respect to employees and other laborers at the Property and no such agreement or contract is currently beingnegotiated by Borrower or Maryland Loan Guarantor.

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4.1.36 Brokers. Except for Broker, neither Borrower (or Maryland Loan Guarantor) nor Lender has dealt with any broker orfinder with respect to the transactions contemplated by the Loan Documents, and neither party has done any acts, had anynegotiations or conversations, or made any agreements or promises which will in any way create or give rise to any obligationor liability for the payment by either party of any brokerage fee, charge, commission or other compensation to any Person withrespect to the transactions contemplated by the Loan Documents. Each of Borrower and Maryland Loan Guarantor covenantsand agrees that it shall pay as and when due any and all brokerage fees, charges, commissions or other compensation orreimbursement due to Broker with respect to the transactions contemplated by the Loan Documents. Borrower, Maryland LoanGuarantor and Lender shall each indemnify and hold harmless the other from and against any loss, liability, cost or expense,including any judgments, attorneys’ fees, or costs of appeal, incurred by the other party and arising out of or relating to anybreach or default by the indemnifying party of its representations, warranties and/or agreements set forth in this Section 4.1.36.The provisions of this Section 4.1.36 shall survive the expiration and termination of this Agreement and the payment of theIndebtedness.

4.1.37 No Other Debt. Neither Borrower nor Maryland Loan Guarantor has borrowed or received debt financing that hasnot been heretofore repaid in full, other than the Permitted Debt.

4.1.38 Taxpayer Identification Number. Borrower’s and Maryland Loan Guarantor’s Federal taxpayer identificationnumber is as set forth on Schedule VIII.

4.1.39 Compliance with Anti-Terrorism, Embargo and Anti-Money Laundering Laws . (i) None of the Borrower, MasterLessee, Maryland Loan Guarantor or any Guarantor or any Person who owns any equity interest in or Controls any of such listedPersons currently is identified on the OFAC List or otherwise qualifies as a Prohibited Person, and (ii) none of Borrower,Maryland Loan Guarantor or Guarantor is in violation of any Legal Requirements relating to anti-money laundering or anti-terrorism, including, without limitation, Legal Requirements related to transacting business with Prohibited Persons or therequirements of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and ObstructTerrorism Act of 2001, U.S. Public Law 107-56, and the related regulations issued thereunder, including temporary regulations,all as amended from time to time. To Borrower’s knowledge, no Tenant currently is identified on the OFAC List or otherwisequalifies as a Prohibited Person, and no Tenant is owned or Controlled by a Prohibited Person.

4.1.40 Rights of First Refusal or First Offer to Lease or Purchase. No Person, whether pursuant to a Lease or a Sublease orotherwise has a right of first refusal, right of first offer or other right or option pursuant to such Lease or Sublease or otherwise tolease or purchase or to restrict or impose requirements upon the lease or purchase of all or any part of any Individual Property.

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4 .2 Survival of Representations. Borrower and Maryland Loan Guarantor agree that all of the representations andwarranties of Borrower and Maryland Loan Guarantor set forth in Section 4.1 and elsewhere in this Agreement and in the otherLoan Documents shall survive for so long as any amount remains owing to Lenders under this Agreement or any of the otherLoan Documents by Borrower or Maryland Loan Guarantor (it being understood, however, that except as otherwise provided inthis Agreement or any of the other Loan Documents, such representations and warranties shall be true and correct only as of thedate hereof). All representations, warranties, covenants and agreements made in this Agreement or in the other Loan Documentsby Borrower and Maryland Loan Guarantor shall be deemed to have been relied upon by Lender notwithstanding anyinvestigation heretofore or hereafter made by Lender or on its behalf.

4.3 Borrower’s or Maryland Loan Guarantor’s Knowledge . Wherever in this Agreement a representation and warranty ismade to Borrower’s knowledge (and variations thereon used herein, including an Individual Borrower’s knowledge), or to theknowledge of Borrower (and variations thereon used herein, including to the knowledge of an Individual Borrower, suchrepresentation and warranty shall also be deemed to be limited to Maryland Loan Guarantor’s, and such knowledge shall meanthe actual (as opposed to constructive or imputed) knowledge of any of the following individuals after reasonable inquiry underthe circumstances of the applicable representation and warranty: Gary Cummings, Vice President of Real Estate and DougGoforth, Controller, which Persons Borrower and Maryland Loan Guarantor hereby represent and warrant are in a position tohave meaningful knowledge with respect to the subject matter of such representations and warranties.

V. BORROWER AND MARYLAND LOAN GUARANTOR COVENANTS

5 .1 Affirmative Covenants. From the Closing Date and until payment and performance in full of all obligations ofBorrower and Maryland Loan Guarantor under the Loan Documents or the earlier release of the Liens of the Security Instrumentencumbering the Property (and all related obligations) in accordance with the terms of this Agreement and the other LoanDocuments, each of Borrower and Maryland Loan Guarantor hereby covenants and agrees with Lenders that:

5.1.1 Performance by Borrower and Maryland Loan Guarantor. Each of Borrower and Maryland Loan Guarantor shall in atimely manner observe, perform and fulfill each and every covenant, term and provision of each Loan Document executed anddelivered by, or applicable to, it, and shall not enter into or otherwise suffer or permit any amendment, waiver, supplement,termination or other modification of any Loan Document executed and delivered by, or applicable to, it, as applicable, withoutthe prior written consent of Lender.

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5.1.2 Existence; Compliance with Legal Requirements; Insurance. Subject to Borrower’s (or in the case of the MarylandProperty, Maryland Loan Guarantor’s) right of contest pursuant to Section 7.3, Borrower (or in the case of the MarylandProperty, Maryland Loan Guarantor’s) shall at all times comply and cause Master Lessee and the Property to be in compliancewith all Legal Requirements applicable to Borrower, Maryland Loan Guarantor, Master Lessee and/or the Property and/or theuses permitted upon the Property. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor’s) shall do orcause to be done all things necessary to preserve, renew and keep in full force and effect its existence, rights, licenses, permitsand franchises necessary to comply with all Legal Requirements applicable to it and the Property. There shall never becommitted by Borrower or Maryland Loan Guarantor, and neither Borrower nor Maryland Loan Guarantor shall knowinglypermit Master Lessee to commit any act or omission affording the federal government or any state or local government the rightof forfeiture as against the Property or any part thereof or any monies paid in performance of Borrower’s or Maryland LoanGuarantor’s obligations under any of the Loan Documents. Each of Borrower and Maryland Loan Guarantor hereby covenantsand agrees not to commit, knowingly permit or suffer to exist any act or omission affording such right of forfeiture. Borrower (orin the case of the Maryland Property, Maryland Loan Guarantor’s) shall at all times maintain, preserve and protect all franchisesand trade names, and preserve all the remainder of its property used in the conduct of its business and shall keep or cause theMaster Lessee to keep the Property in good working order and repair, and from time to time make, or cause to be made, allreasonably necessary repairs, renewals, replacements, betterments and improvements thereto, all as more fully set forth in theSecurity Instrument. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor’s) shall keep the Propertyinsured at all times to such extent and against such risks, and maintain liability and such other insurance, as is more fully setforth in this Agreement.

5.1.3 Litigation. Borrower shall give prompt written notice to Lender of any litigation or governmental proceedingspending or, to Borrower’s knowledge, threatened in writing against Borrower, Maryland Loan Guarantor, Master Lessee or theProperty which, if determined adversely, would reasonably be expected to have a Material Adverse Effect.

5.1.4 Single Purpose Entity. Each of Borrower, Maryland Loan Guarantor and each other SPE Entity has been since thedate of its formation and shall remain a Single Purpose Entity.

(a) Each of Borrower, Maryland Loan Guarantor and each other SPE Entity shall continue to maintain its own depositaccount or accounts, separate from those of any Affiliate, with commercial banking institutions. None of the funds of Borrower,Maryland Loan Guarantor or any other SPE Entity will be diverted to any other Person or for other than business uses ofBorrower, Maryland Loan Guarantor or such other SPE Entity, as applicable, nor will such funds be commingled with the fundsof any other Affiliate.

(b) To the extent that Borrower, Maryland Loan Guarantor or any other SPE Entity shares the same officers or otheremployees as any of Borrower, Maryland Loan Guarantor, any other SPE Entity or their Affiliates, the salaries of and theexpenses related to providing benefits to such officers and other employees shall be fairly allocated among such entities, andeach such entity shall bear its fair share of the salary and benefit costs associated with all such common officers and employees.

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(c) To the extent that Borrower, Maryland Loan Guarantor or any other SPE Entity jointly contracts with any of Borrower,Maryland Loan Guarantor, any other SPE Entity or any of their Affiliates, as applicable, to do business with vendors or serviceproviders or to share overhead expenses, the costs incurred in so doing shall be allocated fairly among such entities, and eachsuch entity shall bear its fair share of such costs. To the extent that any of Borrower, Maryland Loan Guarantor or any other SPEEntity contracts or does business with vendors or service providers where the goods and services provided are partially for thebenefit of any other Person, the costs incurred in so doing shall be fairly allocated to or among such entities for whose benefitthe goods and services are provided, and each such entity shall bear its fair share of such costs. All material transactions between(or among) Borrower, Maryland Loan Guarantor or each other SPE Entity and any of their respective Affiliates shall beconducted on substantially the same terms (or on more favorable terms for Borrower, Maryland Loan Guarantor or any other SPEEntity, as applicable) as would be conducted with third parties.

(d) To the extent that Borrower, Maryland Loan Guarantor any other SPE Entity or any of their Affiliates have offices in thesame location, there shall be a fair and appropriate allocation of overhead costs among them, and each such entity shall bear itsfair share of such expenses.

(e) Borrower, Maryland Loan Guarantor and each other SPE Entity shall conduct its affairs strictly in accordance with itsorganizational documents, and observe all necessary, appropriate and customary corporate, limited liability company orpartnership formalities, as applicable, including, but not limited to, obtaining any and all members’ consents necessary toauthorize actions taken or to be taken, and maintaining accurate and separate books, records and accounts, including, withoutlimitation, payroll and intercompany transaction accounts.

(f) In addition, Borrower, Maryland Loan Guarantor and each other SPE Entity shall each: (i) maintain books and recordsseparate from those of any other Person; (ii) maintain its assets in such a manner that it is not more costly or difficult tosegregate, identify or ascertain such assets; (iii) hold regular meetings of its board of directors, shareholders, partners ormembers, as the case may be, and observe all other corporate, partnership or limited liability company, as the case may be,formalities; (iv) hold itself out to creditors and the public as a legal entity separate and distinct from any other entity;(v) prepare separate tax returns and financial statements, or if part of a consolidated group, it will be shown as a separate memberof such group; (vi) transact all business with its Affiliates on an arm’s-length basis and pursuant to enforceable agreements;(vii) conduct business in its name and use separate stationery, invoices and checks; (viii) not commingle its assets or funds withthose of any other Person; and (ix) not assume, guarantee or pay the debts or obligations of any other Person.

5.1.5 Consents. If Borrower, Maryland Loan Guarantor or any other SPE Entity is a corporation, the board of directors ofsuch Person may not take any action requiring the unanimous affirmative vote of one hundred percent (100%) of the membersof the board of directors unless all of the directors, including the Independent Directors, shall have participated in such vote. IfBorrower, Maryland Loan Guarantor or any other SPE Entity is a limited liability company, (a) if such Person is managed by aboard of managers, the board of managers of such Person may not take any action requiring the unanimous affirmative vote ofone hundred percent (100%) of the members of the board of managers unless all of the managers, including the IndependentManagers, shall have participated in such vote, (b) if such Person is not managed by a board of managers, the members of suchPerson may not take any action requiring the affirmative vote of one hundred percent (100%) of the members of such Personunless all of the members, including the Independent Members, shall have participated in such vote. An affirmative vote of onehundred percent (100%) of the directors, board of managers or members, as applicable, of Borrower, Maryland Loan Guarantorand any other SPE Entity shall be required to (i) file a bankruptcy or insolvency petition or otherwise institute insolvencyproceedings or to authorize Borrower, Maryland Loan Guarantor or any other SPE Entity to do so or (ii) file an involuntarybankruptcy petition against any Affiliate. Furthermore, the formation documents of Borrower, Maryland Loan Guarantor andeach other SPE Entity shall expressly state that for so long as the Loan is outstanding, none of Borrower, Maryland LoanGuarantor nor any other SPE Entity shall be permitted to (i) dissolve, liquidate, consolidate, merge or sell all or substantially allof the assets of Borrower, Maryland Loan Guarantor or any other SPE Entity, other than in connection with the repayment of theLoan or (ii) engage in any other business activity and such restrictions shall not be modified or violated for so long as the Loanis outstanding.

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5.1.6 Access to Property. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall permit agents,representatives and employees of Lender and the Rating Agencies to inspect the Property or any part thereof during normalbusiness hours on Business Days upon reasonable advance notice.

5.1.7 Notice of Default. Borrower and Maryland Loan Guarantor shall promptly advise Lender (a) of any event or conditionthat has or is likely to have a Material Adverse Effect and (b) of the occurrence of any Default or Event of Default of whichBorrower has knowledge.

5.1.8 Cooperate in Legal Proceedings. Borrower and Maryland Loan Guarantor shall cooperate fully with Lender withrespect to any proceedings before any court, board or other Governmental Authority which would reasonably be expected toaffect, in any material adverse way, the rights of Lender hereunder or under any of the other Loan Documents and, in connectiontherewith, permit Lender, at its election, to participate in any such proceedings which may have a Material Adverse Effect.

5.1.9 Insurance.

(a) Borrower and Maryland Loan Guarantor shall cooperate with Lender in obtaining for Lender the benefits of anyProceeds lawfully or equitably payable in connection with any Individual Property and Lender shall be reimbursed for anyactual out-of-pocket expenses incurred in connection therewith (including reasonable attorneys’ fees and disbursements) out ofsuch Proceeds.

(b) Borrower and Maryland Loan Guarantor shall comply with all Insurance Requirements and shall not bring or keep orpermit to be brought or kept any article upon any of the Property or cause or permit any condition to exist thereon which wouldbe prohibited by any Insurance Requirement, or would invalidate insurance coverage required hereunder to be maintained byBorrower or Maryland Loan Guarantor on or with respect to any part of the Property pursuant to Section 6.1.

5.1.10 Further Assurances; Severance of Notes and Mezzanine Loan.

(a) Borrower and Maryland Loan Guarantor shall execute and acknowledge (or cause to be executed and acknowledged)and deliver to Lender all documents, and take all actions, reasonably required by Lender from time to time to confirm the rightscreated or now or hereafter intended to be created under this Agreement and the other Loan Documents and any security interestcreated or purported to be created thereunder, to protect and further the validity, priority and enforceability of this Agreementand the other Loan Documents, to subject to the Loan Documents any property of Borrower (or in the case of the MarylandProperty, Maryland Loan Guarantor’s) intended by the terms of any one or more of the Loan Documents to be encumbered bythe Loan Documents, or otherwise carry out the purposes of the Loan Documents and the transactions contemplated thereunder.

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(b) Borrower and Maryland Loan Guarantor each agrees that it shall, upon request, reasonably cooperate with Lender inconnection with any request by Lender to sever one or more of the Notes into two (2) or more separate substitute notes in anaggregate principal amount equal to the Principal Amount and to reapportion the Loan among such separate substitute notes,including, without limitation, by executing and delivering to Lender new substitute notes to replace the applicable Note orNotes, amendments to or replacements of existing Loan Documents to reflect such severance and/or Opinions of Counsel withrespect to such substitute notes, amendments and/or replacements. Borrower shall bear no costs or expenses in connection withany such severance or bifurcation, except that Borrower shall be responsible for one hundred percent (100%) of the costs andexpenses of Borrower and Lender with respect to the initial bifurcation of the Loan and the related transfer of a portion of theLoan to Wachovia. Any such substitute notes may have varying principal amounts and economic terms, provided, however, that(i) Borrower shall not be required to incur, suffer or accept (except to a de minimis extent)) any greater obligations or liabilitiesthan as currently set forth in the Loan Documents, (ii) the maturity date of any such substitute notes shall be the same as thescheduled Maturity Date of the Notes immediately prior to the issuance of such substitute notes, (iii) the weighted averageInterest Rate (as defined in the Notes) for the term of the substitute notes shall not exceed the Interest Rate (as defined in theNotes) under the Notes, whether before, after or during an Event of Default (it being acknowledged that the Default Rate shall beapplicable during the continuance of an Event of Default); and (iv) the economics of the Loan, taken as a whole, shall notchange in a manner which is adverse to Borrower. Subject to the foregoing clauses (i) through (iv), upon the occurrence andduring the continuance of an Event of Default, Lender may apply payment of all sums due under such substitute notes in suchorder and priority as Lender shall elect in its sole and absolute discretion.

(c) Borrower, Maryland Loan Guarantor and Lender agree that, subject to the conditions set forth in the last sentence of thisSection 5.1.11(c), Lender may, at any time, elect to reduce the mortgage debt on the Property and re-size the principal amount ofthe Loan and allocate the reduced portion to one or more mezzanine loans (a “Mezzanine Loan”). In connection with theforegoing, at Lender’s sole cost and expense, Borrower and Maryland Loan Guarantor each agrees to (i) create one or more (asapplicable) new single purpose entities which will become the mezzanine borrower (a “Mezzanine Borrower”) and cause theMezzanine Borrower and any members of Mezzanine Borrower to enter into the documents deemed reasonably necessary byLender to evidence the Mezzanine Loan, including, without limitation, a promissory note and a mezzanine loan agreement andsuch other documents reasonably required by Lender which are in a form and substance reasonably satisfactory to Borrower andsubstantially similar to the Loan Documents (collectively, the “Mezzanine Loan Documents”); (ii) cause Mezzanine Borrowerto pledge the equity interests in Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor); and (iii) executeand deliver such documents and other agreements reasonably required by Lender to reduce the amount of the mortgage debtencumbering the Property, including, without limitation, an amendment to the Notes and the other Loan Documents, anendorsement to the Title Policy reflecting a change in the insured amount thereunder, legal opinions and other customary loandocumentation. Borrower’s and Maryland Loan Guarantor’s obligations under the foregoing provisions of this Section 5.1.11(c)are subject to the condition that (A) Borrower shall bear no costs or expenses in connection therewith; (B) Borrower shall not berequired to incur, suffer or accept (except to a de minimis extent)) any greater obligations or liabilities than as currently set forthin the Loan Documents; (C) the maturity date of any mezzanine notes shall be the same as the scheduled Maturity Date of theNotes immediately prior to the issuance of such mezzanine notes; (D) the weighted average Interest Rate (as defined in theNotes) for the term of the mezzanine notes shall not exceed the Interest Rate (as defined in the Notes) under the Notes, whetherbefore, after or during an Event of Default (it being acknowledged that the Default Rate shall be applicable during thecontinuance of an Event of Default); and (E) the economics of the Loan, taken as a whole, shall not change in a manner which isadverse to Borrower.

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5.1.11 Mortgage Taxes. Borrower and Maryland Loan Guarantor shall pay all taxes, charges, filing, registration andrecording fees, excises and levies payable with respect to the Notes or the Liens created or secured by the Loan Documents,other than income, franchise and doing business taxes imposed on Lender. In the case of the Maryland Property, such taxes shallinclude any recordation taxes imposed by Title 12 of the Tax-Property Article of the Maryland Annotated Code (1994Replacement Volume), as amended from time to time, including any fines, penalties, interest or similar charges arising from thenon-payment thereof, which may now or hereafter become due and payable in connection with the Security Instrument and shallbe paid by Borrower and Maryland Loan Guarantor as and when the same becomes due and payable, whether at the time of therecording of the Security Instrument or any later date. Subject to the terms and provisions of Section 18.1 of this Agreement,Borrower and Maryland Loan Guarantor shall, jointly and severally, indemnify, defend and hold harmless Lender from andagainst any and all claims, charges, actions, suits, proceedings, law suits, obligations, losses, damages, expenses or liabilities,including attorney’s fees, suffered or incurred by Lender as a result of any assessment by any applicable governmental authoritywith respect to recording fees and expenses. This indemnity shall be a continuing one and shall be unaffected by repayment ofthe Loan.

5.1.12 Business and Operations. Borrower and Maryland Loan Guarantor shall each continue to engage in the businessespresently conducted by it as and to the extent the same are necessary for the ownership, maintenance, management andoperation of the Property. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall qualify to dobusiness and shall remain in good standing under the laws of the State in which the Property is located to the extent required forthe ownership, maintenance, management and operation of the Property.

5.1.13 Title to the Property. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor’s) shall warrantand defend (a) its title to each Individual Property and every part thereof, subject only to Liens permitted hereunder (includingPermitted Encumbrances) and (b) the validity and priority of the Liens of the Security Instrument, the Assignment of Leases andthis Agreement on the Property, subject only to Liens permitted hereunder (including Permitted Encumbrances), in each caseagainst the claims of all Persons whomsoever. Borrower and Maryland Loan Guarantor shall reimburse Lender for any losses,costs, damages or expenses (including reasonable attorneys’ fees and court costs) incurred by Lender if an interest in anyIndividual Property, other than as permitted hereunder, is claimed by another Person.

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5.1.14 Costs of Enforcement. In the event (a) that this Agreement or the Security Instrument is foreclosed upon in whole orin part or that this Agreement or the Security Instrument is put into the hands of an attorney for collection, suit, action orforeclosure, (b) of the foreclosure of any security agreement prior to or subsequent to this Agreement encumbering anyIndividual Property in which proceeding Lender is made a party, or a mortgage prior to or subsequent to the Security Instrumentencumbering any Individual Property in which proceeding Lender is made a party, or (c) of the bankruptcy, insolvency,rehabilitation or other similar proceeding in respect of Borrower, Maryland Loan Guarantor or any of their respectiveconstituent Persons or an assignment by Borrower, Maryland Loan Guarantor or any of their respective constituent Persons forthe benefit of its creditors, Borrower and Maryland Loan Guarantor, and their successors or assigns, shall be chargeable with andagrees to pay all costs of collection and defense, including reasonable attorneys’ fees and costs, incurred by Lender or Borrowerin connection therewith and in connection with any appellate proceeding or post-judgment action involved therein, togetherwith all required service or use taxes.

5.1.15 Estoppel Statements.

(a) Borrower and Maryland Loan Guarantor shall, from time to time, upon thirty (30) days’ prior written request fromLender, execute, acknowledge and deliver to the Lender, an Officer’s Certificate, stating that this Agreement and the other LoanDocuments are unmodified and in full force and effect (or, if there have been modifications, that this Agreement and the otherLoan Documents are in full force and effect as modified and setting forth such modifications), stating the amount of accrued andunpaid interest and the outstanding principal amount of the Notes and containing such other information with respect to theBorrower, Maryland Loan Guarantor, the Property and the Loan as Lender shall reasonably request. The estoppel certificateshall also state that to Borrower’s knowledge either that no Event of Default exists hereunder or, if any Event of Default shallexist hereunder, specify such Event Default and the steps being taken to cure such Event of Default.

(b) Lender shall, from time to time, upon thirty (30) days’ prior written request from Borrower, execute, acknowledge anddeliver to the Borrower, a certificate executed by an officer of Lender, stating that this Agreement and the other LoanDocuments are unmodified and in full force and effect (or, if there have been modifications, that this Agreement and the otherLoan Documents are in full force and effect as modified and setting forth such modifications), stating the amount of accrued andpaid interest and the outstanding balance of the Notes, and such other information as Borrower may reasonably request. Theestoppel certificate shall also state whether Lender has issued any notice of an Event of Default.

5.1.16 Loan Proceeds. Borrower shall use the proceeds of the Loan received by it on the Closing Date only for the purposesset forth in Section 2.1.4.

5.1.17 No Joint Assessment. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall not suffer,permit or initiate the joint assessment of the Property, (a) with any other real property constituting a tax lot separate from theProperty and (b) which constitutes real property with any portion of the Property which may be deemed to constitute personalproperty, or any other procedure whereby the lien of any taxes which may be levied against such personal property shall beassessed or levied or charged to such real property portion of the Property.

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5.1.18 No Further Encumbrances. Borrower shall do, or cause to be done, all things necessary to keep and protect theProperty and all portions thereof unencumbered from any Liens, easements or agreements granting rights in or restricting the useor development of the Property, except for (a) Permitted Encumbrances, (b) Liens permitted pursuant to the Loan Documents, (c)Liens for Impositions prior to the imposition of any interest, charges or expenses for the non-payment thereof and (d) any Lienspermitted pursuant to the Leases.

5.1.19 Leases and Material Subleases. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall,promptly after receipt thereof, deliver to Lender a copy of any notice received with respect to the Leases or any MaterialSubleases claiming that Borrower, Maryland Loan Guarantor or Master Lessee, as applicable, is in default in the performance orobservance of any of the material terms, covenants or conditions of any of the Leases or Material Subleases.

5.1.20 Management.

(a) Borrower(or in the case of the Maryland Property, Maryland Loan Guarantor) shall, and shall use commerciallyreasonable efforts to cause any third party property manager under any management agreement executed pursuant toSection 5.2.14 to, (i) promptly perform and/or observe all of the covenants and agreements required to be performed andobserved by it under such management agreement and do all things necessary to preserve and to keep unimpaired its materialrights thereunder; (ii) promptly notify Lender of any “event of default” under such management agreement of which it is aware;(iii) promptly deliver to Lender a copy of each financial statement, capital expenditures plan, property improvement plan andany other notice, report and estimate received by it under such management agreement; and (iv) enforce in a commerciallyreasonable manner the performance and observance of all of the covenants and agreements required to be performed and/orobserved by it under such management agreement.

(b) If (a) an Event of Default has occurred and is continuing or (b) the third party property manager under any managementagreement executed pursuant to Section 5.2.14 shall become insolvent, Borrower (or in the case of the Maryland Property,Maryland Loan Guarantor) shall, at the request of Lender, terminate or cause Master Lessee to terminate such managementagreement and replace the third party property manager thereunder with a third party property manager approved by Lender inaccordance with Section 5.2.14.

5.1.21 Master Lease.

(a) Each Individual Property shall at all times be leased directly and exclusively by the Borrower (or in the case of theMaryland Property, Maryland Loan Guarantor) to Master Lessee under the Master Lease (and not to any other Person under theMaster Lease or any replacement Master Lease). Master Lessee shall be permitted to enter into Leases subject to and inaccordance with Section 8.7.

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(b) The Master Lease shall have a term extending at least through 2021.

(c) The Master Lease shall require Master Lessee to make payments of Master Lease Rent. Pursuant to the Master Lease andthe Master Lease Rent Payment Direction Letter (i) all Master Lease Scheduled Rent shall at all times during the term of theLoan be made directly to the Holding Account (the Master Lessee Base Rent portion of which shall be payable on a monthlybasis), (ii) other than during any Low LCR Cash Sweep Period or any period during which an Event of Default is continuing, allMaster Lease Variable Additional Rent shall be paid directly by Master Lessee to the Borrower (or in the case of the MarylandProperty, Maryland Loan Guarantor) or to the party entitled to such sums, as specified in the Master Lease, and (iii) during anyLow LCR Cash Sweep Period or any period during which an Event of Default is continuing, all Master Lease VariableAdditional Rent shall be paid directly to the Holding Account, and none of the foregoing payments of Master Lease Rent underclauses (i) and (iii) above shall be deemed made until such payment has been deposited into the Holding Account. Lender shallpay all Master Lease Variable Additional Rent directly to the Person having the right to receive such funds on or prior to therespective due dates therefore, and shall promptly notify Borrower of such payments in accordance with the terms ofSection 3.1.6.

(d) The Master Lease shall require the Master Lessee to prepare applicable reports of expenses and revenue in accordancewith Article XI and to submit copies to Lender.

(e) Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall not terminate the Master Lease orconsent to the termination of the Master Lease without the prior written consent of Lender. The Master Lease shall provide forthe release of an Individual Property therefrom only in connection with (i) a casualty or Taking in the circumstances set forththerein, (ii) the payment of amounts with respect to such Individual Property as required by, and the release of such IndividualProperty from the lien of the Security Instrument pursuant to, the provisions of Section 2.3, (iii) the release of an Outparcel, or(iv) the substitution of an Individual Property with a Replaced Property in accordance with the provisions of Section 2.3. Uponany such release of an Individual Property from the Master Lease, the Master Lease will be amended to reduce the Master LeaseRent by the amount allocable to such Individual Property (as specified in the Master Lease).

(f) Except for the Assignment of Leases and the Permitted Encumbrances, Borrower (or in the case of the MarylandProperty, Maryland Loan Guarantor) shall not shall pledge, transfer, sublease, assign, mortgage, encumber, or allow to beencumbered its interest in the Master Lease or any interest therein without the prior written consent of the Lender. The Borrower(or in the case of the Maryland Property, Maryland Loan Guarantor) shall not permit and shall not consent to any assignment bythe Master Lessee of its interest in the Master Lease or its rights and interests thereunder without the prior written consent of theLender.

(g) Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall not, without the prior writtenconsent of Lender, (i) renew (other than pursuant to renewal rights expressly set forth in the Master Lease), extend, release anyIndividual Property from (except in connection with a Property Release, the release of an Outparcel, a Defeasance or aSubstitution in compliance with Sections 2.3.4, 2.3.5, 2.3.6 and 2.3.7 hereof), terminate, waive any provisions of, reduce rents orother sums payable under, accept a surrender of, or shorten the term of, the Master Lease, (ii) waive any provisions of the MasterLease or (iii) amend or modify any provision of the Master Lease in any material respect except as permitted in the last sentenceof Section 5.1.21(e).

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(h) The Master Lease shall be subject and subordinate to the Loan pursuant to the Master Lease SNDA. Each of Borrowerand Maryland Loan Guarantor agrees to terminate the Master Lease and/or exercise and enforce its remedies under the MasterLease as directed by Lender following an event of default under the Master Lease, as more particularly set forth in Section 2(B)of the Master Lease SNDA.

(i) Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall (i) promptly perform and/or observeall of the covenants and agreements required to be performed and observed by it under the Master Lease and do all thingsnecessary to preserve and to keep unimpaired its material rights thereunder; (ii) promptly notify Lender of default by MasterLessee under the Master Lease; (iii) promptly deliver to Lender a copy of each financial statement, capital expenditures plan,property improvement plan and any other notice, report and estimate received by it under the Master Lease; and (iv) enforce in acommercially reasonable manner the performance and observance of all of the covenants and agreements required to beperformed and/or observed by the Master Lessee under the Master Lease.

5.2 Negative Covenants. From the Closing Date until payment and performance in full of all obligations of Borrower andMaryland Loan Guarantor under the Loan Documents or the earlier release of the Lien of this Agreement or the SecurityInstrument in accordance with the terms of this Agreement and the other Loan Documents, Borrower and Maryland LoanGuarantor each covenants and agrees with Lender that it will not do, directly or indirectly, any of the following:

5.2.1 Incur Debt. Incur, create or assume any Debt other than Permitted Debt or Transfer or lease all or any part of theProperty or any interest therein, except as permitted in the Loan Documents;

5.2.2 Encumbrances. Incur, create or assume or permit the incurrence, creation or assumption of any Debt secured by aninterest in Borrower, Maryland Loan Guarantor, Master Lessee or any other SPE Entity;

5.2.3 Engage in Different Business. Engage, directly or indirectly, in any business other than that of entering into thisAgreement and the other Loan Documents to which Borrower and/or Maryland Loan Guarantor is a party and the use,ownership, management, leasing, renovation, financing, development, operation and maintenance of the Property and activitiesrelated thereto;

5.2.4 Make Advances. Make advances or make loans to any Person, or hold any investments, except as expressly permittedpursuant to the terms of this Agreement or any other Loan Document;

5.2.5 Partition. Partition any Individual Property;

5.2.6 Commingle. Commingle its assets with the assets of any of its Affiliates;

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5.2.7 Guarantee Obligations. Guarantee any obligations of any Person;

5.2.8 Transfer Assets. Transfer any asset other than in the ordinary course of business or Transfer any interest in theProperty except, in each case, as may be permitted hereby or in the other Loan Documents;

5.2.9 Amend Organizational Documents. Amend or modify any of its organizational documents without Lender’s consent,other than in connection with any Transfer permitted pursuant to Article VIII or to reflect any change in capital accounts,contributions, distributions, allocations or other provisions that do not and could not reasonably be expected to have a MaterialAdverse Effect and provided that Borrower, Maryland Loan Guarantor and each other SPE Entity each remain a Single PurposeEntity;

5.2.10 Dissolve. Dissolve, wind-up, terminate, liquidate, merge with or consolidate into another Person, except as expresslypermitted pursuant to this Agreement;

5.2.11 Bankruptcy. (i) File a bankruptcy or insolvency petition or otherwise institute insolvency proceedings, (ii) dissolve,liquidate, consolidate, merge or sell all or substantially all of Borrower’s or Maryland Loan Guarantor’s assets other than inconnection with the repayment of the Loan, (iii) engage in any other business activity or (iv) file or solicit the filing of aninvoluntary bankruptcy petition against Borrower, Maryland Loan Guarantor, Master Lessee, Guarantor or any SPE Entitywithout obtaining the prior consent of all of the directors, members or managers, as applicable, of the applicable Person;

5.2.12 ERISA. Engage in any activity that would subject Borrower or Maryland Loan Guarantor to regulation under ERISAor qualify it as an “employee benefit plan” (within the meaning of Section 3(3) of ERISA) to which ERISA applies andBorrower’s and Maryland Loan Guarantor’s assets do not and will not constitute plan assets within the meaning of 29 C.F.R.Section 2510.3-101;

5.2.13 Distributions. From and after the occurrence and during the continuance of an Event of Default, make anydistributions to or for the benefit of any of its partners or members or its or their Affiliates;

5.2.14 Management.

(a) The Property is currently self-managed by Master Lessee. None of Borrower, Maryland Loan Guarantor nor MasterLessee shall, without the prior written consent of Lender, which consent shall not be unreasonably withheld or delayed(provided, if a Securitization shall have occurred, Borrower obtains a Rating Agency Confirmation with respect to such action)retain a third party property manager to manage the Property. Upon the retention of a third party property manager inaccordance with the foregoing sentence, Lender, and if a Securitization shall have occurred, the Rating Agencies, shall have theright to approve any management agreement with such third party property manager (which approval by Lender shall not beunreasonably withheld or delayed). Without limitation to the foregoing, none of Borrower, Maryland Loan Guarantor norMaster Lessee shall enter into a management agreement for the Property unless Lender shall have received a manager’s consentand subordination of management agreement, executed by Borrower (or in the case of the Maryland Property, Maryland LoanGuarantor), Master Lessee and the applicable third party property manager, in form and substance reasonably acceptable toLender, pursuant to which the management agreement is collaterally assigned to Lender and the third party property manageragrees that its rights under the management agreement are subject and subordinate to the Loan;

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(b) With respect to any management agreement executed by Borrower (or in the case of the Maryland Property, MarylandLoan Guarantor) or Master Lessee in accordance with Section 5.2.14(a), neither Borrower (or in the case of the MarylandProperty, Maryland Loan Guarantor) nor Master Lessee shall, without the prior written consent of Lender, which consent shallnot be unreasonably withheld or delayed (provided, if a Securitization shall have occurred, Borrower obtains a Rating AgencyConfirmation with respect to such action): (i) materially modify, change, supplement, alter or amend such managementagreement or waive or release any of its right and remedies under such management agreement or (ii) replace the third partyproperty manager under such management agreement with any Person which has not been approved in accordance withSection 5.2.14(a);

5.2.15 Reserved.

5.2.16 Modify Account Agreement . Without the prior consent of Lender, which shall not be unreasonably withheld,delayed or conditioned (and if a Securitization shall have occurred, a Rating Agency Confirmation obtained by Borrower),execute any modification to the Account Agreement;

5.2.17 Zoning Reclassification. Without the prior written consent of Lender, (a) initiate or consent to any zoningreclassification of any portion of the Property, (b) seek any variance under any existing zoning ordinance that could result inthe use of the Property becoming a non-conforming use under any zoning ordinance or any other applicable land use law, ruleor regulation, or (c) allow any portion of the Property to be used in any manner that could result in the use of the Propertybecoming a non-conforming use under any zoning ordinance or any other applicable land use law, rule or regulation;

5.2.18 Change of Principal Place of Business. Change its principal place of business and chief executive office set forth onthe first page of this Agreement without first giving Lender thirty (30) days’ prior written notice (but in any event, within theperiod required pursuant to the UCC) and there shall have been taken such action, reasonably satisfactory to Lender, as may benecessary to maintain fully the effect, perfection and priority of the security interest of Lender hereunder in the AccountCollateral at all times;

5.2.19 Debt Cancellation. Cancel or otherwise forgive or release any material claim or debt owed to it by any Person,except for adequate consideration or in the ordinary course of its business and except for termination of a Lease as permitted bySection 8.7;

5.2.20 Misapplication of Funds. Distribute any revenue from the Property or any Proceeds in violation of the provisions ofthis Agreement, fail to remit amounts to the Holding Account as required by Section 3.1, misappropriate any security deposit orportion thereof or apply the proceeds of the Loan in violation of Section 2.1.4; or

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5.2.21 Single Purpose Entity. Fail to be a Single Purpose Entity or take or suffer any action or inaction the result of whichwould be to cause it or any SPE Entity to cease to be a Single Purpose Entity.

VI. INSURANCE; CASUALTY; CONDEMNATION; RESTORATION

6.1 Insurance Coverage Requirements. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall,at its sole cost and expense, keep in full force and effect, or cause the Master Lessee to keep in full force and effect, insurancecoverage of the types and minimum limits as follows during the term of this Agreement (it being understood that to the extentthat Master Lessee maintains any such coverage on the Closing Date, but thereafter fails to maintain such coverage, Borrower(or in the case of the Maryland Property, Maryland Loan Guarantor) shall obtain such coverage at its sole cost and expense):

6.1.1 Property Insurance. Insurance against loss customarily included under so called “All Risk” policies including flood,windstorm, earthquake, vandalism, and malicious mischief, boiler and machinery, and such other insurable hazards as, undergood insurance practices, from time to time are insured against for other property and buildings similar to the Improvements andBuilding Equipment in nature, use, location, height, and type of construction. Such insurance policy shall also insure theadditional expense of demolition and if any of the Improvements or the use of the Property shall at any time constitute legalnon-conforming structures or uses, provide coverage for contingent liability from Operation of Building Laws, DemolitionCosts and Increased Cost of Construction Endorsements and containing an “Ordinance or Law Coverage” or “Enforcement”endorsement. The amount of such “All Risk” insurance shall be not less than one hundred percent (100%) of the replacementcost value of the Improvements and the Building Equipment. Each such insurance policy shall contain an agreed amount(coinsurance waiver) and replacement cost value endorsement and shall cover, without limitation, all tenant improvements andbetterments which Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) is required to insure inaccordance with any Lease. Lender shall be named “Loss Payee” on a “Standard Mortgagee Endorsement” and be provided notless than thirty (30) days advance notice of change in coverage, cancellation or non-renewal.

6.1.2 Liability Insurance. “Commercial General Liability” insurance and “Umbrella Liability” coverage for “PersonalInjury,” “Bodily Injury” including “Accident or Death and Property Damage,” providing in combination no less than$50,000,000 per occurrence and in the annual aggregate and Automobile insurance including coverage for “Owned” (if any),“Hired” and “Non Owned vehicles.” The policies described in this paragraph shall cover “Contractual Liability” includingelevators, escalators and independent contractors (covering Borrower’s (or in the case of the Maryland Property, Maryland LoanGuarantor) obligation to indemnify Lender as required under this Agreement and “Products and Completed OperationsLiability” coverage). All liability insurance shall name Lender as “Additional Insured” either on a specific endorsement orunder a blanket endorsement reasonably satisfactory to Lender.

6.1.3 Workers’ Compensation Insurance. Workers compensation insurance as required by law.

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6.1.4 Business Interruption Insurance. Supplemental Business Interruption insurance in an amount equal to twelve(12) months actual rental loss and with a coverage limit of $7,000,000. Each such insurance policy shall contain an agreedamount (coinsurance waiver). In the event business interruption insurance is no longer available at commercially reasonablerates, then in lieu of obtaining business interruption insurance, Borrower may elect to deposit into the LCR DeteriorationReserve Account Cash or Cash Equivalents or deliver to Lender a Letter of Credit, in either case in an amount equal to (i)$7,000,000 or (ii) the difference between $7,000,000 and the amount of business interruption insurance below $7,000,000 (the“Business Interruption Reserve Amount”). The Business Interruption Reserve Amount shall be applied by Lender againstMaster Lease Rent Shortfalls resulting from a casualty or a Taking. During the continuance of an Event of Default, Lender shallhave the right to draw all undrawn sums on any such Letter of Credit and deposit same into the LCR Deterioration ReserveAccount for application as set forth in the preceding sentence, and, notwithstanding anything to the contrary contained herein,the Business Interruption Reserve Amount shall not be applied against the Obligations during the continuance of an Event ofDefault. In the event of a Master Lease Rent Shortfall resulting from a casualty or Taking, Lender shall have the right to draw anamount equal to such Master Lease Rent Shortfall on any such Letter of Credit and deposit same into the LCR DeteriorationReserve Account. Upon written request of Borrower, Lender agrees to reasonably modify the requirements herein in the eventbusiness interruption insurance is no longer commercially available.

6.1.5 Builder’s All-Risk Insurance . During any period of repair or restoration, builder’s “All-Risk” insurance in an amountequal to not less than the full insurable value of the Property against such risks (including so called “All Risk” perils coverageand collapse of the Improvements to agreed limits as Lender may request, in form and substance acceptable to Lender).

6.1.6 Boiler and Machinery Insurance. Comprehensive boiler and machinery insurance (without exclusion for explosion)covering all mechanical and electrical equipment against physical damage, rent loss and improvements loss and covering,without limitation, all tenant improvements and betterments that Borrower (or in the case of the Maryland Property, MarylandLoan Guarantor) or Master Lessee is required to insure pursuant to the Master Lease or any Lease on a replacement cost basis.The minimum amount of limits to be provided shall be $10,000,000 per accident.

6.1.7 Flood Insurance and Earthquake Insurance.

(a) If any portion of the Improvements is located within an area designated as “flood Zone A or V” or a “special floodhazard area” (as defined under the regulations adopted under the National Flood Insurance Act of 1968 and the Flood DisasterProtection Act of 1973), flood insurance shall be provided, in an amount not less than the maximum limit of coverage availableunder the Federal Flood Insurance plan with respect to the Property. Lender reserves the right to require flood insurance inexcess of that available under the Federal Flood Insurance plan in commercially reasonable amounts. Lender agrees to(a) reasonably modify the requirements herein if such insurance is not commercially available and (b) accept any reducedcoverage requirements acceptable to the Rating Agencies as evidenced by a Rating Agency Confirmation.

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(b) If earthquake insurance limits and aggregates are shared with locations other than the Property insured on the samepolicy as any of the Property or, if the amount of Earthquake insurance provided is less than one hundred percent (100%) of theinsurable values of the Property and business interruption coverage combined, then the amount of earthquake coverage shall bebased on a “Probable Maximum Loss” Study for the applicable Individual Property, which must be conducted by a firmsatisfactory to Lender, which for purposes of this Agreement, Lender agrees that Aon Risk Services, Borrower’s propertyinsurance broker is satisfactory. The results of the “Probable Maximum Loss” Study, on an Individual Property basis and for alllocations insured in the same earthquake insurance policies, shall be used to determine the amount of earthquake coverage to beprovided by Borrower. The amount of insurance shall be determined by adding the total expected damage to all Improvementssubject to a single earthquake event in a given region together along with the expected loss of Rents and other income from theapplicable Individual Property. The total amount of earthquake insurance in limits shall be the sum of expected propertydamage, reconstruction cost and annual business income expected loss. Should the available aggregate limits of earthquakeinsurance be eroded by losses so that the remaining limits available to pay losses are less than forty percent (40%) of therequired limits, Borrower shall purchase additional coverage to restore the available limit and aggregate limit to not less thaneighty percent (80%) of the required amount of insurance. If the earthquake insurance and associated aggregate limits are sharedamong other locations the risks associated with other locations also insured in the same policy shall be taken into considerationin determining the amount of insurance to be provided herein. Lender agrees to (a) reasonably modify the requirements herein ifsuch insurance is not commercially available and (b) accept any reduced coverage requirements acceptable to the RatingAgencies as evidenced by a Rating Agency Confirmation.

6.1.8 Terrorism Insurance. To the extent commercially available, Borrower (or in the case of the Maryland Property,Maryland Loan Guarantor) shall be required to carry insurance with respect to the Improvements and Building Equipmentcovering acts of sabotage or acts by terrorist groups or individuals (“Terrorism Insurance”) throughout the Loan term consistentwith the amounts of insurance required by Sections 6.1.1 and 6.1.5 in an amount not less than $25,000,000, and having adeductible commensurate with the deductibles under the insurance required by Sections 6.1.1 and 6.1.5, or following aSecuritization, such lesser coverage amount or such greater deductible, on a blanket basis, that is acceptable to the RatingAgencies as evidenced by a Rating Agency Confirmation. Borrower (or in the case of the Maryland Property, Maryland LoanGuarantor) agrees that if any property insurance policy covering any Individual Property provides for any exclusions ofcoverage for acts of terrorism, then a separate Terrorism Insurance policy in the coverage amount required under this section andin form and substance reasonably acceptable to Lender will be obtained by the Borrower (or in the case of the MarylandProperty, Maryland Loan Guarantor) for such Property to the extent such Terrorism Insurance is commercially available. Lenderagrees that Terrorism Insurance coverage may be provided under a Blanket Policy that is reasonably acceptable to Lender.Notwithstanding anything to the contrary in this Section 6.1.8, Borrower (or in the case of the Maryland Property, MarylandLoan Guarantor) shall not be obligated to maintain Terrorism Insurance in an amount more than that which can be purchased fora sum equal to $150,000 or such lesser amount of coverage acceptable to the Rating Agencies as evidenced by a Rating AgencyConfirmation.

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6.1.9 Storage Tank System Third Party Liability and Cleanup Insurance. Storage Tank System Third Party Liability andCleanup Insurance providing coverage amounts not less than $2,000,000 per occurrence and $4,000,000 in the annualaggregate.

6.1.10 Other Insurance. At Lender’s reasonable request, such other insurance (including, without limitation, to the extentrequested by Lender, windstorm insurance) with respect to the Property against loss or damage of the kinds from time to timecustomarily insured against and in such amounts as are generally required by institutional lenders on loans of similar amountsand secured by properties comparable to, and in the general vicinity of, the Property.

6.1.11 Ratings of Insurers. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall maintain theinsurance coverage described in Section 6.1.1 through Section 6.1.10 above, in all cases, with one or more domestic primaryinsurers reasonably acceptable to Lender, having both (x) claims-paying-ability and financial strength ratings by S&P of notless than “A” and its equivalent by the other Rating Agencies and (y) an Alfred M. Best Company, Inc. rating of “A-” or betterand a financial size category of not less than “X.” All insurers providing insurance required by this Agreement shall beauthorized to issue insurance in the State.

6.1.12 Form of Insurance Policies; Endorsements. All insurance policies shall be in such form and with such endorsementsas are specified herein (and Lender shall have the right to reasonably approve deductibles and loss payees on the Propertysecured under this Agreement). A certificate of insurance with respect to all of the above-mentioned insurance policies has beendelivered to Lender and copies of all such policies shall be delivered to Lender when the same are available upon request byLender and shall be held by Lender. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall nameLender as an additional insured, shall provide that all Proceeds (except with respect to Proceeds of general liability, automobileliability, excess liability and workers’ compensation insurance) be payable to Lender as and to the extent set forth inSection 6.2, and shall contain: (i) a standard “non-contributory mortgagee” endorsement or its equivalent relating, inter alia, torecovery by Lender notwithstanding the negligent or willful acts or omissions of Borrower (or in the case of the MarylandProperty, Maryland Loan Guarantor); (ii) a waiver of subrogation endorsement in favor of Lender; (iii) an endorsementproviding for a deductible per loss of an amount not more than that which is customarily maintained by prudent owners ofproperties with a standard of operation and maintenance comparable to and in the general vicinity of the Property, but in noevent in excess of an amount reasonably acceptable to Lender (and Lender hereby agrees and acknowledges that in no eventshall Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) be required to maintain a deductible in anamount less than $1,000,000 with respect to any insurance policy obtained pursuant to Section 6.1.1); and (iv) a provision thatsuch policies shall not be canceled, terminated or expire without at least thirty (30) days’ prior written notice to Lender, in eachinstance.

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6.1.13 Evidence of Insurance. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall deliverto Lender annually, prior to the expiration of the insurance policies required hereunder, evidence that the insurance policiesrequired pursuant to this Section 6.1 are maintained with insurers who comply with the terms of Section 6.1.10, setting forth aschedule describing all premiums required to be paid to maintain the policies of insurance required under this Section 6.1, andstating that Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) has or will pay such premiums whendue. Evidence of insurance with respect to all replacement policies shall be delivered to Lender prior to the expiration date ofany of the insurance policies required to be maintained hereunder. If Borrower (or in the case of the Maryland Property,Maryland Loan Guarantor) fails to maintain and deliver to Lender the evidence of insurance required by this Agreement, Lendermay procure such insurance, and all costs thereof (and interest thereon at the Default Rate) shall be added to the Indebtedness.Lender shall not, by the fact of approving, disapproving, accepting, preventing, obtaining or failing to obtain any insurance,incur any liability for or with respect to the amount of insurance carried, the form or legal sufficiency of insurance contracts,solvency of insurance companies, or payment or defense of lawsuits, and Borrower (or in the case of the Maryland Property,Maryland Loan Guarantor) hereby expressly assumes full responsibility therefor and all liability, if any, with respect to suchmatters.

6.1.14 Separate Insurance. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall not take outseparate insurance contributing in the event of loss with such required to be maintained pursuant to this Section 6.1 unless suchinsurance complies with this Section 6.1.

6.1.15 Blanket Policies. The insurance coverage required under this Section 6.1 may be effected under a blanket policy orpolicies covering the Property and other properties and assets not constituting a part of the Property (a “Blanket Policy”),provided that any blanket insurance policy shall cover each Individual Property in an amount of coverage that is not less thanthe amounts required pursuant to this Section 6.1 and which shall in any case comply in all other respects with the requirementsof this Section 6.1.

6.2 Condemnation and Insurance Proceeds.

6.2.1 Notification. Borrower shall promptly notify Lender in writing upon obtaining knowledge of (i) the institution of anyproceedings relating to any Taking (whether material or immaterial) of, or (ii) the occurrence of any casualty, damage or injuryto, the Property or any portion thereof, the restoration of which is estimated by Borrower in good faith to cost more than theCasualty Amount as to any Individual Property. In addition, each such notice shall set forth such good faith estimate of the costof repairing or restoring such casualty, damage, injury or Taking in reasonable detail if the same is then available and, if not, assoon thereafter as it can reasonably be provided. Borrower shall promptly provide Lender with copies of any materialdocumentation available to Borrower and requested by Lender relating to any Taking.

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6.2.2 Proceeds. In the event of any Taking of or any casualty or other damage or injury to the Property, Borrower’s (or inthe case of the Maryland Property, Maryland Loan Guarantor) right, title and interest in and to all compensation, awards,proceeds, damages, claims, insurance recoveries, causes and rights of action (whether accrued prior to or after the date hereof)and payments which Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) may receive or becomeentitled with respect to the Property or any part thereof other than payments received in connection with any liability orbusiness interruption insurance and other than any of the foregoing with respect to the Excluded Personal Property(collectively, “Proceeds”) in connection with any such Taking of, or casualty or other damage or injury to, the Property or anypart thereof are hereby assigned by Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) to Lender and,except as otherwise herein provided, shall be paid to the Lender. Borrower (or in the case of the Maryland Property, MarylandLoan Guarantor) shall, in good faith and in a commercially reasonable manner, file and prosecute the adjustment, compromiseor settlement of any claim for Proceeds and, subject to Borrower’s (or in the case of the Maryland Property, Maryland LoanGuarantor’s) right to receive the direct payment of any Proceeds as herein provided, will cause the same to be paid directly toLender to be held and applied in accordance with the provisions of this Agreement. Except upon the occurrence and during thecontinuance of an Event of Default, Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) may settleany insurance claim with respect to Proceeds which does not exceed the Casualty Amount as to any Individual Property.Whether or not an Event of Default shall have occurred and be continuing, Lender shall have the right to approve, suchapproval not to be unreasonably withheld, any settlement which might result in any Proceeds in excess of the Casualty Amountas to any Individual Property and Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall deliver orcause to be delivered to Lender all instruments reasonably requested by Lender to permit such approval. Borrower shall pay allreasonable out-of-pocket costs, fees and expenses reasonably incurred by Lender (including all reasonable attorneys’ fees andexpenses, the reasonable fees of insurance experts and adjusters and reasonable costs incurred in any litigation or arbitration),and interest thereon at the Default Rate to the extent not paid within ten (10) Business Days after delivery of a request forreimbursement by Lender, in connection with the settlement of any claim for Proceeds and seeking and obtaining of anypayment on account thereof in accordance with the foregoing provisions. If any Proceeds are received by Borrower (or in thecase of the Maryland Property, Maryland Loan Guarantor) and may be retained by Borrower or Maryland Loan Guarantorpursuant to this Section 6.2, such Proceeds shall, until the completion of the related Work, be held in trust for Lender and shallbe segregated from other funds of Borrower and Maryland Loan Guarantor to be used to pay for the cost of the Work inaccordance with the terms hereof, and in the event such Proceeds exceed the Casualty Amount as to any Individual Property,such Proceeds shall be forthwith paid directly to and held by Lender in the Proceeds Reserve Account in trust for Borrower (orin the case of the Maryland Property, Maryland Loan Guarantor), in each case to be applied or disbursed in accordance with thisSection 6.2. Notwithstanding anything to the contrary set forth in this Agreement, however, and excluding situations requiringprepayment of the Notes, to the extent any Proceeds (either singly or when aggregated with all other then unapplied Proceedswith respect to the Property) do not exceed the Casualty Amount as to any Individual Property, such Proceeds are to be paiddirectly to Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) to be applied to restoration of theProperty in accordance with the terms hereof (except that Proceeds paid in respect of the insurance described in Section 6.1.4shall be deposited directly to the Holding Account as revenue of the Property).

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6.2.3 Lender to Take Proceeds. If (i) the Proceeds with respect to any particular Individual Property shall equal or exceedthe Allocated Loan Amount for such Individual Property at a time when the aggregate Allocated Loan Amounts of IndividualProperties then currently impacted by a casualty, damage, destruction or Taking is greater than 10% of the Principal Amount,(ii) an Event of Default shall have occurred and be continuing, (iii) a Total Loss with respect to any Individual Property shallhave occurred, (iv) the Work is not capable of being completed before the earlier to occur of the date which is six (6) monthsprior to the earlier of the Maturity Date and the date on which the business interruption insurance carried with respect to suchIndividual Property on which the business interruption insurance carried with respect to such Individual Property shall expire(the “Cut-Off Date”), unless on or prior to the Cut-Off Date (A) Borrower shall deliver to the Lender and there shall remain ineffect a binding written offer, subject only to customary conditions, of an Approved Bank or such other financial institution orinvestment bank duly authorized to originate loans secured by real property located in the State and reasonably satisfactory toLender for a loan from such Approved Bank or such other financial institution or investment bank to the Borrower (or in thecase of the Maryland Property, Maryland Loan Guarantor) in a principal amount of not less than the then outstanding AllocatedLoan Amount for such Individual Property and which shall, in the Lender’s reasonable judgment, enable the Borrower (or in thecase of the Maryland Property, Maryland Loan Guarantor) to refinance the Allocated Loan Amount with respect to suchIndividual Property at or prior to the Maturity Date and (B) if a Securitization shall have occurred, Borrower shall obtain aRating Agency Confirmation, (v) the Individual Property is not capable of being restored substantially to its condition prior tosuch Taking or casualty and such incapacity shall have a Material Adverse Effect, (vi) the Master Lessee or Borrower (or in thecase of the Maryland Property, Maryland Loan Guarantor) shall exercise any termination right under the Master Lease or(vii) Lender determines that, upon the completion of the restoration, the gross cash flow and the net cash flow of the Propertywill not be restored to a level sufficient to cover all carrying costs and operating expenses of the Property, including, withoutlimitation, debt service on the Notes at a coverage ratio (after deducting all required reserves, as required by Lender, from netoperating income) of at least 1.0 to 1.0, which coverage ratio shall be determined by Lender in its reasonable discretion; then inany such case, all Proceeds shall be paid over to Lender (if not paid directly to Lender) for application as set forth in clause(b) below. Any Proceeds remaining after reimbursement of Lender’s or its agent’s costs and expenses incurred in connectionwith recovery of any such Proceeds (including, without limitation, administrative costs and inspection fees) shall, except to theextent required under the provisions hereof to be applied for restoration, be paid to the Holding Account to be applied byLender to prepay the Notes to the extent of the Release Price for such Individual Property in accordance with the provisionshereof (without the imposition of any Yield Maintenance Premium), with the balance, if any, to be paid to the Borrower’sAccount. If the Proceeds applied by Lender pursuant to the preceding sentence equal or exceed the Release Price for suchIndividual Property, Borrower shall be entitled to obtain a Property Release subject to and in accordance with Section 2.3.4. Ifthe Proceeds so applied by Lender pursuant to clauses (a)(iii), (v) or (vi) above are not sufficient to pay the Release Price withrespect to an Individual Property in full, Borrower shall be entitled to prepay the remainder of the Release Price and obtain aProperty Release with respect to the Individual Property for which the Proceeds were received in accordance with Section 2.3.4without the imposition of any Yield Maintenance Premium and otherwise in accordance with the terms and provisions of theNote.

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6.2.4 Borrower to Restore.

(a) Subject to Borrower’s rights pursuant to Section 2.3.4 to cause the Property to be released from the Lien of the SecurityInstrument, and provided that the Proceeds, if any, shall be made available to Borrower by Lender, Borrower (or in the case ofthe Maryland Property, Maryland Loan Guarantor) shall (whether or not such Proceeds shall be sufficient) promptly after theoccurrence of any damage or destruction to all or any portion of the Property or a Taking of a portion of the Property, commenceand diligently prosecute, or cause to be commenced and diligently prosecuted, to completion, subject to Excusable Delays, therepair, restoration and rebuilding of the Property (in the case of a partial Taking, to the extent it is capable of being restored) sodamaged, destroyed or remaining after such Taking in full compliance with all material Legal Requirements and free and clearof any and all Liens except Permitted Encumbrances (such repair, restoration and rebuilding are collectively referred to hereinas the “Work”). The plans and specifications shall require that the Work be done in a workmanlike manner at least equivalent tothe quality and character prior to the damage or destruction (provided, however, that in the case of a partial Taking, the Propertyrestoration shall be done to the extent reasonably practicable after taking into account the consequences of such partialTaking), so that upon completion thereof, the Property shall be at least equal in value and general utility to the Property prior tothe damage or destruction; it being understood, however, that Borrower (or in the case of the Maryland Property, MarylandLoan Guarantor) shall not be obligated to restore the Property to the precise condition of the Property prior to any partialTaking of, or casualty or other damage or injury to, the Property, if the Work actually performed, if any, or failed to beperformed, shall have no Material Adverse Effect on the value of the Property from the value that the Property would have had ifthe same had been restored to its condition immediately prior to such Taking or casualty.

(b) If Proceeds are not required to be applied toward payment of the Indebtedness pursuant to the terms hereof, then Lendershall make the Proceeds which it is holding pursuant to the terms hereof (after payment of any expenses incurred by Lender inconnection with the collection thereof plus interest thereon at the Default Rate from the date advanced through the date ofreimbursement) available to Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) for payment orreimbursement of Borrower’s (or in the case of the Maryland Property, Maryland Loan Guarantor’s) or the applicable Tenant’sexpenses incurred with respect to the Work, upon the terms and subject to the conditions set forth in paragraphs (i), (ii) and(iii) below and in Section 6.2.5:

(i) at the time of loss or damage or at any time thereafter while Borrower (or in the case of the Maryland Property,Maryland Loan Guarantor) is holding any portion of the Proceeds, there shall be no Event of Default;

(ii) if, at any time, the estimated cost of the Work (as estimated by the Independent Architect referred to in clause(iii) below) shall exceed the Proceeds (a “Deficiency”) and for so long as such Deficiency shall exist, Lender shall not berequired to make any Proceeds disbursement to Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor)unless Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) (within a reasonable period of time afterreceipt of such estimate), at its election, either deposits with or delivers to Lender (A) Cash and Cash Equivalents or a Letter orLetters of Credit in an amount equal to the estimated cost of the Work less the Proceeds available, or (B) such other evidence ofBorrower’s (or in the case of the Maryland Property, Maryland Loan Guarantor’s) ability to meet such excess costs and which issatisfactory to Lender and the Rating Agencies;

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(iii) Each of Lender and the Independent Architect shall have reasonably approved the plans and specifications forthe Work and any change orders in connection with such plans and specifications; and

(iv) Lender shall, within a reasonable period of time prior to request for initial disbursement, be furnished with anestimate of the cost of the Work accompanied by an Independent Architect’s certification as to such costs and appropriate plansand specifications for the Work. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall restore allImprovements such that when they are fully restored and/or repaired, such Improvements and their contemplated use fullycomply with all applicable Legal Requirements including zoning, environmental and building laws, codes, ordinances andregulations.

6.2.5 Disbursement of Proceeds.

(a) Disbursements of the Proceeds in Cash or Cash Equivalents to Borrower (or in the case of the Maryland Property,Maryland Loan Guarantor) hereunder shall be made from time to time (but not more frequently than once in any month) byLender but only for so long as no Event of Default shall have occurred and be continuing, as the Work progresses upon receiptby Lender of (i) an Officer’s Certificate dated not more than ten (10) Business Days prior to the application for such payment,requesting such payment or reimbursement and describing the Work performed that is the subject of such request, the partiesthat performed such Work and the actual cost thereof, and also certifying that such Work and materials are or, upondisbursement of the payment requested to the parties entitled thereto, will be free and clear of Liens other than PermittedEncumbrances, (ii) evidence reasonably satisfactory to Lender that (A) all materials installed and work and labor performed inconnection with such Work have been paid for in full and (B) there exists no notices of pendency, stop orders, mechanic’s liensor notices of intention to file same (unless the same is required by the applicable State law as a condition to the payment of acontractor) or any liens or encumbrances of any nature whatsoever on the Property arising out of the Work which have not beeneither fully bonded to the satisfaction of Lender or discharged of record or in the alternative, fully insured to the satisfaction ofLender by the Title Company and (iii) an Independent Architect’s certificate certifying performance of the Work together withan estimate of the cost to complete the Work. No payment made prior to the final completion of the Work, as certified by theArchitect, except for payment made to contractors or subcontractors whose Work shall have been fully completed and fromwhich final lien waivers have been received, shall exceed ninety percent (90%) of the value of the Work performed andmaterials furnished and incorporated into the Improvements from time to time, and at all times the undisbursed balance of saidProceeds together with all amounts deposited, bonded, guaranteed or otherwise provided for pursuant to Section 6.2.4(b) above,shall be at least sufficient to pay for the estimated cost of completion of the Work; final payment of all Proceeds remaining withLender shall be made upon receipt by Lender of a certification by an Independent Architect, as to the completion of the Worksubstantially in accordance with the submitted plans and specifications, final lien releases, and the filing of a notice ofcompletion and the expiration of the period provided under the law of the applicable State for the filing of mechanics’ andmaterialmens’ liens which are entitled to priority as to other creditors, encumbrances and purchasers, as certified pursuant to anOfficer’s Certificate, and delivery of a certificate of occupancy with respect to the Work, or, if not applicable, an Officer’sCertificate to the effect that a certificate of occupancy is not required.

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(b) If, after the Work is completed in accordance with the provisions hereof and Lender receives evidence that all costs ofcompletion have been paid, there are excess Proceeds, such excess Proceeds shall be paid over to Lender for application inaccordance with Section 6.2.3(b).

VII. IMPOSITIONS, OTHER CHARGES, LIENS AND OTHER ITEMS

7.1 Borrower or Maryland Loan Guarantor to Pay Impositions and Other Charges. Borrower (or in the case of the MarylandProperty, Maryland Loan Guarantor) shall pay all Impositions now or hereafter levied or assessed or imposed against theProperty or any part thereof prior to the imposition of any interest, charges or expenses for the non-payment thereof and shallpay all Other Charges on or before the date they are due. Borrower shall deliver to Lender annually, no later than fifteen(15) Business Days after the first day of each fiscal year of Borrower, and shall update as new information is received, a scheduledescribing all Impositions, payable or estimated to be payable during such fiscal year attributable to or affecting the Property orBorrower. Subject to Borrower’s right of contest set forth in Section 7.3, as set forth in the next two (2) sentences and providedthat there are sufficient funds available in the Tax Reserve Account, Lender, on behalf of Borrower, shall pay all Impositionsand Other Charges which are attributable to or affect the Property or Borrower, prior to the date such Impositions or OtherCharges shall become delinquent or late charges may be imposed thereon, directly to the applicable taxing authority withrespect thereto. Lender shall, or Lender shall direct the Cash Management Bank to, pay to the taxing authority such amounts tothe extent funds in the Tax Reserve Account are sufficient to pay such Impositions. Nothing contained in this Agreement or theSecurity Instrument shall be construed to require Borrower or Maryland Loan Guarantor to pay any tax, assessment, levy orcharge imposed on Lender in the nature of a franchise, capital levy, estate, inheritance, succession, income or net revenue tax.

7.2 No Liens. Subject to its right of contest set forth in Section 7.3, Borrower (or in the case of the Maryland Property,Maryland Loan Guarantor) shall at all times keep, or cause to be kept, the Property free from all Liens (other than PermittedEncumbrances) and shall pay when due and payable (or bond over) all claims and demands of mechanics, materialmen, laborersand others which, if unpaid, might result in or permit the creation of a Lien on the Property or any portion thereof and shall inany event cause the prompt, full and unconditional discharge of all Liens imposed on or against the Property or any portionthereof within forty-five (45) days after receiving written notice of the filing (whether from Lender, the lienor or any otherPerson) thereof. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall do or cause to be done, atthe sole cost of Borrower, everything reasonably necessary to fully preserve the first priority of the Lien of the SecurityInstrument against the Property, subject to the Permitted Encumbrances. Upon the occurrence and during the continuance of anEvent of Default with respect to its Obligations as set forth in this Article VII, Lender may (but shall not be obligated to) makesuch payment or discharge such Lien, and Borrower shall reimburse Lender on demand for all such advances pursuant toSection 19.12 (together with interest thereon at the Default Rate).

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7.3 Contest. Nothing contained herein shall be deemed to require Borrower to pay, or cause to be paid, any Imposition orto satisfy any Lien, or to comply with any Legal Requirement or Insurance Requirement, so long as Borrower (or in the case ofthe Maryland Property, Maryland Loan Guarantor) is in good faith, and by proper legal proceedings, where appropriate,diligently contesting the validity, amount or application thereof, provided that in each case, at the time of the commencementof any such action or proceeding, and during the pendency of such action or proceeding (i) no Event of Default shall exist andbe continuing hereunder, (ii) Borrower shall keep Lender informed of the status of such contest at reasonable intervals, (iii) ifBorrower is not providing security as provided in clause (vi) below, adequate reserves with respect thereto are maintained onBorrower’s books in accordance with GAAP or in the Tax Reserve Account or Insurance Reserve Account, as applicable,(iv) either such contest operates to suspend collection or enforcement as the case may be, of the contested Imposition, Lien orLegal Requirement and such contest is maintained and prosecuted continuously and with diligence or the Imposition or Lien isbonded, (v) in the case of any Insurance Requirement, the failure of Borrower to comply therewith shall not impair the validityof any insurance required to be maintained by Borrower under Section 6.1 or the right to full payment of any claims thereunder,and (vi) in the case of Impositions and Liens which are not bonded in excess of an amount equal to five percent (5%) of theAllocated Loan Amount of the applicable Individual Property, or Two Million Dollars ($2,000,000) in the aggregate, duringsuch contest, Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor), shall deposit with or deliver toLender either Cash and Cash Equivalents or a Letter of Credit or Letters of Credit in an amount equal to one hundred twenty-five percent (125%) of (A) the amount of Borrower’s (or in the case of the Maryland Property, Maryland Loan Guarantor’s)obligations being contested plus (B) any additional interest, charge, or penalty arising from such contest. Notwithstanding theforegoing, the creation of any such reserves or the furnishing of any bond or other security, Borrower and Maryland LoanGuarantor promptly shall comply with any contested Legal Requirement or Insurance Requirement or shall pay any contestedImposition or Lien, and compliance therewith or payment thereof shall not be deferred, if, at any time the Property or anyportion thereof shall be, in Lender’s reasonable judgment, in imminent danger of being forfeited or lost or Lender is likely to besubject to criminal damages as a result thereof. If such action or proceeding is terminated or discontinued adversely to Borrower(or in the case of the Maryland Property, Maryland Loan Guarantor), Borrower or Maryland Loan Guarantor, as applicable, shalldeliver to Lender reasonable evidence of its compliance with such contested Imposition, Lien, Legal Requirements or InsuranceRequirements, as the case may be.

VIII. TRANSFERS, INDEBTEDNESS AND SUBORDINATE LIENS

8 .1 General Restriction on Transfers and Debt. Unless such action is permitted by the provisions of this Agreement,Borrower and Maryland Loan Guarantor shall not, and shall not permit Master Lessee or any Person holding any direct orindirect ownership interest in Borrower, Maryland Loan Guarantor, Master Lessee, or any other SPE Entity or the Property to,except with the prior written consent of Lender and, if a Securitization has occurred, delivery of a Rating Agency Confirmation,(i) Transfer all or any part of the Property, (ii) incur any Debt, other than Permitted Debt or Permitted Encumbrances, or(iii) permit any Transfer (directly or indirectly) of any direct or indirect interest in Borrower, Maryland Loan Guarantor, MasterLessee, any SPE Entity or Guarantor. Notwithstanding the forgoing or anything to the contrary contained in this Agreement, theprovisions of this Article VIII shall not apply to or prohibit and the Lender’s consent shall not be required for (A) the transfer ofshares of stock of any Person (other than Borrower or Maryland Loan Guarantor) that is an Affiliate of Borrower, Maryland LoanGuarantor, Master Lessee, any SPE Entity or Guarantor (1) in connection with an initial public offering of such Person’s stockprovided that Borrower complies with Section 8.4(b)(i), (ii), (iv), (v) and (vi) and/or (2) if such Person is publicly traded, inordinary course trading on a nationally recognized stock exchange, or (B) the incurrence of Debt by Master Lessee and the grantof a Lien by Master Lessee on the Excluded Personal Property as security for such Debt.

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8 .2 Sale of Building Equipment. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) mayTransfer or dispose of Building Equipment which is being replaced or which is no longer necessary in connection with theoperation of the Property free from the Lien of the Security Instrument provided that such Transfer or disposal will not have aMaterial Adverse Effect on the value of the Property taken as a whole, will not materially impair the utility of the Property andwill not result in a reduction or abatement of, or right of offset against, the Rents payable under the Master Lease or any Lease,in either case as a result thereof, and provided, further, that any new Building Equipment acquired by Borrower (or in the case ofthe Maryland Property, Maryland Loan Guarantor) (and not so disposed of) shall be subject to the Lien of the SecurityInstrument. Lender shall, from time to time, upon receipt of an Officer’s Certificate requesting the same and confirmingsatisfaction of the conditions set forth above, execute a written instrument in form reasonably satisfactory to Lender to confirmthat such Building Equipment which is to be, or has been, sold or disposed of is free from the Lien of the Security Instrument.

8.3 Immaterial Transfers and Easements, etc. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor)may, without the consent of Lender, (i) make immaterial Transfers of portions of the Property to Governmental Authorities fordedication or public use (subject to the provisions of Section 6.2) or, portions of the Property to third parties for the purpose oferecting and operating additional structures whose use is integrated with the use of the Property, and (ii) grant easements,restrictions, covenants, reservations and rights of way in the ordinary course of business for access, water and sewer lines,telephone and telegraph lines, electric lines or other utilities or for other similar purposes, provided that no such Transfer,conveyance or encumbrance set forth in the foregoing clauses (i) and (ii) shall materially impair the utility and operation of theProperty or have a Material Adverse Effect on the value of the Property taken as a whole. In connection with any Transferpermitted pursuant to this Section 8.3, Lender shall execute and deliver any instrument reasonably necessary or appropriate, inthe case of the Transfers referred to in clause (i) above, to release the portion of the Property affected by such Taking or suchTransfer from the Lien of the Security Instrument or, in the case of clause (ii) above, to subordinate the Lien of the SecurityInstrument to such easements, restrictions, covenants, reservations and rights of way or other similar grants upon receipt byLender of:

(a) thirty (30) days prior written notice thereof;

(b) a copy of the instrument or instruments of Transfer;

(c) an Officer’s Certificate stating (x) with respect to any Transfer, the consideration, if any, being paid for the Transfer and(y) that such Transfer does not materially impair the utility and operation of the Property, materially reduce the value of theProperty or have a Material Adverse Effect; and

(d) reimbursement of all of Lender’s costs and expenses incurred in connection with such Transfer.

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8.4 Permitted Equity Transfers.

(a) A Transfer (but not a pledge or encumbrance) of a direct or indirect beneficial interest in Borrower (other than MarylandBorrower), Maryland Loan Guarantor or Master Lessee that is otherwise prohibited hereunder shall nevertheless be permittedwithout Lender’s prior written consent if (i) Lender receives thirty (30) days prior written notice thereof, (ii) immediately prior tosuch Transfer, no Event of Default shall have occurred and be continuing, (iii) no more than forty-nine percent (49%) of thedirect or indirect ownership interests in Borrower is being Transferred (in the aggregate of all such Transfers), (iv) the transfereeis not a Disqualified Transferee, (v) Guarantor retains Control of Borrower and Master Lessee and continues to own, directlyand/or indirectly, at least fifty-one percent (51%) of the equity interests in Borrower and Master Lessee, (vi) Master Lesseeremains the master lessee under the Master Lease, (vii) Borrower retains control and management of the Property,(viii) Maryland Loan Guarantor retains a 100% direct ownership interest in Maryland Borrower and (ix) if the Loan has beenrestructured to include any mezzanine component, such Transfer is not a Transfer of the direct interests in Borrower (or in thecase of the Maryland Property, the Maryland Loan Guarantor) which serve as collateral for such mezzanine loan.

(b) A Transfer of more than forty-nine percent (49%) of the direct or indirect ownership interests in Borrower (other thandirect interests in Maryland Borrower) and Maryland Loan Guarantor (in the aggregate of all such Transfers) shall be permittedonly upon the satisfaction of the following conditions precedent: (i) Lender shall have received thirty (30) days prior writtennotice thereof, (ii) immediately prior to such Transfer, no Event of Default shall have occurred and be continuing, (iii) Lendershall have granted its prior written consent to such Transfer, such consent not to be unreasonably withheld, conditioned ordelayed, (iv) the proposed transferee shall be a Qualified Transferee, (v) Borrower shall have reimbursed to Lender all ofLender’s costs and expenses incurred in connection with such Transfer, (vi) Borrower shall have delivered to Lender and, if aSecuritization has occurred, the Rating Agencies, (A) a Non-consolidation Opinion and (B) such other documentation andOpinions of Counsel as shall be reasonably required by Lender and/or, if a Securitization has occurred, required by the RatingAgencies, in each case in a form reasonably satisfactory to Lender and, if the Loan is the subject of a Securitization, in a formsatisfactory to the Rating Agencies in their sole discretion and (vii) prior to such Transfer, Borrower shall have obtained aRating Agency Confirmation.

(c) Notwithstanding anything herein to the contrary, the following Transfers shall not require the prior written consent ofLender or a Rating Agency Confirmation (but shall be subject to the remaining conditions of Section 8.4(a) and (b) asapplicable other than 8(a)(v), 8(b)(iii), (iv) and (vii) all of which shall not be required: a Transfer (but not a pledge orencumbrance) of any direct or indirect interests in Guarantor, Master Lessee, Maryland Loan Guarantor or Borrower (other thandirect interests in Maryland Borrower), provided that subsequent to any such Transfer, more than fifty-one percent (51%)percent of Borrower, Maryland Loan Guarantor and Master Lessee is directly or indirectly owned by one or more investmentfunds, limited liability companies, limited partnerships or general partnerships with combined committed capital of at least$1,000,000,000 where one or more Permitted Fund Managers acts as the general partners, managing members or fund managersand at least fifty-one percent (51%) of the equity interests in each of such Permitted Fund Managers are owned, directly orindirectly, by Guarantor, Cerberus Capital Management, L.P. or a wholly owned subsidiary of Guarantor or Cerberus CapitalManagement, L.P.

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8.5 Deliveries to Lender. Not less than thirty (30) days prior to the closing of any transaction subject to the provisions ofthis Article VIII, Borrower shall deliver to Lender an Officer’s Certificate describing the proposed transaction and stating thatsuch transaction is permitted by this Article VIII, together with any appraisal or other documents upon which such Officer’sCertificate is based. In addition, Borrower shall provide Lender with copies of executed deeds or other similar closingdocuments within ten (10) Business Days after such closing.

8.6 Loan Assumption. Upon receipt of Lender’s prior written consent (which consent shall not be unreasonably withheld ordelayed) and provided no Event of Default is then continuing, Borrower (or in the case of the Maryland Property, MarylandLoan Guarantor) may sell, assign, convey or transfer (but not mortgage, hypothecate or otherwise encumber or grant a securityinterest in) legal or equitable title to all (but not fewer than all) of the Individual Properties only if, after giving effect to theproposed transaction, the Individual Properties will be owned by one or more Single Purpose Entities wholly owned by aQualified Transferee which shall have executed and delivered to Lender an assumption agreement in form and substanceacceptable to Lender. Any such assumption of the Loan shall be conditioned upon, among other things, (i) the delivery offinancial information, including, without limitation, audited financial statements, for such purchaser and the direct and indirectowners such purchaser, (ii) the delivery of evidence that the purchaser is a Single Purpose Entity and is a Qualified Transferee,(iii) the execution and delivery of all documentation reasonably requested by Lender or, if applicable, requested by the RatingAgencies, (iv) the delivery of Opinions of Counsel requested by Lender or the Rating Agencies, including, without limitation, aNon-Consolidation Opinion with respect to the purchaser and other entities identified by Lender and Opinions of Counsel withrespect to the valid formation, due authority and good standing of the purchaser and any additional pledgors and the continuedenforceability of the Loan Documents and any other matters requested by Lender or, if applicable, the Rating Agencies, (v) thedelivery of an endorsement to the Title Policy in form and substance acceptable to Lender, insuring the lien of the SecurityInstrument, as assumed, subject only to the Permitted Encumbrances, (vi) the payment of (A) all of Lender’s fees, costs andexpenses, including, without limitation, reasonable attorneys’ fees and costs, incurred by Lender in connection with suchassumption, (B) any fees of the Rating Agencies and (C) an assumption fee in the amount of $200,000 and (vii) if the Loan isthe subject of a Securitization, delivery of a Rating Agency Confirmation with respect to such assumption.

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8.7 Leases and Subleases.

8.7.1 Leasing Conditions. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall not enterinto any Lease without the prior written consent of Lender. During the continuance of Event of Default, Borrower (or in the caseof the Maryland Property, Maryland Loan Guarantor) shall not permit Master Lessee to (i) enter into any Sublease (a “NewSublease”) or (ii) modify any Sublease (including, without limitation, accept a surrender of any portion of the Property subjectto a Sublease (unless otherwise permitted or required by law), allow a reduction in the term of any Sublease or a reduction in therent payable under any Sublease, change any renewal provisions of any Sublease, materially increase the obligations of thelandlord or materially decrease the obligations of any Tenant) or terminate any Sublease unless the Tenant under such Subleaseis in default (any such action referred to in clause (ii) being referred to herein as a “Sublease Modification”), without the priorwritten consent of Lender. If no Event of Default is then continuing, Borrower (or in the case of the Maryland Property,Maryland Loan Guarantor) may permit Master Lessee to enter into any New Sublease or execute or effect any SubleaseModification without Lender’s consent (provided that, in each case, the terms thereof are market terms and, unless consented toin writing by Lender (such consent not to be unreasonably, withheld, conditioned or delayed) the tenant thereunder is a bonafide third party); provided, however, that during any Low LCR Cash Flow Sweep Period, Borrower (or in the case of theMaryland Property, Maryland Loan Guarantor) shall not permit Master Lessee to enter into a New Sublease that is a MaterialSublease or execute or effect any Sublease Modification with respect to a Material Sublease, without the prior written consent ofLender.

8 .7 .2 Delivery of New Sublease or Sublease Modification. Upon the execution of any New Sublease or SubleaseModification, as applicable, Borrower shall deliver to Lender an executed copy of thereof.

8.7.3 Security Deposits. All security or other deposits of Tenants of the Property shall be treated by Borrower as trust fundsand shall not be commingled with any other funds of Borrower, and such deposits shall be deposited, upon receipt of the sameby Borrower in a separate trust account maintained by Borrower expressly for such purpose. Within ten (10) Business Days afterwritten request by Lender, Borrower shall furnish to Lender reasonably satisfactory evidence of compliance with thisSection 8.7.3, together with a statement of all lease securities deposited with Borrower by the Tenants and the location andaccount number of the account in which such security deposits are held.

8.7.4 No Default Under Subleases. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shallcause Master Lessee to (i) use reasonable efforts to promptly perform and observe all of the material terms, covenants andconditions required to be performed and observed by Master Lessee under the Subleases, (ii) exercise, within ten (10) BusinessDays after a written request by Lender made not more than two (2) times in any calendar year, any right to request from theTenant under any Lease a certificate with respect to the status thereof and (iii) not collect any of the rents thereunder, more thanone (1) month in advance.

8.7.5 Subordination. All Sublease Modifications and New Subleases entered into by Master Lessee after the date hereofshall by their express terms be subject and subordinate to the Master Lease.

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8.7.6 Attornment. Each New Sublease entered into from and after the date hereof shall provide that, (a) in the event of atermination of the Master Lease the Tenant under such Sublease shall attorn to Borrower (or in the case of the MarylandProperty, Maryland Loan Guarantor) and shall recognize Borrower (or in the case of the Maryland Property, Maryland LoanGuarantor) as lessor under such Sublease without change in the provisions thereof and (b) in the event, following anytermination of the Master Lease, of the enforcement by Lender of any remedy under this Agreement or the Security Instrument,the Tenant under such Lease shall, at the option of Lender or of any other Person succeeding to the interest of Lender aslandlord under such Lease as a result of such enforcement, attorn to Lender or to such Person and shall recognize Lender or suchsuccessor in the interest as lessor under such Lease without change in the provisions thereof; provided, however, Lender or suchsuccessor in interest shall not be liable for or bound by (i) any payment of an installment of rent or additional rent made morethan thirty (30) days before the due date of such installment, (ii) any act or omission of or default by Borrower (or in the case ofthe Maryland Property, Maryland Loan Guarantor) or Master Lessee, as applicable, under any such Lease, (iii) any credits,claims, setoffs or defenses which any Tenant may have against Borrower (or in the case of the Maryland Property, MarylandLoan Guarantor) or Master Lessee, as applicable, (iv) any obligation on the part of Borrower (or in the case of the MarylandProperty, Maryland Loan Guarantor) or Master Lessee, as applicable, pursuant to such Lease, to perform any tenantimprovement work or (v) any obligation on the part of Borrower (or in the case of the Maryland Property, Maryland LoanGuarantor) or Master Lessee, as applicable, pursuant to such Lease, to pay any sum of money to any Tenant. Each such NewSublease shall also provide that, upon the reasonable request by Lender or such successor in interest, the Tenant shall executeand deliver an instrument or instruments confirming such attornment.

8.7.7 Non-Disturbance Agreements. Lender shall enter into, and, if required by applicable law to provide constructivenotice or requested by a Tenant, record in the county where the subject Property is located, a subordination, attornment andnon-disturbance agreement, substantially in form and substance substantially similar to the form attached hereto as Exhibit N (a“Non-Disturbance Agreement”), with any Tenant (other than an Affiliate of Borrower) entering into a Lease or Sublease, withinten (10) Business Days after written request therefor by Borrower; provided that Lender’s consent to such Lease or Sublease hasbeen obtained if and to the extent required hereunder and such request is accompanied by an Officer’s Certificate stating thatsuch Lease or Sublease (as applicable) complies in all material respects with this Section 8.7 and payment of all costs andexpenses incurred by Lender in connection with the negotiation, preparation, execution and delivery of any Non-DisturbanceAgreement, including, without limitation, reasonable attorneys’ fees and disbursements.

IX. RESERVED

X. MAINTENANCE OF PROPERTY; ALTERATIONS

10.1 Maintenance of Property. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall keepand maintain, or cause to be kept and maintained, the Property and every part thereof in good condition and repair, subject toordinary wear and tear, and, subject to Excusable Delays and the provisions of this Agreement with respect to damage ordestruction caused by casualty events or Takings, shall not permit or commit any waste, impairment or deterioration of anyportion of the Property in any material respect. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor)further covenants to do all other acts which from the character or use of the Property may be reasonably necessary to protect thesecurity hereof, the specific enumerations herein not excluding the general. Borrower (or in the case of the Maryland Property,Maryland Loan Guarantor) shall not remove or demolish any Improvement on the Property except as the same may be necessaryin connection with an Alteration or a restoration in connection with a Taking or casualty, or as otherwise permitted herein, ineach case in accordance with the terms and conditions hereof.

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10.2 Conditions to Alteration . Provided that no Event of Default shall have occurred and be continuing hereunder,Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall have the right, without Lender’s consent, toundertake any alteration, improvement, demolition or removal of the Property or any portion thereof (any such alteration,improvement, demolition or removal, an “Alteration”) so long as (i) Borrower provides Lender with prior written notice of anyMaterial Alteration, and (ii) such Alteration is undertaken in accordance with the applicable provisions of this Agreement andthe other Loan Documents, is not prohibited by any relevant Lease or Sublease and shall not, upon completion (giving credit torent and other charges attributable to Leases executed upon such completion), have a Material Adverse Effect on the value, useor operation of the Property taken as a whole or otherwise. Any Material Alteration shall be conducted under the supervision ofan Independent Architect and, in connection with any Material Alteration, Borrower shall deliver to Lender, for informationpurposes only and not for approval by Lender, detailed plans and specifications and cost estimates therefor prepared orapproved by such Independent Architect, as well as an Officer’s Certificate stating that such Alteration will involve estimatedcosts of no more than the Threshold Amount. Such plans and specifications may be revised at any time and from time to time bysuch Independent Architect provided that material revisions of such plans and specifications are filed with Lender, forinformation purposes only. All work done in connection with any Alteration shall be performed with due diligence in a goodand workmanlike manner, all materials used in connection with any Alteration shall not be less than the standard of quality ofthe materials currently used at the Property and all materials used shall be in accordance with all applicable material LegalRequirements and Insurance Requirements.

10.3 Costs of Alteration . Notwithstanding anything to the contrary contained in this Article X, no Material Alteration orAlteration which, when aggregated with all other Alterations (other than Material Alterations) then being undertaken byBorrower (or in the case of the Maryland Property, Maryland Loan Guarantor) or Master Lessee (exclusive of Alterations beingdirectly paid for by Tenants at the Property), exceeds the Threshold Amount shall be performed by or on behalf of Borrower (orin the case of the Maryland Property, Maryland Loan Guarantor) or Master Lessee unless Borrower shall have delivered toLender Cash and Cash Equivalents and/or a Letter of Credit as security in an amount not less than (a) the estimated cost of theMaterial Alteration or the Alterations minus the Threshold Amount (as set forth in the Independent Architect’s written estimatereferred to above) or (b) in the case of Alterations being performed by or on behalf of the Master Lessee, any sums required to bedeposited by Master Lessee under the Master Lease. Borrower (or in the case of the Maryland Property, Maryland LoanGuarantor) shall deliver to Lender any security deposited by the Master Lessee for any Alteration under the Master Lease. Inaddition to payment or reimbursement from time to time of Borrower’s expenses incurred in connection with any MaterialAlteration or any such Alteration, the amount of any such security shall be reduced on any given date to the IndependentArchitect’s written estimate of the cost to complete the Material Alteration or the Alterations (including any retainages), freeand clear of Liens, other than Permitted Encumbrances. Costs which are subject to retainage (which in no event shall be lessthan five percent (5%) in the aggregate until fifty percent (50%) of the work to be performed under the applicable contract hasbeen substantially completed) shall be treated as due and payable and unpaid from the date they would be due and payable butfor their characterization as subject to retainage. In the event that any Material Alteration or Alteration shall be made inconjunction with any restoration with respect to which Borrower shall be entitled to withdraw Proceeds pursuant to Section 6.2,the amount of the Cash and Cash Equivalents and/or Letter of Credit to be furnished pursuant hereto need not exceed theaggregate cost of such restoration and such Material Alteration or Alteration (as estimated by the Independent Architect), lessthe sum of the amount of any Proceeds which Borrower may be entitled to withdraw pursuant to Section 6.2 and which are heldby Lender in accordance with Section 6.2. Payment or reimbursement of Borrower’s expenses incurred with respect to anyMaterial Alteration or any such Alteration shall be accomplished upon the terms and conditions specified in Section 6.2.

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At any time after substantial completion of any Material Alteration or any such Alteration in respect of which Cashand Cash Equivalents and/or a Letter of Credit is deposited pursuant hereto, the whole balance of any Cash and CashEquivalents so deposited by Borrower with Lender and then remaining on deposit (together with earnings thereon), as well asall retainages, may be withdrawn by Borrower and shall be paid by Lender to Borrower, and any other Cash and CashEquivalents and/or a Letter of Credit so deposited or delivered shall, to the extent it has not been called upon, reduced ortheretofore released, be released to Borrower, within ten (10) days after receipt by Lender of an application for such withdrawaland/or release together with an Officer’s Certificate, and signed also (as to the following clause (a)) by the IndependentArchitect, setting forth in substance as follows:

(a) that to the knowledge of the certifying Person, the Material Alteration or Alteration in respect of which such Cash andCash Equivalents and/or a Letter of Credit was deposited has been substantially completed in all material respects substantiallyin accordance with any plans and specifications therefor previously filed with Lender under Section 10.2 and that, if applicable,a certificate of occupancy has been issued with respect to such Material Alteration or Alteration by the relevant GovernmentalAuthority(ies) or, if not applicable, that a certificate of occupancy is not required; and

(b) that to the knowledge of the certifying Person all amounts which Borrower is or may become liable to pay in respect ofsuch Material Alteration or Alteration through the date of the certification have been paid in full or adequately provided for orare being contested in accordance with Section 7.3 and that, except to the extent of such contests, lien waivers have beenobtained from the general contractor and major subcontractors performing such Material Alterations or Alterations (or suchwaivers are not customary and reasonably obtainable by prudent owners in the area where the Property is located).

Notwithstanding the foregoing, in lieu of posting Cash and Cash Equivalents and/or a Letter of Credit with Lender pursuant tothe provisions of this Section 10.3, Borrower may, at its election, deliver to lender a guaranty from Guarantor in form acceptableto Lender, pursuant to which Guarantor unconditionally guaranties the lien free completion of the subject Alteration andpayment in full of all costs related thereto in excess of the Threshold Amount.

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XI. BOOKS AND RECORDS, FINANCIAL STATEMENTS, REPORTS AND OTHER INFORMATION

11.1 Books and Records. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall keep andmaintain on a fiscal year basis proper books and records separate from any other Person, in which accurate and complete entriesshall be made of all dealings or transactions of or in relation to the Notes, the Property and the business and affairs of Borrower(or in the case of the Maryland Property, Maryland Loan Guarantor) relating to the Property which shall reflect all items ofincome and expense in connection with the operation of the Property and in connection with any services, equipment orfurnishings provided in connection with the operation of the Property, in accordance with GAAP. Lender and its authorizedrepresentatives shall have the right, at reasonable times and upon reasonable notice, to examine the books and records ofBorrower (or in the case of the Maryland Property, Maryland Loan Guarantor) relating to the operation of the Property and tomake such copies or extracts thereof as Lender may reasonably require.

11.2 Financial Statements.

11.2.1 Quarterly Reports. Commencing not later than forty-five (45) days following the end of each Fiscal Quarter(commencing with the Fiscal Quarter ending in June, 2006), Borrower shall deliver, and shall cause Master Lessee to deliver, toLender unaudited financial statements of Guarantor, Borrower, Maryland Loan Guarantor and Master Lessee, internallyprepared in accordance with GAAP, reporting Master Lessee’s EBITDAR, including (i) a balance sheet and profit and lossstatement, as of the end of such Fiscal Quarter and for the corresponding Fiscal Quarter of the previous year, including astatement of net income (in respect of the Property) for the year to date and (ii) a statement of revenues and expenses for suchFiscal Quarter, together with a comparison of the year to date results with (A) the results for the same period of the previous year,(B) the results that had been projected by Borrower and Master Lessee for such period and (C) the portion of the Annual Budgetapplicable to such period, and (c) a calculation of the LCR for such period and a statement of the Master Lease VariableAdditional Rent and Master Lease Recurrent Additional Rent for such period. Such statements for each Fiscal Quarter shall beaccompanied by an Officer’s Certificate certifying to the signer’s knowledge, (1) that such statements fairly represent thefinancial condition and results of operations of Borrower, Maryland Loan Guarantor and Master Lessee, (2) that as of the date ofsuch Officer’s Certificate, no Default exists under this Agreement, the Notes or any other Loan Document or, if so, specifying thenature and status of each such Default and the action then being taken by Borrower or proposed to be taken to remedy suchDefault, (3) that as of the date of each Officer’s Certificate, no litigation exists (A) involving Borrower, Maryland LoanGuarantor or the Property in which the amount involved is $500,000 (in the aggregate) or more or in which all or substantiallyall of the potential liability is not covered by insurance, or (B) involving Master Lessee which if adversely determined would bereasonably likely to have a Material Adverse Effect, or if so, specifying such litigation and the actions being taking in relationthereto and (4) the amount by which actual operating expenses were greater than or less than the operating expenses anticipatedin the applicable Annual Budget. Borrower shall provide such other financial information as shall be reasonably requested byLender for purposes of calculations to be made by Lender pursuant to the terms of this Agreement.

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11.2.2 Annual Reports. Concurrently with the public filings of any financial statements of Borrower and in any event notlater than one-hundred twenty (120) days after the end of each Fiscal Year of Borrower’s operations, Borrower shall deliver, andshall cause Master Lessee to deliver, to Lender (a) consolidated audited financial statements of Guarantor certified by anIndependent Accountant in accordance with GAAP and unaudited financial statements of Borrower, Maryland Loan Guarantorand Master Lessee, including a balance sheet as of the end of such Fiscal Year and a statement of revenues and expenses forsuch Fiscal Year, as well as a supplemental schedule of net income or loss presenting the net income or loss for the Property andthe figures for the previous Fiscal Year and the figures set forth in the Annual Budget for such Fiscal Year, (b) a calculation ofthe LCR, Master Lease Variable Additional Rent and Master Lease Recurrent Additional Rent for such period and (c) copies ofall federal income tax returns of Borrower, Maryland Loan Guarantor, Master Lessee and Guarantor if and to the extend such taxreturns are required to be filed under applicable law. Such annual financial statements shall also be accompanied by an Officer’sCertificate in the form required pursuant to Section 11.2.1.

11.2.3 Capital Expenditures Summaries. Borrower shall, or shall cause Master Lessee to, within ninety (90) days after theend of each calendar year during the term of the Notes, deliver to Lender an annual summary of material Capital Expendituresmade at the Property during the prior twelve (12) month period.

11.2.4 Master Lease. Without duplication of any other provision of this Agreement or any other Loan Documents,Borrower shall deliver to Lender, within ten (10) Business Days of the receipt thereof by Borrower, a copy of all reports preparedby Master Lessee, if any, pursuant to the Master Lease, including, without limitation, the Annual Budget and any inspectionreports.

11.2.5 Annual Budget. Borrower shall deliver to Lender the Annual Budget for Lender’s review, but not approval, not morethan ninety (90) days after the end of each Fiscal Year. Any proposed modifications to such Annual Budget shall be delivered toLender for its review, but not approval.

11.2.6 Other Information. Borrower shall, promptly after written request by Lender or, if a Securitization shall haveoccurred, the Rating Agencies, furnish or cause to be furnished to Lender, in such manner and in such detail as may bereasonably requested by Lender or requested by the Rating Agencies, such reasonable additional financial information as maybe reasonably requested by Lender or requested by the Rating Agencies with respect to the Property, Borrower, Maryland LoanGuarantor, Master Lessee and/or Guarantor.

11.2.7 Consolidation. Lender acknowledges that all financial reporting of Borrower and Maryland Loan Guarantor will beconsolidated.

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XII. ENVIRONMENTAL MATTERS

12.1 Representations. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) hereby represents andwarrants that except as set forth in the environmental reports and studies delivered to Lender (the “Environmental Reports”), toBorrower’s knowledge, (i) Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) has not engaged in orknowingly permitted any operations or activities upon, or any use or occupancy of the Property, or any portion thereof, for thepurpose of or in any way involving the handling, manufacture, treatment, storage, use, generation, release, discharge, refining,dumping or disposal of any Hazardous Materials on, under, in or about the Property, or transported any Hazardous Materials to,from or across the Property, except in all cases in material compliance with Environmental Laws and only in the course oflegitimate business operations at the Property; (ii) no tenant, occupant or user of the Property, or any other Person, has engagedin or permitted any operations or activities upon, or any use or occupancy of the Property, or any portion thereof, for thepurpose of or in any material way involving the handling, manufacture, treatment, storage, use, generation, release, discharge,refining, dumping or disposal of any Hazardous Materials on, in or about the Property, or transported any Hazardous Materialsto, from or across the Property, except in all cases in material compliance with Environmental Laws and only in the course oflegitimate business operations at the Property; (iii) no Hazardous Materials are presently constructed, deposited, stored, orotherwise located on, under, in or about the Property except in material compliance with Environmental Laws; (iv) noHazardous Materials have migrated from the Property upon or beneath other properties which would reasonably be expected toresult in material liability for Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor); and (v) noHazardous Materials have migrated or threaten to migrate from other properties upon, about or beneath the Property whichwould reasonably be expected to result in material liability for Borrower (or in the case of the Maryland Property, MarylandLoan Guarantor).

12.2 Covenants.

12.2.1 Compliance with Environmental Laws. Subject to Borrower’s right to contest under Section 7.3, each of Borrowerand Maryland Loan Guarantor covenants and agrees with Lender that it shall comply with all Environmental Laws. If at anytime during the continuance of the Lien of the Security Instrument, a Governmental Authority having jurisdiction over theProperty requires remedial action to correct the presence of Hazardous Materials in, around, or under the Property (an“Environmental Event”), Borrower shall deliver prompt notice of the occurrence of such Environmental Event to Lender.Within thirty (30) days after Borrower has knowledge of the occurrence of an Environmental Event, Borrower shall deliver toLender an Officer’s Certificate (an “Environmental Certificate”) explaining the Environmental Event in reasonable detail andsetting forth the proposed remedial action, if any. Borrower shall promptly provide Lender with copies of all notices whichallege or identify any actual or potential violation or noncompliance received by or prepared by or for Borrower in connectionwith any Environmental Law. For purposes of this paragraph, the term “notice” shall mean any summons, citation, directive,order, claim, pleading, letter, application, filing, report, findings, declarations or other materials pertinent to compliance of theProperty and Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) with such Environmental Laws.

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12.3 Environmental Reports. Upon the occurrence and during the continuance of an Environmental Event with respect toany Individual Property or any Event of Default, Lender shall have the right to have its consultants perform a comprehensiveenvironmental audit of such affected Individual Property. Such audit shall be conducted by an environmental consultantchosen by Lender and may include a visual survey, a record review, an area reconnaissance assessing the presence of hazardousor toxic waste or substances, PCBs or storage tanks at such Individual Property, an asbestos survey of such Individual Property,which may include random sampling of the Improvements and air quality testing, and such further site assessments as Lendermay reasonably require due to the results obtained from the foregoing. Borrower (or in the case of the Maryland Property,Maryland Loan Guarantor) grants Lender, its agents, consultants and contractors the right to enter any Individual Propertyaffected by an Environmental Event as reasonable or appropriate for the circumstances for the purposes of performing suchstudies and the reasonable cost of such studies shall be due and payable by Borrower to Lender upon demand and shall besecured by the Lien of the Security Instrument. Lender shall not unreasonably interfere with, and Lender shall direct theenvironmental consultant to use its commercially reasonable efforts not to hinder, Borrower’s, Maryland Loan Guarantor’s,Master Lessee’s or any Tenant’s operations upon such Individual Property when conducting such audit, sampling orinspections. By undertaking any of the measures identified in and pursuant to this Section 12.3, Lender shall not be deemed tobe exercising any control over the operations of Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor)or the handling of any environmental matter or hazardous wastes or substances of Borrower (or in the case of the MarylandProperty, Maryland Loan Guarantor) for purposes of incurring or being subject to liability therefor.

12.4 Environmental Indemnification. Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shallprotect, indemnify, save, defend, and hold harmless the Indemnified Parties from and against any and all liability, loss, damage,actions, causes of action, costs or expenses whatsoever (including reasonable attorneys’ fees and expenses) and any and allclaims, suits and judgments which any Indemnified Party may suffer, as a result of or with respect to: (a) any EnvironmentalClaim relating to or arising from the Property; (b) the violation of any Environmental Law in connection with the Property;(c) any release, spill, or the presence of any Hazardous Materials affecting the Property; and (d) the presence at, in, on or under,or the release, escape, seepage, leakage, discharge or migration at or from, the Property of any Hazardous Materials, whether ornot such condition was known or unknown to Borrower, provided that, in each case, the liabilities and obligations of Borrower(or in the case of the Maryland Property, Maryland Loan Guarantor) hereunder shall not apply to the extent that any event orcondition described in the foregoing clauses (a) through (d) (i) is fully insured against by an Environmental Insurance Policyand the related insurer defends Lender and fully pays Lender’s claims thereunder, (ii) is caused by or results from the grossnegligence or willful misconduct of any of the Indemnified Parties or any of their respective Affiliates, agents, employees orcontractors, or (iii) did not occur (but need not have been discovered) prior to (A) the foreclosure of the Security Instrument,(B) the delivery by Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) to Lender or its designee of adeed-in-lieu of foreclosure with respect to the Property, or (C) Lender’s or its designee’s taking possession and control of theProperty after the occurrence of an Event of Default. If any action or other proceeding shall be brought against Lender whichBorrower (or in the case of the Maryland Property, Maryland Loan Guarantor) is required to defend pursuant to the foregoingprovisions of this Section 12.4, upon written notice from Borrower to Lender (given reasonably promptly following Lender’snotice to Borrower of such action or proceeding), Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor)shall be entitled to assume the defense thereof, at Borrower’s expense, with counsel reasonably acceptable to Lender; provided,however, Lender may, at its own expense, retain separate counsel to participate in such defense, but such participation shall notbe deemed to give Lender a right to control such defense, which right Borrower expressly retains. Notwithstanding theforegoing, each Indemnified Party shall have the right to employ separate counsel in any action or other proceeding whichBorrower (or in the case of the Maryland Property, Maryland Loan Guarantor) is required to defend pursuant to the foregoingprovisions of this Section 12.4, at Borrower’s expense if, in the reasonable opinion of legal counsel, a conflict or potentialconflict exists between the Indemnified Party and Borrower that would make such separate representation advisable.Notwithstanding the foregoing, Lender and the other Indemnified Parties agree to seek recovery against Borrower (or in the caseof the Maryland Property, Maryland Loan Guarantor) for losses for which they are indemnified under this Section 12.4 onlyafter a claim for such losses has been filed under any Environmental Insurance Policy then in full force and effect which coverssuch losses and Lender has received any written communication from the insurer rejecting such claim. In addition, Borrowershall have no obligation to indemnify an Indemnified Party for damage or loss resulting from such Indemnified Party’s grossnegligence or willful misconduct.

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12.5 Recourse Nature of Certain Indemnifications. Except as otherwise provided in this Agreement or in any other LoanDocument, including, without limitation, the provisions of Article XVIII, the indemnification provided in Section 12.4 shall befully recourse to Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) and shall be independent of, andshall survive, the discharge of the Indebtedness, the release of the Lien created by the Security Instrument, and/or theconveyance of title to the Property to Lender or any purchaser or designee in connection with a foreclosure of the SecurityInstrument or conveyance in lieu of foreclosure.

XIII. RESERVED

XIV. SECURITIZATION

14.1 Sale of Notes and Securitization. At the request of Lender and, to the extent not already required to be provided byBorrower or Maryland Loan Guarantor under this Agreement, Borrower and Maryland Loan Guarantor shall use reasonableefforts to cooperate with Lender and the Rating Agencies in connection with the sale of one or more of the Notes or aparticipation interest therein as part of the securitization (such sale and/or securitization, the “Securitization”) of rated single ormulti-class securities (the “Securities”) secured by or evidencing ownership interests in the applicable Note or Notes and thisAgreement, including using reasonable efforts to cooperate with Lender and the Rating Agencies in connection with the actionsset forth in clauses (a) through (d) below, but Borrower shall not, in connection with a Securitization, be required to incur, sufferor accept (except to a de minimis extent)) (i) any greater obligations or liabilities than as currently set forth in the LoanDocuments or (ii) any cost or expense.

(a) Provided Information. (i) Use reasonable efforts to provide such financial and other information (but not projections)with respect to the Property, Borrower, Maryland Loan Guarantor, Master Lessee and Guarantor to the extent such information isreasonably available to Borrower and provided any such request for financial information is consistent with the financialreporting requirements set forth in Article XI, (ii) provide business plans (but not projections) and budgets relating to theProperty, to the extent previously prepared by or on behalf of the Borrower, and (iii) cooperate with the holder of the Notes (andits representatives) in obtaining such site inspection, appraisals, market studies, environmental reviews and reports, engineeringreports and other due diligence investigations of the Property, as may be reasonably requested by the holder of the Notes orreasonably requested by the Rating Agencies (all information provided pursuant to this Section 14.1 together with all otherinformation heretofore provided to Lender in connection with the Loan, as such may be updated, at Lender’s request, inconnection with a Securitization, or hereafter provided to Lender in connection with the Loan or a Securitization, being hereincollectively called the “Provided Information”);

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(b) Opinions of Counsel. Use reasonable efforts to cause to be rendered such customary updates or customary modificationsto the Opinions of Counsel delivered at the closing of the Loan as may be reasonably requested by the holder of the Notes or theRating Agencies in connection with the Securitization;

(c) Modifications to Loan Documents. Execute such amendments to the Security Instrument and Loan Documents as maybe reasonably requested by Lender or the Rating Agencies in order to achieve the required rating or to effect the Securitization(including, without limitation, modifying the Payment Date and modifying the commencement and expiration of the InterestPeriod, in each case to dates other than as originally set forth in the Notes to the extent provided in the Note), and

(d) Cooperation with Rating Agencies. Borrower and Maryland Loan Guarantor shall, on reasonable prior notice, (i) atLender’s request, meet with representatives of the Rating Agencies at reasonable times to discuss the business and operations ofthe Property and (ii) cooperate with the reasonable requests of the Rating Agencies in connection with the Property. After aSecuritization and until the Obligations are paid in full, Lender may provide the Rating Agencies with all financial reports andother information required hereunder, including copies of any default notices or other material notices delivered to and receivedfrom Lender hereunder, to enable them to continuously monitor the creditworthiness of Borrower and Maryland Loan Guarantorand to permit an annual surveillance of the implied credit rating of the Securities.

14.2 Securitization Financial Statements. Borrower acknowledges that all financial information delivered by Borrower toLender pursuant to Article XI may, at Lender’s option, be delivered to the Rating Agencies.

14.3 Securitization Indemnification.

14.3.1 Disclosure Documents. Borrower understands that certain of the Provided Information may be included in disclosuredocuments in connection with the Securitization, including a prospectus, private placement memorandum, collateral term sheetor a public registration statement (each, a “Disclosure Document”) and may also be included in filings with the Securities andExchange Commission pursuant to the Securities Act of 1933, as amended (the “Securities Act”) or the Securities and ExchangeAct of 1934, as amended (the “Exchange Act”), or provided or made available to investors or prospective investors in theSecurities, the Rating Agencies, and service providers relating to the Securitization. In the event that the Disclosure Documentis required to be revised prior to the sale of all Securities, upon request, Borrower and Maryland Loan Guarantor shallreasonably cooperate with the holder of the Notes, at no cost or expense to Borrower, in updating the Provided Information forinclusion or summary in the Disclosure Document by providing all current information pertaining to Borrower, Maryland LoanGuarantor and the Property reasonably requested by Lender:

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14.3.2 Indemnification Certificate. In connection with each applicable Disclosure Document, Borrower and MarylandLoan Guarantor each agrees to provide, at Lender’s reasonable request, an indemnification certificate:

(a) certifying that Borrower and Maryland Loan Guarantor each has carefully examined those portions of suchmemorandum or prospectus, as applicable, reasonably designated in writing by Lender for Borrower’s review pertaining toBorrower, Maryland Loan Guarantor, the Property, Guarantor, the Loan and/or the Provided Information and insofar as suchsections or portions thereof specifically pertain to Borrower, Maryland Loan Guarantor, the Property, Guarantor, the ProvidedInformation or the Loan (such portions, the “Relevant Portions”), the Relevant Portions do not (except to the extent specifiedby Borrower if Borrower does not agree with the statements therein), as of the date of such certificate, to Borrower’s knowledge,contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, inthe light of the circumstances under which they were made, not misleading.

(b) subject to the provisions of Article XVIII hereof, indemnifying Lender and the Affiliates of Deutsche Bank Securities,Inc. (collectively, “DBS”) as well as Wachovia Bank, National Association and its Affiliates (“ Wachovia”) that have preparedthe Disclosure Document relating to the Securitization, each of their respective directors, each of their respective officers whohave signed the Disclosure Document and each person or entity who controls DBS or Wachovia within the meaning ofSection 15 of the Securities Act or Section 20 of the Exchange Act (collectively, the “ Lender Group”), and DBS and Wachovia,together with the Lender Group, each of their respective directors and each person who controls DBS or Wachovia or the LenderGroup, within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act (collectively, the“Underwriter Group”) for any actual, out-of-pocket losses, third party claims, damages (excluding lost profits, diminution invalue and other consequential damages) or liabilities arising out of third party claims (the “Liabilities”) to which any member ofthe Underwriter Group may become subject to the extent such Liabilities arise out of or are based upon any untrue statement ofany material fact contained in the Relevant Portions and in the Provided Information or arise out of or are based upon theomission by Borrower to state therein a material fact required to be stated in the Relevant Portions in order to make thestatements in the Relevant Portions in light of the circumstances under which they were made, not misleading (except that(x) Borrower’s obligation to indemnify in respect of any information contained in a Disclosure Document that is derived in partfrom information provided by Borrower or any Affiliate of Borrower and in part from information provided by others unrelatedto or not employed by Borrower, and (y) Borrower shall have no responsibility for the failure of any member of the UnderwritingGroup to accurately transcribe written information supplied by Borrower or to include such portions of the ProvidedInformation); provided that Liabilities shall exclude all actual, out-of-pocket losses, third party claims, damages or liabilitiesarising out any corrections, qualifications and/or clarifications to the Relevant Portions which are disclosed by Borrower toLender in writing as provided above and as to which Lender does not change the Relevant Portions to reflect such corrections,qualifications and/or clarifications). The indemnity contained in the indemnification certificate will be in addition to anyliability which Borrower may otherwise have.

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(c) The indemnification certificate shall provide that Borrower’s and Maryland Loan Guarantor’s liability under theindemnification certificate shall be (i) limited solely to Liabilities arising solely out of or based upon any such untrue statementor omission made in a Disclosure Document in reliance upon and in conformity with the Relevant Portions and (ii) subject tothe provisions of Article XVIII hereof.

(d) The indemnification certificate shall also provide that promptly after receipt by an indemnified party of notice of thecommencement of any action covered by the indemnification certificate, such indemnified party will notify the indemnifyingparty in writing of the commencement thereof, but the omission to so notify the indemnifying party will not relieve theindemnifying party from any liability which the indemnifying party may have to any indemnified party thereunder except tothe extent that failure to notify causes prejudice to the indemnifying party. In the event that any action is brought against anyindemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled,jointly with any other indemnifying party, to participate therein and, to the extent that it (or they) may elect by written noticedelivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume thedefense thereof with counsel reasonably satisfactory to such indemnified party. After such notice from the indemnifying party tosuch indemnified party of its assumption of such defense, the indemnifying party shall not be liable for any legal or otherexpenses subsequently incurred by such indemnified party in connection with the defense thereof; provided, however, if anindemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there are anylegal defenses available to it that are different from or in conflict with those available to the indemnifying party, or indemnifiedparty or parties shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in thedefense of such action on behalf of such indemnified party or parties at the expense of the indemnifying party.

(e) Retention of Servicer. Lender reserves the right to retain the Servicer at no cost or expense to Borrower. Lender hasadvised Borrower that the Servicer initially retained by Lender shall be Wachovia Bank, National Association or its Affiliate.Borrower shall pay any fees and expenses of the Servicer and any reasonable third party fees and expenses of the Servicer,including, without limitation, special servicing fees, work out fees and reasonable attorneys fees and disbursements, inconnection with a prepayment, release or substitution of the Property, assumption or modification of the Loan, or following anevent of Default, special servicing or work out of the Loan or enforcement of the Loan Documents; provided however thatServicer fees (excluding any reasonable third party fees and expenses) for releases, substitutions and prepayments shall notexceed the following amounts:

(i) Releases: $2500 (inclusive of payoff calculation) per release; (ii) Substitutions: $7500 per substitution; and (iii) Prepayments: $300 for payoff quote calculation.

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XV. ASSIGNMENTS AND PARTICIPATIONS

15.1 Assignment and Acceptance. Lender may assign to one or more Persons all or a portion of its rights and obligationsunder this Agreement and the other Loan Documents (including, without limitation, all or a portion of one or more of theNotes); provided that the parties to each such assignment shall execute and deliver to Lender, for its acceptance and recordingin the Register (as hereinafter defined), an Assignment and Acceptance. In addition, Lender may participate to one or morePersons all or any portion of its rights and obligations under this Agreement and the other Loan Documents (including withoutlimitation, all or a portion of one or more of the Notes) utilizing such documentation to evidence such participation and theparties’ respective rights thereunder as Lender, in its sole discretion, shall elect.

15.2 Effect of Assignment and Acceptance . Upon such execution, delivery, acceptance and recording, from and after theeffective date specified in such Assignment and Acceptance, (i) the assignee thereunder shall be a party hereto and, to the extentthat rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, have the rights andobligations of Lender, as the case may be, hereunder and such assignee shall be deemed to have assumed such rights andobligations, and (ii) Lender shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to suchAssignment and Acceptance, relinquish its rights and be released from its obligations under this Agreement and the other LoanDocuments (and, in the case of an Assignment and Acceptance covering all or the remaining portion of Lender’s rights andobligations under this Agreement and the other Loan Documents, Lender shall cease to be a party hereto) accruing from andafter the effective date of the Assignment and Acceptance, except with respect to (A) any payments made by Borrower to Lenderpursuant to the terms of the Loan Documents after the effective date of the Assignment and Acceptance and (B) any letter ofcredit, cash deposit or other deposits or security (other than the Lien of the Security Instrument and the other Loan Documents)delivered to or for the benefit of or deposited with German American Capital Corporation, on behalf of the holders of the Notes,as Lender, for which German American Capital Corporation, on behalf of the holders of the Notes, shall remain responsible forthe proper disposition thereof until such items are delivered to a party who is qualified as an Approved Bank and agrees to holdthe same in accordance with the terms and provisions of the agreement pursuant to which such items were deposited.

15.3 Content. By executing and delivering an Assignment and Acceptance, Lender and the assignee thereunder confirm toand agree with each other and the other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance,Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties orrepresentations made in or in connection with this Agreement or any other Loan Documents or the execution, legality, validity,enforceability, genuineness, sufficiency or value of, or the perfection or priority of any lien or security interest created orpurported to be created under or in connection with, this Agreement or any other Loan Documents or any other instrument ordocument furnished pursuant hereto or thereto; (ii) Lender makes no representation or warranty and assumes no responsibilitywith respect to the financial condition of Borrower or Maryland Loan Guarantor or the performance or observance by Borroweror Maryland Loan Guarantor of any of its obligations under any Loan Documents or any other instrument or documentfurnished pursuant thereto; (iii) such assignee confirms that it has received a copy of this Agreement, together with copies ofsuch other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter intosuch Assignment and Acceptance; (iv) such assignee will, independently and without reliance upon Lender and based on suchdocuments and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or nottaking action under this Agreement and the other Loan Documents; (v) such assignee appoints and authorizes Lender to takesuch action as agent on its behalf and to exercise such powers and discretion under the Loan Documents as are delegated toLender by the terms hereof together with such powers and discretion as are reasonably incidental thereto; and (vi) such assigneeagrees that it will perform, in accordance with their terms, all of the obligations which by the terms of this Agreement and theother Loan Documents are required to be performed by Lender.

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15.4 Register. Lender shall maintain a copy of each Assignment and Acceptance delivered to and accepted by it and aregister for the recordation of the names and addresses of Lender and each assignee pursuant to this Article XV and the principalamount of the Loan owing to each such assignee from time to time (the “Register”). The entries in the Register shall, withrespect to such assignees, be conclusive and binding for all purposes, absent manifest error. The Register shall be available forinspection by Borrower or any assignee pursuant to this Article XV at any reasonable time and from time to time uponreasonable prior written notice.

15.5 Substitute Notes. Upon its receipt of an Assignment and Acceptance executed by an assignee, together with any Noteor Notes subject to such assignment, Lender shall, if such Assignment and Acceptance has been completed and is insubstantially the form of Exhibit M hereto, (i) accept such Assignment and Acceptance, (ii) record the information containedtherein in the Register, and (iii) give prompt written notice thereof to Borrower. Within five (5) Business Days after its receipt ofsuch notice, Borrower, at Lender’s expense, shall execute and deliver to Lender in exchange and substitution for the surrenderedNote or Notes a new Note to the order of such assignee in an amount equal to the portion of the Loan assigned to it and a newNote to the order of Lender in an amount equal to the portion of the Loan retained by it hereunder. Such new Note or Notes shallbe in an aggregate principal amount equal to the aggregate then outstanding principal amount of such surrendered Note orNotes, shall be dated the effective date of such Assignment and Acceptance and shall otherwise be in substantially the form ofthe Notes (modified, however, to the extent necessary so as not to impose duplicative or increased obligations on Borrower andto delete obligations previously satisfied by Borrower). Notwithstanding the provisions of this Article XV, Borrower shall notbe responsible or liable for any additional taxes, reserves, adjustments or other costs and expenses that are related to, or arise asa result of, any transfer of the Loan or any interest or participation therein that arise from the transfer of the Loan or any interestor participation therein or from the execution of the new Note contemplated by this Section 15.5, including, without limitation,any mortgage tax. Lender and/or the assignees, as the case may be, shall from time to time designate one agent through whichBorrower shall request all approvals and consents required or contemplated by this Agreement and on whose statementsBorrower may rely.

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15.6 Participations. Each assignee pursuant to this Article XV may sell participations to one or more Persons (other thanBorrower or any of its Affiliates) in or to all or a portion of its rights and obligations under this Agreement and the other LoanDocuments (including, without limitation, all or a portion of the Note held by it); provided, however, that (i) such assignee’sobligations under this Agreement and the other Loan Documents shall remain unchanged, (ii) such assignee shall remain solelyresponsible to the other parties hereto for the performance of such obligations, (iii) such assignee shall remain the holder of anysuch Note for all purposes of this Agreement and the other Loan Documents, (iv) Borrower, Lender and the assignees pursuant tothis Article XV shall continue to deal solely and directly with such assignee in connection with such assignee’s rights andobligations under this Agreement and the other Loan Documents, (v) Borrower shall bear no costs or expenses in connectiontherewith, (vi) Borrower shall not be required to incur, suffer or accept (except to a de minimis extent)) any greater obligationsor liabilities than as currently set forth in the Loan Documents, and (vii) the economics of the Loan, taken as a whole, shall notchange in a manner which is adverse to Borrower. In the event that more than one (1) party comprises Lender, Lender shalldesignate one party to act on the behalf of all parties comprising Lender in providing approvals and all other necessary consentsunder the Loan Documents and on whose statements Borrower may rely.

15.7 Disclosure of Information. Any assignee pursuant to this Article XV may, in connection with any assignment orparticipation or proposed assignment or participation pursuant to this Article XV, disclose to the assignee or participant orproposed assignee or participant, any information relating to Borrower furnished to such assignee by or on behalf of Borrower;provided, however, that, prior to any such disclosure, the assignee or participant or proposed assignee or participant shall agreein writing for the benefit of Borrower to preserve the confidentiality of any confidential information received by it.

15.8 Security Interest in Favor of Federal Reserve Bank. Notwithstanding any other provision set forth in this Agreement orany other Loan Document, any assignee pursuant to this Article XV may at any time create a security interest in all or anyportion of its rights under this Agreement or the other Loan Documents (including, without limitation, the amounts owing to itand the Note or Notes held by it) in favor of any Federal Reserve Bank in accordance with Regulation A of the Board ofGovernors of the Federal Reserve System.

XVI. RESERVE ACCOUNTS

16.1 Tax Reserve Account . In accordance with the time periods set forth in Section 3.1, Borrower (or in the case of theMaryland Property, Maryland Loan Guarantor) shall cause to be deposited into the Tax Reserve Account an amount equal to(a) one-twelfth of the annual Impositions that Lender reasonably estimates, based on the most recent tax bill for the Property,will be payable during the next ensuing twelve (12) months in order to accumulate with Lender sufficient funds to pay all suchImpositions thirty (30) days prior to the imposition of any interest, charges or expenses for the non-payment thereof and (b) one-twelfth of the annual Other Charges that Lender reasonably estimates will be payable during the next ensuing twelve(12) months (said monthly amounts in (a) and (b) above hereinafter called the “Monthly Tax Reserve Amount ,” and theaggregate amount of funds held in the Tax Reserve Account being the “ Tax Reserve Amount ”). As of the Closing Date, theMonthly Tax Reserve Amount is $739,696.79, but such amount is subject to adjustment by Lender upon notice to Borrower.The Monthly Tax Reserve Amount shall be paid by Borrower (or in the case of the Maryland Property, Maryland LoanGuarantor) to Lender on each

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Payment Date. Lender will apply the Monthly Tax Reserve Amount to payments of Impositions and Other Charges required tobe made by Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) pursuant to Article V and Article VIIand under the Security Instrument, subject to Borrower’s right to contest Impositions in accordance with Section 7.3. In makingany payment relating to the Tax Reserve Account, Lender may do so according to any bill, statement or estimate procured fromthe appropriate public office, without inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax,assessment, sale, forfeiture, tax lien or title or claim thereof. If the amount of funds in the Tax Reserve Account shall exceed theamounts due for Impositions and Other Charges pursuant to Article V and Article VII, Lender shall credit such excess againstfuture payments to be made to the Tax Reserve Account. If at any time Lender reasonably determines that the Tax ReserveAmount is not or will not be sufficient to pay Impositions and Other Charges by the dates set forth above, Lender shall notifyBorrower of such determination and Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall increaseits monthly payments to Lender by the amount that Lender reasonably estimates is sufficient to make up the deficiency at leastthirty (30) days prior to the imposition of any interest, charges or expenses for the non-payment of the Impositions and OtherCharges. Upon payment of the Impositions and Other Charges, Lender shall reassess the amount necessary to be deposited in theTax Reserve Account for the succeeding period, which calculation shall take into account any excess amounts remaining in theTax Reserve Account.

16.2 Insurance Reserve Account . Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall, inaccordance with the time periods set forth in Section 3.1, cause to be deposited into the Insurance Reserve Account an amountequal to one-twelfth of the insurance premiums that Lender reasonably estimates, based on the most recent bill, will be payablefor the renewal of the coverage afforded by the insurance policies upon the expiration thereof in order to accumulate withLender sufficient funds to pay all such insurance premiums thirty (30) days prior to the expiration of the policies required to bemaintained by Borrower pursuant to the terms hereof (said monthly amounts hereinafter called the “Monthly Insurance ReserveAmount,” and the aggregate amount of funds held in the Insurance Reserve Account being the “Insurance Reserve Amount”).As of the Closing Date, the Monthly Insurance Reserve Amount is $206,007.88, but such amount is subject to adjustment byLender upon notice to Borrower. The Monthly Insurance Reserve Amount shall be paid by Borrower (or in the case of theMaryland Property, Maryland Loan Guarantor) to Lender on each Payment Date. Lender will apply the Monthly InsuranceReserve Amount to payments of insurance premiums required to be made by Borrower (or in the case of the Maryland Property,Maryland Loan Guarantor) pursuant to Article VI and under the Security Instrument. In making any payment relating to theInsurance Reserve Account, Lender may do so according to any bill, statement or estimate procured from the insurer or agent,without inquiry into the accuracy of such bill, statement or estimate or into the validity thereof. If the amount of funds in theInsurance Reserve Account shall exceed the amounts due for insurance premiums pursuant to Article VI, Lender shall creditsuch excess against future payments to be made to the Insurance Reserve Account. If at any time Lender reasonably determinesthat the Insurance Reserve Amount is not or will not be sufficient to pay insurance premiums by the dates set forth above,Lender shall notify Borrower of such determination and Borrower (or in the case of the Maryland Property, Maryland LoanGuarantor) shall increase its monthly payments to Lender by the amount that Lender reasonably estimates is sufficient to makeup the deficiency at least thirty (30) days prior to expiration of the applicable insurance policies. Upon payment of suchinsurance premiums, Lender shall reassess the amount necessary to be deposited in the Insurance Reserve Account for thesucceeding period, which calculation shall take into account any excess amounts remaining in the Insurance Reserve Account.

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16.3 Structural Repair Reserve Account.

(a) In accordance with the time periods set forth in Section 3.1, Borrower (or in the case of the Maryland Property,Maryland Loan Guarantor) shall deposit, or cause to be deposited into the Structural Repair Reserve Account, an amount equalto the Monthly Structural Repair Reserve Amount to be held by the Cash Management Bank for the benefit of Lender asadditional security for the Loan in accordance with Section 3.1 and the Account Agreement.

(b) Lender shall make disbursements from the Structural Repair Reserve Account to or as directed by Borrower to pay orreimburse Borrower for the cost of Structural Repairs in accordance with and in the manner provided in this Section 16.3. AnyStructural Repairs that in the aggregate with all related Structural Repairs (collectively, a “Project”) would reasonably beexpected to cost in excess of the Threshold Amount shall be subject to compliance with Section 10.2. Lender shall, withinfifteen (15) Business Days of a written request from Borrower and upon satisfaction of the requirements set forth in thisSection 16.3, disburse to Borrower amounts from the Structural Repair Reserve Account necessary to pay for the actual costsincurred with respect to Structural Repairs, which work shall be subject to the inspection of Lender for compliance with therequirements of this Agreement. In no event shall Lender be obligated to disburse funds from the Structural Repair ReserveAccount if a Monetary Default or an Event of Default exists.

(c) Each request for disbursement from the Structural Repair Reserve Account shall be in a form reasonably specified orreasonably approved by Lender and be submitted together with an Officer’s Certificate specifying the specific items for whichthe disbursement is requested, certifying that such item qualifies as a Structural Repair, the estimated cost for the applicableProject through completion and the cost of each item purchased. Each request for disbursement shall be delivered at least fifteen(15) Business Days prior to the date of the requested disbursement and shall include copies of invoices for all costs incurred andeach request shall include evidence satisfactory to Lender of payment of all such amounts or evidence that such amounts will bepaid by such disbursement. Borrower shall not make a request for disbursement from the Structural Repair Reserve Accountmore frequently than once in any calendar month and the total amount of any request shall not be less than $10,000 (except inthe case of the final request for disbursement).

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16.4 Immediate Repair and Remediation Reserve Account.

(a) On the Closing Date, a portion of the Loan in the amount of $404,310, representing one hundred twenty-five percent(125%) of the cost to complete the Immediate Repairs and Remediation, will be deposited by Lender into the Immediate Repairand Remediation Reserve Account. Subject to the pre-conditions to disbursement set forth in this Section 16.4, Lender shallmake disbursements of amounts deposited in the Immediate Repair and Remediation Reserve Account from time to time (but nomore frequently than once a calendar month) to pay for the costs of completing the Immediate Repairs and Remediation. Lendershall, upon written request from Borrower and satisfaction of the requirements to final disbursement set forth in this Section 16.4(the “Completion”), instruct the Cash Management Bank to disburse to Borrower the amounts remaining in the ImmediateRepair and Remediation Reserve Account. Subject to Excusable Delay, the Completion shall occur on or before the date whichis one hundred eighty (180) days following the date hereof (the “Immediate Repairs and Remediation Completion Deadline”).In the event Completion does not occur on or before the Immediate Repairs Completion Deadline, Lender shall notify Borrowerof such fact and Borrower shall have a period of at least thirty (30) days, as determined by Lender and set forth in such notice, toeffect the Completion. It shall be an Event of Default hereunder in the event the Completion does not occur on or before theImmediate Repairs and Remediation Completion Deadline or any date afforded by Lender’s notice to effect the Completion asset forth in Lender’s notice, and upon such event, Lender shall have no further obligation to disburse the remaining amountsdeposited in the Immediate Repair and Remediation Reserve Account to Borrower and such remaining amounts shall be appliedby Lender reduce the Principal Amount then outstanding under the Notes.

(b) Amounts deposited in the Immediate Repair and Remediation Reserve Account may be disbursed from time to time,(provided that Borrower shall not make a request for disbursement therefrom more frequently than once in any calendar monthand the total amount of any request shall not be less than $10,000 (except in the case of the final request for disbursement))upon Borrower’s satisfaction of the conditions set forth in subsection (c) below, except that the final disbursement of amountsdeposited in the Immediate Repair and Remediation Reserve Account shall not be disbursed until the conditions set forth insubsection (c)(ii)(E) shall have also been satisfied.

(c) The obligation of Lender to disburse any portion of the amounts deposited in the Immediate Repair and RemediationReserve Account is subject to the condition precedent that all of the following requirements shall have been completed toLender’s reasonable satisfaction:

(i) No Event of Default shall have occurred and be continuing; (ii) Lender shall have received the following items:

(A) a request for advance duly executed by an authorized officer of the Borrower delivered to Lender no earlierthan ten (10) Business Days prior to the date the disbursement is requested;

(B) with respect to all but the final disbursement of the amounts deposited in the Immediate Repair andRemediation Reserve Account, a certificate from Borrower certifying to Lender that there are sufficient funds remaining in theImmediate Repair and Remediation Reserve Account to attain Completion;

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(C) with respect to all but the final disbursement of the amounts deposited in the Immediate Repair andRemediation Reserve Account, evidence reasonably satisfactory to Lender that the applicable Immediate Repairs andRemediation have been completed and all amounts due in respect thereof have been paid, including specific general ledgerentries and/or copies of invoices, in either case, equal to (or greater than) the amount being disbursed from the Immediate Repairand Remediation Reserve Account;

(D) payment of all of Lender’s costs and expenses, if any, incurred in connection with disbursement from theImmediate Repair and Remediation Reserve Account, including, without limitation, reasonable attorneys fees anddisbursements (which may, at the option of Lender, be paid from the amounts deposited in the Immediate Repair andRemediation Reserve Account); and

(E) in connection with the final disbursement (in addition to satisfying each of the conditions, other than thecondition in clauses (B) and (C), set forth above), a certificate from Lender’s Consultant certifying to Lender that the ImmediateRepairs and Remediation have been completed to the satisfaction of such Person.

16.5 Master Lease Variable Additional Rent Reserve Account and LCR Deterioration Reserve Account.

(a) Pursuant to and in accordance with the provisions of Section 3.1, during a Low LCR Cash Sweep Period, certain moniesshall be transferred, in accordance with Section 3.1 hereof, from the Holding Account into the Master Lease Variable AdditionalRent Reserve Account and retained by Lender as additional security for the Indebtedness and shall be applied or disbursed ashereinafter provided. From and after the occurrence and continuation of an Event of Default, Lender shall have the right toapply any amounts then remaining in the Master Lease Variable Additional Rent Reserve Account to repay the Indebtedness orany other amounts due hereunder or under the other Loan Documents in such order, manner and amount as Lender shalldetermine in its sole discretion. Provided no Event of Default has occurred and is then continuing hereunder, Lender shallinstruct the Cash Management Bank to transfer to Borrower’s Account, free and clear of all Liens, any amounts remaining in theMaster Lease Variable Additional Rent Reserve Account within ten (10) Business Days following the termination of a Low LCRCash Sweep Period.

(b) Following each Fiscal Quarter after the Closing Date, Lender will perform an LCR Test to determine whether a LowLCR Cash Sweep Period has occurred and is continuing. Such LCR Test shall be made by Lender based on the financialinformation delivered by Borrower pursuant to Section 11.1 hereof. Pursuant to and in accordance with the provisions ofSection 3.1, during a Low LCR Cash Sweep Period, the Excess Proceeds shall be transferred, in accordance with Section 3.1hereof, from the Holding Account into the LCR Deterioration Reserve Account and retained by Lender as additional security forthe Indebtedness and shall be applied or disbursed as hereinafter provided. From and after the occurrence and continuation of anEvent of Default, Lender shall have the right to apply any amounts then remaining in the LCR Deterioration Reserve Accountto repay the Indebtedness or any other amounts due hereunder or under the other Loan Documents in such order, manner andamount as Lender shall determine in its sole discretion. Provided no Event of Default has occurred and is then continuinghereunder, Lender shall instruct the Cash Management Bank to transfer to Borrower’s Account, free and clear of all Liens, anyamounts remaining in the LCR Deterioration Reserve Account within ten (10) Business Days following the termination of aLow LCR Cash Sweep Period.

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XVII. DEFAULTS

17.1 Event of Default.

(a) Each of the following events shall constitute an event of default hereunder (an “Event of Default”):

(i) if (A) the Indebtedness is not paid in full on the Maturity Date, (B) any regularly scheduled monthly payment ofinterest due under the Notes is not paid in full on or before the fifth (5th) calendar day following the applicable Payment Date(or, if such fifth (5 th) calendar day is not a Business Day, on or before the immediately preceding Business Day), (C) anyprepayment of principal due under this Agreement or the Notes is not paid on or before the fifth (5 th) calendar day following thedate the same is due (or, if such fifth (5 th) calendar day is not a Business Day, on or before the immediately preceding BusinessDay), (D) the Yield Maintenance Premium is not paid when due, (E) any deposit to the Holding Account is not made when due,and such failure continuing for ten (10) Business Days after Lender delivers written notice thereof to Borrower, or (F) except asto any amount included in (A), (B), (C) or (D) of this clause (i), any other amount payable pursuant to this Agreement, the Notesor any other Loan Document is not paid in full when due and payable in accordance with the provisions of the applicable LoanDocument, with such failure continuing for ten (10) Business Days after Lender delivers written notice thereof to Borrower;

(ii) subject to Borrower’s right to contest as set forth in Section 7.3, if any of the Impositions or Other Charges are notpaid prior to the imposition of any interest, penalty, charge or expense for the non-payment thereof;

(iii) if the insurance policies required by Section 6.1 are not kept in full force and effect or if certified copies of any ofsuch insurance policies are not delivered to Lender within fifteen (15) days of the effective date of such insurance policies;

(iv) if, except as permitted pursuant to this Agreement, any of the following shall occur: (a) any Transfer of any director indirect legal, beneficial or equitable interest in all or any portion of the Property, (b) any Transfer of any direct or indirectinterest in Borrower, Master Lessee, Maryland Loan Guarantor any other SPE Entity or Guarantor, (c) Borrower (or in the case ofthe Maryland Property, Maryland Loan Guarantor) fails to remove any Lien or encumbrance (other than a PermittedEncumbrance) on all or any portion of the Property (other than a Permitted Encumbrance) within thirty (30) days after Lenderdelivers written notice thereof to Borrower, (d) any pledge, hypothecation, creation of a security interest in or otherencumbrance of any direct or indirect interests in Borrower, Maryland Loan Guarantor, Master Lessee, any other SPE Entity orGuarantor or (e) the filing of a declaration of condominium with respect to the Property;

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(v) if any representation or warranty made by Borrower or Maryland Loan Guarantor herein or by Borrower, MarylandLoan Guarantor or Guarantor in any other Loan Document, or in any report, certificate, financial statement or other instrument,agreement or document furnished to Lender shall have been false or misleading in any material respect as of the date therepresentation or warranty was made, unless, if the representation or warranty is of a nature that can be made to be true andcorrect as of the then-current date, and is not likely to have a Material Adverse Effect and was not intentionally false ormisleading in any material respect when made, then same does not constitute an Event of Default if Borrower makes suchrepresentation or warranty true and correct and not misleading within thirty (30) days after written notice thereof from Lenders;

(vi) if Borrower, Maryland Loan Guarantor, Master Lessee, any other SPE Entity or Guarantor shall make anassignment for the benefit of creditors;

(vii) if a receiver, liquidator or trustee shall be appointed for Borrower, Maryland Loan Guarantor, Master Lessee, anyother SPE Entity or Guarantor or Borrower, Maryland Loan Guarantor, Master Lessee, any other SPE Entity or Guarantor shallbe adjudicated a bankrupt or insolvent, or if any petition for bankruptcy, reorganization or arrangement pursuant to federalbankruptcy law, or any similar federal or state law, shall be filed by or against, consented to, or acquiesced in by, Borrower,Maryland Loan Guarantor, Master Lessee, any other SPE Entity or Guarantor, or if any proceeding for the dissolution orliquidation of Borrower, Maryland Loan Guarantor, Master Lessee, any other SPE Entity or Guarantor shall be instituted;provided, however, if such appointment, adjudication, petition or proceeding was involuntary and not consented to byBorrower, Maryland Loan Guarantor, Master Lessee, any other SPE Entity or Guarantor upon the same not being discharged,stayed or dismissed within one hundred (120) days;

(viii) if Borrower, Maryland Loan Guarantor, any other SPE Entity or Guarantor, as applicable, attempts to assign itsrights under this Agreement or any of the other Loan Documents or any interest herein or therein in contravention of the LoanDocuments;

(ix) with respect to any term, covenant or provision set forth herein (other than the other subsections of thisSection 17.l) which specifically contains a notice requirement or grace period, if Borrower, Maryland Loan Guarantor, any otherSPE Entity or Guarantor shall be in default under such term, covenant or condition after the giving of such notice or theexpiration of such grace period;

(x) if any of the assumptions contained in the Non-Consolidation Opinion, in any Additional Non-ConsolidationOpinion or in any other non-consolidation opinion delivered to Lender in connection with the Loan, or in any other non-consolidation opinion delivered subsequent to the closing of the Loan, is or shall become untrue;

(xi) if Borrower or Maryland Loan Guarantor shall fail to comply with any covenants set forth in Section 5.1.4,Section 5.2.9 or Section 5.2.21;

(xii) except as provided clause (xi) above, if Borrower or Maryland Loan Guarantor shall fail to comply with anycovenants set forth in Article V or Section XI with such failure continuing for ten (10) Business Days after Lender deliverswritten notice thereof to Borrower;

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(xiii) if Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall fail to comply with anycovenants set forth in Section 3(d) or Section 8 of the Security Instrument with such failure continuing for ten (10) BusinessDays after Lender delivers written notice thereof to Borrower;

(xiv) if Borrower or Maryland Loan Guarantor shall fail to deposit any sums required to be deposited in the CollateralAccounts pursuant to Article XVI when due;

(xv) if this Agreement or any other Loan Document or any Lien granted hereunder or thereunder, in whole or in part,shall terminate or shall cease to be effective or shall cease to be a legally valid, binding and enforceable obligation of Borrower,Maryland Loan Guarantor or Guarantor, or any Lien securing the Indebtedness shall, in whole or in part, cease to be a perfectedfirst priority Lien, subject to the Permitted Encumbrances (except in any of the foregoing cases in accordance with the termshereof or under any other Loan Document or by reason of any affirmative act of Lender);

(xvi) except as expressly permitted pursuant to the Loan Documents, if Borrower (or in the case of the MarylandProperty, Maryland Loan Guarantor) or Master Lessee grants any easement, covenant or restriction (other than the PermittedEncumbrances) over the Property and such easement, covenant or restriction is not terminated within thirty (30) days afterLender delivers written notice thereof to Borrower;

(xvii) if the Master Lease shall be materially modified without the prior written consent of Lender, except as expresslypermitted hereunder;

(xviii) if Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) shall be in default in anymaterial obligation on the part of Borrower (or in the case of the Maryland Property, Maryland Loan Guarantor) beyond anyapplicable notice periods and cure periods pursuant to the terms of the Master Lease and such default is reasonably likely tohave a Material Adverse Effect;

(xix) if the Master Lease shall terminate;

(xx) if Borrower or Maryland Loan Guarantor shall continue to be in Default under any of the other terms, covenantsor conditions of this Agreement or of any Loan Document not specified in clauses (i) through (xix) above, for thirty (30) daysafter notice from Lender; provided, however, that if such Default is susceptible of cure but cannot reasonably be cured withinsuch thirty (30) day period and provided, further, that Borrower or Maryland Loan Guarantor, as applicable, shall havecommenced to cure such Default within such thirty (30) day period and thereafter diligently proceeds to cure the same, suchthirty (30) day period shall be extended for such time as is reasonably necessary for Borrower or Maryland Loan Guarantor, asapplicable, in the exercise of due diligence to cure such Default, such additional period not to exceed ninety (90) days.

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(b) Unless waived in writing by Lender, upon the occurrence and during the continuance of an Event of Default (other thanan Event of Default described in clauses (a)(vi), (vii) or (viii) above) Lender may, without notice or demand, in addition to anyother rights or remedies available to it pursuant to this Agreement and the other Loan Documents or at law or in equity, takesuch action that Lender deems advisable to protect and enforce its rights against Borrower and Maryland Loan Guarantor and inthe Property, including, without limitation, (i) declaring immediately due and payable the entire Principal Amount togetherwith interest thereon and all other sums due by Borrower and Maryland Loan Guarantor under the Loan Documents,(ii) collecting interest on the Principal Amount at the Default Rate whether or not Lender elects to accelerate the Notes and (iii)enforcing or availing itself of any or all rights or remedies set forth in the Loan Documents against Borrower, Maryland LoanGuarantor and the Property, including, without limitation, all rights or remedies available at law or in equity; and upon anyEvent of Default described in clauses (a)(vi) or (a)(vii) above, the Indebtedness and all other obligations of Borrower andMaryland Loan Guarantor hereunder and under the other Loan Documents shall immediately and automatically become dueand payable, without notice or demand, and Borrower and Maryland Loan Guarantor each hereby expressly waives any suchnotice or demand, anything contained herein or in any other Loan Document to the contrary notwithstanding. The foregoingprovisions shall not be construed as a waiver by Lender of its right to pursue any other remedies available to it under thisAgreement, the Security Instrument or any other Loan Document. Any payment hereunder may be enforced and recovered inwhole or in part at such time by one or more of the remedies provided to Lender in the Loan Documents.

17.2 Remedies.

(a) Unless waived in writing by Lender, upon the occurrence and during the continuance of an Event of Default, all or anyone or more of the rights, powers, privileges and other remedies available to Lender against Borrower and Maryland LoanGuarantor under this Agreement or any of the other Loan Documents executed and delivered by, or applicable to, Borrower orMaryland Loan Guarantor or at law or in equity may be exercised by Lender at any time and from time to time, whether or notall or any of the Indebtedness shall be declared due and payable, and whether or not Lender shall have commenced anyforeclosure proceeding or other action for the enforcement of its rights and remedies under any of the Loan Documents withrespect to the Property. Any such actions taken by Lender shall be cumulative and concurrent and may be pursuedindependently, singly, successively, together or otherwise, at such time and in such order as Lender may determine in its solediscretion, to the fullest extent permitted by law, without impairing or otherwise affecting the other rights and remedies ofLender permitted by law, equity or contract or as set forth herein or in the other Loan Documents. Without limiting thegenerality of the foregoing, Borrower and Maryland Loan Guarantor each agrees that if an Event of Default is continuing(i) Lender shall not be subject to any one action or election of remedies law or rule and (ii) all liens and other rights, remedies orprivileges provided to Lender shall remain in full force and effect until Lender has exhausted all of its remedies against theProperty and the Security Instrument has been foreclosed, sold and/or otherwise realized upon in satisfaction of theIndebtedness or the Indebtedness has been paid in full.

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(b) Upon the occurrence and during the continuance of an Event of Default, with respect to the Account Collateral, theLender may:

(i) without notice to Borrower, except as required by law, and at any time or from time to time, charge, set-off andotherwise apply all or any part of the Account Collateral against the Obligations, operating expenses and/or CapitalExpenditures for the Property or any part thereof;

(ii) in Lender’s sole discretion, at any time and from time to time, exercise any and all rights and remedies available toit under this Agreement, and/or as a secured party under the UCC;

(iii) demand, collect, take possession of or receipt for, settle, compromise, adjust, sue for, foreclose or realize upon theAccount Collateral (or any portion thereof) as Lender may determine in its sole discretion; and

(iv) take all other actions provided in, or contemplated by, this Agreement.

(c) With respect to Borrower, Maryland Loan Guarantor, the Account Collateral and the Property, nothing contained hereinor in any other Loan Document shall be construed as requiring Lender to resort to the Property for the satisfaction of any of theIndebtedness, and Lender may seek satisfaction out of the Property or any part thereof, in its absolute discretion in respect of theIndebtedness. In addition, Lender shall have the right from time to time to partially foreclose this Agreement and the SecurityInstrument in any manner and for any amounts secured by this Agreement or the Security Instrument then due and payable asdetermined by Lender in its sole discretion including, without limitation, the following circumstances: (i) in the event Borroweror Maryland Loan Guarantor defaults beyond any applicable grace period in the payment of one or more scheduled payments ofprincipal or interest, Lender may foreclose this Agreement and the Security Instrument to recover such delinquent payments, or(ii) in the event Lender elects to accelerate less than the entire outstanding principal balance of the Loan, Lender may foreclosethis Agreement and the Security Instrument to recover so much of the principal balance of the Loan as Lender may accelerateand such other sums secured by this Agreement or the Security Instrument as Lender may elect. Notwithstanding one or morepartial foreclosures, the Property shall remain subject to this Agreement and the Security Instrument to secure payment of sumssecured by this Agreement and the Security Instrument and not previously recovered.

17.3 Remedies Cumulative; Waivers. The rights, powers and remedies of Lender under this Agreement and the SecurityInstrument shall be cumulative and not exclusive of any other right, power or remedy which Lender may have against Borroweror Maryland Loan Guarantor pursuant to this Agreement or the other Loan Documents, or existing at law or in equity orotherwise. Lender’s rights, powers and remedies may be pursued singly, concurrently or otherwise, at such time and in suchorder as Lender may determine in Lender’s sole discretion. No delay or omission to exercise any remedy, right or poweraccruing upon an Event of Default shall impair any such remedy, right or power or shall be construed as a waiver thereof, butany such remedy, right or power may be exercised from time to time and as often as may be deemed expedient. A waiver of oneDefault or Event of Default with respect to Borrower, Maryland Loan Guarantor or Guarantor shall not be construed to be awaiver of any subsequent Default or Event of Default by Borrower, Maryland Loan Guarantor or Guarantor or to impair anyremedy, right or power consequent thereon.

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17.4 Costs of Collection. In the event that after an Event of Default: (i) the Notes or any of the Loan Documents is placedin the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding; (ii) anattorney is retained to represent Lender in any bankruptcy, reorganization, receivership, or other proceedings affectingcreditors’ rights and involving a claim under the Notes or any of the Loan Documents; or (iii) an attorney is retained to protector enforce the lien or any of the terms of this Agreement, the Security Instrument or any of the Loan Documents; then Borrowershall pay to Lender all reasonable attorney’s fees, costs and expenses actually incurred in connection therewith, including costsof appeal, together with interest on any judgment obtained by Lender at the Default Rate.

XVIII. SPECIAL PROVISIONS

18.1 Exculpation.

18.1.1 Exculpated Parties. Except as set forth in this Section 18.1, the Recourse Guaranty and the EnvironmentalIndemnity, no personal liability shall be asserted, sought or obtained by Lender or enforceable against (i) Borrower, (ii) anyAffiliate of Borrower, (iii) any Person owning, directly or indirectly, any legal or beneficial interest in Borrower or any Affiliateof Borrower or (iv) any direct or indirect partner, member, principal, officer, Controlling Person, beneficiary, trustee, advisor,shareholder, employee, agent, Affiliate or director of any Persons described in clauses (i) through (iii) above (collectively, the“Exculpated Parties”) and none of the Exculpated Parties shall have any personal liability (whether by suit deficiency judgmentor otherwise) in respect of the Obligations, this Agreement, the Security Instrument, the Notes, the Property or any other LoanDocument, or the making, issuance or transfer thereof, all such liability, if any, being expressly waived by Lender. Theforegoing limitation shall not in any way limit or affect Lender’s right to any of the following and Lender shall not be deemedto have waived any of the following:

(a) Foreclosure of the lien of this Agreement and the Security Instrument in accordance with the terms and provisions setforth herein and in the Security Instrument;

(b) Action against any other security at any time given to secure the payment of the Notes and the other Obligations;

(c) Exercise of any other remedy set forth in this Agreement or in any other Loan Document which is not inconsistent withthe terms of this Section 18.1;

(d) Any right which Lender may have under Sections 506(a), 506(b), 1111(b) or any other provisions of the BankruptcyCode to file a claim for the full amount of the Indebtedness secured by this Agreement and the Security Instrument or to requirethat all collateral shall continue to secure all of the Indebtedness owing to Lender in accordance with the Loan Documents; or

(e) The liability of any given Exculpated Party with respect to any separate written guaranty or agreement given by anysuch Exculpated Party in connection with the Loan (including, without limitation, the Recourse Guaranty and theEnvironmental Indemnity).

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18.1.2 Carveouts From Non-Recourse Limitations. Notwithstanding the foregoing or anything in this Agreement or any ofthe other Loan Documents to the contrary, there shall at no time be any limitation on Borrower’s, Maryland Loan Guarantor’sor, except as set forth in the Recourse Guaranty, Guarantor’s liability for the payment, in accordance with the terms of thisAgreement, the Notes, the Security Instrument and the other Loan Documents, to Lender of and for:

(a) any actual out-of-pocket loss, damage, cost, expense, liability, claim and any other obligation incurred by or on behalfof Lender arising out of or in connection with fraud or intentional material misrepresentation by Borrower, Maryland LoanGuarantor, Master Lessee, Guarantor or any of their principals, officers, agents or employees in connection with the Loan;

(b) damage to the Property arising from intentional misconduct of Borrower, Maryland Loan Guarantor, Master Lessee,Guarantor or any of their principals, officers, agents or employees, and any removal of assets forming part of any IndividualProperty by Borrower, Maryland Loan Guarantor or Master Lessee in violation of the Loan Documents;

(c) any actual out-of-pocket loss, damage, cost, expense, liability, claim and any other obligation incurred by or on behalfof Lender arising out of or in connection with the breach of any representation, warranty, covenant or indemnification provisionin the Environmental Indemnity or herein concerning environmental laws, hazardous substances and asbestos and anyindemnification of Lender with respect thereto in the Environmental Indemnity or herein, but only to the extent that the sameare not insured against by an Environmental Insurance Policy;

(d) the amount of any misappropriation or conversion by Borrower, Maryland Loan Guarantor or Master Lessee of (A) anyProceeds paid by reason of any casualty, damage or destruction of the Property, (B) any Proceeds received in connection with aTaking, (C) any Rents following and during the continuance of an Event of Default, or (D) any Rents paid more than one(1) month in advance (it being agreed that no use of funds for the repair, maintenance or operations of the Property shall betreated as a “misappropriation” hereunder);

(e) any actual out-of-pocket loss, damage, cost, expense, liability, claim and any other obligation incurred by or on behalfof Lender arising out of or in connection with a breach of any representation set forth in Section 4.1.29;

(f) any actual out-of-pocket loss, damage, cost, expense, liability, claim and any other obligation incurred by or on behalfof Lender arising out of or in connection with Borrower’s or Maryland Loan Guarantor’s failure to obtain Lender’s prior consentto any Debt or voluntary Lien encumbering the Property as required by this Agreement or by the Security Instruments;

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(g) any actual out-of-pocket loss, damage, cost, expense, liability, claim and any other obligation incurred by or on behalfof Lender (including, without limitation, reasonable attorneys’ fees, causes of action, suits, claims, demands and adjustments ofany nature or description whatsoever) which may at any time be imposed upon, incurred by or awarded against Lender, in theevent (and arising out of such circumstances) that Borrower or Maryland Loan Guarantor should raise any defense, counterclaimand/or allegation in any foreclosure action by Lender relative to any Individual Property or the Account Collateral or any partthereof which is found by a court of competent jurisdiction in a final, unappealable decision to have been raised by Borrower orMaryland Loan Guarantor in bad faith or to be without basis in fact or law;

(h) any actual out-of-pocket loss, damage, cost, expense, liability, claim and any other obligation incurred by or on behalfof Lender arising out of or in connection with (A) any Borrower or Maryland Loan Guarantor filing a voluntary petition underthe Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (B) any Borrower or Maryland Loan Guarantorsoliciting or causing to be solicited petitioning creditors for an involuntary petition against any Borrower or Maryland LoanGuarantor under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or an involuntary case beingcommenced against any Borrower or Maryland Loan Guarantor under the Bankruptcy Code or any other Federal or statebankruptcy or insolvency law with the collusion of any Individual Borrower or Maryland Loan Guarantor or any of itsAffiliates, (C) any Borrower or Maryland Loan Guarantor filing an answer consenting to or otherwise acquiescing in or joiningin any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or statebankruptcy or insolvency law; (D) any Borrower or Maryland Loan Guarantor consenting to or acquiescing in or joining in anapplication for the appointment of a custodian, receiver, trustee, or examiner for any such Borrower or Maryland LoanGuarantor or any portion of the Property; (E) any Borrower or Maryland Loan Guarantor making an assignment for the benefit ofcreditors, or admitting, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due;

(i) any actual out-of-pocket loss, damage, cost, expense, liability, claim and any other obligation incurred by or on behalfof Lender arising out of or in connection with any Borrower’s or Maryland Loan Guarantor’s failure to obtain Lender’s priorwritten consent to any Transfer as required by the Loan Agreement or the Security Instruments; or

(j) reasonable attorney’s fees and expenses incurred by Lender in connection with any successful suit filed on account ofany of the foregoing clauses (a) through (i).

Notwithstanding the foregoing provisions of this Section 18.1.2, Borrower and Maryland Loan Guarantor shall not beliable for the payment of any such costs and expenses to the extent that a court of competent jurisdiction determines in a finaldecision that the same arose by reason of the gross negligence, criminal acts, fraud or willful misconduct of Lender.

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XIX. MISCELLANEOUS

19.1 Survival. This Agreement and all covenants, indemnifications, agreements, representations and warranties madeherein and in the certificates delivered pursuant hereto shall survive the making by Lender of the Loan and the execution anddelivery to Lender of the Notes, and shall continue in full force and effect so long as all or any of the Indebtedness isoutstanding and unpaid unless a longer period is expressly set forth herein or in the other Loan Documents. Whenever in thisAgreement any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of suchparty. All covenants, promises and agreements in this Agreement, by or on behalf of Borrower or Maryland Loan Guarantor,shall inure to the benefit of the successors and assigns of Lender. If Borrower consists of more than one person, the obligationsand liabilities of each such person hereunder and under the other Loan Documents shall be joint and several. The obligationsand liabilities of Borrower and Maryland Loan Guarantor hereunder and under the other Loan Documents shall be joint andseveral.

19.2 Lender’s Discretion . Whenever pursuant to this Agreement, Lender exercises any right given to it to approve ordisapprove, or any arrangement or term is to be satisfactory to Lender, the decision of Lender to approve or disapprove or todecide whether arrangements or terms are satisfactory or not satisfactory shall (except as is otherwise specifically hereinprovided) be in the sole discretion of Lender and shall be final and conclusive.

19.3 Governing Law.

(A) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, THE LOAN WAS MADE BYLENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS ASUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY,AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OFCONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISINGHEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OFNEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TOPRINCIPLES OF CONFLICT OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA. TO THEFULLEST EXTENT PERMITTED BY LAW, BORROWER AND MARYLAND LOAN GUARANTOR EACH HEREBYUNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHERJURISDICTION GOVERNS THIS AGREEMENT AND THE NOTES, AND THIS AGREEMENT SHALL BE GOVERNED BYAND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401OF THE NEW YORK GENERAL OBLIGATIONS LAW.

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(B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER OR MARYLANDLOAN GUARANTOR ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY AT LENDER’S OPTION BEINSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANTTO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND BORROWER AND MARYLAND LOANGUARANTOR EACH WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUEAND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER ANDMARYLAND LOAN GUARANTOR EACH HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCHCOURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER AND MARYLAND LOAN GUARANTOR EACH DOESHEREBY DESIGNATE AND APPOINT:

CORPORATION SERVICE COMPANY80 STATE STREETALBANY, NEW YORK 12207-2543

AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALLPROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATECOURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESSAND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO BORROWER AND MARYLAND LOANGUARANTOR IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OFPROCESS UPON BORROWER AND MARYLAND LOAN GUARANTOR IN ANY SUCH SUIT, ACTION OR PROCEEDING INTHE STATE OF NEW YORK. BORROWER AND MARYLAND LOAN GUARANTOR (I) SHALL GIVE PROMPT NOTICE TOLENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROMTIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK(WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OFPROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TOHAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.

19.4 Modification, Waiver in Writing . No modification, amendment, extension, discharge, termination or waiver of anyprovision of this Agreement, or of the Notes, or of any other Loan Document, or consent to any departure therefrom, shall in anyevent be effective unless the same shall be in a writing signed by the party against whom enforcement is sought (and, if aSecuritization shall have occurred, a Rating Agency Confirmation is obtained), and then such waiver or consent shall beeffective only in the specific instance, and for the purpose, for which given. Except as otherwise expressly provided herein, nonotice to or demand on Borrower shall entitle Borrower to any other or future notice or demand in the same, similar or othercircumstances.

19.5 Delay Not a Waiver. Neither any failure nor any delay on the part of Lender in insisting upon strict performance ofany term, condition, covenant or agreement, or exercising any right, power, remedy or privilege hereunder, or under the Notes orunder any other Loan Document, or any other instrument given as security therefor, shall operate as or constitute a waiverthereof, nor shall a single or partial exercise thereof preclude any other future exercise, or the exercise of any other right, power,remedy or privilege. In particular, and not by way of limitation, by accepting payment after the due date of any amount payableunder this Agreement, the Notes or any other Loan Document, Lender shall not be deemed to have waived any right either torequire prompt payment when due of all other amounts due under this Agreement, the Notes or the other Loan Documents, or todeclare a default for failure to effect prompt payment of any such other amount.

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19.6 Notices. All notices, consents, approvals and requests required or permitted hereunder or under any other LoanDocument shall be given in writing and shall be effective for all purposes if hand delivered or sent by (a) certified or registeredUnited States mail, postage prepaid, return receipt requested, or (b) expedited prepaid delivery service, either commercial orUnited States Postal Service, with proof of attempted delivery, addressed as follows (or at such other address and Person as shallbe designated from time to time by any party hereto, as the case may be, in a written notice to the other parties hereto in themanner provided for in this Section): If to Lender:

German American Capital Corporation, on behalf of the holders of theNotes

60 Wall Street, 10th floor New York, NY 10005 Attention: Todd Sammann and General Counsel With a copy to:

Wachovia Bank, National Assocation, as Servicer, at such notice addressas shall be designated by notice delivered in accordance with thisSection.

With a copy to: Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, New York 10036 Attention: Harvey R. Uris, Esq. With a copy to: Wachovia Bank, National Association 375 Park Avenue, 5th Floor New York, New York 10022 Attention: Mr. Peter Scola If to Borrower (which shall be deemed notice to Maryland Loan Guarantor): c/o BlueLinx Holdings Inc. 4300 Wildwood Parkway Atlanta, Georgia 30339 Attention: Mr. David Morris, CFO & Treasurer With a copy to: Schulte Roth & Zabel LLP 919 Third Avenue New York, New York 10022 Attention: Jeffrey A. Lenobel, Esq.

All notices, elections, requests and demands under this Agreement shall be effective and deemed received upon the earliest of(i) the actual receipt of the same by personal delivery or otherwise, (ii) one (1) Business Day after being deposited with anationally recognized overnight courier service as required above, or (iii) three (3) Business Days after being deposited in theUnited States mail as required above. Rejection or other refusal to accept or the inability to deliver because of changed addressof which no notice was given as herein required shall be deemed to be receipt of the notice, election, request, or demand sent.

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19.7 TRIAL BY JURY. EACH OF BORROWER, MARYLAND LOAN GUARANTOR AND LENDER AND ALL PERSONSCLAIMING BY, THROUGH OR UNDER IT, HEREBY EXPRESSLY, KNOWINGLY, VOLUNTARILY AND INTENTIONALLYWAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (I) ARISINGUNDER THIS AGREEMENT, THE SECURITY INSTRUMENT, THE NOTES OR ANY OTHER LOAN DOCUMENT,INCLUDING, WITHOUT LIMITATION, ANY PRESENT OR FUTURE MODIFICATION THEREOF OR (II) IN ANY WAYCONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEMWITH RESPECT TO THIS AGREEMENT, THE SECURITY INSTRUMENT, THE NOTES OR ANY OTHER LOANDOCUMENT (AS NOW OR HEREAFTER MODIFIED) OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENTEXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO,IN EACH CASE WHETHER SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION IS NOW EXISTING ORHEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND BORROWER ANDMARYLAND LOAN GUARANTOR EACH HEREBY AGREES AND CONSENTS THAT AN ORIGINAL COUNTERPART ORA COPY OF THIS SECTION MAY BE FILED WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT HERETO TOTHE WAIVER OF ANY RIGHT TO TRIAL BY JURY. BORROWER AND MARYLAND LOAN GUARANTOR EACHACKNOWLEDGES THAT IT HAS CONSULTED WITH LEGAL COUNSEL REGARDING THE MEANING OF THIS WAIVERAND ACKNOWLEDGES THAT THIS WAIVER IS AN ESSENTIAL INDUCEMENT FOR THE MAKING OF THE LOAN. THISWAIVER SHALL SURVIVE THE REPAYMENT OF THE LOAN.

19.8 Headings. The Article and/or Section headings and the Table of Contents in this Agreement are included herein forconvenience of reference only and shall not constitute a part of this Agreement for any other purpose.

19.9 Severability. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to beeffective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid underapplicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating theremainder of such provision or the remaining provisions of this Agreement.

19.10 Preferences. To the extent Borrower or Maryland Loan Guarantor makes a payment or payments to Lender, whichpayment or proceeds or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside orrequired to be repaid to a trustee, receiver or any other party under any bankruptcy law, state or federal law, common law orequitable cause, then, to the extent of such payment or proceeds received, the obligations hereunder or part thereof intended tobe satisfied shall be revived and continue in full force and effect, as if such payment or proceeds had not been received byLender.

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19.11 Waiver of Notice. Borrower and Maryland Loan Guarantor shall not be entitled to any notices of any naturewhatsoever from Lender except with respect to matters for which this Agreement or the other Loan Documents specifically andexpressly provide for the giving of notice by Lender to Borrower and except with respect to matters for which Borrower is not,pursuant to applicable Legal Requirements, permitted to waive the giving of notice. Borrower hereby expressly waives the rightto receive any notice from Lender with respect to any matter for which this Agreement or the other Loan Documents do notspecifically and expressly provide for the giving of notice by Lender to Borrower.

19.12 Expenses; Indemnity.

(a) Borrower and Maryland Loan Guarantor each covenants and agrees to pay or, if Borrower or Maryland Loan Guarantorfails to pay, to reimburse, Lender upon receipt of written notice from Lender for all reasonable costs and expenses (includingreasonable attorneys’ fees and disbursements) actually incurred by Lender in connection with (i) the preparation, negotiation,execution and delivery of this Agreement and the other Loan Documents and the consummation of the transactionscontemplated hereby and thereby and all the costs of furnishing all opinions by counsel for Borrower (including withoutlimitation any opinions requested by Lender pursuant to this Agreement); (ii) the servicing of the Loan by the Servicer after theClosing Date in accordance with Section 14.3.2(e); (iii) the negotiation, preparation, execution, delivery and administration ofany consents, amendments, waivers or other modifications to this Agreement and the other Loan Documents and any otherdocuments or matters as required herein or under the other Loan Documents; (iv) securing Borrower’s compliance with anyrequests made pursuant to the provisions of this Agreement; (v) the filing and recording fees and expenses, mortgage recordingtaxes, title insurance and reasonable fees and expenses of counsel for providing to Lender all required legal opinions, and othersimilar expenses incurred in creating and perfecting the Lien in favor of Lender pursuant to this Agreement and the other LoanDocuments; (vi) enforcing or preserving any rights, in response to third party claims or the prosecuting or defending of anyaction or proceeding or other litigation, in each case against, under or affecting Borrower, Maryland Loan Guarantor, thisAgreement, the other Loan Documents, the Property, or any other security given for the Loan; (vii) enforcing any obligations ofor collecting any payments due from Borrower or Maryland Loan Guarantor under this Agreement, the other Loan Documents orwith respect to the Property or in connection with any refinancing or restructuring of the credit arrangements provided underthis Agreement in the nature of a work-out or of any insolvency or bankruptcy proceedings and (viii) procuring insurancepolicies pursuant to Section 6.1; provided, however, that Borrower shall not be liable for the payment of any such costs andexpenses to the extent the same arise by reason of the gross negligence, illegal acts, fraud or willful misconduct of Lender. Anycost and expenses due and payable to Lender may be paid from any amounts in the Holding Account.

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(b) Subject to the non-recourse provisions of Section 18.1, Borrower and Maryland Loan Guarantor shall protect,indemnify and save harmless Lender, and all officers, directors, stockholders, members, partners, employees, agents, successorsand assigns thereof (collectively, the Indemnified Parties) from and against all liabilities, obligations, claims, damages,penalties, causes of action, costs and expenses (including all reasonable attorneys’ fees and expenses actually incurred) imposedupon or incurred by or asserted against the Indemnified Parties or the Property or any part of its interest therein, by reason of theoccurrence or existence of any of the following (to the extent Proceeds payable on account of the following shall be inadequate;it being understood that in no event will the Indemnified Parties be required to actually pay or incur any costs or expenses as acondition to the effectiveness of the foregoing indemnity) prior to (i) the acceptance by Lender or its designee of a deed-in-lieuof foreclosure with respect to the Property, or (ii) an Indemnified Party or its designee taking possession or control of theProperty or (iii) the foreclosure of the Security Instrument, except to the extent caused by the actual willful misconduct or grossnegligence of any Indemnified Party (other than such willful misconduct, criminal acts, fraud or gross negligence imputed to theIndemnified Parties because of their interest in the Property): (1) ownership of Borrower’s (or in the case of the MarylandProperty, Maryland Loan Guarantor’s) interest in the Property, or any interest therein, or receipt of any Rents or other sumtherefrom, (2) any accident, injury to or death of any persons or loss of or damage to property occurring on or about the Propertyor any Appurtenances thereto, (3) any design, construction, operation, repair, maintenance, use, non-use or condition of theProperty or Appurtenances thereto, including claims or penalties arising from violation of any Legal Requirement,Environmental Law or Insurance Requirement, as well as any claim based on any patent or latent defect, whether or notdiscoverable by Lender, any claim the insurance as to which is inadequate, and any Environmental Claim except to the extentsuch Environmental Claim is covered by the Environmental Insurance Policy and the related insurer agrees to pay Lender’sclaims thereunder, (4) any Event of Default under this Agreement or any of the other Loan Documents, (5) any performance ofany labor or services or the furnishing of any materials or other property in respect of the Property or any part thereof, (6) anynegligence or tortious act or omission on the part of Borrower, Maryland Loan Guarantor or any of its agents, contractors,servants, employees, sublessees, licensees or invitees, (7) any contest referred to in Section 7.3 hereof, or (8) any obligation orundertaking relating to the performance or discharge of any of the terms, covenants and conditions of the landlord contained inthe Leases. Any amounts the Indemnified Parties are legally entitled to receive under this Section 19.12(b) which are not paidwithin thirty (30) days after written demand therefor by the Indemnified Parties or Lender, setting forth in reasonable detail theamount of such demand and the basis therefor, shall bear interest from the date of demand at the Default Rate, and shall,together with such interest, be part of the Indebtedness and secured by the Security Instrument. In case any action, suit orproceeding is brought against the Indemnified Parties by reason of any such occurrence, Borrower shall at Borrower’s expenseresist and defend such action, suit or proceeding or will cause the same to be resisted and defended by counsel at Borrower’sreasonable expense for the insurer of the liability or by counsel designated by Borrower (unless reasonably disapproved byLender promptly after Lender has been notified of such counsel); provided, however, that nothing herein shall compromise theright of Lender (or any Indemnified Party) to appoint its own counsel at Borrower’s reasonable expense for its defense withrespect to any action which in its reasonable opinion presents a conflict or potential conflict between Lender and Borrower thatwould make such separate representation advisable; provided, further, that if Lender shall have appointed separate counselpursuant to the foregoing, Borrower shall not be responsible for the expense of additional separate counsel of any IndemnifiedParty unless in the reasonable opinion of Lender a conflict or potential conflict exists between such Indemnified Party andLender. So long as Borrower is resisting and defending such action, suit or proceeding as provided above in a prudent andcommercially reasonable manner, Lender and the Indemnified Parties shall not be entitled to settle such action, suit orproceeding without Borrower’s consent which shall not be unreasonably withheld or delayed, and claim the benefit of thisSection 19.12(b) with respect to such action, suit or proceeding and Lender agrees that it will not settle any such action, suit orproceeding without the consent of Borrower. Any Indemnified Party will give Borrower prompt notice after such IndemnifiedParty obtains actual knowledge of any potential claim by such Indemnified Party for indemnification hereunder.

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19.13 Exhibits and Schedules Incorporated. The Exhibits and Schedules annexed hereto are hereby incorporated herein asa part of this Agreement with the same effect as if set forth in the body hereof.

19.14 Offsets, Counterclaims and Defenses. Any assignee of Lender’s interest in and to this Agreement, the Notes and theother Loan Documents shall take the same free and clear of all offsets, counterclaims or defenses which are unrelated to suchdocuments which Borrower or Maryland Loan Guarantor may otherwise have against any assignor of such documents, and nosuch unrelated counterclaim or defense shall be interposed or asserted by Borrower or Maryland Loan Guarantor in any actionor proceeding brought by any such assignee upon such documents and any such right to interpose or assert any such unrelatedoffset, counterclaim or defense in any such action or proceeding is hereby expressly waived by Borrower and Maryland LoanGuarantor.

19.15 Liability of Assignees of Lender. No assignee of Lender shall have any personal liability, directly or indirectly,under or in connection with this Agreement or any other Loan Document or any amendment or amendments hereto made at anytime or times, heretofore or hereafter, any different than the liability of Lender hereunder. In addition, no assignee shall have atany time or times hereafter any personal liability, directly or indirectly, under or in connection with or secured by anyagreement, lease, instrument, encumbrance, claim or right affecting or relating to the Property or to which the Property is now orhereafter subject any different than the liability of Lender hereunder. The limitation of liability provided in this Section 19.15 is(i) in addition to, and not in limitation of, any limitation of liability applicable to the assignee provided by law or by any othercontract, agreement or instrument, and (ii) shall not apply to any assignee’s gross negligence or willful misconduct.

19.16 No Joint Venture or Partnership; No Third Party Beneficiaries.

(a) Borrower and Lender intend that the relationships created hereunder and under the other Loan Documents be solely thatof borrower and lender. Nothing herein or therein is intended to create a joint venture, partnership, tenancy-in-common, or jointtenancy relationship between Borrower and Lender or to grant Lender any interest in the Property other than that of mortgagee,beneficiary or lender.

(b) This Agreement and the other Loan Documents are solely for the benefit of Lender and Borrower and Maryland LoanGuarantor and nothing contained in this Agreement or the other Loan Documents shall be deemed to confer upon anyone otherthan Lender, Borrower and Maryland Loan Guarantor any right to insist upon or to enforce the performance or observance ofany of the obligations contained herein or therein. All conditions to the obligations of Lender to make the Loan hereunder areimposed solely and exclusively for the benefit of Lender and no other Person shall have standing to require satisfaction of suchconditions in accordance with their terms or be entitled to assume that Lender will refuse to make the Loan in the absence ofstrict compliance with any or all thereof and no other Person shall under any circumstances be deemed to be a beneficiary ofsuch conditions, any or all of which may be freely waived in whole or in part by Lender if, in Lender’s sole discretion, Lenderdeems it advisable or desirable to do so.

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19.17 Publicity. Other than legally required disclosures, filings and reporting requirements, all news releases, publicity oradvertising by Borrower or Lender or their respective Affiliates through any media intended to reach the general public whichrefers to the Loan Documents or the financing evidenced by the Loan Documents, to Lender, or any of its Affiliates shall besubject to the prior written approval of Lender and Borrower.

19.18 Waiver of Marshalling of Assets. To the fullest extent permitted by law, Borrower and Maryland Loan Guarantor, foritself and its successors and assigns, waives all rights to a marshalling of the assets of Borrower, Maryland Loan Guarantor,Borrower’s and Maryland Loan Guarantor’s members and others with interests in Borrower, Maryland Loan Guarantor and of theProperty, and agrees not to assert any right under any laws pertaining to the marshalling of assets, the sale in inverse order ofalienation, homestead exemption, the administration of estates of decedents, or any other matters whatsoever to defeat, reduceor affect the right of Lender under the Loan Documents to a sale of the Property for the collection of the Indebtedness withoutany prior or different resort for collection or of the right of Lender to the payment of the Indebtedness out of the net proceeds ofthe Property in preference to every other claimant whatsoever.

19.19 Waiver of Counterclaim and other Actions . Borrower and Maryland Loan Guarantor each hereby expressly andunconditionally waives, in connection with any suit, action or proceeding brought by Lender on this Agreement, the Notes, theSecurity Instrument or any Loan Document, any and every right it may have to (i) interpose any counterclaim therein (otherthan a counterclaim which can only be asserted in the suit, action or proceeding brought by Lender on this Agreement, theNotes, the Security Instrument or any Loan Document and cannot be maintained in a separate action) and (ii) have any suchsuit, action or proceeding consolidated with any other or separate suit, action or proceeding.

19.20 Conflict; Construction of Documents; Reliance. In the event of any conflict between the provisions of thisAgreement and any of the other Loan Documents, the provisions of this Agreement shall control. The parties heretoacknowledge that they were represented by competent counsel in connection with the negotiation, drafting and execution ofthe Loan Documents and that such Loan Documents shall not be subject to the principle of construing their meaning against theparty which drafted same. Borrower acknowledges that, with respect to the Loan, Borrower shall rely solely on its own judgmentand advisors in entering into the Loan without relying in any manner on any statements, representations or recommendations ofLender or any parent, subsidiary or Affiliate of Lender. Lender shall not be subject to any limitation whatsoever in the exerciseof any rights or remedies available to it under any of the Loan Documents or any other agreements or instruments which governthe Loan by virtue of the ownership by it or any parent, subsidiary or Affiliate of Lender of any equity interest any of them mayacquire in Borrower or Maryland Loan Guarantor, and Borrower and Maryland Loan Guarantor each hereby irrevocably waivesthe right to raise any defense or take any action on the basis of the foregoing with respect to Lender’s exercise of any such rightsor remedies. Borrower acknowledges that Lender engages in the business of real estate financings and other real estatetransactions and investments which may be viewed as adverse to or competitive with the business of Borrower or its Affiliates.

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19.21 Prior Agreements. This Agreement and the other Loan Documents contain the entire agreement of the parties heretoand thereto in respect of the transactions contemplated hereby and thereby, and all prior agreements among or between suchparties, whether oral or written, are superseded by the terms of this Agreement and the other Loan Documents and unlessspecifically set forth in a writing contemporaneous herewith the terms, conditions and provisions of any and all such prioragreements do not survive execution of this Agreement.

19.22 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall constitute an original,but all of which shall constitute one document.

[NO FURTHER TEXT ON THIS PAGE]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their duly authorizedrepresentatives, all as of the day and year first above written.

BORROWER: ABP AL (MIDFIELD) LLC ABP AR (LITTLE ROCK) LLCABP CA (CITY OF INDUSTRY) LLC ABP CA (NATIONAL CITY) LLCABP CA (NEWARK) LLC ABP CO I (DENVER) LLCABP CA (RIVERSIDE) LLC ABP CT (NEWTON) LLCABP CO II (DENVER) LLC ABP FL (MIAMI) LLCABP FL (LAKE CITY) LLC ABP FL (TAMPA) LLCABP FL (PENSACOLA) LLC ABP GA (LAWRENCEVILLE) LLCABP FL (YULEE) LLC ABP IL (UNIVERSITY PARK) LLCABP IA (DES MOINES) LLC ABP KY (INDEPENDENCE) LLCABP IN (ELKHART) LLC ABP MA (BELLINGHAM) LLCABP LA (SHREVEPORT) LLC ABP ME (PORTLAND) LLCABP MD (BALTIMORE) SUBSIDIARY LLC ABP MI (GRAND RAPIDS) LLCABP MI (DETROIT) LLC ABP MN (MAPLE GROVE) LLCABP MN (EAGAN) LLC ABP MO (KANSAS CITY) LLCABP MO (BRIDGETON) LLC ABP MS (PEARL) LLCABP MO (SPRINGFIELD) LLC ABP NC (CHARLOTTE) LLCABP NC (BUTNER) LLC ABP NJ (DENVILLE) LLCABP ND (NORTH FARGO) LLC ABP NY (YAPHANK) LLCABP NM (ALBUQUERQUE) LLC ABP OK (TULSA) LLCABP OH (TALMADGE) LLC ABP PA (ALLENTOWN) LLCABP OR (BEAVERTON) LLC ABP SC (CHARLESTON) LLCABP PA (STANTON) LLC ABP TN (ERWIN) LLCABP SD (SIOUX FALLS) LLC ABP TN (NASHVILLE) LLCABP TN (MEMPHIS) LLC ABP TX (FORT WORTH) LLCABP TX (EL PASO) LLC ABP TX (HOUSTON) LLCABP TX (HARLINGEN) LLC ABP TX (SAN ANTONIO) LLCABP TX (LUBBOCK) LLC ABP VA (VIRGINIA BEACH) LLCABP VA (RICHMOND) LLC ABP WA (WOODINVILLE) LLCABP VT (SHELBURNE) LLC ABP WI (WAUSAU) LLC By: /s/ David Morris Name: David Morris Title: Vice President

S-1 (Borrower)

MARYLAND LOAN GUARANTOR:

ABP MD (BALTIMORE) LLC

By: /s/ David Morris Name: David Morris Title: Vice President

[Lender’s signature appears on following page]

S-2 (Borrower)

LENDER:

GERMAN AMERICAN CAPITALCORPORATION, a Maryland corporation, onbehalf of the holders of the Notes

By: /s/ Todd O. Sammann Name: Todd O. Sammann Title: Vice President By: /s/ Thomas R. Traynor Name: Thomas R. Traynor Title: Vice President

S-1 (Lender)

EXHIBIT A

TITLE INSURANCE REQUIREMENTS, ENDORSEMENTSAND AFFIRMATIVE COVERAGES

1. General. Borrower and/or its counsel is responsible for ordering or updating any title insurance work. Lender requires alender’s title insurance policy insuring “German American Capital Corporation, a Maryland corporation, for the benefit of theholders of the Notes, and its successors and assigns”. The approved title underwriters, type and amount of insurance andrequired endorsements are described below. The list of endorsements is subject to review by Lender’s counsel, local counsel andadditional specific coverages may be required after review of the related title commitment. The requirements of this Exhibit Ashall not limit any requirements set forth in the Loan Agreement with respect to the matters set forth herein.

2 . Title Insurer. The title company or title companies must be approved by Lender and licensed to do business in thejurisdiction in which the Property is located. The Title Company (as defined in the Loan Agreement) has been pre-approved byLender.

3. Title Agent. Unless Lender otherwise agrees, all title work shall be ordered and coordinated, and the closing of the Loanshall be conducted through the Title Company.

4. Primary Title Insurance Requirements.

(a) Amount of Coverage. As required pursuant to the Loan Agreement.

(b) Effective Date. The later of the date of recording of the Security Instrument or the date of funding of the Loan. Borrowershall be required to provide a customary “gap” indemnity in order to enable the Title Company to provide “gap” coverage.

(c) Insured. “German American Capital Corporation, a Maryland corporation, for the benefit of the holders of the Notes,and its successors and assigns”.

(d) Legal Description. Metes and bounds description to be provided which must conform to that shown on the Survey, theSecurity Instrument and any other Loan Documents that require a legal description of the Property. A lot and block descriptionshall be acceptable in place of a metes and bounds description if accepted by the Title Company for issuance of a Title Policyfor an Individual Property.

(e) Policy Form. An ALTA (or equivalent) lender’s policy of title insurance in form and substance acceptable to Lender.Without limiting Lender’s right to require specific coverages, endorsements or other title work, the Title Policy shall (i) be inthe 1970 ALTA (as amended 84) form or, if not available, ALTA 1992 form (deleting arbitration and creditor rights exclusions)or, if not available, the form commonly used in the state where the Property is located, (ii) to the extent available, include the“extended coverage” provisions described in paragraph 5 below, (iii) include all applicable endorsements described inparagraph 6 below, and (iv) include Schedule B exceptions in a form and to the extent acceptable to Lender’s counsel.

A-1

5. Extended Coverage Requirements. The Title Policy shall:

(a) not contain any exception for filed or unfiled mechanic, materialmen or similar liens;

(b) limit any general exception for real estate taxes and other charges to real estate or other similar taxes or assessments thatare not yet due and payable or delinquent and are not a current lien on the Property;

(c) limit any general exception for the rights of persons in possession to the rights of specified tenants, as tenants only withno right or option to purchase, set forth on the rent roll for the Property and attached to the Title Policy; and

(d) not contain any general exception as to matters that an accurate Survey of the Property would disclose, but may containspecific exceptions to matters disclosed on the Survey to be delivered on the Closing Date, subject to review by Lender’scounsel.

6. Required Endorsements. In addition to any other endorsements required by Lender to be obtained by Borrower pursuantto the terms of the Loan Agreement, the following endorsements are required, to the extent applicable and otherwise availablein the jurisdiction in which the Property is located:

• Extended Coverage.

• Restrictions, Encroachments, Minerals Endorsement ALTA Form 9 or equivalent. (If not available, the Title Policymust insure by way of affirmative coverage statements that there are no encroachments by any of the improvementsonto easements, rights of way or other exceptions to streets or adjacent property, or insure against loss or damageresulting therefrom.)

• Deletion of Creditors Rights Exclusion Endorsement.

• Environmental Protection Lien Endorsement. (The Title Policy may make an exception only for specific state statutesthat provide for potential subsequent liens that could take priority over the lien securing the Loan.)

• Direct Access to Public Road Endorsement;

• Usury Endorsement.

• Land Same As Survey/Legal Description Endorsement.

A-2

• Zoning 3.1 Endorsement (including parking).

• Subdivision Endorsement.

• Doing Business Endorsement.

• Deletion of Arbitration Endorsement.

• Separate Tax Lot Endorsement.

• Street Address Endorsement

• Contiguity Endorsement.

• Variable Rate Endorsement.

• Mortgage Recording Tax Endorsement.

• REA Endorsement.

• Any of the following endorsements customary in the state in which the Property is located or as required by the natureof the transaction:

Tie-In Endorsement for Multiple PoliciesMortgage Assignment EndorsementFirst Loss / Last Dollar EndorsementBlanket Un-located Easements EndorsementClosure Endorsement

A-3

EXHIBIT B

GERMAN AMERICAN CAPITAL CORPORATIONSURVEY REQUIREMENTS

The requirements of this Exhibit A shall not limit any requirements set forth in the Loan Agreement with respect to thematters set forth herein. The Surveys shall contain the following:

• The legal description of the Property;

• The courses and measured distances of the exterior boundary lines of the Property and the identification of owners ofabutting parcels;

• The total acreage of the Property to the nearest tenth of an acre;

• The location of any existing improvements, the dimensions thereof at the ground surface level and their relationship tothe facing exterior property lines, streets and set-back lines of the Property;

• The location, lines and widths of adjoining publicly dedicated and accepted streets showing the number and location ofexisting curb cuts, driveways, and fences;

• The location and dimensions of encroachments, if any, upon the Property;

• The location of all set-back lines, restrictions of record, other restrictions established by zoning or building codeordinance, utilities, easements, rights-of-way and other matters affecting title to the Property which are to be shown inSchedule B-2 of the Title Policy identifying each by reference to its recording data, where applicable;

• Evidence that adequate means of ingress and egress to and from the Property exist and that the Property does not serveany adjoining property for ingress, egress or any other purpose;

• If the Property is described as being on a recorded map or plat, a legend relating the survey to such map or plat;

• The street address of the Property;

• Parking areas at the Property and, if striped, the striping and type (e.g., handicapped, motorcycle, regular, etc.) andnumber of parking spaces at the Property;

• A statement as to whether the Property is located in a special flood or mudslide hazard area as determined by a review of astated and identified Flood Hazard Boundary Map published by the Federal Insurance Administration of the U.S. Department ofHousing and Urban Development;

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• A vicinity map showing the property in reference to nearby highways or major street intersections.

• The exterior dimensions of all buildings at ground level and the square footage of the exterior footprint of all buildings,or gross floor area of all buildings, at ground level.

• The location of utilities serving or existing on the property as evidenced by on-site observation or as determined byrecords provided by client, utility companies and other appropriate sources (with reference as to the source of information) (forexample)

• railroad tracks and sidings;

• manholes, catch basins, valve vaults or other surface indications of subterranean uses;

• wire and cables (including their function) crossing the surveyed premises, all poles on or within ten feet ofthe surveyed premises, and the dimensions of all crosswires or overhangs affecting the surveyed premises;and

• utility company installations on the surveyed premises.

• A certificate in substantially the following form:

The undersigned being a registered surveyor of the State of [State] hereby certifies to GERMAN AMERICAN CAPITALCORPORATION, A MARYLAND CORPORATION, ON BEHALF OF THE HOLDERS OF THE NOTES [NAME OFBORROWING ENTITY] and [INSERT NAME OF TITLE COMPANY], and each of their respective successors and assigns, as ofthe date below, as follows:

I, , a Registered Land Surveyor in the [State/Commonwealth] of , dohereby certify to the aforesaid parties, their successors and assigns, as of the date set forth above that I have made a carefulsurvey of a tract of land described as follows:

See Surveyor’s Legal Description.

I further certify that:

i. The survey map and the survey on which it is based were made (a) in accordance with: “Minimum Standard DetailRequirements for ALTA/ACSM Land Title Surveys” jointly established and adopted by ALTA and ACSM in 1999,including items 1 (except for states that require record monument platting), 2, 3, 4, 6, 7(a), 7(b)(1), 7(c), 8, 9, 10, 11(a), 13,14, 15 and 16 of Table A thereof, (b) pursuant to Accuracy Standards (as adopted by ALTA and ACSM and in effect on thedate of this certification), with Positional Uncertainties resulting from the survey measurements made on the survey notexceeding the allowable Positional Tolerance, and (c) in compliance with all applicable laws of the jurisdiction in whichthe subject property lies.

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ii. The survey is an accurate survey of all of the real property legally described therein (the “Property”).

iii. The survey map properly and accurately indicates and locates: (a) all visible improvements on the Property as ofthe date of the survey; (b) visible utility structures for power, telephone, storm drainage, sanitary waste disposal anddrinking water; (c) visible footprint foundations, parking spaces, loading docks and other visible structures andimprovements on the Property; and (d) any changes in street right of way lines completed and available from thecontrolling jurisdiction, as well as observable evidence of recent street or sidewalk construction repairs.

iv. The survey map was prepared under the direct supervision and control of the undersigned from an actualinstrument survey made of the Property.

v. There are no encroachments either across property lines or zoning district lines or restriction lines in effect as of thedate of the survey except as follows [if no encroachments are specified, there are NONE]: ;

vi. The Property described hereon is the same as the property described in title insurance commitment # issued by the Title Insurance Company dated , 2005 (the “Title Commitment”), and thesurvey map properly designates and locates all visible or recorded easements, rights-of-way, party walls and restricted areasas of the date of the survey and areas affected by other survey-related matters, if any, listed on the Title Commitment;

vii. The Property has direct physical ingress and egress to [names of streets or roads ] uponwhich the Property abuts, the same being paved and public streets, or paved and private ways leading to public streets.

viii. The Property is [or in not] located in an area designated as a special flood hazard area by the United StatesDepartment of Housing and Urban Development and lies in an area having a Zone Designation by the Secretaryof Housing and Urban Development, on Flood Insurance Rate Map No. , with a date of identification of , _____, which is the current Flood Insurance Rate Map for the community in which the Property is situated.

ix. The Property does not service any adjoining property for drainage, ingress or egress.

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x. The Property [is/is not] an acceptable subdivision of land under state law or local, county or city ordinances.

If the Property constitutes more than one parcel or lot, there are no gaps, gores or strips between them. , Licensed Surveyor

Date: [seal]

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EXHIBIT C

SINGLE PURPOSE ENTITY PROVISIONS

It is a requirement that the borrower be a bankruptcy remote, special purpose entity. A bankruptcy remote, special purposeentity is an entity which is unlikely to become insolvent as a result of its own activities and which is adequately insulated fromthe consequences of any other party’s insolvency. Set forth below is language to be included in the organizational documentsof corporations, limited partnerships and limited liability companies to evidence such entities’ existence as bankruptcy remote,special purpose entities.

I. CORPORATION.

If the Single Purpose Entity is a corporation, its certificate of incorporation will have to have the following provisions tobe considered a special purpose entity:

A. Purpose.

The corporation’s purpose should be limited to owning and operating the mortgaged property (or interests in theBorrower).

“Notwithstanding any provision hereof or of any other document governing the formation, management or operationof the Corporation to the contrary, the following shall govern: The nature of the business and of the purposes to beconducted and promoted by the Corporation, is to engage solely in the following activities:

1. To acquire that certain parcel of real property, together with all improvements located thereon, in the City of ,State of [ interests in [insert Borrower or other applicable entity’s name]] (the “Property”).

2. To own, hold, sell, assign, transfer, operate, lease, mortgage, pledge and otherwise deal with the Property.

3. To exercise all powers enumerated in the [General Corporation Law] of necessary or convenient to theconduct, promotion or attainment of the business or purposes otherwise set forth herein.

B. Certain Prohibited Activities.

The corporation shall be prohibited, except in certain circumstances, from engaging in certain activities, includingvarious types of insolvency proceedings, dissolution, liquidation, consolidation, merger, sale of all or substantially all ofthe corporation’s assets, transfer of ownership assets, incurrence of additional debt and amendment of the corporation’sarticles of incorporation.

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“Notwithstanding any provision hereof or of any other document governing the formation, management or operationof the Corporation to the contrary, the following shall govern: The Corporation shall only incur indebtedness in an amountnecessary to acquire, operate and maintain the [Property] [use other term for the real estate if necessary]. For so long as anymortgage lien exists on the [Property] [use other term for the real estate if necessary], the Corporation shall not incur,assume, or guaranty any other indebtedness. The Corporation shall not consolidate or merge with or into any other entityor convey or transfer its properties and assets substantially as an entirety to any entity unless (i) the entity (if other than theCorporation) formed or surviving such consolidation or merger or that acquired by conveyance or transfer the propertiesand assets of the Corporation substantially as an entirety (a) shall be organized and existing under the laws of the UnitedStates of America or any State or the District of Columbia, (b) shall include in its organizational documents the samelimitations set forth in this Article _____ and in Article [insert section setting forth Separateness Covenants], and (c) shallexpressly assume the due and punctual performance of the Corporation’s obligations; and (ii) immediately after givingeffect to such transaction, no default or event of default under any agreement to which it is a party shall have beencommitted by this corporation and be continuing. For so long as a mortgage lien exists on the [Property] [use other term forthe real estate if necessary], the Corporation will not voluntarily commence a case with respect to itself, as debtor, underthe Federal Bankruptcy Code or any similar federal or state statute without the unanimous consent of the Board ofDirectors. For so long as a mortgage lien exists on the [Property] [use other term for the real estate if necessary], (ii) noamendment to this certificate of incorporation or to the Corporation’s By-Laws may be made without first obtainingapproval of the mortgagee holding a first mortgage lien on the [Property] [use other term for the real estate if necessary] and(ii) the Corporation shall not dissolve, terminate or liquidate.”

“The Board of Directors may not take any action requiring the unanimous affirmative vote of 100% of the members of theBoard of Directors unless all directors including the Independent Directors shall have participated in such vote.”

C. Indemnification.

Indemnification of a corporation’s directors and officers should be fully subordinated to obligations respecting theProperty.

“Notwithstanding any provision hereof or of any other document governing the formation, management or operationof the Corporation to the contrary, the following shall govern: Any indemnification shall be fully subordinated to anyobligations respecting the [Property] [use other term for the real estate if necessary] and shall not constitute a claim againstthe Corporation in the event that cash flow is insufficient to pay such obligations.”

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D. Separateness Covenants.

In order to demonstrate that it is a bankruptcy remote entity not at risk of having its assets substantivelyconsolidated with those of another entity, the corporation must observe certain covenants designed to make evident thespecial purpose entity’s separateness from its affiliates.

“Notwithstanding any provision hereof or of any other document governing the formation, management or operationof the Corporation to the contrary, the following shall govern: For so long as any mortgage lien exists on the [Property][use other term for the real estate if necessary], in order to preserve and ensure its separate and distinct corporate identity, inaddition to the other provisions set forth in this certificate of incorporation, the Corporation shall conduct its affairs inaccordance with the following provisions:

1. It shall establish and maintain an office through which its business shall be conducted separate and apart from those ofits parent and any affiliate and shall allocate fairly and reasonably any overhead for shared office space.

2. It shall maintain separate corporate records and books of account from those of its parent and any affiliate.

3. Its Board of Directors shall hold appropriate meetings (or act by unanimous consent) to authorize all appropriatecorporate actions, and in authorizing such actions, shall observe all corporate formalities. The Board of Directors shall includeat least two (2) individuals who are Independent Directors. As used herein, an “Independent Director” shall mean an individualwho shall not have been at the time of such individual’s appointment, and may not have been at any time (i) a partner, member,shareholder of, or an officer or employee of, the Corporation or any of its respective partners, members, shareholders,subsidiaries or affiliates, (ii) a customer of, or supplier to, the Corporation or managing member of the Corporation or any oftheir respective partners, members, shareholders, subsidiaries or affiliates, (iii) a person controlling any such partner, member,shareholder, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, employee, supplieror customer of any other director of the Corporation or of the managing member of the Corporation. As used herein, the term“control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management andpolicies of a person or entity, whether through ownership of voting securities, by contract or otherwise.

4. It shall not commingle assets with those of its parent and any affiliate.

5. It shall conduct its own business in its own name.

6. It shall maintain financial statements separate from its parent and any affiliate.

7. It shall pay any liabilities out of its own funds, including salaries of any employees, not funds of its parent or anyaffiliate.

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8. It shall maintain an arm’s length relationship with its parent and any affiliate.

9. It shall maintain adequate capital in light of its contemplated business operations.

10. It shall not guarantee or become obligated for the debts of any other entity, including its parent or any affiliate or holdout its credit as being available to satisfy the obligations of others.

11. It shall not acquire obligations or securities of its partners, members or shareholders.

12. It shall use stationery, invoices and checks separate from its parent and any affiliate.

13. It shall not pledge its assets for the benefit of any other entity, including its parent and any affiliate or make any loansor advances to any other person.

14. It shall hold itself out as an entity separate from its parent and any affiliate.

15. It shall correct any known misunderstanding regarding its separate identity.”

For purpose of this Article _____, the following terms shall have the following meanings:

“affiliate” means any person controlling or controlled by or under common control with the parent, including,without limitation (i) any person who has a familial relationship, by blood, marriage or otherwise with any director, officeror employee of the Corporation, its parent, or any affiliate thereof and (ii) any person which receives compensation foradministrative, legal or accounting services from this corporation, its parent or any affiliate. For purposes of this definition,“control” when used with respect to any specified person, means the power to direct the management and policies of suchperson, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms“controlling” and “controlled” have meanings correlative to the foregoing.

“parent” means, with respect to a corporation, any other corporation owning or controlling, directly or indirectly, fiftypercent (50%) or more of the voting stock of the Corporation.

“person” means any individual, corporation, partnership, limited liability company, joint venture, association, jointstock company, trust (including any beneficiary thereof), unincorporated organization, or government or any agency orpolitical subdivision thereof.

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II. LIMITED PARTNERSHIP.

If the Single Purpose Entity is a limited partnership, to be a special purpose entity, all of its general partners shall bespecial purpose entities. If such limited partnership has more than one general partner, then such limited partnership shallcontinue (and not dissolve) for so long as a solvent general partner exists. Consequently, both the limited partnership’spartnership agreement and the certificate of incorporation of its general partner(s) will have to meet certain requirements tobe considered special purpose entities. Such requirements are as follows:

A. Limited Partnership Agreement.

a. Purpose.

The limited partnership’s purpose should be limited to owning and operating the mortgaged property.

“Notwithstanding any provision hereof or of any other document governing the formation, management or operationof the Partnership to the contrary, the following shall govern: The nature of the business and of the purposes to beconducted and promoted by the Partnership, is to engage solely in the following activities:

1. To acquire that certain parcel of real property, together with all improvements located thereon, in the City of ,State of [ interests in [insert Borrower or other applicable entity’s name]] (the “Property”).


3. To exercise all powers enumerated in the Uniform Limited Partnership Act of necessary or convenient to theconduct, promotion or attainment of the business or purposes otherwise set forth herein.”

b. Certain Prohibited Activities.

The partnership shall be prohibited, except in certain circumstances, from engaging in certain activities, includingvarious types of insolvency proceedings, dissolution, liquidation, consolidation, merger, sale of all or substantially all ofthe partnership’s assets, transfer of partnership interests, incurrence of additional debt and amendment of the partnershipagreement.

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“Notwithstanding any provision hereof or of any other document governing the formation, management or operationof the Partnership to the contrary, the following shall govern: The Partnership shall only incur indebtedness in an amountnecessary to acquire, operate and maintain the [Property] [use other term for the real estate if necessary]. For so long as anymortgage lien exists on the [Property] [use other term for the real estate if necessary] , the Partnership shall not incur,assume, or guaranty any other indebtedness. The Partnership shall not consolidate or merge with or into any other entity orconvey or transfer its properties and assets substantially as an entirety to any entity unless (i) the entity (if other than thePartnership) formed or surviving such consolidation or merger or that acquired by conveyance or transfer the propertiesand assets of the Partnership substantially as an entirety (a) shall be organized and existing under the laws of the UnitedStates of America or any State or the District of Columbia, (b) shall include in its organizational documents the samelimitations set forth in this Article and in Article [insert section setting forth Separateness Covenants], and(c) shall expressly assume the due and punctual performance of the Partnership’s obligations; and (ii) immediately aftergiving effect to such transaction, no default or event of default under any agreement to which it is a party shall have beencommitted by this partnership and be continuing. For so long as a mortgage lien exists on the [Property] [use other term forthe real estate if necessary], the Partnership will not voluntarily commence a case with respect to itself, as debtor, under theFederal Bankruptcy Code or any similar federal or state statute without the unanimous consent of all of the partners of thePartnership. For so long as a mortgage lien exists on the [Property] [use other term for the real estate if necessary], (i) noamendment to this partnership agreement may be made and (ii) the partnership shall not dissolve, liquidate or terminatewithout first obtaining approval of the mortgagee holding a first mortgage lien on the [Property] [use other term for the realestate if necessary] .”

c. Indemnification.

Indemnification of a partnership’s partners should be fully subordinated to obligations respecting the Property.

“Notwithstanding any provision hereof or of any other document governing the formation, management or operation of thePartnership to the contrary, the following shall govern: Any indemnification shall be fully subordinated to any obligationsrespecting the [Property] [use other term for the real estate if necessary] and shall not constitute a claim against thePartnership in the event that cash flow is insufficient to pay such obligations.”

d. Separateness Covenants.

In order to demonstrate that it is a bankruptcy remote entity not at risk of having its assets substantivelyconsolidated with those of another entity, the partnership must observe certain covenants designed to make evident thespecial purpose entity’s separateness from its affiliates.

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“Notwithstanding any provision hereof or of any other document governing the formation, management or operationof the Partnership to the contrary, the following shall govern: For so long as any mortgage lien exists on the [Property] [useother term for the real estate if necessary] , in order to preserve and ensure its separate and distinct identity, in addition tothe other provisions set forth in this partnership agreement, the Partnership shall conduct its affairs in accordance with thefollowing provisions:

1. It shall establish and maintain an office through which its business shall be conducted separate and apart from that ofany of its affiliate and shall allocate fairly and reasonably any overhead for shared office space.

2. It shall maintain separate partnership records and books of account from those of any affiliate.

3. It shall not commingle assets with those of any affiliate.


5. It shall observe all partnership formalities.

6. It shall maintain financial statements separate from any affiliate.

7. It shall pay any liabilities out of its own funds, including salaries of any employees, not funds of any affiliate.

8. It shall maintain an arm’s length relationship with any affiliate.


10. It shall not guarantee or become obligated for the debts of any other entity, including any affiliate, or hold out its creditas being available to satisfy the obligations of others.


12. It shall use stationery, invoices and checks separate from any affiliate.

13. It shall not pledge its assets for the benefit of any other entity, including any affiliate or make any loans or advances toany other person.

14. It shall hold itself out as an entity separate from any affiliate.

15. It shall correct any known misunderstanding regarding its separate identity.

16. At all times have all of its general partners shall be special purpose corporate entities with at least two (2) IndependentDirectors.”

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For purpose of this Article , the following terms shall have the following meanings:

“affiliate” means any person controlling or controlled by or under common control with the Partnership including,without limitation (i) any person who has a familial relationship, by blood, marriage or otherwise with any partner oremployee of the Partnership, or any affiliate thereof and (ii) any person which receives compensation for administrative,legal or accounting services from this partnership, or any affiliate. For purposes of this definition, “control” when used withrespect to any specified person, means the power to direct the management and policies of such person, directly orindirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and“controlled” have meanings correlative to the foregoing.

“Independent Director” shall mean an individual who shall not have been at the time of such individual’sappointment, and may not have been at any time (i) a partner, member, shareholder of, or an officer or employee of, thePartnership or any of its respective partners, members, shareholders, subsidiaries or affiliates, (ii) a customer of, or supplierto, the Partnership or managing member of the Partnership or any of their respective partners, members, shareholders,subsidiaries or affiliates, (iii) a person controlling any such partner, member, shareholder, supplier or customer, or (iv) amember of the immediate family of any such shareholder, officer, employee, supplier or customer of any other director ofthe Partnership or of the managing member of the Partnership. As used herein, the term “control” means the possession,directly or indirectly, of the power to direct or cause the direction of the management and policies of a person or entity,whether through ownership of voting securities, by contract or otherwise.


e. Dissolution.

The limited partnership agreement should provide that the partnership will continue (and not dissolve) so long as asolvent general partner exists.

“Notwithstanding any provision or of any other document governing the formation, management or operation of thePartnership hereof to the contrary, the following shall govern: The Partnership shall not terminate solely as a consequenceof the [Bankruptcy] of one or more of the general partners of the Partnership so long as there remains a solvent generalpartner of the Partnership.”

In addition, dissolution of the partnership must not occur so long as the partnership remains mortgagor of the mortgagedproperly.

“Notwithstanding any provision hereof or of any other document governing the formation, management or operation of thePartnership to the contrary, the following shall govern: Subject to applicable law, dissolution of the Partnership shall notoccur so long as the Partnership remains mortgagor of the [Property] [use other term for the real estate if necessary] .”

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B. Corporate General Partner

a. Purpose.

The corporation’s purpose should be limited to acting as general partner of the limited partnership whose purpose, asset forth above, generally should be limited to owning and operating the mortgaged property.

“Notwithstanding any provision hereof or of any other document governing the formation, management or operationof the Corporation to the contrary, the following shall govern: The nature of the business and of the purposes to beconducted and promoted by the Corporation is to engage solely in the activity of acting as a general partner of a limitedpartnership (the “Partnership”) whose purpose is to acquire that certain parcel of real property, together with allimprovements located thereon, in the City of , State of (the “Property”) and own, hold, sell, assign,transfer, operate, lease, mortgage, pledge and otherwise deal with the Property. The Corporation shall exercise all powersenumerated in the General Corporation Law of necessary or convenient to the conduct, promotion orattainment of the business or purposes otherwise set forth herein.”


The corporation shall be prohibited, except in certain circumstances, from engaging in or causing the partnership toengage in certain activities, including various types of insolvency proceedings, dissolution, liquidation, consolidation,merger, sale of all or substantially all of the corporation’s or partnership’s assets, transfer of ownership assets, transfer ofpartnership interests, incurrence of additional debt, amendment of the corporation’s articles of incorporation andamendment of the partnership agreement.

“Notwithstanding any provision hereof or of any other document governing the formation, management or operationof the Corporation to the contrary, the following shall govern: The Corporation shall only incur or cause the Partnership toincur indebtedness in an amount necessary to acquire, operate and maintain the Property. For so long as any mortgage lienexists on the Property, the Corporation shall not and shall not cause the Partnership to incur, assume, or guaranty any otherindebtedness. For so long as the Partnership remains mortgagor of the Property, the Corporation shall not cause thePartnership to dissolve. The Corporation shall not and shall not cause the Partnership to consolidate or merge with or intoany other entity or convey or transfer its properties and assets substantially as an entirety to any entity unless (i) the entity

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(if other than the Corporation or Partnership) formed or surviving such consolidation or merger or that acquired byconveyance or transfer the properties and assets of the Corporation or Partnership substantially as an entirety (a) shall beorganized and existing under the laws of the United States of America or any State or the District of Columbia, (b) shallinclude in its organizational documents the same limitations set forth in this Article and in Article [insertsection setting forth Separateness Covenants], and (c) shall expressly assume the due and punctual performance of theCorporation’s obligations; and (ii) immediately after giving effect to such transaction, no default or event of default underany agreement to which it is a party shall have been committed by this corporation or the Partnership and be continuing.For so long as a mortgage lien exists on the Property, the Corporation shall not voluntarily commence a case with respectto itself or cause the Partnership to voluntarily commence a case with respect to itself, as debtor, under the FederalBankruptcy Code or any similar federal or state statute without the unanimous consent of the Board of Directors. For solong as a mortgage lien exists on the Property, (i) no amendment to this certificate of incorporation or to the Corporation’sBy-Laws nor to the Partnership agreement of the Partnership may be made and (ii) neither the Corporation nor thePartnership shall be dissolved, liquidated or terminated without first obtaining approval of the mortgagee holding a firstmortgage lien on the Property.”


c. Indemnification.


“Notwithstanding any provision hereof or of any other document governing the formation, management or operation of theCorporation to the contrary, the following shall govern: Any indemnification shall be fully subordinated to anyobligations respecting the Partnership or the Property and shall not constitute a claim against the Corporation in the eventthat cash flow is insufficient to pay such obligations.”


In order to demonstrate that it is a bankruptcy remote entity not at risk of having its assets substantively consolidatedwith those of another entity, the Corporation must observe certain covenants designed to make evident the specialpurpose entity’s separateness from its affiliates.

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“Notwithstanding any provision hereof or of any other document governing the formation, management or operation of theCorporation to the contrary, the following shall govern: For so long as any mortgage lien exists on the Property, in order topreserve and ensure its separate and distinct corporate identity, in addition to the other provisions set forth in thiscertificate of incorporation, the Corporation shall conduct its affairs in accordance with the following provisions:










10. It shall not guarantee or, except to the extent of its liability for the debt secured by such mortgage lien, becomeobligated for the debts of any other entity, including its parent or any affiliate or hold out its credit as being available to satisfythe obligations of others.

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For purpose of this Article , the following terms shall have the following meanings:


“parent” means, with respect to a corporation, any other corporation owning or controlling, directly or indirectly, fiftypercent (50%) or more of the voting stock of the Corporation.


III. LIMITED LIABILITY COMPANY

If the Single Purpose Entity is a limited liability company, to be a special purpose entity, each managing member shall be aspecial purpose corporation. If such limited liability company has more than one managing member then such limitedliability company shall continue (and not dissolve) for so long as a solvent managing member exists. Consequently, boththe Limited Liability Company’s articles of organization and the certificate of incorporation of its outside member willhave to meet certain requirements to be considered special purpose entities. Such requirements are as follows:

A. Articles of Organization

a. Purpose.

The limited liability company’s purpose should be limited to owning and operating the mortgaged property.

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“Notwithstanding any provision hereof or of any other document governing the formation, management or operation of theLimited Liability Company to the contrary, the following shall govern: The nature of the business and of the purposes tobe conducted and promoted by the Limited Liability Company, is to engage solely in the following activities:

1. To acquire that certain parcel of real property, together with all improvements located thereon, in the City of ,State of [_____ interests in [insert Borrower or other applicable entity’s name]] (the “Property”).


3. To exercise all powers enumerated in the Limited Liability Company Act of necessary or convenient to theconduct, promotion or attainment of the business or purposes otherwise set forth herein.”


The limited liability company shall be prohibited, except in certain circumstances from engaging in certain activities,including various types of insolvency proceedings, dissolution, liquidation, consolidation, merger, sale of all orsubstantially all of the limited liability company’s assets, transfer of limited liability company interests, incurrence ofadditional debt and amendment of the articles of organization.

“Notwithstanding any provision hereof or of any other document governing the formation, management or operation of theLimited Liability Company to the contrary, the following shall govern: The Limited Liability Company shall only incurindebtedness in an amount necessary to acquire, operate and maintain the [Property] [use other term for the real estate ifnecessary]. For so long as any mortgage lien exists on the [Property] [use other term for the real estate if necessary], theLimited Liability Company shall not incur, assume, or guaranty any other indebtedness. The Limited Liability Companyshall not consolidate or merge with or into any other entity or convey or transfer its properties and assets substantially asan entirety to any entity unless (i) the entity (if other than the Limited Liability Company) formed or surviving suchconsolidation or merger or that acquired by conveyance or transfer the properties and assets of the Limited LiabilityCompany substantially as an entirety (a) shall be organized and existing under the laws of the United States of America orany State or the District of Columbia, (b) shall include in its organizational documents the same limitations set forth in thisArticle _____ and in Article [insert section setting forth Separateness Covenants], and (c) shall expressly assume the due

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and punctual performance of the Limited Liability Company’s obligations; and (ii) immediately after giving effect to suchtransaction, no default or event of default under any agreement to which it is a party shall have been committed by thislimited liability company and be continuing. For so long as a mortgage lien exists on the [Property] [use other term for thereal estate if necessary], the Limited Liability Company will not voluntarily commence a case with respect to itself, asdebtor, under the Federal Bankruptcy Code or any similar federal or state statute without the unanimous consent of all ofthe members of the Limited Liability Company. For so long as a mortgage lien exists on the [Property] [use other term forthe real estate if necessary], (i) no amendment to these articles of organization may be made and (ii) the Limited LiabilityCompany shall not be dissolved, liquidated or terminated without first obtaining approval of the mortgagee holding a firstmortgage lien on the [Property] [use other term for the real estate if necessary].”

c. Indemnification.

Indemnification of a limited liability company’s partners should be fully subordinated to obligations respecting theProperty.

“Notwithstanding any provision hereof or of any other document governing the formation, management or operation of theLimited Liability Company to the contrary, the following shall govern: Any indemnification shall be fully subordinated toany obligations respecting the [Property] [use other term for the real estate if necessary] and shall not constitute a claimagainst the Limited Liability Company in the event that cash flow is insufficient to pay such obligations.”


In order to demonstrate that it is a bankruptcy remote entity not at risk of having its assets substantively consolidatedwith those of another entity, the limited liability company must observe certain covenants designed to make evident thespecial purpose entity’s separateness from its affiliates.

“Notwithstanding any provision hereof or of any other document governing the formation, management or operation of theLimited Liability Company to the contrary, the following shall govern: For so long as any mortgage lien exists on the[Property] [use other term for the real estate if necessary], in order to preserve and ensure its separate and distinct identity,in addition to the other provisions set forth in these articles of organization, the Limited Liability Company shall conductits affairs in accordance with the following provisions:

1. It shall establish and maintain an office through which its business shall be conducted separate and apart from that ofany of its affiliates and shall allocate fairly and reasonably any overhead for shared office space.

2. It shall maintain separate records and books of account from those of any affiliate.

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3. It shall not commingle assets with those of any affiliate.


5. It shall maintain financial statements separate from any affiliate.

6. It shall pay any liabilities out of its own funds, including salaries of any employees, not funds of any affiliate.

7. It shall maintain an arm’s length relationship with any affiliate.


9. It shall not guarantee or become obligated for the debts of any other entity, including any affiliate, or hold out its creditas being available to satisfy the obligations of others.


11. It shall use stationery, invoices and checks separate from any affiliate.

12. It shall not pledge its assets for the benefit of any other entity, including any affiliate or make any loans or advances toany other person.

13. It shall hold itself out as an entity separate from any affiliate.

14. It shall correct any known misunderstanding regarding its separate identity.

15. At all times all managing members shall be a special purpose corporate member with at least two (2) IndependentDirectors.”


“affiliate” means any person controlling or controlled by or under common control with the Limited LiabilityCompany including, without limitation (i) any person who has a familial relationship, by blood, marriage or otherwise withany partner or employee of the Limited Liability Company, or any affiliate thereof and (ii) any person which receivescompensation for administrative, legal or accounting services from this limited liability company, or any affiliate. Forpurposes of this definition, “control” when used with respect to any specified person, means the power to direct themanagement and policies of such person, directly or indirectly, whether through the ownership of voting securities, bycontract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

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“Independent Director” shall mean an individual who shall not have been at the time of such individual’sappointment, and may not have been at any time (i) a partner, member, shareholder of, or an officer or employee of, theLimited Liability Company or any of its respective partners, members, shareholders, subsidiaries or affiliates, (ii) acustomer of, or supplier to, the Limited Liability Company or managing member of the Limited Liability Company or anyof their respective partners, members, shareholders, subsidiaries or affiliates, (iii) a person controlling any such partner,member, shareholder, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer,employee, supplier or customer of any other director of the Limited Liability Company or of the managing member of theLimited Liability Company. As used herein, the term “control” means the possession, directly or indirectly, of the power todirect or cause the direction of the management and policies of a person or entity, whether through ownership of votingsecurities, by contract or otherwise.


e. Dissolution.

To the extent permitted by tax law the articles of organization should provide that the vote of a majority-in-interest of theremaining members is sufficient to continue the life of the limited liability company. If such vote is not obtained, for solong as a mortgage lien exists on the [Property] [use other term for the real estate if necessary] the limited liabilitycompany may not be permitted to liquidate the [Property] [use other term for the real estate if necessary] without firstobtaining approval of the mortgagee holding a first mortgage lien on the [Property] [use other term for the real estate ifnecessary]. Such holders may continue to exercise all of their rights under the existing security agreements or mortgagesuntil the debt underlying the mortgage lien has been paid in full or otherwise completely discharged.”

“Notwithstanding any provision hereof or of any other document governing the formation, management or operation of theLimited Liability Company to the contrary, the following shall govern: To the extent permissible under applicable federaland state tax law, the vote of a majority-in-interest of the remaining members is sufficient to continue the life of theLimited Liability Company. If such vote is not obtained, for so long as a mortgage lien exists on the [Property] [use otherterm for the real estate if necessary] the Limited Liability Company shall not liquidate the [Property] [use other term for thereal estate if necessary] without first obtaining approval of the mortgagee holding a first mortgage lien on the [Property][use other term for the real estate if necessary]. Such holders may continue to exercise all of their rights under the existingsecurity agreements or mortgages until the debt underlying the mortgage liens has been paid in full or otherwisecompletely discharged.

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f. Voting.

When acting on matters subject to the vote of the members, notwithstanding that the limited liability company is not theninsolvent, the members and the outside member must take into account the interest of the Limited Liability Company’screditors, as well as those of the members.

“Notwithstanding any provision hereof or of any other document governing the formation, management or operation of theLimited Liability Company to the contrary, the following shall govern: When acting on matters subject to the vote of themembers, notwithstanding that the Limited Liability Company is not then insolvent, all of the members shall take intoaccount the interest of the Limited Liability Company’s creditors, as well as those of the members.”

B. Outside Corporate Member

a. Purpose.

The outside corporate member’s purpose should be limited to acting as corporate member of the limited liability companywhose purpose, as set forth above, generally should be limited to owning and operating the mortgaged property.

“Notwithstanding any provision hereof or of any other document governing the formation, management or operation of theCorporation to the contrary, the following shall govern: The nature of the business and of the purposes to be conductedand promoted by the Corporation is to engage solely in the activity of acting as the outside member of a limited liabilitycompany (the “Limited Liability Company”) whose purpose is to acquire that certain parcel of real property, together withall improvements located thereon, in the City of , State of (the “Property”) and own, hold, sell,assign, transfer, operate, lease, mortgage, pledge and otherwise deal with the Property. The Corporation shall exercise allpowers enumerated in the General Corporation Law of necessary or convenient to the conduct, promotion orattainment of the business or purposes otherwise set forth herein.”


The corporation shall be prohibited, except in certain circumstances, from engaging in or causing the limited liabilitycompany to engage in certain activities, including various types of insolvency proceedings, dissolution, liquidation,consolidation, merger, sale of all or substantially all of the corporation’s or the limited liability company’s assets,transfer of ownership assets, transfer of limited liability company interests, incurrence of additional debt, amendment ofthe corporation’s articles of incorporation and amendment of the articles of organization.

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“Notwithstanding any provision hereof or of any other document governing the formation, management or operationof the Corporation to the contrary, the following shall govern: The Corporation shall only incur or cause the LimitedLiability Company to incur indebtedness in an amount necessary to acquire, operate and maintain the Property. For solong as any mortgage lien exists on the Property, the Corporation shall not and shall not cause the Limited LiabilityCompany to incur, assume, or guaranty any other indebtedness. The Corporation shall not and shall not cause the LimitedLiability Company to consolidate or merge with or into any other entity or convey or transfer its properties and assetssubstantially as an entirety to any entity unless (i) the entity (if other than the Corporation or Limited Liability Company)formed or surviving such consolidation or merger or that acquired by conveyance or transfer of the properties and assets ofthe Corporation or Limited Liability Company substantially as an entirety (a) shall be organized and existing under thelaws of the United States of America or any State or the District of Columbia, (b) shall include in its organizationaldocuments the same limitations set forth in this Article and in Article [insert section setting forth SeparatenessCovenants], and (c) shall expressly assume the due and punctual performance of the Corporation’s obligations; and(ii) immediately after giving effect to such transaction, no default or event of default under any agreement to which it is aparty shall have been committed by this corporation or the Limited Liability Company and be continuing. For so long as amortgage lien exists on the Property, the Corporation shall not voluntarily commence a case with respect to itself or causethe Limited Liability Company to voluntarily commence a case with respect to itself, as debtor, under the FederalBankruptcy Code or any similar federal or state statute without the unanimous consent of the Board of Directors. For solong as a mortgage lien exists on the Property, without first obtaining approval of the mortgagee holding a first mortgagelien on the Property (i) no material amendment to this certificate of incorporation or to the Corporation’s By-Laws nor tothe articles of organization of the Limited Liability Company may be made and (ii) neither the Corporation nor theLimited Liability Company shall dissolve, liquidate or terminate without first obtaining approval of the mortgageeholding a first mortgage lien on the Property.”


c. Indemnification.


“Notwithstanding any provision hereof or of any other document governing the formation, management or operation of theCorporation to the contrary, the following shall govern: Any indemnification shall be fully subordinated to anyobligations respecting the Limited Liability Company or the Property and shall not constitute a claim against theCorporation in the event that cash flow is insufficient to pay such obligations.”

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In order to demonstrate that it is a bankruptcy remote entity not at risk of having its assets substantively consolidatedwith those of another entity, the corporation must observe certain covenants designed to make evident the special purposeentity’s separateness from its affiliates.

“Notwithstanding any provision hereof or of any other document governing the formation, management or operation of theCorporation to the contrary, the following shall govern: For so long as any mortgage lien exists on the Property, in order topreserve and ensure its separate and distinct corporate identity, in addition to the other provisions set forth in thiscertificate of incorporation, the Corporation shall conduct its affairs in accordance with the following provisions:







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10. It shall not guarantee or become obligated for the debts of any other entity, including its parent or any affiliate or holdout its credit as being available to satisfy the obligations of others.








“parent’’ means, with respect to a corporation, any other corporation owning or controlling, directly or indirectly, fiftypercent (50%) or more of the voting stock of the Corporation.


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e. Voting.

When voting on matters concerning the limited liability company, notwithstanding that the limited liability company isnot then insolvent, the Corporation must take into account the interest of the Limited Liability Company’s creditors, aswell as those of its members.

“Notwithstanding any provision hereof or of any other document governing the formation, management or operation of theCorporation to the contrary, the following shall govern: When voting on matters concerning the Limited LiabilityCompany, notwithstanding that the Limited Liability Company is not then insolvent, the Corporation shall take intoaccount the interest of the Limited Liability Company’s creditors, as well as those of its members.”

IV. OTHER STRUCTURES

The foregoing provisions do not exhaustively contemplate all ownership structures for a mortgaged property. Situationsinvolving ownership structures not specifically contemplated by the provisions set forth on this Exhibit C shallnevertheless require Single Purpose Entities substantively to comply with the requirements to these provisions, modifiedas appropriate to accommodate the ownership structure in question.

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EXHIBIT D

ENFORCEABILITY OPINION REQUIREMENTS

1. The Opinion shall be delivered on the Closing Date and shall satisfy all applicable requirements of the Rating Agencies inrelation thereto.

2. The Opinion shall be given by a professional law firm selected by Borrower and reasonably acceptable to Lender.

3. The Opinion shall be in form and substance acceptable to Lender and shall be given in relation to Borrower, Guarantor,Manager and any other relevant party to the Loan (each a “Loan Party”). Depending on the nature of the transaction, theOpinion shall address the applicable law of the State of New York, the State where the Property is located and each Statewhere any Loan Party is organized (collectively, the “Relevant States”). To the extent that the Property is located in ajurisdiction outside of the State of New York and/or any Loan Party is organized under a jurisdiction outside the States ofNew York or Delaware, the appropriate opinions below should be given by local counsel. The Opinion shall be given onthe basis of an examination of an executed original of each completed Loan Document in addition to such otherdocuments or instruments counsel deems relevant.

4. The Opinion shall contain the following opinions:

I. Opinions with respect to the law of the State of Formation or Organization of the Loan Parties

(a) Each Loan Party is a [Describe Legal Form] duly organized, validly existing and in good standing under the laws ofthe State of [State of Organization] and is authorized to do business and in good standing in the State of [State ofOrganization].

(b) Each Loan Party has the requisite power to own its properties and to carry on its business as now being conducted andto enter into the transactions covered by the Loan Documents.

(c) The execution and delivery by each Loan Party of each Loan Document to which it is a party has been dulyauthorized by all necessary partnership, company and/or corporate action, as applicable. To the extent a party thereto,the Loan Documents have been duly executed and delivered by each Loan Party.

(d) The execution, delivery and performance by each Loan Party of the Loan Documents to which it is a party does not:

(i) conflict with or result in a breach of any of the terms, conditions or provisions of, or constitute a default under,the partnership agreement, partnership certificate, articles of incorporation, by-laws, trust agreement or trustcertificate, as applicable, of such Loan Party;

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(ii) contravene any law, statute or regulation of the United States of America or the [ State of Organization] or anyagency or political subdivision of either thereof;

(iii) violate any order, writ, injunction, or decree of which, after due inquiry, counsel has actual knowledge, issued byany court or governmental authority of the United States of America or the [State of Organization] or any agencyor political subdivision of either thereof to which such Loan Party is subject; or

(iv) conflict with or result in any breach of any of the terms or provisions of, or constitute a default under, or result inthe creation or imposition of (or the obligation to create or impose) any lien other than the lien of the LoanDocuments upon any of the assets or properties of such Loan Party pursuant to the terms of any materialindenture, mortgage, deed of trust, agreement, contract or instrument to which such Loan Party is a party or bywhich it or any of its assets or properties is bound.

(e) No order, consent, approval, license or authorization of, or filing, recording or registration with, any governmental orpublic body or authority of the United States of America or the State of [Relevant State] or any agency or politicalsubdivision of either thereof is required in connection with the execution and delivery of any of the Loan Documents,the validity, binding effect or enforceability of any of the Loan Documents or the consummation of the transactionscontemplated thereby.

(f) There are no actions, suits or proceedings by or before any court, governmental or regulatory authority or agency ofwhich, after due inquiry, we have actual knowledge pending or threatened against or affecting any Loan Party orBorrower’s rights with respect to the Property wherein an adverse ruling or decision, individually or collectively withother such actions, suits or proceedings, is reasonably likely (i) to affect materially and adversely the ability of anyLoan Party to consummate the transactions contemplated by the Loan Documents or to perform its obligations underany of the Loan Documents, or (ii) to result in a challenge to the legality, validity, binding effect or enforceability ofany of the Loan Documents.

(g) To the extent the State of [State of Organization] UCC is applicable to the authorization of the Financing Statement,pursuant to the provisions of the Loan Agreement and the Security Instrument, Borrower has authorized the filing ofthe Financing Statement for purposes of Section 9-509 of the State of [State of Organization] UCC.

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(h) To the extent the State of [State of Organization] UCC is applicable, the financing Statement includes not only all ofthe types of information required by Section 9-502(a) of the State of [State of Organization] UCC but also the types ofinformation without which the Filing Office may refuse to accept the Financing Statement pursuant to Section 9-516of the State of [State of Organization] UCC.

(i) To the extent the State of [State of Organization] UCC is applicable, the security interest of the Secured Party will beperfected in Borrower’s rights in all UCC Collateral upon the later of the attachment of the security interest and thefiling of the Financing Statement in the Filing Office; provided, however, we express no opinion with respect to(i) money, (ii) deposit accounts, (iii) letter of credit rights, (iv) goods covered by a certificate of title statute, (v) as-extracted collateral, timber to be cut, or (vi) any property subject to a statute, regulation or treaty of the United Stateswhose requirements for a security interest’s obtaining priority over the rights of a lien creditor with respect to theproperty preempt Section 9-310(a) of the State of [State of Organization]. “UCC Collateral” means the portion of theProperty (as defined in the Security Instrument), the Rate Cap Collateral, the Account Collateral (as defined in theLoan Agreement) and the Collateral Accounts (as defined in the Account Agreement) to the extent the UCC governs asecurity interest in such collateral.

(j) You have asked whether Borrower is a “registered organization” as such term is defined in Section 9-102(a)(70) of theState of [State of Organization] UCC. Pursuant to Section 9-102(a)(70) of the State of [State of Organization] UCC, a“registered organization” must be (i) organized solely under the laws of a single State (or the United States) and(ii) the State (or the United States) must maintain a public record showing the organization to have been organized.

II. Opinions with respect to New York Law

(a) To the extent governed by New York law and to the extent a party thereto, the Loan Documents are the legal, validand binding obligations of each Loan Party, enforceable against such Loan Party in accordance with their terms.

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(b) The execution, delivery and performance by each Loan Party of the Loan Documents to which it is a party does not:

(i) contravene any law, statute or regulation of the United States of America or the State of New York or any agencyor political subdivision of either thereof;

(ii) violate any order, writ, injunction, or decree of which, after due inquiry, counsel has actual knowledge, issued byany court or governmental authority of the United States of America or the State of New York or any agency orpolitical subdivision of either thereof to which such Loan Party is subject; or

(iii) conflict with or result in any breach of any of the terms or provisions of, or constitute a default under, or result inthe creation or imposition of (or the obligation to create or impose) any lien other than the lien of the LoanDocuments upon any of the assets or properties of such Loan Party pursuant to the terms of any materialindenture, mortgage, deed of trust, agreement, contract or instrument to which such Loan Party is a party or bywhich it or any of its assets or properties is bound.

(c) No order, consent, approval, license or authorization of, or filing, recording or registration with, any governmental orpublic body or authority of the United States of America or the State of New York or any agency or politicalsubdivision of either thereof is required in connection with the execution and delivery of any of the Loan Documents,the validity, binding effect or enforceability of any of the Loan Documents or the consummation of the transactionscontemplated thereby.

(d) There are no actions, suits or proceedings by or before any court, governmental or regulatory authority or agency ofwhich, after due inquiry, we have actual knowledge pending or threatened against or affecting any Loan Party orBorrower’s rights with respect to the Property wherein an adverse ruling or decision, individually or collectively withother such actions, suits or proceedings, is reasonably likely (i) to affect materially and adversely the ability of anyLoan Party to consummate the transactions contemplated by the Loan Documents or to perform its obligations underany of the Loan Documents, or (ii) to result in a challenge to the legality, validity, binding effect or enforceability ofany of the Loan Documents.

(e) The payment by Borrower and receipt by Lender of all principal and interest will not violate the usury laws of theState of New York or otherwise constitute unlawful interest.

(f) The provisions of the Loan Agreement and the Security Instrument are effective to create, in favor of Lender to securethe obligations purported to be secured thereby, a valid security interest in Borrower’s rights in the UCC Collateral.

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(g) Under New York UCC, the provisions of the Account Agreement are effective to perfect the security interest of Lenderin Borrower’s rights in the Collateral Accounts (as defined in the Account Agreement).

III. Opinions with respect to the law of States in which the Property is located

(a) Each Loan Party is authorized to do business and in good standing in the State of [Relevant State].

(b) To the extent governed by the laws of the State of [Relevant States], the Security Instrument and the Assignment ofLeases are the legal, valid and binding obligations of Borrower, enforceable against Borrower in accordance with theirterms.

(c) The Security Instrument is in proper form so as to comply with recording requirements of the State of [Relevant State].The Security Instrument creates in favor of Lender valid liens on the portion of the Property that are located in theState of [Relevant States], securing payment of the Obligations (as defined in the Security Instrument), and no furtheraction will be required for the valid creation of such liens. Upon recordation in the office of the [Recording Office] theSecurity Instrument will provide constructive notice of the terms thereof and the liens created thereby to third partiesacquiring interests in the portion of the Property that are located in the State of [Relevant States] subsequent to suchrecordation.

(d) The Assignment of Leases is in proper form so as to comply with the recording requirements of the State of [RelevantStates]. At the time the Assignment of Leases is delivered to the Recording Office for recording, it will take effect as toall creditors and subsequent purchasers for a valuable consideration without notice, and it shall be entitled to priorityover any other similar instrument delivered to said Recording Office for recording after that time, in the absence ofactual notice.

(e) Pursuant to the provisions of the Security Instrument Borrower has authorized the filing of the Fixture FinancingStatement identifying the Fixture Collateral for purposes of Section 9-509 of the [Relevant States] UCC. “FixtureCollateral” means that portion of the UCC Collateral which consists of “fixtures” (as defined in Article 9 of the UCC)to the extent the UCC governs a security interest in such collateral.

(f) The Fixture Financing Statement includes not only all the types of information required by Section 9-502(a) and 9-502(b) of the [Relevant States] UCC but also the types of information without which the Fixture Filing Office mayrefuse to accept the Fixture Financing Statement pursuant to Section 9-516 of the State of [Relevant States] UCC.

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(g) Under the [Relevant States] UCC, the security interest of the Secured Party will be perfected in Borrower’s rights inany Fixture Collateral located on the real property described on Schedule 1 to the Fixture Financing Statement uponthe later of the attachment of the security interest and the filing of the Fixture Financing Statement in the FixtureFiling Office.

(h) Borrower has paid all recording tax due in connection with the recording of the Security Instrument and theAssignment of Leases. No additional deed of trust recording, intangibles tax, documentary stamp tax or similar taxesor charges, other than nominal recordation or filing fees, are required to be paid as a condition of the legality ofenforceability of the Security Instrument or the Assignment of Leases.

(i) The State of [Relevant States] has no law pursuant to which a lien against any assets or properties of Borrower(whether real, personal, mixed, tangible or intangible) superior to the lien created by the Security Instrument couldarise as a result of a violation of environmental laws or regulations of such State. No environmental law or regulationof the State of [Relevant States] would require any remedial or removal action or certification of nonapplicability as acondition to the granting of the Security Instrument, the foreclosure or other enforcement of the Loan Documents orthe sale of any assets or properties of Borrower (whether real, personal, mixed, tangible or intangible) located in theState of [Relevant States].

(j) No order, consent, approval, license or authorization of, or filing, recording or registration with, any governmental orpublic body or authority of the United States of America or the State of [Relevant States] or any agency or politicalsubdivision of either thereof is required in connection with the execution and delivery of any of the Loan Documents,the validity, binding effect or enforceability of any of the Loan Documents or the consummation of the transactionscontemplated thereby.

(k) There are no actions, suits or proceedings by or before any court, governmental or regulatory authority or agency ofwhich, after due inquiry, we have actual knowledge pending or threatened against or affecting any Loan Party orBorrower’s rights with respect to the Property wherein an adverse ruling or decision, individually or collectively withother such actions, suits or proceedings, is reasonably likely (i) to affect materially and adversely the ability of anyLoan Party to consummate the transactions contemplated by the Loan Documents or to perform its obligations underany of the Loan Documents, or (ii) to result in a challenge to the legality, validity, binding effect or enforceability ofany of the Loan Documents.

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(l) If the Obligations (as defined in the Security Instrument) were to be governed by the laws of the State of [RelevantStates], the payment by Borrower and receipt by Lender of all principal and interest will not violate the usury laws ofthe State of [Relevant States] or otherwise constitute unlawful interest.

(m) A federal court sitting in the State of [Relevant States] and applying the conflict of law rules of the State of [RelevantStates], and the state courts in the State of [Relevant States], would give effect to the choice of law provisionscontained in the Loan Documents. If counsel is not able to give this opinion as an unqualified opinion, an opinionthat the Loan Agreement and Note would be enforceable under the law of the State of [Relevant States] if such lawwere held to apply will be required.

(n) The operation of any term of the Loan Documents, including, without limitation, the terms regarding late charges,default interest or prepayment premiums, or the lawful exercise of any right thereunder, shall not render the LoanDocuments unenforceable, in whole or in part, or subject to any right of rescission, set-off, counterclaim or defense.

5. The Opinion shall be addressed to Lender and its successors and assigns and shall state that it may be relied upon by (i) anyassignee of Lender’s interest in the Loan, (ii) any servicer of the Loan, (iii) any purchaser of the Loan or any portion thereofin any Securitization, (iv) any Rating Agency involved in a Securitization of the Loan, (v) the issuer of securities in aSecuritization of the Loan, and (vi) any trustee or servicer appointed in connection with a Securitization of the Loan.

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EXHIBIT E

INTENTIONALLY DELETED

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EXHIBIT F


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EXHIBIT G


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EXHIBIT H


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EXHIBIT I


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EXHIBIT J


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EXHIBIT K

BORROWER ORGANIZATIONAL STRUCTURE

B L U E L IN X H O L D IN G S IN C . A B P A L (MID F IE L D ) L L C A B P A R (L IT T L E R O C K ) L L C A B P C A (C IT Y O F IN D U S T R Y ) L L C A B P C A (N A T IO N A L C IT Y ) L L C A B P C A (N E WA R D K ) L L C A B P C O I (D E N V E R ) L L C A B P C A (R IV E R S ID E ) L L C A B P C T (N E WT O N ) L L C A B P F L (MIA MI) L L C A B P F L (L A K E C IT Y ) L L C A B P F L (T A MP A ) L L C A B P F L (P E N S A C O L A ) L L C A B P G A (L A WR E N C E V IL L E ) L L C A B P F L (Y U L E E ) L L C A B P IL (U N IV E R S IT Y P A R K ) L L C A B P IA (D E S MO IN E S ) L L C A B P K Y (IN D E P E N D E N C E ) L L C A B P IN (E L K H A R T ) L L C A B P MA (B E L L IN G H A M) L L C A B P L A (S H E V E P O R T ) L L C A B P ME (P O R T L A N D ) L L C A B P MI (G R A N D R A P ID S ) L L C A B P MI (D E T R O IT ) L L C A B P MN (MA P L E G R O V E ) L L C A B P MN (E A G A N ) L L C A B P MO (K A N S A S C IT Y ) L L C A B P MO (B R ID G E T O N ) L L C A B P MS (P E A R L ) L L C A B P MO (S P R IN G F IE L D ) L L C A B P N C (C H A R L O T T E ) L L C A B P N C (B U T N E R ) L L C A B P N J (D E N V IL L E ) L L C A B P N D (N O R T H F A R G O ) L L C A B P N Y (Y A P H A N K ) L L C A B P N M (A L B U Q U E R Q U E ) L L C A B P O K (T U L S A ) L L C A B P O H (T A L MA D G E ) L L C A B P P A

(A L L E N T O WN ) L L C A B P O R (B E A V E R T O N ) L L C A B P S C (C H A R L E S T O N ) L L C A B P P A (S T A N T O N ) L L C A B P T N (E R WIN ) L L C A B P S D (S IO U X F A L L S ) L L C A B P T N (N A S H V IL L E ) L L C A B P T N (ME MP H IS ) L L C A B P T X (F O R T WO R T H ) L L C A B P T X (E L P A S O ) L L C A B P T X (H O U S T O N ) L L C A B P T X (H A R L IN G E N ) L L C A B P T X (S A N A N T O N IO ) L L C A B P T X (L U B B O C K ) L L C A B P V A (V IR G IN IA B E A C H ) L L C A B P V A (R IC H MO N D ) L L C A B P V A (R IC H MO N D ) L L C A B P V T (S H E L B U R N E ) L L C A B P WI (WA U S A U ) L L C A B P MD (B A L T IMO R E ) L L C A B P MD (B A L T IMO R E ) S U B S ID IA R Y L L C

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EXHIBIT L


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EXHIBIT M

FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

Reference is made to that certain Loan and Security Agreement, dated as of 200__ (as amended, supplementedor otherwise modified from time to time, the “Loan Agreement”) between the borrower signatory thereto (collectively,“Borrower”), and German American Capital Corporation, a Maryland corporation (“Lender”), and certain notes of even datewith the Loan Agreement (collectively, the “ Note”), made by Borrower in favor of Lender. Terms defined in the LoanAgreement and not otherwise defined herein are used herein with the same meaning.

The Assignor and the Assignee referred to on Schedule 1 attached hereto agree as follows:

1. The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from theAssignor, an interest in and to the Assignor’s rights and obligations under the Note and the Loan Agreement as of the datehereof equal to the percentage interest specified on Schedule 1 attached hereto. After giving effect to such sale and assignment,the amount of the Loan and the Note owing to the Assignee will be as set forth on Schedule 1 attached hereto.

2. The Assignor (i) represents and warrants that it is the legal and beneficial owner of the interest being assigned by ithereunder and that such interest is free and clear of any adverse claim; (ii) makes no representation or warranty and assumes noresponsibility with respect to any statements, warranties or representations made in or in connection with the Loan Documentsor the execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the perfection or priority of any lienor security interest created or purported to be created under or in connection with the Loan Documents or any other instrumentor document furnished pursuant thereto; (iii) makes no representation or warranty and assumes no responsibility with respect tothe financial condition of Borrower or the performance or observance by Borrower of any of its obligations under any LoanDocument or any other instrument or document furnished pursuant thereto; and (iv) attaches the Note or notes held by theAssignor and requests that the Lender exchange such Note or notes for a new note or notes payable to the order of the Assigneein an amount equal to the principal amount of the Loan assumed by the Assignee pursuant hereto or new notes payable to theorder of the Assignee in an amount equal to the principal amount of the Loan assumed by the Assignee pursuant hereto and theAssignor in an amount equal to the principal amount of the Loan retained by the Assignor under the Note and the LoanAgreement, respectively, as specified on Schedule 1 attached hereto.

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3. The Assignee (i) confirms that it has received a copy of the Note and the Loan Agreement, together with such financialstatements and other documents and information as it has deemed appropriate to make its own credit analysis and decision toenter into this Assignment and Acceptance; (ii) agrees that it will, independently and without reliance upon Lender or theAssignor based on such documents and information as it shall deem appropriate at the time, continue to make its own creditdecisions in taking or not taking action under the Loan Agreement or the Note; (iii) appoints and authorizes Lender to take suchaction as agent on its behalf and to exercise such powers and discretion under the Loan Documents as are delegated to Lenderby the terms thereof, together with such powers and discretion as are reasonably incidental thereto; and (iv) agrees that it willperform in accordance with their terms all of the obligations that by the terms of the Loan Agreement and the Note are requiredto be performed by it as an assignee of an interest therein.

4. Following the execution of this Assignment and Acceptance, it will be delivered to Lender for acceptance and recording.The effective date for this Assignment and Acceptance (the “ Effective Date”) shall be the date of acceptance hereof by theLender, unless otherwise specified on Schedule 1 attached hereto.

5. Upon such acceptance and recording by Lender, as of the Effective Date, (i) the Assignee shall be a party to the LoanAgreement and the Note and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of anassignee thereof, and (ii) the Assignor shall, to the extent provided in the Loan Agreement and this Assignment and Acceptance,relinquish its rights and be released from its obligations under the Loan Agreement and the Note.

6. Upon such acceptance and recording by Lender, from and after the Effective Date, Lender shall make all payments underthe Loan Agreement and the Note or notes in respect of the interest assigned hereby (including, without limitation, all paymentsof principal, interest and commitment fees with respect thereto) to the Assignee. The Assignor and Assignee shall make allappropriate adjustments in payments under the Loan Agreement and the Note or notes for periods prior to the Effective Datedirectly between themselves.

7. This Assignment and Acceptance shall be governed by, and construed in accordance with, the laws of the State of NewYork.

8. This Assignment and Acceptance may be executed in any number of counterparts and by different parties hereto inseparate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shallconstitute one and the same agreement. Delivery of an executed counterpart of Schedule 1 to this Assignment and Acceptanceby telecopier shall be effective as delivery of a manually executed counterpart of this Assignment and Acceptance.

* * *

IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Assignment and Acceptance and Schedule 1 tothis Assignment and Acceptance to be executed by their officers thereunto duly authorized as of the date specified onSchedule 1.

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Schedule 1 As to the Loan in respect of which an interest is being assigned: Percentage interest assigned: % Aggregate outstanding principal amount of the Loan assigned: $ Principal amount of Note payable to Assignee: $ Principal amount of Note payable to Assignor: $ Effective Date (if other than date of acceptance by Lender): __, ______ [NAME OF ASSIGNOR], as Assignor By: Name: Title: Dated: __, ____ [NAME OF ASSIGNEE], as Assignee By: Name: Title: Dated: , ____

Accepted this _____ day of , _____ [NAME OF LENDER] By: Name: Title:

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EXHIBIT N

FORM OFSUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

,Tenant

AND

GERMAN AMERICAN CAPITAL CORPORATIONLender

County: [ ] Section: [ ] Block: [ ] Lot: [ ] Premises:

Dated: as of , ____

Record and return by mail to:Skadden, Arps, Slate, Meagher & Flom LLP

Four Times SquareNew York, New York 10036

Attention: Harvey R. Uris, Esq.

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SUBORDINATION,NON-DISTURBANCE AND ATTORNMENT AGREEMENT

THIS AGREEMENT made as of this _____ day of _____, 200_, between GERMAN AMERICAN CAPITALCORPORATION, a Maryland corporation, having an address at 60 Wall Street, New York, New York 10005 (hereinafter called“Lender”), and _____, a , having an address at (hereinafter called “Tenant”).

RECITALS:

WHEREAS, by a lease (the “Original Lease”) dated _____, 200__ between (hereinafter called “Landlord”), aslandlord, and Tenant, as tenant, as amended by lease amendment[s] dated _____, 200_, [_____, 200__ and _____, 200_] (theOriginal Lease, as so amended, is hereinafter the “Lease”), a memorandum of which Lease was dated _____ and was recordedi n _____ in Reel _____, Page _____, [ADD RECORDING DATA FOR MEMORANDA OF AMENDMENTS, IFAPPLICABLE], Landlord leased to Tenant certain premises located in (the “Premises”) on the propertydescribed in Schedule “A” annexed hereto and made a part hereof (the “Property”); and

WHEREAS, Lender is about to make a loan to Landlord, which loan shall be secured by, among other things, a mortgage ordeed of trust (which mortgage or deed of trust, and all amendments, renewals, increases, modifications, replacements,substitutions, extensions, spreaders and consolidations thereof and all re-advances thereunder and addictions thereto, is referredto as the “Security Instrument”) encumbering the Property; and

WHEREAS, Lender and Tenant desire to confirm their understanding and agreement with respect to the Lease and theSecurity Instrument.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, Lender and Tenanthereby agree and covenant as follows:

1. The Lease, and all of the terms, covenants, provisions and conditions thereof (including, without limitation, any right offirst refusal, right of first offer, option or any similar right with respect to the sale or purchase of the Property, or any portionthereof) is, shall be and shall at all times remain and continue to be subject and subordinate in all respects to the lien, terms,covenants, provisions and conditions of the Security Instrument and to all advances and re-advances made thereunder and allsums secured thereby. This provision shall be self-operative but Tenant shall execute and deliver any additional instrumentswhich Lender may reasonably require to effect such subordination.

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2. So long as (i) Tenant is not in default (beyond any period given in the Lease to Tenant to cure such default) in thepayment of rent, percentage rent or additional rent or in the performance or observance of any of the other terms, covenants,provisions or conditions of the Lease on Tenant’s part to be performed or observed, (ii) Tenant is not in default under thisAgreement and (iii) the Lease is in full force and effect: (a) Tenant’s possession of the Premises and Tenant’s rights andprivileges under the Lease, or any extensions or renewals thereof which may be effected in accordance with any option thereforwhich is contained in the Lease, shall not be diminished or interfered with by Lender, and Tenant’s occupancy of the Premisesshall not be disturbed by Lender for any reason whatsoever during the term of the Lease or any such extensions or renewalsthereof and (b) Lender will not join Tenant as a party defendant in any action or proceeding to foreclose the Security Instrumentor to enforce any rights or remedies of Lender under the Security Instrument which would cut-off, destroy, terminate orextinguish the Lease or Tenant’s interest and estate under the Lease (except to the extent required so that Tenant’s right toreceive or set-off any monies or obligations owed or to be performed by any of Lender’s predecessors-in-interest shall not beenforceable thereafter against Lender or any of Lender’s successors-in-interest). Notwithstanding the foregoing provisions ofthis paragraph, if it would be procedurally disadvantageous for Lender not to name or join Tenant as a party in a foreclosureproceeding with respect to the Security Instrument, Lender may so name or join Tenant without in any way diminishing orotherwise affecting the rights and privileges granted to, or inuring to the benefit of, Tenant under this Agreement.

3. (A) After notice is given by Lender that the Security Instrument is in default and that the rentals under the Lease shouldbe paid to Lender, Tenant will attorn to Lender and pay to Lender, or pay in accordance with the directions of Lender, all rentalsand other monies due and to become due to Landlord under the Lease or otherwise in respect of the Premises. Such paymentsshall be made regardless of any right of set-off, counterclaim or other defense which Tenant may have against Landlord, whetheras the tenant under the Lease or otherwise.

(B) In addition, if Lender (or its nominee or designee) shall succeed to the rights of Landlord under the Lease throughpossession or foreclosure action, delivery of a deed or otherwise, or another person purchases the Property or the portion thereofcontaining the Premises upon or following foreclosure of the Security Instrument or in connection with any bankruptcy casecommenced by or against Landlord, then at the request of Lender (or its nominee or designee) or such purchaser (Lender, itsnominees and designees, and such purchaser, and their respective successors and assigns, each being a “Successor-Landlord”),Tenant shall attorn to and recognize Successor-Landlord as Tenant’s landlord under the Lease and shall promptly execute anddeliver any instrument that Successor-Landlord may reasonably request to evidence such attornment. Upon such attornment, theLease shall continue in full force and effect as, or as if it were, a direct lease between Successor-Landlord and Tenant upon allterms, conditions and covenants as are set forth in the Lease. If the Lease shall have terminated by operation of law or otherwiseas a result of or in connection with a bankruptcy case commenced by or against Landlord or a foreclosure action or proceedingor delivery of a deed in lieu, upon request of Successor-Landlord, Tenant shall promptly execute and deliver a direct lease withSuccessor-Landlord which direct lease shall be on substantially the same terms and conditions as the Lease (subject, however, tothe provisions of clauses (i)-(v) of this paragraph 3(B)) and shall be effective as of the day the Lease shall have terminated asaforesaid. Notwithstanding the continuation of the Lease, the attornment of Tenant thereunder or the execution of a direct leasebetween Successor-Landlord and Tenant as aforesaid, Successor-Landlord shall not:

(i) be liable for any previous act or omission of Landlord under the Lease;

(ii) be subject to any off-set, defense or counterclaim which shall have theretofore accrued to Tenant againstLandlord;

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(iii) be bound by any modification of the Lease or by any previous prepayment of rent or additional rent made morethan one (1) month prior to the date same was due which Tenant might have paid to Landlord, unless such modification orprepayment shall have been expressly approved in writing by Lender;

(iv) be liable for any security deposited under the Lease unless such security has been physically delivered to Lenderor Successor-Landlord; and

(v) be liable or obligated to comply with or fulfill any of the obligations of the Landlord under the Lease or anyagreement relating thereto with respect to the construction of, or payment for, improvements on or above the Premises (or anyportion thereof), leasehold improvements, tenant work letters and/or similar items.

4. Tenant agrees that without the prior written consent of Lender, it shall not (a) amend, modify, terminate or cancel theLease or any extensions or renewals thereof, (b) tender a surrender of the Lease, (c) make a prepayment of any rent or additionalrent more than one (1) month in advance of the due date thereof, or (d) subordinate or permit the subordination of the Lease toany lien subordinate to the Security Instrument. Any such purported action without such consent shall be void as against theholder of the Security Instrument.

5. (A) Tenant shall promptly notify Lender of any default by Landlord under the Lease and of any act or omission ofLandlord which would give Tenant the right to cancel or terminate the Lease or to claim a partial or total eviction.

(B) In the event of a default by Landlord under the Lease which would give Tenant the right, immediately or after thelapse of a period of time, to cancel or terminate the Lease or to claim a partial or total eviction, or in the event of any other act oromission of Landlord which would give Tenant the right to cancel or terminate the Lease, Tenant shall not exercise such right(i) until Tenant has given written notice of such default, act or omission to Lender and (ii) unless Lender has failed, within sixty(60) days after Lender receives such notice, to cure or remedy the default, act or omission or, if such default, act or omissionshall be one which is not reasonably capable of being remedied by Lender within such sixty (60) day period, until a reasonableperiod for remedying such default, act or omission shall have elapsed following the giving of such notice and following thetime when Lender shall have become entitled under the Security Instrument to remedy the same (which reasonable period shallin no event be less than the period to which Landlord would be entitled under the Lease or otherwise, after similar notice, toeffect such remedy), provided that Lender shall with due diligence give Tenant written notice of its intention to and shallcommence and continue to, remedy such default, act or omission. If Lender cannot reasonably remedy a default, act or omissionof Landlord until after Lender obtains possession of the Premises, Tenant may not terminate or cancel the Lease or claim apartial or total eviction by reason of such default, act or omission until the expiration of a reasonable period necessary for theremedy after Lender secures possession of the Premises. To the extent Lender incurs any expenses or other costs in curing orremedying such default, act or omission, including, without limitation, attorneys’ fees and disbursements, Lender shall besubrogated to Tenant’s rights against Landlord.

(C) Notwithstanding the foregoing, Lender shall have no obligation hereunder to remedy such default, act oromission.

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6. To the extent that the Lease shall entitle Tenant to notice of the existence of any mortgage and the identity of anymortgagee or any ground lessor, this Agreement shall constitute such notice to Tenant with respect to the Security Instrumentand Lender.

7. Upon and after the occurrence of a default under the Security Instrument, which is not cured after any applicable noticeand/or cure periods, Lender shall be entitled, but not obligated, to exercise the claims, rights, powers, privileges and remedies ofLandlord under the Lease and shall be further entitled to the benefits of, and to receive and enforce performance of, all of thecovenants to be performed by Tenant under the Lease as though Lender were named therein as Landlord.

8. Anything herein or in the Lease to the contrary notwithstanding, in the event that a Successor-Landlord shall acquiretitle to the Property or the portion thereof containing the Premises, Successor-Landlord shall have no obligation, nor incur anyliability, beyond Successor-Landlord’s then interest, if any, in the Property, and Tenant shall look exclusively to such interest,if any, of Successor-Landlord in the Property for the payment and discharge of any obligations imposed upon Successor-Landlord hereunder or under the Lease, and Successor-Landlord is hereby released or relieved of any other liability hereunderand under the Lease. Tenant agrees that, with respect to any money judgement which may be obtained or secured by Tenantagainst Successor-Landlord, Tenant shall look solely to the estate or interest owned by Successor-Landlord in the Property, andTenant will not collect or attempt to collect any such judgement out of any other assets of Successor-Landlord.

9. Notwithstanding anything to the contrary in the Lease, Tenant agrees for the benefit of Landlord and Lender that, exceptas permitted by, and fully in accordance with, applicable law, Tenant shall not generate, store, handle, discharge or maintain in,on or about any portion of the Property, any asbestos, polychlorinated biphenyls, or any other hazardous or toxic materials,wastes and substances which are defined, determined or identified as such (including, but not limited to, pesticides andpetroleum products if they are defined, determined or identified as such) in any federal, state or local laws, rules or regulations(whether now existing or hereafter enacted or promulgated) or any judicial or administrative interpretation of any thereof,including any judicial or administrative interpretation of any thereof, including any judicial or administrative orders orjudgments.

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10. If the Lease provides that Tenant is entitled to expansion space, Successor-Landlord shall have no obligation nor anyliability for failure to provide such expansion space if a prior landlord (including, without limitation, Landlord), by reason of alease or leases entered into by such prior landlord with other tenants of the Property, has precluded the availability of suchexpansion space.

11. Except as specifically provided in this Agreement, Lender shall not, by virtue of this Agreement, the SecurityInstrument or any other instrument to which Lender may be a party, be or become subject to any liability or obligation toTenant under the Lease or otherwise.

12. (A) Tenant acknowledges and agrees that this Agreement satisfies and complies in all respects with the provisions ofArticle _____ of the Lease and that this Agreement supersedes (but only to the extent inconsistent with) the provisions of suchArticle and any other provision of the Lease relating to the priority or subordination of the Lease and the interests or estatescreated thereby to the Security Instrument.

(B) Tenant agrees to enter into a subordination, non-disturbance and attornment agreement with any lender which shallsucceed Lender as lender with respect to the Property, or any portion thereof, provided such agreement is substantially similar tothis Agreement. Tenant does herewith irrevocably appoint and constitute Lender as its true and lawful attorney-in-fact in itsname, place and stead to execute such subordination, non-disturbance and attornment agreement, without any obligation on thepart of Lender to do so. This power, being coupled with an interest, shall be irrevocable as long as the Indebtedness secured bythe Security Instrument remains unpaid. Lender agrees not to exercise its rights under the preceding two sentences if Tenantpromptly enters into the subordination, non-disturbance and attornment agreement as required pursuant to the first sentence ofthis subparagraph (B).

13. (A) Any notice required or permitted to be given by Tenant to Landlord shall be simultaneously given also to Lender,and any right to Tenant dependent upon notice shall take effect only after notice is so given. Performance by Lender shallsatisfy any conditions of the Lease requiring performance by Landlord, and Lender shall have a reasonable time to completesuch performance as provided in Paragraph 5 hereof.

(B) All notices or other communications required or permitted to be given to Tenant or to Lender pursuant to theprovisions of this Agreement shall be in writing and shall be deemed given only if mailed by United States registered mail,postage prepaid, or if sent by nationally recognized overnight delivery service (such as Federal Express or United States PostalService Express Mail), addressed as follows: to Tenant, at the address first set forth above, Attention: ; to Lender, atthe address first set forth above, Attention: and General Counsel, with a copy to Skadden, Arps, Slate,Meagher & Flom LLP, Four Times Square, New York, New York 10036, Attention: Harvey R. Uris, Esq.; or to such other addressor number as such party may hereafter designate by notice delivered in accordance herewith. All such notices shall be deemedgiven three (3) business days after delivery to the United States Post office registry clerk if given by registered mail, or on thenext business day after delivery to an overnight delivery courier.

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14. This Agreement may be modified only by an agreement in writing signed by the parties hereto, or their respectivesuccessors-in-interest. This Agreement shall inure to the benefit of and be binding upon the parties hereto, and their respectivesuccessors and assigns. The term “Lender” shall mean the then holder of the Security Instrument. The term “Landlord” shallmean the then holder of the landlord’s interest in the Lease. The term “person” shall mean an individual, joint venture,corporation, partnership, trust, limited liability company, unincorporated association or other entity. All references herein to theLease shall mean the Lease as modified by this Agreement and to any amendments or modifications to the Lease which areconsented to in writing by Lender. Any inconsistency between the Lease and the provisions of this Agreement shall be resolved,to the extent of such inconsistency, in favor of this Agreement.

15. Tenant hereby represents to Lender as follows:

(a) The Lease is in full force and effect and has not been further amended.

(b) There has been no assignment of the Lease or subletting of any portion of the premises demised under the Lease.

(c) There are no oral or written agreements or understandings between Landlord and Tenant relating to the premisesdemised under the Lease or the Lease transaction except as set forth in the Lease.

(d) The execution of the Lease was duly authorized and the Lease is in full force and effect and to the best of Tenant’sknowledge there exists no default (beyond any applicable grace period) on the part of either Tenant or Landlord under theLease.

(e) There has not been filed by or against nor to the best of the knowledge and belief of Tenant is there threatened againstTenant, any petition under the bankruptcy laws of the United States.

(f) To the best of Tenant’s knowledge, there is no present assignment, hypothecation or pledge of the Lease or rentsaccruing under the Lease by Landlord, other than pursuant to the Security Instrument.

16. Whenever, from time to time, reasonably requested by Lender (but not more than three (3) times during any calendaryear), Tenant shall execute and deliver to or at the direction of Lender, and without charge to Lender, one or more writtencertifications, in a form acceptable to Tenant, of all of the matters set forth in Paragraph 15 above, and any other information theLender may reasonably require to confirm the current status of the Lease.

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17. BOTH TENANT AND LENDER HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANYACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

18. This Agreement shall be governed by and construed in accordance with the laws of the State in which the Property islocated. [Signature Page Follows]

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written. GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation By: Name: Title: By: Name: Title: [TENANT] By: Name: Title:

AGREED AND CONSENTED TO:

LANDLORD:

[ ] By: Name: Title:

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

On the _____ day of in the year 200__ before me, the undersigned, a notary public in and for said state,personally appeared , personally known to me or proved to me on the basis of satisfactory evidence to be theindividual whose name is subscribed to the within instrument and acknowledged to me that he/she/they executed the same inhis/her/their capacity, and that by his/her/their signature on the instrument, the individual, or the person upon behalf of whichthe individual acted, executed the instrument. Notary Public [Notary Seal] My commission expires: STATE OF NEW YORK ) ) ss. COUNTY OF NEW YORK )

On the _____ day of in the year 200__ before me, the undersigned, a notary public in and for said state,personally appeared , personally known to me or proved to me on the basis of satisfactory evidence to bethe individual whose name is subscribed to the within instrument and acknowledged to me that he/she/they executed the samein his/her/their capacity, and that by his/her/their signature on the instrument, the individual, or the person upon behalf ofwhich the individual acted, executed the instrument. Notary Public [Notary Seal] My commission expires:

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

On the _____ day of in the year 200__ before me, the undersigned, a notary public in and for said state,personally appeared , personally known to me or proved to me on the basis of satisfactory evidence to be theindividual whose name is subscribed to the within instrument and acknowledged to me that he/she/they executed the same inhis/her/their capacity, and that by his/her/their signature on the instrument, the individual, or the person upon behalf of whichthe individual acted, executed the instrument. Notary Public [Notary Seal] My commission expires: STATE OF NEW YORK ) ) ss. COUNTY OF NEW YORK )

On the _____ day of in the year 200__ before me, the undersigned, a notary public in and for said state,personally appeared , personally known to me or proved to me on the basis of satisfactory evidence to bethe individual whose name is subscribed to the within instrument and acknowledged to me that he/she/they executed the samein his/her/their capacity, and that by his/her/their signature on the instrument, the individual, or the person upon behalf ofwhich the individual acted, executed the instrument. Notary Public [Notary Seal] My commission expires:

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SCHEDULE A TO SNDA

Legal Description of Property

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EXHIBIT O

[INTENTIONALLY DELETED]

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EXHIBIT P

FORM OF MASTER LEASE RENT PAYMENT DIRECTION LETTER

[Borrower Letterhead]

BlueLinx Corporation[Address]

[ ], 2006

Re: [Master Lease Agreement] between [Borrower] (“Borrower”), as lessor, and BlueLinx Corporation, a Delawarecorporation, as lessee, dated [ ], 2006

Ladies and Gentlemen:

With reference to the above referenced lease (the “Master Lease”), please be advised that Borrower has obtained a loan (the“Loan”) with German American Capital Corporation, having an address at 60 Wall Street, New York, New York 10005 (togetherwith its successors and assigns, “Lender”) pursuant to that certain Loan and Security Agreement of even date herewith betweenBorrower and Lender (the “Loan Agreement”), which Loan is secured by, among other things, the properties demised by theMaster Lease. Capitalized terms not separately defined herein shall the meanings provided in the Loan Agreement.

In connection with the Loan, from and after the date hereof and until notified otherwise by written instruction from Lender,you are hereby irrevocably instructed to (a) make all payments of Master Lease Scheduled Rent directly to the Holding Accountat all times during the term of the Loan and (b) make all payment of Master Lease Variable Additional Rent directly to theHolding Account at all times during the continuance of an Event of Default and during any Low LCR Cash Sweep Period, ineach case by wire transfer as follows: Bank: [ ] Account Name: [ ] Account No.: [ ] ABA No.: [ ]

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If you have any questions regarding this letter, please contact Borrower at the address indicated above.

Very truly yours,

BORROWER:

[Borrower Signature Block(s)] cc: German American Capital Corporation 60 Wall Street, 10th Floor New York, New York 10005 Attention: Todd Sammann

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EXHIBIT Q


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EXHIBIT R


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EXHIBIT S


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EXHIBIT T

CERTIFICATE OF INDEPENDENT MANAGER/MEMBER/DIRECTOR*

THE UNDERSIGNED, , hereby certifies as follows:

1. I have been elected to serve as an independent member/manager of [INSERT BORROWER NAME], a Delaware limitedliability company (the “Company”).

2. I am aware that, under its Limited Liability Company Agreement, the Company is required to have at least two so-called“Independent Managers” and/or “Independent Members”.

3. I hereby certify that I am aware of the definition of and requirement for Independent Managers and IndependentMembers as set forth in the Limited Liability Company Agreement of the Company, including but not limited to, therequirement that when voting on a matter put to the vote of the membership or board of managers, that notwithstanding that theCompany [may be insolvent, an Independent Manager shall, to the extent permitted by law, take into account the interest of thecreditors of the Company as well as the interest of the Company. As an Independent Manager and/or Independent Member ofthe Company, I will vote in accordance with my fiduciary duties under applicable law.

4. I hereby certify that I meet the requirements of an Independent Manager and/or Independent Member as set forth in theLimited Liability Company Agreement.

* Following are contacts for independent directors/managers/members appinted by borrowers on prior transaction:

CT Corporation SystemAttention: Corporate Staffing DivisionThe Corporation Trust Center1209 Orange StreetWilmington, DE 19801Attention: Domenic BorrielloTelephone: (302) 777-0240

Mark A. Ferrucci (no longer employed by CT Corporation System)212 Mangum DriveBear, DE 19701(302) 836-9162 (telephone)(302) 8376-836-9182 (fax)

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5. I certify that, subject to my fiduciary duties as an Independent Manager and/or Independent Member, it is my intentionas a so-called “Independent Manager” and/or “Independent Member” to take into account, to the extent permitted by law, theinterest of all creditors of the Company as well as the Company in fulfilling my duties as an Independent Manager and/orIndependent Member of the Company.

6. I understand that German American Capital Corporation and its successors, participants, transferees and assigns, will relyon this Certificate in conjunction with loans to be made to the Borrower.

Executed as of this _____ day of , 2006. Print Name:

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SCHEDULE I

ALLOCATION LOAN AMOUNTS

Blue Linx PortfolioLoan Allocations

Allocated Loan % “As-Is” of No. Name Gross Revenue As-Stabilized U/W DSCR Appraised Value Allocated Loan Value UW Cap Riverside $ 366,301 $ 322,345 1.20 *** $ 4,116,143 *** *** Charlotte $ 262,570 $ 231,062 1.20 *** $ 2,950,512 *** *** Bridgeton $ 577,500 $ 508,200 1.20 *** $ 6,489,396 *** *** Denver $ 395,640 $ 348,163 1.20 *** $ 4,445,826 *** *** La Puente $ 733,433 $ 645,421 1.20 *** $ 8,241,623 *** ***

Lawrenceville (Corp.

HQ) $ 1,400,000 $ 1,232,000 1.20 *** $ 15,731,870 *** *** National City $ 669,600 $ 589,248 1.20 *** $ 7,524,329 *** *** Ft. Worth $ 817,347 $ 719,265 1.20 *** $ 9,184,569 *** *** Frederick $ 2,847,500 $ 2,505,800 1.30 *** $ 29,536,153 *** *** Nashville $ 277,750 $ 244,420 1.25 *** $ 2,996,247 *** *** Ypsilanti $ 740,684 $ 651,802 1.25 *** $ 7,990,179 *** *** Memphis $ 220,943 $ 194,430 1.25 *** $ 2,383,438 *** *** Pensacola $ 323,532 $ 284,708 1.25 *** $ 3,490,123 *** *** Pearl $ 92,625 $ 81,510 1.15 *** $ 948,000 *** *** Woodinville $ 444,820 $ 391,442 1.15 *** $ 4,542,500 *** *** Butner $ 1,004,120 $ 883,626 1.16 *** $ 10,230,500 *** *** Albuquerque $ 261,720 $ 230,314 1.18 *** $ 2,607,000 *** *** Des Moines $ 153,192 $ 134,809 1.18 *** $ 1,524,700 *** *** Miami $ 437,189 $ 384,726 1.18 *** $ 4,345,000 *** *** Beaverton $ 578,424 $ 509,013 1.17 *** $ 5,800,000 *** *** Newark $ 1,039,360 $ 914,637 1.19 *** $ 10,270,000 *** *** Independence $ 656,568 $ 577,780 1.18 *** $ 6,560,000 *** *** New Stanton $ 267,015 $ 234,973 1.19 *** $ 2,640,000 *** *** Portland $ 246,611 $ 217,018 1.20 *** $ 2,424,000 *** ***

Englewood (OFFICE)

— SE Denver $ 687,210 $ 604,745 1.20 *** $ 6,720,000 *** *** San Antonio $ 285,693 $ 251,410 1.21 *** $ 2,784,000 *** *** N. Kansas City $ 586,708 $ 516,303 1.21 *** $ 5,704,000 *** *** Erwin $ 382,673 $ 336,752 1.21 *** $ 3,720,000 *** ***

*** Portions hereof have been omitted and filed separately with the Securities and Exchange Commission pursuant to a requestfor confidential treatment in accordance with Rule 24b-2 of the Exchange Act.

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Allocated Loan % “As-Is” of No. Name Gross Revenue As-Stabilized U/W DSCR Appraised Value Allocated Loan Value UW Cap Bellingham $ 2,242,500 $ 1,973,400 1.21 *** $ 21,744,000 *** *** Yulee $ 1,388,400 $ 1,221,792 1.22 *** $ 13,440,000 *** *** Yaphank $ 266,409 $ 234,440 1.22 *** $ 2,560,000 *** *** Tampa $ 571,473 $ 502,896 1.24 *** $ 5,440,000 *** *** Charleston $ 143,297 $ 126,101 1.24 *** $ 1,360,000 *** *** Little Rock $ 230,750 $ 203,060 1.25 *** $ 2,176,000 *** *** Newtown $ 322,500 $ 283,800 1.25 *** $ 3,040,000 *** *** Lake City $ 238,561 $ 209,934 1.25 *** $ 2,240,000 *** *** Allentown $ 311,250 $ 273,900 1.26 *** $ 2,900,000 *** *** Tallmadge $ 231,000 $ 203,280 1.32 *** $ 2,060,000 *** *** Virginia Beach $ 240,090 $ 211,279 1.33 *** $ 2,128,000 *** *** Denville $ 551,469 $ 485,293 1.35 *** $ 4,800,000 *** *** Wausau $ 151,590 $ 133,399 1.36 *** $ 1,312,000 *** *** Tulsa $ 358,750 $ 315,700 1.36 *** $ 3,104,000 *** *** Lubbock $ 143,442 $ 126,229 1.36 *** $ 1,240,000 *** *** Sioux Falls $ 201,015 $ 176,893 1.38 *** $ 1,720,000 *** *** Houston $ 473,475 $ 416,658 1.38 *** $ 4,041,900 *** *** Shreveport $ 264,200 $ 232,496 1.38 *** $ 2,251,800 *** *** Harlingen $ 174,200 $ 153,296 1.38 *** $ 1,482,300 *** *** El Paso $ 180,125 $ 158,510 1.38 *** $ 1,530,900 *** *** Grand Rapids $ 160,529 $ 141,266 1.39 *** $ 1,360,800 *** *** Fargo $ 272,619 $ 239,905 1.41 *** $ 2,280,000 *** *** Maple Grove $ 431,052 $ 379,326 1.41 *** $ 3,600,000 *** *** University Park $ 1,909,500 $ 1,680,360 1.41 *** $ 15,936,000 *** *** Midfield $ 371,250 $ 326,700 1.42 *** $ 3,080,000 *** *** Shelburne $ 280,125 $ 246,510 1.40 *** $ 2,361,600 *** *** Springfield $ 221,405 $ 194,836 1.40 *** $ 1,861,400 *** *** Elkhart $ 411,750 $ 362,340 1.40 *** $ 3,460,400 *** *** St. Paul (Eagan) $ 237,096 $ 208,644 1.44 *** $ 1,944,000 *** *** Richmond $ 335,960 $ 295,645 1.50 *** $ 2,644,792 *** ***

Total $ 30,072,510 $ 26,463,809 1.21 *** $ 295,000,000 *** ***

$ 295,000,000 $ (0)

*** Portions hereof have been omitted and filed separately with the Securities and Exchange Commission pursuant to arequest for confidential treatment in accordance with Rule 24b-2 of the Exchange Act.

I-2

SCHEDULE II

GEOGRAPHIC QUADRANTS Address Location Name State Country Zip Code Region 306 4300 GEORGIA-PACIFIC BLVD FREDERICK (Baltimore), MD USA 21704 1 303 419 Maple Street BELLINGHAM (Worcester), MA USA 02019 1 307 LUGER ROAD DENVILLE, NJ USA 07834 1 899 210 South Main Street NEWTOWN, CT USA 06470 1 310 DABNEY & BETHLEHAM RICHMOND, VA USA 23230 1 305 508 Warrant Ave PORTLAND, ME USA 04104 1 308 YAPHANK AV & PARK ST, YAPHANK LONG ISLAND (Yaphank), NY USA 11980 1 566 6980 SNOWDRIFT RD N. ALLENTOWN, PA USA 18106 1 311 200 PRICE STREET, VIRGINIA BEACH NORFOLK (Virginia Beach), VA USA 23462 1 304 Pine Haven Shore Road BURLINGTON, VT USA 1 300 HUNKER RD & RT. 119, NEW STANTON PITTSBURG (New Stanton) PA USA 15672 1 580 591 Gene Lasserre Blvd, Yulee JACKSONVILLE (Yulee), FL USA 32097 2 606 200 HOSEA ROAD LAWRENCEVILLE, GA USA 30248 2 309 1712 D Street, Butner RALEIGH (Butner), NC USA 27509 2 626 1040 S INDUSTRIAL BLVD ERWIN (Bristol), TN USA 37650 2 607 1523 Industrial Blvd MIDFIELD (Birmingham) AL USA 35228 2 582 815 So 56th Street TAMPA, FL USA 33675 2 584 3201 NW 110TH ST MIAMI FL USA 33168 2 336 1820 BELLAMAH AVE NW ALBUQUERQUE, NM USA 87104 2 581 4601 McCoy Drive PENSACOLA FL USA 32513 2 829 Price Creek Road & Hwy 100 LAKE CITY, FL USA 32025 2 632 4287 PILOT DRIVE MEMPHIS, TN USA 38130 2 647 331 28TH AVE NORTH NASHVILLE, TN USA 37202 2 786 330 Parkside Drive CHARLOTTE, NC USA 28266 2 330 2801 Valley View Drive SHREVEPORT, LA USA 71108 2 583 4290 ATLANTA STREET CHARLESTON SC USA 29418 2 592 555 GULF LINE ROAD, PEARL JACKSON (Pearl), MS USA 39288 2 585 3101 Dugan Street LITTLE ROCK AR USA 72216 2 312 2101 Dralle Road, University Park UNIVERSITY PARK (Chicago) IL USA 60466 3 315 13860 Corp Woods Tr. ST. LOUIS (Bridgeton), MO USA 63044 3 313 10347 Toebben Drive CINCINNATI (Union, KY), OH USA 41051 3 314 6101 McKean, Ypsilanti DETROIT (Ypsilanti), MI USA 48197 3 317 1727 WARREN STREET, NORTH KANSAS CITY KANSAS CITY, MO USA 64116 3 642 225 Collins Rd ELKHART, IN USA 46515 3 319 8175 JEFFERSON HWY, MAPLE GROVE MINNEAPOLIS (Maple Grove) MN USA 55369 3 329 5717 North Mingo TULSA, OK USA 74117 3 323 4501 N 4TH AVENUE SIOUX FALLS, SD USA 57104 3 322 3941 15th Ave, North FARGO, ND USA 58105 3 316 825 Buchanan Ave SW GRAND RAPIDS MI USA 49501 3 320 5631 NE 17th DES MOINES, IA USA 50316 3 321 2871 West Service Rd. ST. PAUL (Eagan), MN USA 55121 3 563 809 South 62nd Avenue WAUSAU, WI USA 54401 3 302 550 MUNROE FALLS RD OFF GILCHR AKRON (Tallmadge), OH USA 44278 3 318 3220 E. Cherry Street SPRINGFIELD, MO USA 65808 3 337 38811 Cherry St. FREMONT (Newark), CA USA 94560 4 485 14750 Nelson Avenue LOS ANGELES (City of Industry) CA USA 91749 4 743 360 INVERNESS DR SO, ENGLEWOOD DENVER (Englewood) CO USA 80111 4 392 901 W 24th Street SAN DIEGO CA USA 91951 4 395 12815 NE 178th Street SEATTLE, WA USA 98072 4 333 3900 Uvalda Street DENVER, CO USA 80239 4 339 1450 Citrus Avenue RIVERSIDE, CA USA 92507 4 393 10515 SW ALLEN BLVD, BEAVERTON PORTLAND (Beaverton), OR USA 97005 4 325 4747 MARK IV PKWY FORTH WORTH, TX USA 76106 4 326 650 GELLHORN DRIVE HOUSTON TX USA 77229 4 334 6990 Market Street EL PASO, TX USA 79915 4 324 I/4 Mi. West Wilson Road HARLINGEN TX USA 78550 4 328 535 N WW WHITE RD SAN ANTONIO TX USA 78219 4 327 702 East 44th Street LUBBOCK TX USA 79404 4

II-1

SCHEDULE III

IMMEDIATE REPAIRS AND REMEDIATION BRIEF DESCRIPTION OF ANY IMMEDIATE, Total Total Short Total Total Uninflated Inflated Weighted SHORT TERM OR RESERVE COSTSProject Project Date of Date of Immediate Immediate Term Reserve Square Reserves Reserves PML AND/OR ANY ADDITIONAL ENGINEERINGName Address City State Report Inspection Reserve Costs Costs Costs Feet $/SF/Yr $/SF/Yr Value STUDIES REQUIREDAkron 550

MunroeFalls Rd

Tallmadge OH 5/18/2006 5/9/2006 80,410 $ 80,410 $ 0 $ 49,600 63,000 $ 0.07 $ 0.08 N/A Roof replacement ($72,450); parking lot repair($1,600); repair damaged wall panels on west andsouth warehouse and east wall of north shed($6,360)

Fargo 394115thAvenue

Fargo ND 5/31/2006 5/22/2006 32,250 $ 32,250 $ 21,400 $ 50,200 83,100 $ 0.05 $ 0.06 N/A Repair/replace damaged ceiling insulation ($20,000);replace exterior siding on east elevation of office area($3,250); repair damaged concrete on loading docknear railroad spur ($1,500); repair chain link fencealong the perimeter ($7,500)

Pittsburgh OldRoute119 &HunkerRoad

NewStanton

PA 6/1/2006 5/11/2006 51,788 $ 51,788 $ 0 $ 32,860 63,154 $ 0.04 $ 0.05 N/A Replace roof on the eastern portion of warehouse($51,788)

Miami 3201NW110thStreet

Miami FL 6/1/2006 5/11/2006 74,000 $ 74,000 $ 0 $187,250 103,870 $ 0.15 $ 0.16 N/A West building roof was damaged during hurricaneWilma (work to be completed under 2006 capitalplan) and parking needs repair ($58,000); exteriorpaint is faded and peeling, repainting required($16,000)

Lake City 694S.E.CountyRoad245

Lake City FL 6/2/2006 5/26/2006 45,000 $ 45,000 $ 0 $ 61,092 106,519 $ 0.05 $ 0.06 N/A Replace roof on Building No. 2 ($45,000)

Charleston 4290AtlantaStreet

NorthCharleston

SC 6/5/2006 5/22/2006 40,000 $ 40,000 $ 0 $ 28,200 41,580 $ 0.06 $ 0.07 N/A Install adequate storm drainage along railroad spur asrequired by local officials ($25,000); rake/cleanexpansion joints and install new sealant to preventmore cracking on concrete pavement ($10,000);sawcut areas of failed concrete pavement, remove andinstall new pavement ($3,750); replace missinggutters and downspouts ($1,250)

TOTAL $ 323,448 $ 323,448 $ 21,400 immediate

repairescrow(125%)

$ 404,310

III-1

SCHEDULE IV

SUBLEASES

1 . 591 Gene Lasserre Boulevard, Yulee, FL — Lease Agreement between BlueLinx Corporation (successor in interest toGeorgia-Pacific Corporation), as Landlord, and Masonite Door Corporation (successor in interest to Door Fabrication Services,Inc.), as Tenant, dated March 2, 1998 and amended by:

a) First Lease Amendment dated April _____, 1999; b) Second Lease Amendment dated , 1999; c) Third Lease Amendment dated June 1, 2001; d) Fourth Lease Amendment dated May 21, 2002; e) Fifth Lease Amendment dated September 1, 2003; and f) Sixth Lease Amendment dated June 1, 2004.

2. 4300 Georgia Pacific Boulevard, Frederick, MD — Lease Agreement between BlueLinx Corporation (successor in interestto Georgia-Pacific Corporation), as Landlord, and Masonite Door Corporation (successor in interest to Door FabricationServices, Inc.), as Tenant, dated March 2, 1998 and amended by:

a) First Lease Amendment dated August 1, 1999; b) Second Lease Amendment dated , 2000; c) Third Lease Amendment dated June 1, 2001; and d) Fourth Lease Amendment dated June 1, 2004.

IV-1

SCHEDULE V


V-1

SCHEDULE VI

LITIGATION SCHEDULE

1 . Wickes Inc. v. Georgia Pacific Distribution Division (BlueLinx). The following language was filed most recently inBlueLinx Holdings Inc.’s 10-Q for the three month period ended April 1, 2006, and also filed in BlueLinx Holdings Inc.’sAnnual Report on Form 10-K for the year ended December 31, 2005: “On November 19, 2004, we received a letter from WickesLumber, or Wickes, asserting that approximately $16 million in payments received by the Distribution Division of Georgia-Pacific Corporation during the 90-day period prior to Wickes’ January 20, 2004 Chapter 11 filing were preferential paymentsunder section 547 of the United States Bankruptcy Code. On October 14, 2005, Wickes Inc. filed a lawsuit in the United StatesBankruptcy Court for the Northern District of Illinois titled “Wickes Inc. v. Georgia Pacific Distribution Division (BlueLinx),”(Bankruptcy Adversary Proceeding No. 05-2322) asserting its claim. On November 14, 2005, we filed our answer to thecomplaint denying liability. Although the ultimate outcome of this matter cannot be determined with certainty, we believeWickes’ assertion to be without merit and, in any event, subject to one or more complete defenses, including, but not limited to,that the payments were made and received in the ordinary course of business and were a substantially contemporaneousexchange for new value given to Wickes. Accordingly, we have not recorded a reserve with respect to the asserted claim.”

2 . In re Oakwood Homes Corp; OHC Liquidation Trust v. Georgia-Pacific Corporation . This is a lawsuit to avoid andrecover $4,241,798.66 of preference-period payments from BlueLinx Corporation. The case was mediated in early May of2006. The trustee offered to settle the matter by subtracting $250,000 from BlueLinx’ $270,000 reclamation claim against theOakwood Homes bankruptcy estate and to pay the $20,000 balance of the reclamation claim over to BlueLinx. BlueLinxdeclined this result, and the parties were unable to settle their differences. The matter is now scheduled for trial on September 9,2006.

3 . In re Scott Acquisition Corp.; Official Creditors’ Committee v. BlueLinx Corporation . This is a lawsuit to avoid andrecover $600,668.24 of preference-period payments from BlueLinx Corporation. The bankruptcy court has ordered that thematter be subject to mediation to be completed by June 30, 2006, and the matter is otherwise set for trial on August 10, 2006.

4 . BlueLinx Corporation v. Wachovia Bank NA . This a lawsuit against Wachovia filed on May 11, 2006 to recover$126,062.82 that Wachovia paid from the BlueLinx account against a check that was evidently stolen and fraudulentlymodified.

VI-1

SCHEDULE VII

OUTPARCEL LEGAL DESCRIPTIONS

Frederick, MD: A Portion of that certain tract, piece or parcel of land lying and being situated in Frederick County, Marylandand being more particularly described as follows:

Beginning at a point in the South line of Geoffrey Way, which point is 2348’ from the Northeast intersection of BuckeystownPike and Geoffrey Way;

Thence along the south line of said Geoffrey Way South 38 degrees 13 minutes 56 seconds East 327.89 feet to a point;

Thence South 02 degrees 58 minutes 05 seconds East 34.64 feet to a point;

Thence along a curve to the left with a radius of 60.00 feet, an arc distance of 168.09 feet, a chord bearing of South 51 degrees46 minutes 22 seconds East and a chord of 118.27 feet to a point;

Thence South 38 degrees 13 minutes 58 seconds East 320.64 feet to a point;

Thence leaving said road South 34 degrees 23 minutes 21 seconds West 575.15 feet to a point;

Thence North 63 degrees 25 minutes 07 seconds West 639.00 feet to a point;

Thence North 26 degrees 24 minutes 43 seconds East 899.82 feet to the point and place of beginning, containing 11.466 acresor 499,445 square feet, less and except rail extension of no more than 100,000 square feet.

University Park, IL: The south 800 feet, as measured along the east line thereof, of lot 2 less and except the improved landthereof, and the following described part of lot 3 in the subdivision of section 16, township 34 north, range 13 east of the thirdprincipal meridian, in Will county, Illinois:

Beginning at the northwest corner of lot 3; thence east along and upon the north line of lot 3, for a distance of 50.00 feet; thencesoutherly to a point on the west line of said lot 3, which line is also the southeasterly right of way line of the railroad right ofway, said point being 200.00 feet southwesterly of the northwest corner of said lot 3; thence northeasterly along and upon saidwest line, which is also said southeasterly right of way line, for a distance of 200.00 feet to the point of beginning, in Willcounty, Illinois.

Maple Grove, MN: The South 417.30 feet of the East 710.00 feet, except the South 70.00 feet thereof all in the SoutheastQuarter of the Northeast Quarter of Section 24, Township 119, Range 22, Hennepin County, Minnesota

Woodinville, WA: Parcel A — 12811 Northeast 178th Street, Tax ID: 726910-0047

Independence, KY: Beginning at an iron pin of the southern right of way of Toebben Road at the terminus of the first course ofD.B. 595, page 155 and running with property of Toebben LTD and JJEMS INV. LLC South 05 degrees 19 minutes 41 secondsWest for 600 feet; thence North 84 degrees 44 minutes 47 seconds West for 400 feet; thence North 05 degrees 19 minutes 41seconds East for 600 feet to the south line of Toebben drive; thence South 85 degrees 29 minutes 18 seconds East to the pointof beginning.

VII-1

Newtown, CT: A certain piece or parcel of land situated on the easterly side of Route 25 in the Town of Newtown, County ofFairfield and State of Connecticut, being a part of the land as shown and designated on a certain map entitled “Map prepared forGeorgia Pacific Corporation Conn. Route 25, Newtown, Connecticut, Scale 1“=60’ Dec. 14, 1976” by C James Osborne, Jr. RLS,Charles J. Osborne Associates, New Milford, Connecticut. Said map being on file in the office of the Town Clerk of the Town ofNewtown as Map No. 4562. Also being part of the premises conveyed to Georgia Pacific Corporation by The Homer C GodfreyCompany in a deed recorded in Vol. 262 Page 708.

Beginning at a point marked by and existing marble monument, said point lying 16.17’ southwesterly from the Southeastcorner of the herein described parcel. Said point being on the northerly line of the property of N/F Union Water Co., Inc.recorded in Deed Book 510 Page 35 & Deed Book 291 Page 641)Thence along said line the following courses and distances:

S37°12’13”W a distance of 235.24 feet;S50°16’38”W a distance of 200.00 feet;N62°43’22”W a distance of 35.00 feet;

S62°16’38”W a distance of 57.07 feet to a point on the northeasterly side of Connecticut Route 25; said point marking thesouthwest corner of the herein described parcel. Thence turning and running along said CT Route 25 the following courses:

N53°12’14”W a distance of 217.06 feet;N62°07’18”W a distance of 64.21 feet;

Thence continuing along said CT Route 25 on a curve to the right having a radius of 2404.20 feet and a length of 529.90 feet toa CHD monument;

Thence N52°59’31”E a distance of 8.82 feet:Thence N64°08’54”E a distance of 139.54 feet to an existing chain link fence corner post;Thence S79°20’06”E a distance of 109.56 feet to an existing chain link fence corner post;Thence N67°28’00”E a distance of 428.76 feet to an existing chain link fence corner post;

Thence S79°23’20”E a distance of 181.07 feet to a point on the West line of the New York, New Haven and Hartford Railroad(formerly Con-Rail) said point being the Northerly most corner of a 50’ Right of Way (0.763 acres) recorded in Book 147 Page319 and shown on the above referenced map being on file in the office of the Town Clerk of the Town of Newtown as MapNo. 4562;

Thence along said railroad S23°55’28”E a distance of 152.52 feet;Thence continuing along said railroad S30°14’51”E a distance of 254.65 feet;

Thence leaving said railroad S37°12’13”W a distance of 16.17 feet along the line of Union Water Co., Inc. to an existing marblemonument marking the point or place of beginning, containing 9.6 acres more or less.

VII-2

Ft Worth, TX: Being a tract of land situated in the D. ODUM SURVEY, ABSTRACT NO. 1184, City of Fort Worth, TarrantCounty, Texas and being a portion of those tracts of land (Tract One & Tract Two) as described in Deed to Ballister Group, Inc.recorded in Volume 11577, Page 287 of the Deed Records of Tarrant County, Texas and being more particularly described asfollows:

BEGINNING at a 1/2” iron rod with a plastic cap found at the northwest corner of Site 1-Block 8, Mark IV Industrial Park, anaddition to the City of Fort Worth, Tarrant County, Texas as recorded in Volume 388-79, Page 38 of the Plat Records of TarrantCounty, Texas (Prtct);

THENCE South 89 degrees 58 minutes 34 seconds West, 464.68 feet, along the Southern right-of-way of Great SouthwestParkway (60’ R/W), to a capped iron pin found, being the PRINCIPLE POINT OF BEGINNING of herein described tract;

THENCE, South 00 degrees 01 minutes 31 seconds East, 506.27 feet, departing the South right-of-way of Great SouthwestParkway, to a capped iron pin found;

THENCE, South 89 degrees 58 minutes 23 seconds West, 325.02 feet to a point;

THENCE, South 00 degrees 05 minutes 11 seconds East, 754.06 feet to a point in the Northern right-of-way of a 53-foot wideRailroad Easement;

THENCE; North 90 degrees 00 minutes 00 seconds West, 830.83 feet, along said Railroad right-of-way to a capped iron pinfound;

THENCE; North 00 degrees 00 minutes 00 seconds East, 1260.00 feet, to a 1/2 inch pipe found in the Southern right-of-way ofGreat Southwest Parkway;

THENCE; North 89 degrees 58 minutes 34 seconds East, 1154.49 feet to the PRINCIPLE POINT OF BEGINNING, containing27.789 acres more or less.

St Louis (Bridgeton), MO: The Northwest 400 feet measured along the Southwest line thereof; of Lot 17 of a line drawn parallelto the Northwest boundary line bearing N 52o 44’ 21” E of the Hoechst Tract Subdivision according to the Plat thereof recordedin Plat book 341, Page 3 St. Louis County, Missouri;

VII-3

SCHEDULE VIII

BORROWER TAXPAYER IDENTIFICATION NUMBERS Entity EIN 1. ABP AL (MIDFIELD) LLC 77-0627356 2. ABP AR (LITTLE ROCK) LLC 77-0627356 3. ABP CA (CITY OF INDUSTRY) LLC 77-0627356 4. ABP CA (NATIONAL CITY) LLC 77-0627356 5. ABP CA (NEWARK) LLC 77-0627356 6. ABP CA (RIVERSIDE) LLC 77-0627356 7. ABP CO I (DENVER) LLC 77-0627356 8. ABP CO II (DENVER) LLC 77-0627356 9. ABP CT (NEWTON) LLC 36-4553871 10. ABP FL (LAKE CITY) LLC 77-0627356 11. ABP FL (MIAMI) LLC 77-0627356 12. ABP FL (PENSACOLA) LLC 77-0627356 13. ABP FL (TAMPA) LLC 77-0627356 14. ABP FL (YULEE) LLC 77-0627356 15. ABP GA (LAWRENCEVILLE) LLC 77-0627356 16. ABP IA (DES MOINES) LLC 77-0627356 17. ABP IL (UNIVERSITY PARK) LLC 77-0627356 18. ABP IN (ELKHART) LLC 77-0627356 19. ABP KY (INDEPENDENCE) LLC 77-0627356 20. ABP LA (SHREVEPORT) LLC 30-0247739 21. ABP MA (BELLINGHAM) LLC 77-0627356 22. ABP MD (BALTIMORE) LLC 77-0627356 23. ABP ME (PORTLAND) LLC 61-1470388 24. ABP MI (DETROIT) LLC 77-0627356 25. ABP MI (GRAND RAPIDS) LLC 77-0627356 26. ABP MN (EAGAN) LLC 77-0627356

VIII-1

Entity EIN 27. ABP MN (MAPLE GROVE) LLC 77-0627356 28. ABP MO (BRIDGETON) LLC 77-0627356 29. ABP MO (KANSAS CITY) LLC 77-0627356 30. ABP MO (SPRINGFIELD) LLC 77-0627356 31. ABP MS (PEARL) LLC 77-0627356 32. ABP NC (BUTNER) LLC 77-0627356 33. ABP NC (CHARLOTTE) LLC 77-0627356 34. ABP ND (NORTH FARGO) LLC 77-0634934 35. ABP NJ (DENVILLE) LLC 77-0627356 36. ABP NM (ALBUQUERQUE) LLC 77-0627356 37. ABP NY (YAPHANK) LLC 77-0627356 38. ABP OH (TALMADGE) LLC 77-0627356 39. ABP OK (TULSA) LLC 77-0627356 40. ABP OR (BEAVERTON) LLC 77-0627356 41. ABP PA (ALLENTOWN) LLC 77-0627356 42. ABP PA (STANTON) LLC 77-0627356 43. ABP SC (CHARLESTON) LLC 77-0627356 44. ABP SD (SIOUX FALLS) LLC 77-0627356 45. ABP TN (ERWIN) LLC 77-0627356 46. ABP TN (MEMPHIS) LLC 77-0627356 47. ABP TN (NASHVILLE) LLC 77-0627356 48. ABP TX (EL PASO) LLC 77-0627356 49. ABP TX (FORT WORTH) LLC 77-0627356 50. ABP TX (HARLINGEN) LLC 77-0627356 51. ABP TX (HOUSTON) LLC 77-0627356 52. ABP TX (LUBBOCK) LLC 77-0627356 53. ABP TX (SAN ANTONIO) LLC 77-0627356 54. ABP VA (RICHMOND) LLC 77-0627356 55. ABP VA (VIRGINIA BEACH) LLC 77-0627356 56. ABP VT (SHELBURNE) LLC 05-0602221 57. ABP WA (WOODINVILLE) LLC 77-0627356 58. ABP WI (WAUSAU) LLC 05-0602220 59. ABP MD (BALTIMORE) SUBSIDIARY LLC 77-0627356

VIII-2

*** Portions hereof have been omitted and filed separately with the Securities and Exchange Commission pursuant to a requestfor confidential treatment in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

EXHIBIT 10.2

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

by and among

THE FINANCIAL INSTITUTIONS NAMED HEREIN,

as Lenders,

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative and Collateral Agent,

WACHOVIA CAPITAL MARKETS, LLC

as Sole Lead Arranger and Sole Syndication Agent,

BANK OF AMERICA, N.A.,JPMORGAN CHASE BANK, N.A.,

and WELLS FARGO FOOTHILL, LLC,

as Documentation Agents,

BLUELINX CORPORATION,BLUELINX FLORIDA LP,

and BLUELINX SERVICES INC.

as Borrowers,

and

BLUELINX FLORIDA HOLDING NO. 1 INC.,BLUELINX FLORIDA HOLDING NO. 2 INC.,

BLX TEXAS ACQUISITION I LLC, andBLX TEXAS ACQUISITION II LLC

as Guarantors

Dated: August 4, 2006

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

This Amended and Restated Loan and Security Agreement (this “Agreement”), dated August 4, 2006, is entered intoby and among the financial institutions from time to time parties hereto, whether by execution of an Assignment andAcceptance Agreement (as defined below) or this Agreement (each a “Lender” and collectively the “Lenders”), Wachovia Bank,National Association, successor by merger to Congress Financial Corporation (“Wachovia”), as administrative and collateralagent for the Lenders and for the Bank Product Providers (as defined below) (in such capacity, “Administrative and CollateralAgent”), Wachovia Capital Markets, LLC, as sole lead arranger for the credit facility (in such capacity, “Sole Lead Arranger”)and as sole syndication agent for the credit facility (in such capacity, “Sole Syndication Agent”), Bank of America, N.A., WellsFargo Foothill, LLC, and JPMorgan Chase Bank, N.A., formerly known as JPMorgan Chase Bank, as documentation agents(each a “Documentation Agent” and collectively, “Documentation Agents”, and together with the Administrative andCollateral Agent, the Sole Lead Arranger, and the Sole Syndication Agent, each individually an “Agent” and collectively,“Agents”), BlueLinx Corporation, a Georgia corporation (“BlueLinx”), BlueLinx Services Inc., a Georgia corporation (“BSI”),and BlueLinx Florida LP, a Florida limited partnership (“BFLP”, and together with BlueLinx and BSI, each individually a“Borrower” and collectively, “Borrowers” as hereinafter further defined), BlueLinx Florida Holding No. 1 Inc., a Georgiacorporation (“BFH1”), BlueLinx Florida Holding No. 2 Inc., a Georgia corporation (“BFH2”), BLX Texas Acquisition I LLC, aGeorgia limited liability company (“BLX1”), and BLX Texas Acquisition II LLC, a Georgia limited liability company(“BLX2”, and together with BFH1, BFH2, and BLX1, each individually a “Guarantor” and collectively, “Guarantors” ashereinafter further defined).

W I T N E S S E T H:

WHEREAS, BlueLinx, Administrative and Collateral Agent, the Documentation Agents, and the persons party theretoas lenders (the “Original Lenders”), among others, have previously entered into that certain Loan and Security Agreement datedMay 7, 2004 (as amended, restated, supplemented or otherwise modified from time to time, the “Original Loan Agreement”),pursuant to which, among other things, the Original Lenders have made certain loans and financial accommodations availableto BlueLinx.

WHEREAS, BSI and BFLP are Subsidiaries of BlueLinx and together they are inter-related entities which collectivelyconstitute an integrated business unit;

WHEREAS, the directors of each Borrower view the entities as sufficiently dependent upon each other and so inter-related that any advance made hereunder to any Borrower would benefit all of the Borrowers as a result of their consolidatedoperations and identity of interests;

2

WHEREAS, each Borrower has requested that Administrative and Collateral Agent and the Lenders treat them as co-borrowers hereunder, jointly and severally responsible for the obligations of each other hereunder;

WHEREAS, each Revolving Loan Lender is willing (severally and not jointly) to make such loans and provide suchfinancial accommodations to Borrowers on a pro rata basis according to its commitment provided for herein on the terms andconditions set forth herein; and

WHEREAS, Wachovia is willing to continue to act as administrative agent and collateral agent for Lenders on theterms and conditions set forth herein and in the other Financing Agreements (as defined below).

WHEREAS, the parties hereto have agreed to amend and restate, in their entirety, the agreements contained in theOriginal Loan Agreement on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth herein, and for other goodand valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto amend and restatethe Original Loan Agreement and agree as follows:

SECTION 1. DEFINITIONS

For purposes of this Agreement, the following terms shall have the respective meanings given to them below:

1.1 “ACH Transactions” shall mean any overdrafts, cash management or related services, including the automatic clearinghouse transfer of funds by Administrative and Collateral Agent or any of its Affiliates for the account any Borrower or any oftheir respective Subsidiaries, in each case pursuant to agreements entered into with any Borrower or any of their respectiveSubsidiaries.

1.2 “Accounts” shall mean, as to each Borrower and each Guarantor, all present and future rights of such Borrower and suchGuarantor to payment of a monetary obligation, whether or not earned by performance, which is not evidenced by chattel paperor an instrument, (a) for property that has been or is to be sold, leased, licensed, assigned, or otherwise disposed of, (b) forservices rendered or to be rendered, (c) for a secondary obligation incurred or to be incurred, or (d) arising out of the use of acredit, charge or debit card along with all information contained on or for use with such card.

1.3 “Acquisition” shall mean (a) any Stock Acquisition, or (b) any Asset Acquisition.

1.4 “Acquisition Subsidiary” shall mean any wholly owned Subsidiary of any Borrower which is formed by such Borrowersolely in connection with a Permitted Acquisition.

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1.5 “Adjusted Eurodollar Rate” shall mean, with respect to each Interest Period for any Eurodollar Rate Loan, the rate perannum (rounded upwards, if necessary, to the next one- sixteenth (1/16) of one percent (1%)) determined by dividing (a) theEurodollar Rate for such Interest Period by (b) a percentage equal to: (i) one (1) minus (ii) the Reserve Percentage, if any. Forpurposes hereof, “Reserve Percentage” shall mean the reserve percentage, expressed as a decimal, prescribed by any UnitedStates or foreign banking authority for determining the reserve requirement which is or would be applicable to deposits ofUnited States dollars in a non-United States or an international banking office of the Reference Bank used to fund a EurodollarRate Loan or any Eurodollar Rate Loan made with the proceeds of such deposit, whether or not the Reference Bank actuallyholds or has made any such deposits or loans. The Adjusted Eurodollar Rate shall be adjusted on and as of the effective day ofany change in the Reserve Percentage.

1.6 “Administrative Borrower” shall mean BlueLinx Corporation, a Georgia corporation, in its capacity as AdministrativeBorrower on behalf of itself and the other Borrowers pursuant to Section 6.12 hereof and its successors and assigns in suchcapacity.

1.7 “Affiliate” shall mean, with respect to a specified Person, any other Person which directly or indirectly through one ormore intermediaries controls, or is controlled by, or is under common control with such Person, and without limiting thegenerality of the foregoing, includes (a) any Person which beneficially owns or holds twenty percent (20%) or more of any classof Voting Stock of such Person or other equity interests in such Person, and (b) any director or executive officer of such Person.For purposes of this definition, the term “control” (including, with correlative meanings, the terms “controlled by” and “undercommon control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct orcause the direction of the management and policies of such Person, whether through the ownership of Voting Stock, byagreement or otherwise.

1.8 “Affiliate Lease” shall mean that certain Amended and Restated Master Lease Agreement, dated as of June 9, 2006, byand among BlueLinx, ABP AL (MIDFIELD) LLC, a Delaware limited liability company, and the other Affiliates of Parentidentified as Landlords on the signature pages thereof, as the same may be amended, restated, supplemented or otherwisemodified from time to time in accordance with the terms hereof.

1.9 “Asset Acquisition” shall mean the purchase or other acquisition by any Borrower or any Acquisition Subsidiary of allor substantially all of the assets of any other Person engaged in substantially the same or a related business as Borrowers.

1.10 “Assignment and Acceptance” shall mean an Assignment and Acceptance substantially in the form of Exhibit Aattached hereto delivered to Administrative and Collateral Agent in connection with an assignment of a Lender’s interesthereunder in accordance with the provisions of Section 13.6 hereof.

1.11 “Bank Products” shall mean any one or more of the following types of services or facilities extended to any Borroweror any of their respective Subsidiaries by a Bank Product Provider: (a) credit cards, (b) ACH Transactions, (c) HedgingTransactions, and (d) foreign exchange contracts.

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1.12 “Bank Product Providers” shall mean Wachovia and any of its Affiliates that may, from time to time, provide anyBank Products to any Borrower or any of their respective Subsidiaries.

1.13 “Bank Product Reserve” shall mean any and all reserves that Administrative and Collateral Agent may establish fromtime to time, in its reasonable discretion, for the Bank Products provided by any Bank Product Provider which are thenoutstanding.

1.14 “Blocked Accounts” shall have the meaning set forth in Section 6.3(a) hereof.

1.15 “Blocked Account Activation Period” shall have the meaning given in Section 6.3(a) hereof.

1.16 “Borrowers” shall mean, collectively, the following (together with their respective successors and assigns):(a) BlueLinx Corporation, a Georgia corporation; (b) BlueLinx Services Inc., a Georgia corporation; (c) BlueLinx Florida LP, aFlorida limited partnership; and (d) any other Person that at any time after the date hereof becomes a Borrower; each sometimesbeing referred to herein individually as a “Borrower”.

1.17 “Borrowing Base” shall mean, at any time, the amount equal to:

(a) 85% of the Net Amount of Eligible Accounts; provided, however, such percentage shall be reduced by onepercentage point for each percentage point (or fraction thereof) by which Dilution exceeds 5%, plus

(b) the lesser of: (i) 70% (or 75% during the Seasonal Period) of the sum of (A) the Value of Eligible Inventory, (B) theValue of Eligible Domestic In-Transit Inventory, (C) the Value of Eligible International In-Transit Inventory and (D) the Valueof Eligible Re-Load Inventory or (ii) 85% of the sum of the Net Orderly Liquidation Value; provided, however, RevolvingLoans outstanding with respect to Eligible Domestic In-Transit Inventory, Eligible International In-Transit Inventory andEligible Re-Load Inventory shall not exceed, in the aggregate at any one time outstanding, $85,000,000, minus

(c) the sum of all Reserves.

1.18 “Business Day” shall mean any day other than a Saturday, Sunday, or other day on which commercial banks areauthorized or required to close under the laws of the State of New York or the State of North Carolina, and a day on which theReference Bank, Administrative and Collateral Agent and each Lender are open for the transaction of business, except that if adetermination of a Business Day shall relate to any Eurodollar Rate Loans, the term Business Day shall also exclude any day onwhich banks are closed for dealings in dollar deposits in the London interbank market or other applicable Eurodollar Ratemarket.

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1.19 “Canadian Priority Payables” shall mean, as of any date of determination, the full amount of the liabilities of anyBorrower as of such date of determination which (a) have a trust imposed to provide for payment or a security interest, pledge,lien, hypothec or charge ranking or capable of ranking senior to or pari passu with security interests, liens or charges securingthe Obligations on any of the Accounts or Inventory of such Borrower under Canadian federal, Provincial, state, county, district,municipal or local law, or (b) have a right imposed to provide for payment ranking or capable of ranking senior to or pari passuwith the Obligations under local or national Canadian laws, regulations or directives, including, but not limited to, claims forunremitted and/or accelerated rents, taxes, wages, withholding taxes, VAT and other amounts payable to an insolvencyadministrator, employee withholdings or deductions and vacation pay, workers’ compensation obligations, governmentroyalties or pension fund obligations, in each case to the extent such trust or security interest, lien or charge has been or may beimposed, including, without limitation, Inventory upon which the Borrowing Base is calculated which is subject to a right of asupplier to repossess goods pursuant to Section 81.1 of the Bankruptcy and Insolvency Act (Canada) or any applicable lawsgranting revendication or similar rights to unpaid suppliers or any similar laws of Canada or any other applicable jurisdiction.

1.20 “Capital Expenditures” shall mean, for any period, any expenditure of money for the purchase or other acquisition ofany capital asset or for the purchase or construction of assets, or for improvements or additions thereto, which are capitalized ona Person’s balance sheet in accordance with GAAP, including the principal amount of capital expenditures financed withCapital Leases.

1.21 “Capital Leases” shall mean, as applied to any Person, any lease of (or any agreement conveying the right to use) anyproperty (whether real, personal or mixed) by such Person as lessee which in accordance with GAAP, is or is required to bereflected as a capital lease on the balance sheet of such Person.

1.22 “Capital Stock” shall mean, with respect to any Person, any and all shares, interests, participations or otherequivalents (however designated) of such Person’s capital stock, or partnership, limited liability company or other equityinterests at any time outstanding, and any and all rights, warrants or options exchangeable for or convertible into such capitalstock or other interests (but excluding any debt security that is exchangeable for or convertible into such capital stock).

1.23 “Cash Equivalents” shall mean, at any time, (a) any evidence of Indebtedness with a maturity date of one hundredeighty (180) days or less issued or directly and fully guaranteed or insured by the United States of America or any agency orinstrumentality thereof; provided, that, the full faith and credit of the United States of America is pledged in support thereof; (b)certificates of deposit or bankers’ acceptances with a maturity of one hundred eighty (180) days or less of any financialinstitution that is a member of the Federal Reserve System having combined capital and unimpaired surplus of not less thanFive Hundred Million Dollars ($500,000,000); (c) commercial paper (including variable rate demand notes) with a maturity ofone hundred eighty (180) days or less issued by a corporation (except an Affiliate of any Borrower or any Guarantor) organizedunder the laws of any State of the United States of America or the District of Columbia and rated at least A-2 by Standard &Poor’s Ratings Service, a division of The McGraw-Hill Companies, Inc. or at least P-2 by Moody’s Investors Service, Inc.;(d) repurchase obligations with a term of not more than thirty (30) days for underlying securities of the types described in clause(a) above entered into with any financial institution having combined capital and unimpaired surplus of not less than FiveHundred Million Dollars ($500,000,000); (e) repurchase agreements and reverse repurchase agreements relating to marketabledirect obligations issued or unconditionally guaranteed by the United States of America or issued by any governmental agencythereof and backed by the full faith and credit of the United States of America, in each case maturing within one hundred eighty(180) days or less from the date of acquisition; provided, that, the terms of such agreements comply with the guidelines set forthin the Federal Financial Agreements of Depository Institutions with Securities Dealers and Others, as adopted by theComptroller of the Currency on October 31, 1985; and (f) investments in money market funds and mutual funds that areregistered under the Investment Company Act of 1940, as amended, which invest substantially all of their assets in securities ofthe types described in clauses (a) through (e) above.

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1.24 “CFC” shall mean a Person that is organized under the laws of a jurisdiction other than the District of Columbia orany State within the United States of America that is a “controlled foreign corporation” as that term is defined in Section 957(a)of the Code.

1.25 “Change of Control” shall mean (a) except as permitted by Section 9.7, the liquidation or dissolution of any Borroweror any Guarantor or the adoption of a plan by the stockholders of any Borrower or any Guarantor relating to the dissolution orliquidation of such Borrower or such Guarantor; (b) the failure of the Permitted Holders to, directly or indirectly, own andcontrol at least thirty percent (30%) of the Voting Stock of BlueLinx if either: (i) any other Person and/or one or more of itsAffiliates, collectively, own or control more of the Voting Stock of BlueLinx than the Permitted Holders; or (ii) any other Personand/or one or more of its Affiliates, collectively, own or control more than twenty percent (20%) of the Voting Stock ofBlueLinx; (c) the failure of the Permitted Holders to, directly or indirectly, own and control at least thirty percent (30%) of theCapital Stock of BlueLinx if either: (i) any other Person and/or one or more of its Affiliates, collectively, own or control more ofthe Capital Stock of BlueLinx than the Permitted Holders; or (ii) any other Person and/or one or more of its Affiliates,collectively, own or control more than twenty percent (20%) of the Capital Stock of BlueLinx; or (d) the failure of BlueLinx toown directly or indirectly one hundred percent (100%) of the Capital Stock of any other Borrower or Guarantor.

1.26 “Code” shall mean the Internal Revenue Code of 1986, as amended.

1.27 “Collateral” shall have the meaning set forth in Section 5 hereof.

1.28 “Collateral Access Agreement” shall mean an agreement in writing, in form and substance reasonably satisfactory toAdministrative and Collateral Agent, by a lessor of premises to any Borrower or any Guarantor, or any other Person to whom anyCollateral (including Inventory, Equipment, bills of lading or other documents of title) is consigned or who has custody, controlor possession of any such Collateral or is otherwise the owner or operator of any premises on which any of such Collateral islocated, pursuant to which such lessor, consignee or other Person, inter alia, acknowledges the first priority security interest ofAdministrative and Collateral Agent, for itself and the ratable benefit of the Lenders and the Bank Product Providers, in suchCollateral, agrees to waive or subordinate any and all claims such lessor, consignee or other person may, at any time, haveagainst such Collateral, whether for processing, storage or otherwise, and agrees to permit Administrative and Collateral Agentaccess to, and the right to remain on, the premises of such lessor, consignee or other Person so as to exercise Administrative andCollateral Agent’s rights and remedies and otherwise deal with such Collateral and, in the case of any consignee or other personwho at any time has custody, control or possession of any Collateral, acknowledges that it holds and will hold possession of theCollateral for the benefit of Administrative and Collateral Agent and agrees to follow all reasonable instructions ofAdministrative and Collateral Agent with respect thereto.

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1.29 “Collection Account” shall mean any of the deposit accounts set forth on Schedule 1.29 hereto so long as suchdeposit account is subject to a Deposit Account Control Agreement.

1.30 “Compliance Period” shall mean the period commencing on (a) any date on which Excess Availability has been lessthan $40,000,000 for the third (3rd) consecutive Business Day and ending on (b) a subsequent date on which ModifiedAdjusted Excess Availability has been equal to or greater than $40,000,000 for the sixtieth (60th) consecutive day.

1.31 “Debt” shall mean, for any Person, all items of indebtedness or liability which in accordance with GAAP would beincluded in determining total liabilities as shown on the liabilities side of a balance sheet of such Person as at the date as ofwhich Debt is to be determined and the aggregate payments required to be made by such Person at any time under any CapitalLease.

1.32 “Default” shall mean an act, condition or event which with notice or passage of time or both would constitute anEvent of Default.

1.33 “Defaulting Lender” shall have the meaning set forth in Section 6.10(d) hereof.

1.34 “Deposit Account Control Agreement” shall mean an agreement in writing, in form and substance reasonablysatisfactory to Administrative and Collateral Agent, by and among Administrative and Collateral Agent, any Borrower or anyGuarantor with a deposit account at any bank and the bank at which such deposit account is at any time maintained whichprovides that such bank will comply with instructions originated by Administrative and Collateral Agent directing dispositionof the funds in the deposit account without further consent by such Borrower or such Guarantor and has such other terms andconditions as Administrative and Collateral Agent may reasonably require, including, pursuant to Section 6.3 hereof, as to anysuch agreement with respect to any Blocked Account, providing that all items received or deposited in the Blocked Accountsare the property of Administrative and Collateral Agent, for itself and the ratable benefit of the Lenders and the Bank ProductProviders, that the bank has no lien upon, or right to setoff against, the Blocked Accounts, the items received for deposit therein,or the funds from time to time on deposit therein, other than as may be agreed to by Administrative and Collateral Agent forusual and customary charges associated with the maintenance of such deposit account or charges for returned items, and that, atthe direction of Administrative and Collateral Agent, the bank will wire, or otherwise transfer, in immediately available funds,on a daily basis to the Payment Account all funds received or deposited into the Blocked Accounts.

1.35 “Dilution” shall mean, as determined by Administrative and Collateral Agent for any period as of any date, the ratio,expressed as a percentage, of the aggregate amount of non-cash reductions in Borrowers’ Accounts for such period to theaggregate dollar amount of the sales of Borrowers for such period.

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1.36 “EBITDA” shall mean, as of any date of determination, for a specified period ending on such date of determination, anamount equal to: (a) Net Income, plus (b) depreciation, amortization and other non-cash charges (including, but not limited to,imputed interest and deferred compensation) of Borrowers and their respective Subsidiaries for such period (to the extentdeducted in the computation of Net Income), all in accordance with GAAP, plus (c) Interest Expense of Borrowers and theirrespective Subsidiaries for such period (to the extent deducted in the computation of Net Income), plus (d) charges for Federal,State, local and foreign income taxes for such period (to the extent deducted in the computation of Net Income).

1.37 “Eligible Accounts” shall mean Accounts created by a Borrower which are and continue to be acceptable toAdministrative and Collateral Agent, acting in good faith and in its reasonable credit judgment, based on the criteria set forthbelow. In general, Accounts shall be Eligible Accounts if:

(a) such Accounts are invoiced and arise from the actual and bona fide sale and delivery of goods by such Borrower orrendition of services by such Borrower in the ordinary course of its business which transactions are completed in accordancewith the material terms and provisions contained in any documents related thereto;

(b) such Accounts are not unpaid more than ninety (90) days after the date of the original invoice for them or morethan sixty (60) days past the original due date for them;

(c) such Accounts comply with the terms and conditions contained in Section 7.2(b) of this Agreement;

(d) such Accounts do not arise from sales of goods owned by Persons other than such Borrower but held by suchBorrower on consignment, guaranteed sales, sales and returns, sales on approval, or other terms under which payment by theaccount debtor may be conditional or contingent;

(e) the chief executive office of the account debtor owing such Accounts is located in the United States of America orCanada or, at Administrative and Collateral Agent’s option, if the chief executive office and principal place of business of theaccount debtor with respect to such Accounts is located other than in the United States of America or Canada, then if either:(i) the account debtor has delivered to such Borrower an irrevocable letter of credit issued or confirmed by a bank that wouldconstitute an Eligible Transferee or is otherwise satisfactory to Administrative and Collateral Agent and payable only in theUnited States of America and in U.S. Dollars, sufficient to cover the amount of such Account, in form and substance reasonablysatisfactory to Administrative and Collateral Agent and if required by Administrative and Collateral Agent, the original of suchletter of credit has been delivered to Administrative and Collateral Agent or Administrative and Collateral Agent’s agent andsuch Borrower has complied with the terms of Section 5.2(f) hereof with respect to the assignment of the proceeds of such letterof credit to Administrative and Collateral Agent, for itself and the ratable benefit of the Lenders and the Bank Product Providers,or naming Administrative and Collateral Agent, for itself and the ratable benefit of the Lenders and the Bank Product Providers,as transferee beneficiary thereunder, as Administrative and Collateral Agent may specify, or (ii) such Account is subject to creditinsurance payable to Administrative and Collateral Agent, for itself and the ratable benefit of the Lenders and the Bank ProductProviders, issued by an insurer and on terms and in an amount reasonably acceptable to Administrative and Collateral Agent, or(iii) such Account is otherwise acceptable in all respects to Administrative and Collateral Agent (subject to such lendingformula with respect thereto as Administrative and Collateral Agent may determine);

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(f) such Accounts do not consist of progress billings (such that the obligation of the account debtors with respect tosuch Accounts is conditioned upon such Borrower’s satisfactory completion of any further performance under the agreementgiving rise thereto), bill and hold invoices or retainage invoices, except as to bill and hold invoices, if Administrative andCollateral Agent shall have received an agreement in writing from the account debtor, in form and substance reasonablysatisfactory to Administrative and Collateral Agent, confirming the unconditional obligation of the account debtor to take thegoods related thereto and pay such invoice;

(g) the account debtor with respect to such Accounts has not asserted a counterclaim, defense or dispute and does nothave, and neither it nor its Affiliates engage in transactions with such Borrower which may give rise to any legal right of setoffor recoupment against such Accounts (but the portion of the Accounts of such account debtor in excess of the amount at anytime and from time to time owed by such Borrower to such account debtor or claimed owed by such account debtor may bedeemed Eligible Accounts subject to the other criteria set forth herein);

(h) none of the following events has occurred with respect to the account debtor owing such Accounts: (i) the death orjudicial declaration of incompetency of such account debtor if it is an individual; (ii) the filing by or against such accountdebtor of a request or petition for liquidation, reorganization, arrangement, readjustment of debts, dissolution, adjudication as abankrupt, winding-up, moratorium, administration, receivership, arrangement or other relief under the bankruptcy, insolvency,or similar laws of the United States of America, any State or territory thereof, or under the bankruptcy or insolvency laws ofCanada (including the Bankruptcy and Insolvency Act (Canada) and the Companies’ Creditors Arrangement Act (Canada)), orany similar law now or hereafter in effect in any jurisdiction (provided, that, Administrative and Collateral Agent maydetermine, in its reasonable credit judgment, to include Accounts of an account debtor subject to a Chapter 11 case under theU.S. Bankruptcy Code, subject to such terms, conditions and limitations, as Administrative and Collateral Agent may establishwith respect thereto); (iii) the making of any general assignment by such account debtor for the benefit of creditors; (iv) theappointment of a receiver or trustee for such account debtor or for any of the assets of such account debtor, including, withoutlimitation, the appointment of or taking possession by a “custodian,” as defined in the U.S. Bankruptcy Code; (v) thecommencement by or against such account debtor of any other type of insolvency proceeding (under the bankruptcy laws of theUnited States of America or under the bankruptcy or insolvency laws of Canada (including the Bankruptcy and Insolvency Act(Canada) and the Companies’ Creditors Arrangement Act (Canada)), or any similar law now or hereafter in effect in anyjurisdiction) or of any formal or informal proceeding for the dissolution or liquidation of, settlement of claims against, orwinding up of affairs of, such account debtor; (vi) the sale, assignment, or transfer of all or substantially all of the assets of suchaccount debtor; (vii) the nonpayment generally by such account debtor of its debts as they become due; or (viii) the failure,suspension or cessation of the business of such account debtor as a going concern;

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(i) such Accounts are subject to the first priority, valid and perfected security interest of Administrative and CollateralAgent and any goods giving rise thereto are not, and were not at the time of the sale thereof, subject to any liens except thosepermitted in this Agreement;

(j) neither the account debtor nor any officer of the account debtor with respect to such Accounts is an Affiliate (otherthan a Sponsor Portfolio Company) of any Borrower or any Guarantor;

(k) the account debtors with respect to such Accounts are not any foreign government, the United States of America,Canada, any State, political subdivision, department, agency or instrumentality thereof, unless, (i) if the account debtor is theUnited States of America, any State, political subdivision, department, agency or instrumentality thereof, upon Administrativeand Collateral Agent’s request, the Federal Assignment of Claims Act of 1940, as amended or any similar State or local law, ifapplicable, has been complied with in a manner reasonably satisfactory to Administrative and Collateral Agent or (ii) if theaccount debtor is Her Majesty in right of Canada or any Provincial or local Governmental Authority, or any Ministry thereof,such Borrower has assigned its rights to payment of such Account to Administrative and Collateral Agent pursuant to, and inaccordance with, the Financial Administration Act, R.S.C. 185, C.F.-11, as amended, or any similar applicable Provincial orlocal law regulation or requirement has been complied with in a manner reasonably satisfactory to Administrative andCollateral Agent;

(l) such Accounts of a single account debtor and its Affiliates do not constitute more than fifteen percent (15%) of allotherwise Eligible Accounts (but the portion of the Accounts not in excess of such percentage may, subject to the other criteriaset forth herein, be deemed Eligible Accounts);

(m) such Accounts are not owed by an account debtor who has Accounts unpaid more than ninety (90) days after theoriginal invoice date for them or more than sixty (60) days after the original due date for them which constitute more than fiftypercent (50%) of the total Accounts of such account debtor;

(n) the account debtor is not located in a state requiring the filing of a Notice of Business Activities Report or similarreport in order to permit such Borrower to seek judicial enforcement in such State of payment of such Account, unless suchBorrower has qualified to do business in such state or has filed a Notice of Business Activities Report or equivalent report forthe then current year or such failure to file and inability to seek judicial enforcement is capable of being remedied without anymaterial delay or material cost; and

(o) Agent does not believe, in good faith and its reasonable credit judgment, that the prospect of collection of suchAccount is impaired or that the Account may not be paid by reason of the account debtor’s financial inability to pay.

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The criteria for Eligible Accounts set forth above may only be changed and any new criteria for Eligible Accounts may only beestablished by Administrative and Collateral Agent in good faith and its reasonable credit judgment based on either: (x) anevent, condition or other circumstance arising after the date hereof, or (y) an event, condition or other circumstance existing onthe date hereof to the extent Administrative and Collateral Agent has no written notice thereof from a Borrower or other actualknowledge prior to the date hereof, in either case under clause (x) or (y) which adversely affects or could reasonably be expectedto adversely affect the Accounts in the good faith and reasonable credit determination of Administrative and Collateral Agent.Any Accounts which are not Eligible Accounts shall nevertheless be part of the Collateral.

1.38 “Eligible Domestic In-Transit Inventory” shall mean, as to each Borrower, Inventory of such Borrower (other thanEligible International In-Transit Inventory or Eligible Re-Load Inventory) which is not located at premises operated by anyBorrower but which:

(a) otherwise would constitute Eligible Inventory;

(b) is either (i) in-transit between any of Borrowers’ domestic facilities or (ii) in transit to such Borrower from adomestic or Canadian vendor; and

(c) either (i) has been paid for by such Borrower, (ii) has been vouchered for payment on such Borrower’s accountspayable systems and is in fact paid for within 4 days thereafter, or (iii) the vendor thereof has delivered a waiver, in form andsubstance reasonably satisfactory to Administrative and Collateral Agent, of its reclamation and other rights with respect tosuch Inventory.

The criteria for Eligible Domestic In-Transit Inventory set forth above may only be changed and any new criteria for EligibleDomestic In-Transit Inventory may only be established by Administrative and Collateral Agent in good faith based on either:(x) an event, condition or other circumstance arising after the date hereof, or (y) an event, condition or other circumstanceexisting on the date hereof to the extent Administrative and Collateral Agent has no written notice thereof from a Borrower orother actual knowledge prior to the date hereof, in either case under clause (x) or (y) which adversely affects or could reasonablybe expected to adversely affect the Eligible Domestic In-Transit Inventory in the good faith and reasonable credit determinationof Administrative and Collateral Agent. Any Inventory which is not Eligible Domestic In-Transit Inventory shall neverthelessbe part of the Collateral.

1.39 “Eligible International In-Transit Inventory” shall mean, as to each Borrower, Inventory of such Borrower (other thanEligible Domestic In-Transit Inventory or Eligible Re-Load Inventory) which is not located at premises operated by anyBorrower and/or is not located within the United States of America or Canada but which:

(a) otherwise would constitute Eligible Inventory;

(b) either (i) has been paid for by such Borrower or (ii) has been vouchered for payment on such Borrower’s accountspayable systems and is in fact paid for within 4 days thereafter;

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(c) is in transit to such Borrower from an international (other than Canadian) vendor; and

(d) is in the possession or under the control of a Qualified Bailee.

The criteria for Eligible International In-Transit Inventory set forth above may only be changed and any new criteria for EligibleInternational In-Transit Inventory may only be established by Administrative and Collateral Agent in good faith based oneither: (x) an event, condition or other circumstance arising after the date hereof, or (y) an event, condition or othercircumstance existing on the date hereof to the extent Administrative and Collateral Agent has no written notice thereof from aBorrower or other actual knowledge prior to the date hereof, in either case under clause (x) or (y) which adversely affects orcould reasonably be expected to adversely affect the Eligible International In-Transit Inventory in the good faith andreasonable credit determination of Administrative and Collateral Agent. Any Inventory which is not Eligible International In-Transit Inventory shall nevertheless be part of the Collateral.

1.40 “Eligible Inventory” shall mean, as to each Borrower, Inventory of such Borrower consisting of finished goods heldfor resale in the ordinary course of the business of such Borrower, in each case which are acceptable to Administrative andCollateral Agent, in good faith and its reasonable credit judgment, based on the criteria set forth below. In general, EligibleInventory shall not include:

(a) raw materials unless held for sale as finished goods in the ordinary course of such Borrower’s business;

(b) work-in process unless held for sale as finished goods in the ordinary course of such Borrower’s business;

(c) components which are not part of finished goods (unless sold as such by such Borrower in the ordinary course ofits business);

(d) spare parts for equipment (unless sold as such by such Borrower in the ordinary course of its business);

(e) packaging and shipping materials;

(f) supplies used or consumed in such Borrower’s business (unless also sold as such by such Borrower in the ordinarycourse of its business);

(g) Inventory at premises other than those controlled by any Borrower and with respect to which a Collateral AccessAgreement has been delivered to Administrative and Collateral Agent (or Administrative and Collateral Agent has establishedany applicable Reserves for rent payable with respect to such location);

(h) Inventory subject to a security interest or lien in favor of any person other than Administrative and CollateralAgent except those security interests or liens permitted in this Agreement;

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(i) bill and hold goods;

(j) Inventory which is not fit for sale in the ordinary course of such Borrower’s business or which is obsolete or slowmoving;

(k) Inventory which is not subject to the first priority, valid and perfected security interest of Administrative andCollateral Agent, for itself and the ratable benefit of the Lenders and the Bank Product Providers;

(l) returned, damaged and/or defective Inventory;

(m) Inventory purchased or sold on consignment; provided, however, Inventory owned by such Borrower and held byLowe’s or Home Depot on consignment may, subject to the other criteria set forth in this Agreement, be deemed EligibleInventory so long as (i) such Person continues to be deemed creditworthy by Administrative and Collateral Agent in good faith,(ii) such consigned Inventory is subject to an effective consignment agreement, pursuant to which, among other things, suchPerson acknowledges such Borrower’s ownership of such Inventory, acknowledges Administrative and Collateral Agent’s lienson such Inventory, authorizes the filing of UCC financing statements naming such Person as consignee, such Borrower asconsignor, and Administrative and Collateral Agent as such Borrower’s assignee, Administrative and Collateral Agent ispermitted to access such Person’s premises for the purpose of removing, auditing or otherwise accessing such consignedInventory, and which is otherwise in form and substance satisfactory to Administrative and Collateral Agent,(iii) Administrative and Collateral Agent has received evidence, in form and substance satisfactory to it, that a UCC financingstatement regarding the consignment arrangement between such Person and such Borrower has been filed in the appropriatejurisdiction, and (iv) Administrative and Collateral Agent has received UCC searches with respect to such Person from eachjurisdiction in which such consigned Inventory is located and from the jurisdiction under whose laws such Person is organized;and

(n) Inventory located outside the United States of America or Canada.

The criteria for Eligible Inventory set forth above may only be changed and any new criteria for Eligible Inventory may only beestablished by Administrative and Collateral Agent in good faith based on either: (x) an event, condition or other circumstancearising after the date hereof, or (y) an event, condition or other circumstance existing on the date hereof to the extentAdministrative and Collateral Agent has no written notice thereof from a Borrower or other actual knowledge prior to the datehereof, in either case under clause (x) or (y) which adversely affects or could reasonably be expected to adversely affect theInventory in the good faith and reasonable credit determination of Administrative and Collateral Agent. Any Inventory which isnot Eligible Inventory shall nevertheless be part of the Collateral.

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1.41 “Eligible Re-Load Inventory” shall mean, as to each Borrower, Inventory of such Borrower (other than EligibleDomestic In-Transit Inventory or Eligible International In-Transit Inventory) which is located at a domestic warehouse ownedand operated by a Person who is not an Affiliate of such Borrower pursuant to a contract for storage and/or handling betweensuch Borrower and such Person and with respect to which:

(a) such Inventory would constitute Eligible Inventory but for the fact that such Inventory is not located at a domesticfacility operated by a Borrower; and

(b) the Person owning and operating the facility at which such Inventory is located is a Qualified Bailee; provided,however, Inventory which would otherwise constitute Eligible Re-Load Inventory but for the fact that it is not located at afacility owned and operated by a Qualified Bailee may, subject to all other applicable eligibility criteria contained in thisAgreement, constitute Eligible Re-Load Inventory if at least 2/3 of the total value of Eligible Re-Load Inventory is located at afacility owned and operated by a Qualified Bailee.

The criteria for Eligible Re-Load Inventory set forth above may only be changed and any new criteria for Eligible Re-LoadInventory may only be established by Administrative and Collateral Agent in good faith based on either: (x) an event,condition or other circumstance arising after the date hereof, or (y) an event, condition or other circumstance existing on thedate hereof to the extent Administrative and Collateral Agent has no written notice thereof from a Borrower or other actualknowledge prior to the date hereof, in either case under clause (x) or (y) which adversely affects or could reasonably be expectedto adversely affect the Eligible Re-Load Inventory in the good faith and reasonable credit determination of Administrative andCollateral Agent. Any Inventory which is not Eligible Re-Load Inventory shall nevertheless be part of the Collateral.

1.42 “Eligible Transferee” shall mean (a) any Lender; (b) any Affiliate of a Lender; and (c) any other commercial bank,financial institution or “accredited investor” (as defined in Regulation D under the Securities Exchange Act) approved byAdministrative and Collateral Agent and, unless an Event of Default has occurred and is continuing at the time any assignmentis effected hereunder, Administrative Borrower, such approval not to be unreasonably withheld, conditioned or delayed byAdministrative Borrower, and such approval to be deemed given by Administrative Borrower if no objection fromAdministrative Borrower is received by the assigning Lender and Administrative and Collateral Agent within five (5) BusinessDays after notice of such proposed assignment has been provided by the assigning Lender or Administrative and CollateralAgent to Administrative Borrower; provided, that, none of Administrative Borrower, any other Borrower, any Guarantor, or anyof their respective Affiliates (other than Sponsor Affiliated Lenders) shall qualify as an Eligible Transferee.

1.43 “Environmental Laws” shall mean all foreign (including, without limitation, Canadian), Federal, State and local laws(including common law), legislation, rules, codes, licenses, permits (including any conditions imposed therein), authorizations,judicial or administrative decisions, injunctions or agreements between any Borrower or any Guarantor and any GovernmentalAuthority, (a) relating to the environment (including air, water vapor, surface water, ground water, drinking water, drinkingwater supply, surface land, subsurface land, plant and animal life or any other natural resource), (b) relating to the exposure to,or the use, storage, recycling, treatment, generation, transportation, handling, labeling, release or disposal, or threatened release,of Hazardous Materials, or (c) relating to all laws with regard to recordkeeping, notification, disclosure and reportingrequirements respecting Hazardous Materials. The term “Environmental Laws” includes (i) the Federal ComprehensiveEnvironmental Response, Compensation and Liability Act of 1980, the Federal Superfund Amendments and ReauthorizationAct, the Federal Water Pollution Control Act of 1972, the Federal Clean Water Act, the Federal Clean Air Act, the FederalResource Conservation and Recovery Act of 1976 (including the Hazardous and Solid Waste Amendments thereto), the FederalSolid Waste Disposal and the Federal Toxic Substances Control Act, the Federal Insecticide, Fungicide and Rodenticide Act,and the Federal Safe Drinking Water Act of 1974, (ii) applicable state or Provincial counterparts to such laws, and (iii) anycommon law or equitable doctrine that may impose liability or obligations for injuries or damages due to, or threatened as aresult of, the presence of or exposure to any Hazardous Materials.

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1.44 “Equipment” shall mean, as to each Borrower and each Guarantor, all of such Borrower’s and such Guarantor’s nowowned and hereafter acquired equipment, wherever located, including machinery, data processing and computer equipment andhardware, software embedded in any equipment (whether owned or licensed), vehicles, tools, furniture, fixtures, all attachments,accessions and property now or hereafter affixed thereto or used in connection therewith, and substitutions and replacementsthereof, wherever located.

1.45 “ERISA” shall mean the United States Employee Retirement Income Security Act of 1974, together with all rules,regulations and interpretations thereunder or related thereto.

1.46 “ERISA Affiliate” shall mean any person required to be aggregated with any Borrower, any Guarantor or any of its ortheir respective Subsidiaries under Sections 414(b), 414(c), 414(m) or 414(o) of the Code.

1.47 “ERISA Event” shall mean (a) any “reportable event”, as defined in Section 4043(c) of ERISA or the regulationsissued thereunder (other than an event not subject to the provision for 30 days notice to the Pension Benefit GuarantyCorporation under such regulations, with respect to a Plan; (b) the adoption of any amendment to a Plan that would require theprovision of security pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA; (c) the existence with respect to anyPlan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or notwaived; (d) the filing pursuant to Section 412 of the Code or Section 303(d) of ERISA of an application for a waiver of theminimum funding standard with respect to any Plan; (e) the occurrence of a “prohibited transaction” (not subject to a statutory,class or individual exemption) with respect to which Borrower or any of its Subsidiaries is a “disqualified person” (within themeaning of Section 4975 of the Code) or with respect to which any Borrower, any Guarantor or any of their respectiveSubsidiaries could otherwise be liable; (f) a complete or partial withdrawal by any Borrower, any Guarantor or any ERISAAffiliate from a Multiemployer Plan or a cessation of operations which is treated as such a withdrawal or notification that aMultiemployer Plan is in reorganization; (g) the filing of a notice of intent to terminate, the treatment of a Plan amendment as atermination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the Pension Benefit GuarantyCorporation to terminate a Plan; (h) an event or condition which might reasonably be expected to constitute grounds underSection 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan; (i) the imposition of anyliability under Title IV of ERISA, other than the Pension Benefit Guaranty Corporation premiums due but not delinquent underSection 4007 of ERISA, upon any Borrower, any Guarantor or any ERISA Affiliate, and other than contributions to a Plan to bemade timely under the Code and ERISA, in excess of Five Million Dollars ($5,000,000); and (j) any other event or conditionwith respect to a Plan subject to Title IV of ERISA maintained, or contributed to, by any ERISA Affiliate that could reasonablybe expected to result in material liability of any Borrower or any Guarantor.

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1.48 “Eurodollar Rate” shall mean with respect to the Interest Period for a Eurodollar Rate Loan, the interest rate perannum equal to the arithmetic average of the rates of interest per annum (rounded upwards, if necessary, to the next one-sixteenth (1/16) of one percent (1%)) at which Reference Bank is offered deposits of United States dollars in the Londoninterbank market (or other Eurodollar Rate market selected by Borrower and approved by Lender) on or about 11:00 a.m. (NewYork time) two (2) Business Days prior to the commencement of such Interest Period in amounts substantially equal to theprincipal amount of the Eurodollar Rate Loans requested by and available to Borrowers in accordance with this Agreement,with a maturity of comparable duration to the Interest Period selected by Administrative Borrower.

1.49 “Eurodollar Rate Loans” shall mean any Loans or portion thereof on which interest is payable based on the AdjustedEurodollar Rate in accordance with the terms hereof.

1.50 “Event of Default” shall have the meaning set forth in Section 10.1 hereof.

1.51 “Excess” shall have the meaning set forth in Section 3.1(e) hereof.

1.52 “Excess Availability” shall mean the amount, as determined by Administrative and Collateral Agent, calculated atany time, equal to: (a) the lesser of: (i) the Borrowing Base (when calculated after giving effect to any Reserves other thanReserves in respect of Letter of Credit Accommodations) and (ii) the Revolving Loan Limit, plus (b) the then available amountof all Qualified Cash minus (c) the sum of: (i) the amount of all then outstanding and unpaid Obligations (but not including forthis purpose the then outstanding aggregate principal amount of the Term Loan), plus (ii) the amount of all Reserves thenestablished in respect of Letter of Credit Accommodations.

1.53 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, together with all rules, regulations andinterpretations thereunder or related thereto.

1.54 “Excluded Taxes” shall have the meaning set forth in Section 6.5(a) hereof.

1.55 “Fee Letter” shall mean the letter agreement, dated May 7, 2004, by and between BlueLinx and Administrative andCollateral Agent, setting forth certain fees payable by BlueLinx to Administrative and Collateral Agent for the benefit of itselfand the Lenders, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated orreplaced.

1.56 “Final Maturity Date” shall mean May 7, 2011.

1.57 “Financing Agreements” shall mean, collectively, this Agreement, the Fee Letter and all notes, guaranties, securityagreements, stock pledge agreements, Deposit Account Control Agreements, Investment Property Control Agreements,Collateral Access Agreements, intercreditor agreements, and all other agreements, documents and instruments now or at anytime hereafter executed and/or delivered by any Borrower or any Guarantor in connection with this Agreement.

17

1.58 “Fixed Charge Coverage Ratio” shall mean the ratio, as of any date of determination, calculated either for the trailingtwelve-month period ending on such date of determination, of (a) EBITDA to (b) the sum of cash payments for income taxes,Interest Expense, cash dividends (other than with respect to the repayment of any Mortgage Proceeds Investment in accordancewith Section 9.11(f) hereof) or stock redemptions, principal payments on Debt (other than with respect to principal paymentsmade on account of a revolving line of credit, and other than with respect to the repayment of any Mortgage ProceedsInvestment in accordance with Section 9.9(q) hereof) and Capital Expenditures.

1.59 “Funding Bank” shall have the meaning set forth in Section 3.2(a) hereof.

1.60 “GAAP” shall mean generally accepted accounting principles in the United States of America as in effect from time totime as set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of CertifiedPublic Accountants and the statements and pronouncements of the Financial Accounting Standards Board which are applicableto the circumstances as of the date of determination consistently applied, except that, for purposes of Section 9.17 hereof, GAAPshall be determined on the basis of such principles in effect on the date hereof and consistent with those used in the preparationof the most recent audited financial statements delivered to Administrative and Collateral Agent prior to the date hereof.

1.61 “Governmental Authority” shall mean any nation or government, any state, province, or other political subdivisionthereof, any central bank (or similar monetary or regulatory authority) thereof, any entity exercising executive, legislative,judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned orcontrolled, through stock or capital ownership or otherwise, by any of the foregoing.

1.62 “Guarantors” shall mean, collectively, the following (together with their respective successors and assigns):(a) BlueLinx Florida Holding No. 1 Inc., a Georgia corporation; (b) BlueLinx Florida Holding No. 2 Inc., a Georgia corporation;(c) BLX Texas Acquisition I LLC, a Georgia limited liability company; (d) BLX Texas Acquisition II LLC, a Georgia limitedliability company; and (e) any other Person that at any time after the date hereof becomes party to a guarantee in favor ofAdministrative and Collateral Agent or any Lender or otherwise liable on or with respect to the Obligations or who is the ownerof any property which is security for the Obligations (other than Borrowers); each sometimes being referred to hereinindividually as a “Guarantor”.

1.63 “Hazardous Materials” shall mean any hazardous, toxic or dangerous substances, materials and wastes regulated underEnvironmental Laws, including hydrocarbons (including naturally occurring or man-made petroleum and hydrocarbons),flammable explosives, asbestos, urea formaldehyde insulation, radioactive materials, biological substances, polychlorinatedbiphenyls, pesticides, herbicides and any other kind and/or type of pollutants or contaminants (including materials whichinclude hazardous constituents), sewage, sludge, industrial slag, solvents and/or any other similar substances, materials, orwastes and including any other substances, materials or wastes that are or become regulated under any Environmental Law.

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1.64 “Hedging Transactions” shall mean (a) any and all rate swap transactions, basis swaps, forward rate transactions,commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bondprice or bond index swaps or options, forward bond or forward bond price or forward bond index transactions, interest rateoptions, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swaptransactions, cross-currency rate swap transaction, currency options or any other similar transactions or any combination of anyof the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed byor subject to any master agreement, or (b) any and all transactions of any kind, and the related confirmations, that are subject tothe terms or conditions of, or governed by, any form of master agreement published by the International Swaps and DerivativesAssociation, Inc., or any other master agreement, as amended, restated, extended, supplemented or otherwise modified in writingfrom time to time, including but not limited to, any such obligations or liabilities under any such agreement.

1.65 “Home Depot” shall mean Home Depot U.S.A., Inc., a Delaware corporation and its Affiliates.

1.66 “Indebtedness” shall mean, with respect to any Person, any liability, whether or not contingent, (a) in respect ofborrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portionthereof) or evidenced by bonds, notes, debentures or similar instruments; (b) representing the balance deferred and unpaid of thepurchase price of any property or services (except any such balance that constitutes an account payable to a trade creditor(whether or not an Affiliate) created, incurred, assumed or guaranteed by such Person in the ordinary course of business of suchPerson in connection with obtaining goods, materials or services that is not overdue by more than ninety (90) days, unless thetrade payable is being contested in good faith); (c) all obligations as lessee under leases which have been, or should be, inaccordance with GAAP recorded as Capital Leases; (d) any contractual obligation, contingent or otherwise, of such Person topay or be liable for the payment of any indebtedness described in this definition of another Person, including, withoutlimitation, any such indebtedness, directly or indirectly guaranteed (other than guaranties of a such Person’s Subsidiary’soperating leases made in the ordinary course of such Person’s business), or any agreement to purchase, repurchase, or otherwiseacquire such indebtedness, obligation or liability or any security therefor, or to provide funds for the payment or dischargethereof, or to maintain solvency, assets, level of income, or other financial condition; (e) all obligations with respect toredeemable stock and redemption or repurchase obligations under any Capital Stock or other equity securities issued by suchPerson; (f) all reimbursement obligations and other liabilities of such Person with respect to surety bonds (whether bid,performance or otherwise), letters of credit, banker’s acceptances, drafts or similar documents or instruments issued for suchPerson’s account; (g) all indebtedness of such Person in respect of indebtedness of another Person for borrowed money orindebtedness of another Person otherwise described in this definition which is secured by any consensual lien, security interest,collateral assignment, conditional sale, mortgage, deed of trust, or other encumbrance on any asset of such Person, whether ornot such obligations, liabilities or indebtedness are assumed by or are a personal liability of such Person, all as of such time;(h) all obligations, liabilities and indebtedness of such Person (marked to market) arising under swap agreements, capagreements and collar agreements and other agreements or arrangements designed to protect such Person against fluctuations ininterest rates or currency or commodity values; and (i) all obligations owed by such Person under License Agreements withrespect to non-refundable, advance or minimum guaranty royalty payments.

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1.67 “Information Certificate” shall mean, collectively, the Information Certificates of Borrowers and Guarantorsconstituting Exhibit B hereto containing material information with respect to Borrowers and Guarantors, their respectivebusinesses and assets provided by or on behalf of Borrowers and Guarantors to Administrative and Collateral Agent inconnection with the preparation of this Agreement and the other Financing Agreements and the financing arrangementsprovided for herein.

1.68 “Intellectual Property” shall mean, as to each Borrower and each Guarantor, all of such Borrower’s and suchGuarantor’s now owned and hereafter arising or acquired: patents, patent rights, patent applications, copyrights, works whichare the subject matter of copyrights, copyright registrations, trademarks, service marks, trade names, trade styles, trademark andservice mark applications, and licenses and rights to use any of the foregoing; all extensions, renewals, reissues, divisions,continuations, and continuations-in-part of any of the foregoing; all rights to sue for past, present and future infringement ofany of the foregoing; inventions, trade secrets, formulae, processes, compounds, drawings, designs, blueprints, surveys, reports,manuals, and operating standards; goodwill (including any goodwill associated with any trademark or the license of anytrademark); customer and other lists in whatever form maintained; and trade secret rights, copyright rights, rights in works ofauthorship, domain names and domain name registrations; software and contract rights relating to software, in whatever formcreated or maintained.

1.69 “Interest Expense” shall mean, for any period, as to any Person and its Subsidiaries, all of the following as determinedin accordance with GAAP, total interest expense, whether paid or accrued (including the interest component of Capital Leasesfor such period), including, without limitation, all bank fees, commissions, discounts and other fees and charges owed withrespect to letters of credit, banker’s acceptances or similar instruments and all amounts paid or accrued in connection withHedging Transactions, but excluding (a) amortization of discount and amortization of deferred financing fees and closing costspaid in cash in connection with the transactions contemplated hereby, (b) interest paid in property other than cash, (c) any otherinterest expense not payable in cash and (d) any amounts received in connection with Hedging Transactions.

1.70 “Interest Period” shall mean for any Eurodollar Rate Loan, a period of approximately fourteen (14) days or one (1),two (2), three (3) or six (6) months duration, as Administrative Borrower may elect, the exact duration to be determined inaccordance with the customary practice in the applicable Eurodollar Rate market; provided, that, Administrative Borrower maynot elect an Interest Period which will end after the last day of the then-current term of this Agreement.

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1.71 “Interest Rate” shall mean,

(a) Subject to subsections (b) and (c) of this Section 1.71:

(i) as to Prime Rate Loans, a per annum rate equal to the Prime Rate; and

(ii) as to Eurodollar Rate Loans, a per annum rate equal to the Adjusted Eurodollar Rate (based on the EurodollarRate applicable for the Interest Period selected by Administrative Borrower as in effect three (3) Business Days after the date ofreceipt by Administrative and Collateral Agent of the request of Administrative Borrower for such Eurodollar Rate Loans inaccordance with the terms hereof, whether such rate is higher or lower than any rate previously quoted to any Borrower) plusone and one-half of one (1.50) percentage points.

(b) So long as no Event of Default has occurred and is continuing, for each Interest Period commencing after deliveryof Borrowers’ financial statements required to be delivered pursuant to this Agreement for each fiscal quarter ending afterJune 1, 2006, effective on the first day of such Interest Period, the Interest Rate will be adjusted to be: (i) as to Prime Rate Loans,a per annum rate equal to the Prime Rate plus the “Applicable Prime Rate Margin” set forth below based on (A) Borrowers’EBITDA as of the end of such fiscal quarter for the prior 12 month period then ended and (B) the average month end amount ofModified Adjusted Excess Availability, as determined by Administrative and Collateral Agent, for such fiscal quarter thenended; and (ii) as to Eurodollar Rate Loans, a per annum rate equal to the Adjusted Eurodollar Rate (based on the EurodollarRate applicable for the Interest Period selected by Administrative Borrower as in effect three (3) Business Days after the date ofreceipt by Administrative and Collateral Agent of the request of Administrative Borrower for such Eurodollar Rate Loans inaccordance with the terms hereof, whether such rate is higher or lower than any rate previously quoted to any Borrower) plus the“Applicable Eurodollar Rate Margin” set forth below based on (A) Borrowers’ EBITDA as of the end of such fiscal quarter forthe prior 12 month period then ended and (B) the average month end amount of Modified Adjusted Excess Availability, asdetermined by Administrative and Collateral Agent, for such fiscal quarter then ended; provided, however, in each case, if theBorrowers have not delivered the financial statements required to be delivered to Administrative and Collateral Agenthereunder within the time frames specified herein, without limiting any other provision of this Agreement, until such financialstatements are delivered to Administrative and Collateral Agent in accordance with this Agreement, the Interest Rate shall becalculated using the highest Applicable Prime Rate Margin or the highest Applicable Eurodollar Rate Margin, as applicable, setforth below: Average Modified Applicable Applicable Adjusted Excess Prime Rate Eurodollar RateEBITDA Availability Margin Margin Greater than $160,000,000 Greater than $250,000,000 0.00 1.00 Greater than $160,000,000

Greater than $200,000,000 but equal

to or less than $250,000,000 0.00

1.25

Greater than $160,000,000 Equal to or less than $200,000,000 0.00 1.50

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Average Modified Applicable Applicable Adjusted Excess Prime Rate Eurodollar RateEBITDA Availability Margin Margin Greater than $130,000,000 but equalto or less than $160,000,000

Greater than $250,000,000

0.00

1.25

Greater than $130,000,000 but equalto or less than $160,000,000


0.00

1.50


Equal to or less than $200,000,000

.25

1.75



0.00

1.50



.25

1.75



.50

2.00

Greater than $70,000,000 but equal toor less than $100,000,000


.25

1.75

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Average Modified Applicable Applicable Adjusted Excess Prime Rate Eurodollar RateEBITDA Availability Margin Margin Greater than $70,000,000 but equal toor less than $100,000,000

Greater than $200,000,000 butequal to or less than $250,000,000

.50

2.00

Greater than $70,000,000 but equal toor less than $100,000,000


.75

2.25

Equal to or less than $70,000,000 Greater than $250,000,000 .50 2.00 Equal to or less than $70,000,000

Greater than $200,000,000 but

equal to or less than $250,000,000 .75

2.25

Equal to or less than $70,000,000 Equal to or less than $200,000,000 1.00 2.50

(c) Notwithstanding anything to the contrary contained herein, at Administrative and Collateral Agent’s option,without notice, (i) for the period on and after the date of termination or non-renewal hereof until such time as all Obligations arepaid and satisfied in full in immediately available funds, and (ii) for the period from and after the date of the occurrence of anyEvent of Default, and for so long as such Event of Default is continuing as determined by Administrative and Collateral Agent,a per annum rate equal to the Interest Rate which would otherwise be in effect plus two (2) percentage points.

1.72 “Inventory” shall mean, as to each Borrower and each Guarantor, all of such Borrower’s and such Guarantor’s nowowned and hereafter existing or acquired goods, wherever located, which (a) are held for lease by such Borrower or suchGuarantor as lessor; (b) are held by such Borrower or such Guarantor for sale or lease or to be furnished under a contract ofservice; (c) are furnished by such Borrower or such Guarantor under a contract of service; or (d) consist of raw materials, work inprocess, finished goods or materials used or consumed in its business.

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1.73 “Investment Property Control Agreement” shall mean an agreement in writing, in form and substance reasonablysatisfactory to Administrative and Collateral Agent, by and among Administrative and Collateral Agent, any Borrower or anyGuarantor (as the case may be), and any securities intermediary, commodity intermediary or other Person who has custody,control or possession of any investment property of such Borrower or such Guarantor, agreeing and acknowledging that, interalia, such Person has custody, control or possession of such investment property on behalf of Administrative and CollateralAgent, that such Person comply with entitlement orders originated by Administrative and Collateral Agent with respect to suchinvestment property, or other instructions of Administrative and Collateral Agent, and such Person will apply any valuedistributed on account of any commodity contract as directed by Administrative and Collateral Agent, in each case, without thefurther consent of such Borrower or such Guarantor, and including such other terms and conditions as Administrative andCollateral Agent may reasonably require.

1.74 “Letter of Credit Accommodations” shall mean, collectively, the letters of credit, merchandise purchase or otherguaranties which are from time to time either (a) issued or opened by Administrative and Collateral Agent or any RevolvingLoan Lender for the account of any Borrower or any Guarantor or (b) with respect to which Administrative and Collateral Agenton behalf of the Revolving Loan Lenders has agreed to indemnify the issuer or guaranteed to the issuer the performance by anyBorrower of its obligations to such issuer; sometimes being referred to herein individually as a “Letter of CreditAccommodation.”

1.75 “License Agreements” shall have the meaning set forth in Section 8.11 hereof.

1.76 “Licensor Agreement” shall mean an agreement, in form and substance reasonably satisfactory to Administrative andCollateral Agent, pursuant to which a licensor of Intellectual Property that is affixed to any Inventory agrees to allowAdministrative and Collateral Agent to sell or otherwise dispose of such Inventory in connection with the exercise of its rightsand remedies under this Agreement.

1.77 “Loans” shall mean the Revolving Loans, the Term Loan, Special Agent Advances and Letter of CreditAccommodations.

1.78 “Lowe’s” shall mean Lowe’s Companies, Inc., a North Carolina corporation, and its Affiliates.

1.79 “Material Adverse Change” shall mean a material adverse change in (a) the financial condition, business, performanceor operations of Borrower or the legality, validity or enforceability of this Agreement or any of the other Financing Agreements;(b) the legality, validity, enforceability, perfection or priority of the security interests and liens of Administrative and CollateralAgent on the Collateral; (c) the value of the Collateral taken as a whole; (d) the ability of Borrower to repay the Obligations orof Borrower to perform its obligations under this Agreement or any of the other Financing Agreements as and when to beperformed; or (e) the ability of Administrative and Collateral Agent or any Lender to enforce the Obligations or realize upon theCollateral or otherwise with respect to the rights and remedies of Administrative and Collateral Agent and Lenders under thisAgreement or any of the other Financing Agreements.

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1.80 “Material Adverse Effect” shall mean a material and adverse effect on the business, assets, properties, operations,financial condition or results of operations of the Borrowers or the Purchased Business taken as a whole; provided, however,that the following shall not be taken into account in determining whether there has been or would be a “Material AdverseEffect”: (i) any adverse changes or developments resulting from conditions affecting the United States of America or any foreigneconomy generally; (ii) any adverse changes or developments that are primarily caused by conditions affecting the buildingproducts and the building products distribution industries generally unless such changes or developments disproportionatelyaffect the Borrowers or the Purchased Business; (iii) any adverse changes or developments in the laws, regulations, rules ororders of any governmental authority; (iv) any adverse changes or developments that are attributable to seasonal fluctuations inthe building products and the building products distribution industries; (v) any acts of war, insurrection, sabotage or terrorismunless such changes or developments disproportionately affect the Borrowers or the Purchased Business; and (vi) any adversechanges or developments arising primarily out of, or resulting primarily from, actions taken by any party to the PurchaseAgreements in connection with (but not in breach of) the Purchase Agreements and the transactions contemplated thereunder, orwhich are primarily attributable to the announcement of the entering into of the Purchase Agreements and the transactionscontemplated thereby or the identity of BlueLinx (including, to the extent so attributable, any litigation, employee attrition,any loss or postponement of business resulting from the termination or modification of any vendor, customer or other businessrelationships, any delay of customer orders or otherwise, as well as any corresponding change in the margins, profitability orfinancial condition of such person); provided, further, that the failure by either Seller or its Affiliates to meet their respectiveinternal revenue or earnings predictions or expectations with respect to the Purchased Business for any period ending or forwhich earnings are released on or after the date of the Purchase Agreements shall not in and of itself be deemed to constitute aMaterial Adverse Effect.

1.81 “Material Contract” shall mean (a) any written contract or other executed agreement of any Borrower or any Guarantorinvolving monetary liability of or to any Person in an amount in excess of Twenty-Five Million Dollars ($25,000,000) in anyfiscal year other than (i) the Financing Agreements, (ii) purchase orders issued in the ordinary course of such Borrower’s or suchGuarantor’s business, (iii) contracts which by their terms may be terminated by either party thereto, without penalty, obligationor other such adverse consequences, on less than 60 days’ prior notice (or 90 days’ prior notice in the case of exclusive supplycontracts) or (iv) supply contracts (by such Borrower or such Guarantor as supplier) which do not provide for committedpurchases in excess of Fifty Million Dollars ($50,000,000) in any fiscal year, and (b) any other written contract or otherexecuted agreement (other than the Financing Agreements) to which any Borrower or any Guarantor is a party as to which thebreach, nonperformance, cancellation or failure to renew by any party thereto would constitute a Material Adverse Change.

1.82 “Maximum Interest Rate” shall mean the maximum non-usurious rate of interest under applicable Federal or State lawas in effect from time to time that may be contracted for, taken, reserved, charged or received in respect of the Obligations.

1.83 “Modified Adjusted Excess Availability” shall mean the amount, as determined by Administrative and CollateralAgent, calculated at any time, equal to: (a) Excess Availability minus (b) the sum of: (i) the aggregate amount of outstandingand unpaid trade payables and other obligations of each Borrower which are more than thirty (30) days past due as of the end ofthe month most recently ended, plus (ii) the amount of checks issued by each Borrower to pay trade payables and otherobligations which are more than thirty (30) days past due as of the end of the month most recently ended.

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1.84 “Mortgage Loan Agreement” shall mean that certain Loan and Security Agreement dated as of June 9, 2006, by andamong German American Capital Corporation and certain Subsidiaries of Parent (other than the Borrowers and the Guarantors).

1.85 “Mortgage Proceeds Investment” shall mean any capital contribution or subordinated loan made by Parent toBlueLinx using the excess proceeds under the Mortgage Loan Agreement.

1.86 “Multiemployer Plan” shall mean a “multi-employer plan” as defined in Section 4001(a)(3) of ERISA which is or wasat any time during the current year or the immediately preceding six (6) years contributed to by any Borrower, any Guarantor orany ERISA Affiliate.

1.87 “Net Amount of Eligible Accounts” shall mean, the gross amount of Eligible Accounts less (to the extent Reservestherefor have not been established or a reduction in the advance rate for Eligible Accounts due to an increase in Dilution as aresult thereof has not been made), returns, discounts, claims, credits and allowances of any nature at any time issued, owing,granted, outstanding, available or claimed with respect thereto.

1.88 “Net Income” shall mean, as of any date of determination, as determined in accordance with GAAP, when calculatedfor a specified period ending on such date of determination, the aggregate of the net income (loss) of Borrowers and theirrespective Subsidiaries, on a consolidated basis, for such period (but excluding to the extent included therein any extraordinaryor one-time gains or losses or non-recurring events, including, but not limited to, restructuring charges, unusual severancecharges, casualty losses and acquisitions or divestiture related charges), provided, that, (a) the net income of any Person that isnot a wholly-owned Subsidiary or that is accounted for by the equity method of accounting shall be included only to the extentof the amount of dividends or distributions paid or payable to any Borrower or a wholly-owned Subsidiary of any Borrower;(b) the effect of any change in accounting principles adopted by any Borrower or their respective Subsidiaries after the datehereof shall be excluded; and (c) the net income (if positive) of any wholly-owned Subsidiary to the extent that the declarationor payment of dividends or similar distributions by such wholly-owned Subsidiary to any Borrower or to any other wholly-owned Subsidiary of any Borrower is not at the time permitted by operation of the terms of its charter or any agreement,instrument, judgment, decree, order, statute, rule of government regulation applicable to such wholly-owned Subsidiary shall beexcluded. For the purpose of this definition, net income excludes any gain or loss, together with any related Provision for Taxesfor such gain or loss realized upon the sale or other disposition of any assets that are not sold in the ordinary course of business(including, without limitation, dispositions pursuant to sale and leaseback transactions), or of any Capital Stock of anyBorrower or any Subsidiary of any Borrower and any net income realized as a result of changes in accounting principles or theapplication thereof to any Borrower.

1.89 “Net Orderly Liquidation Value” shall mean, as of any date of determination, the net orderly liquidation percentageset forth in the most recent appraisal of each Borrower’s Inventory provided to Administrative and Collateral Agent pursuant tothe terms hereof times the Value of such Borrower’s Inventory.

1.90 “New Lending Office” shall have the meaning set forth in Section 6.5(e) hereof.

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1.91 “Non-Consenting Lenders” shall have the meaning set forth in Section 11.3(d) hereof.

1.92 “Non-U.S. Lender” shall have the meaning set forth in Section 6.5(e) hereof.

1.93 “Obligations” shall mean any and all Loans and all other obligations, liabilities and indebtedness of every kind,nature and description owing by any or all of Borrowers to any Agent or any Lender and/or any of their respective Affiliates,including all obligations arising under or in connection with Bank Products to the extent the same have been reserved for aspart of the Bank Product Reserve or would not cause the total amount of the Obligations to exceed the value of the Collateral;in each case, whether consisting of principal, interest, charges, fees, costs and expenses, however evidenced, whether asprincipal, surety, endorser, guarantor or otherwise, whether arising under this Agreement or otherwise, whether now existing orhereafter arising, whether arising before, during or after the initial or any renewal term of this Agreement or after thecommencement of any case with respect to any Borrower under the United States Bankruptcy Code or any similar statute(including the payment of interest and other amounts which would accrue and become due but for the commencement of suchcase, whether or not such amounts are allowed or allowable in whole or in part in such case), whether direct or indirect, absoluteor contingent, joint or several, due or not due, primary or secondary, liquidated or unliquidated, secured or unsecured, andhowever acquired by any such Agent, Lender or Affiliate.

1.94 “Original Closing Date” shall mean May 7, 2004.

1.95 “Other Taxes” shall mean any present or future stamp or documentary taxes or any other excise or property taxes,charges or similar levies which arise from any payment made hereunder or from the execution, delivery or registration of, orotherwise with respect to, this Agreement or any of the other Financing Agreements.

1.96 “Parent” shall mean BlueLinx Holding Inc., a Delaware corporation, as successor in interest by merger to ADPDistribution Holdings Inc., a Georgia corporation.

1.97 “Participant” shall mean any financial institution that acquires and holds a participation in the interest of any Lenderin any of the Loans in conformity with the provisions of Section 13.6 of this Agreement governing participations.

1.98 “Payment Account” shall mean account no. 5000000030321 of Administrative and Collateral Agent at Wachovia, orsuch other account of Administrative and Collateral Agent as Administrative and Collateral Agent may from time to timedesignate to Administrative Borrower as the Payment Account for purposes of this Agreement.

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1.99 “Permitted Acquisitions” shall mean any Acquisition so long as: (a) Modified Adjusted Excess Availability at alltimes for the thirty (30) day period prior to the closing date for such Acquisition, and on the closing date for such Acquisitionafter giving effect to such proposed Acquisition, shall be equal to or greater than $70,000,000; (b) no Default or Event ofDefault has occurred and is continuing or would result from the consummation of the proposed Acquisition; (c) both before andafter giving effect to such proposed Acquisition, Borrowers’ Fixed Charge Coverage Ratio, on a consolidated basis, shall not beless than 1.1 to 1.0; provided, however, if Modified Adjusted Excess Availability is greater than $120,000,000 at all times forthe thirty (30) day period prior to the closing date for such Acquisition, and on the closing date for such Acquisition aftergiving effect to such proposed Acquisition, Borrowers’ Fixed Charge Coverage Ratio may be calculated, for purposes of thisSection 1.99(c) only, without giving effect to (i) any Capital Expenditures incurred by any Borrower which are otherwisepermitted to be incurred by such Borrower under the terms of this Agreement, (ii) any dividends to Parent which are otherwisepermitted to be made by BlueLinx under the terms of this Agreement, and (iii) any repayment by BlueLinx to Parent of anyMortgage Proceeds Investment in accordance with Section 9.11(f) hereof; (d) Administrative Borrower provides Administrativeand Collateral Agent with prior written notice of such proposed Acquisition; (e) Administrative and Collateral Agent, for theratable benefit of the Lenders and the Bank Product Providers, shall be granted a first priority security interest (subject to thesecurity interests, mortgages, pledges, liens, charges and other encumbrances otherwise permitted under Section 9.8 hereof) inall assets (including any Capital Stock) acquired by any Borrower or any Acquisition Subsidiary and all assets (including anyCapital Stock) owned by any Person acquired by any Borrower or any Acquisition Subsidiary as part of such Acquisition andsuch Borrower shall, and shall cause any applicable Subsidiary to, execute any documents and take all actions that may berequired under applicable law or that Administrative and Collateral Agent may reasonably request, in order to grant, preserve,protect and perfect such security interest, all in form and substance satisfactory to Administrative and Collateral Agent; and(f) in the case of a Stock Acquisition, in Administrative and Collateral Agent’s election, either (i) Borrowers shall cause theacquired Person to execute a (A) general continuing guaranty in favor of Administrative and Collateral Agent, for itself and theratable benefit of the Lenders and the Bank Product Providers, in form and substance satisfactory to Administrative andCollateral Agent, and (B) a joinder to this Agreement, in form and substance satisfactory to Administrative and CollateralAgent, whereby such acquired Person acknowledges and agrees that it is a “Guarantor” hereunder; or (ii) the acquired Personshall execute a joinder to this Agreement, in form and substance satisfactory to Administrative and Collateral Agent, wherebysuch acquired Person acknowledges and agrees that it is a “Borrower” hereunder subject to the terms hereunder and subject tosuch acquired Person and Borrowers executing such documentation requested by Administrative Agent in its reasonablediscretion.

1.100 “Permitted Holders” shall mean Sponsor and any of its affiliated funds or managed accounts which are managed oradvised by Sponsor or an Affiliate of Sponsor.

1.101 “Person” or “person” shall mean any individual, sole proprietorship, partnership, corporation (including anycorporation which elects subchapter S status under the Code), limited liability company, limited liability partnership, businesstrust, unincorporated association, joint stock corporation, trust, joint venture or other entity or any government or any agency orinstrumentality or political subdivision thereof.

1.102 “Plan” means an employee benefit plan (as defined in Section 3(3) of ERISA) which any Borrower, any Guarantor orany ERISA Affiliate sponsors, maintains, or to which it makes, is making, or is obligated to make contributions other than aMultiemployer Plan.

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1.103 “PPSA” shall mean the Personal Property Security Act of any province of Canada in which any of the Collateral islocated and any other applicable Canadian or Provincial personal property security legislation (including, without limitation,the Civil Code of Quebec) as all such legislation now exists or may from time to time hereafter be amended, modified,recodified, supplemented or replaced, together with all rules, regulations and interpretations thereunder or related thereto.

1.104 “Prime Rate” shall mean the rate from time to time publicly announced by the Reference Bank as its prime rate,whether or not such announced rate is the best rate available at such bank.

1.105 “Prime Rate Loans” shall mean any Loans or portion thereof on which interest is payable based on the Prime Rate inaccordance with the terms thereof.

1.106 “Pro Rata Share” shall mean the fraction (expressed as a percentage) the numerator of which is such Lender’sRevolving Loan Commitment and the denominator of which is the aggregate amount of all of the Revolving LoanCommitments of all Revolving Loan Lenders.

1.107 “Provision for Taxes” shall mean, as of any date of determination, calculated for the twelve month period ending onsuch date of determination, an amount equal to all taxes imposed on or measured by net income, whether Federal, State or local,and whether foreign or domestic, that are paid or payable by any Borrower and its Subsidiaries in respect of such period on aconsolidated basis in accordance with GAAP.

1.108 “PTCE 95-60” shall have the meaning set forth in Section 13.6(a) hereof.

1.109 “Purchase Agreements” shall mean, individually and collectively, the Asset Purchase Agreement, dated March 12,2004, between BlueLinx and Seller, together with bills of sale, quitclaim deeds, assignment and assumption agreements andsuch other instruments of transfer as are referred to therein and all side letters with respect thereto, and all agreements,documents and instruments executed and/or delivered in connection therewith, including, without limitation, a HumanResources Agreement, a Transition Services Agreement, an IT Support Services Agreement, an Agreement Concerning PrivateLabel Agreements and a Master Purchase, Supply and Distribution Agreement, as the foregoing now exist or may hereafter beamended, modified, supplemented, extended, renewed, restated or replaced; provided, that, the term “Purchase Agreements” asused herein shall not include any of the “Financing Agreements” as such term is defined herein or the Real Property PurchaseAgreement.

1.110 “Purchased Assets” shall mean all of the assets and properties acquired by BlueLinx from Seller pursuant to thePurchase Agreements.

1.111 “Purchased Business” shall mean the building products distribution business conducted by Seller through itsbuilding products distribution operating segment immediately prior to the consummation of the transactions contemplated bythe Purchase Agreements.

1.112 “Qualified Bailee” shall mean a bailee, carrier, processor or other such Person from time to time in possession orcontrol of any Borrower’s Inventory or documents of title related thereto who has executed a Collateral Access Agreement infavor of Administrative and Collateral Agent.

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1.113 “Qualified Cash” shall mean, as of any date of determination, the aggregate amount of cash carried by each Borroweron its balance sheet (a) which is in a savings account or investment account subject to Administrative and Collateral Agent’sfirst priority perfected security interest pursuant to a Deposit Account Control Agreement or Investment Property ControlAgreement, as the case may be, (b) with respect to which Administrative and Collateral Agent has received statements of theavailable balances thereof from the bank or other financial institution at which such account is maintained which confirm suchamounts and (c) which is not pledged or deposited to secure any obligations of any Borrower other than the Obligations.

1.114 “Real Property” shall mean all now owned and hereafter acquired real property of each Borrower and each Guarantor,including leasehold interests, together with all buildings, structures, and other improvements located thereon and all licenses,easements and appurtenances relating thereto, wherever located.

1.115 “Real Property Purchase Agreement” shall mean that certain Real Property Purchase and Sale Agreement, datedMarch 12, 2004, by and between Parent and Seller, and all documents, agreements and instruments executed, delivered orentered into in connection therewith.

1.116 “Receivables” shall mean all of the following now owned or hereafter arising or acquired property of each Borrowerand each Guarantor: (a) all Accounts; (b) all interest, fees, late charges, penalties, collection fees and other amounts due or tobecome due or otherwise payable in connection with any Account; and (c) all payment intangibles of such Borrower or suchGuarantor and other contract rights, chattel paper, instruments, notes, and other forms of obligations owing to any Borrower orany Guarantor, whether from the sale and lease of goods or other property, licensing of any property (including IntellectualProperty or other general intangibles), rendition of services or from loans or advances by any Borrower or any Guarantor or to orfor the benefit of any third person (including loans or advances to any Affiliates or Subsidiaries of any Borrower or anyGuarantor) or otherwise associated with any Accounts, Inventory or general intangibles of any Borrower or any Guarantor(including, without limitation, choses in action, causes of action, tax refunds, tax refund claims, any funds which may becomepayable to any Borrower or any Guarantor in connection with the termination of any Plan or other employee benefit plan andany other amounts payable to any Borrower or any Guarantor from any Plan or other employee benefit plan, rights and claimsagainst carriers and shippers, rights to indemnification, business interruption insurance and proceeds thereof, casualty or anysimilar types of insurance and any proceeds thereof and proceeds of insurance covering the lives of employees on which anyBorrower or any Guarantor is a beneficiary).

1.117 “Records” shall mean, as to each Borrower and each Guarantor, all of such Borrower’s and such Guarantor’s presentand future books of account of every kind or nature, purchase and sale agreements, invoices, ledger cards, bills of lading andother shipping evidence, statements, correspondence, memoranda, credit files and other data relating to the Collateral or anyaccount debtor, together with the tapes, disks, diskettes and other data and software storage media and devices, file cabinets orcontainers in or on which the foregoing are stored (including any rights of any Borrower or any Guarantor with respect to theforegoing maintained with or by any other person).

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1.118 “Reference Bank” shall mean Wachovia, its successor or such other bank as Administrative and Collateral Agentmay from time to time designate.

1.119 “Register” shall have the meaning set forth in Section 13.6(b) hereof.

1.120 “Report” and “Reports” shall have the meaning set forth in Section 12.10(a) hereof.

1.121 “Required Lenders” shall mean, at any time, those Revolving Loan Lenders, other than Sponsor Affiliate Lenders,whose Pro Rata Shares aggregate fifty-one percent (51%) or more of the aggregate of the Revolving Loan Commitments of allRevolving Loan Lenders other than Sponsor Affiliate Lenders.

1.122 “Required Super-Majority Lenders” shall mean, at any time, those Revolving Loan Lenders, other than SponsorAffiliate Lenders, whose Pro Rata Shares aggregate eighty percent (80%) or more of the aggregate of the Revolving LoanCommitments of all Revolving Loan Lenders other than Sponsor Affiliate Lenders.

1.123 “Reserves” shall mean as of any date of determination, such amounts as Administrative and Collateral Agent mayfrom time to time establish and revise in good faith and in its reasonable credit judgment reducing the amount of RevolvingLoans and Letter of Credit Accommodations which would otherwise be available to Borrowers under the lending formula(s)provided for herein: (a) to reflect events, conditions, contingencies or risks which, as determined by Administrative andCollateral Agent in good faith and its reasonable credit judgment, adversely affect, or could reasonably be expected toadversely affect, either (i) any of the Collateral or its value or (ii) the security interests and other rights of Administrative andCollateral Agent in the Collateral (including the enforceability, perfection and priority thereof) or (b) to reflect Administrativeand Collateral Agent’s good faith belief that any collateral report or financial information furnished by or on behalf of anyBorrower or any Guarantor to any Agent is or may have been incomplete, inaccurate or misleading in any material respect or(c) to reflect outstanding Letter of Credit Accommodations as provided in Section 2.2 hereof or (d) with respect to any Defaultor Event of Default. To the extent Administrative and Collateral Agent may revise the lending formulas used to determine theBorrowing Base or establish new criteria or revise existing criteria for Eligible Accounts, Eligible Inventory, Eligible DomesticIn-Transit Inventory, Eligible International In-Transit Inventory or Eligible Re-Load Inventory so as to address anycircumstances, condition, event or contingency in a manner satisfactory to Administrative and Collateral Agent, Administrativeand Collateral Agent shall not establish a Reserve for the same purpose. The amount of any Reserve established byAdministrative and Collateral Agent shall have a reasonable relationship to the event, condition or other matter which is thebasis for such reserve as determined by Administrative and Collateral Agent in good faith and its reasonable credit judgment.Without limiting the generality of the foregoing, and without duplication, Reserves shall be established, at Administrative andCollateral Agent’s option, (q) in the amount of the Bank Product Reserve, (r) for the amount of the Canadian Priority Payablesthen outstanding, (s) for three (3) month’s rental payments with regard to any leased location of any Borrower (i) for whichAdministrative and Collateral Agent has not received a Collateral Access Agreement, (ii) subject to an Affiliate Lease until suchtime as

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Administrative and Collateral Agent has received an updated appraisal of the Inventory which accounts for such rentalpayments as part of liquidation expenses or (iii) which was owned by Parent as of the date hereof but which has ceased to beowned by Parent or an Affiliate of any Borrower, (t) for reductions in the amount of Eligible Accounts due to currencyconversion rates, (u) for freight, shipping, storage, warehousing or other such handling costs associated with Eligible DomesticIn-Transit Inventory, Eligible International In-Transit Inventory or Eligible Re-Load Inventory or any other amountsAdministrative and Collateral Agent determines in good faith and its reasonable credit judgment must be paid in order to allowAdministrative and Collateral Agent to take possession of such Inventory, (v) to reflect that returns, discounts, claims, creditsand allowances of any nature that are not paid pursuant to the reduction of Accounts, (w) for sales, excise or similar taxesincluded in the amount of any Accounts reported to Administrative and Collateral Agent, (x) to reflect, since the date of themost recent appraisal, that a change in the turnover, age or mix of the categories of Inventory that adversely affects theaggregate value of all Inventory or (y) to reflect, since the date of the most recent appraisal, that the liquidation value ofInventory, has decreased. In the event that, based on the calculation of the Borrowing Base by Administrative and CollateralAgent, the establishment of a Reserve of a type not previously established will result in there being Excess Availability of lessthan $40,000,000, Administrative and Collateral Agent shall give Administrative Borrower three (3) Business Days’ notice priorto establishing such a Reserve; provided, that, Administrative and Collateral Agent shall not be required to provide any suchnotice with regard to (1) any further Reserves established or increased while Excess Availability remains less than $40,000,000or (2) with regard to any Reserve established or increased in connection with an event which either constitutes an Event ofDefault or could reasonably be expected to materially impair Administrative and Collateral Agent’s liens on the Collateral or itsability to realize upon the Collateral.

1.124 “Revolving Loan Commitment” shall mean, as to any Lender: (a) at any time prior to the termination of theRevolving Loan Commitments, the amount of such Lender’s revolving loan commitment as set forth on Schedule 1.124 heretoor on Schedule 1 to the Assignment and Acceptance Agreement pursuant to which such Lender became a Lender under thisAgreement, as such amount may be adjusted from time to time in accordance with the provisions of Section 13.6 hereof, and(b) after the termination of the Revolving Loan Commitments, the unpaid amount of Revolving Loans, Term Loan and SpecialAgent Advances made by such Lender and such Lender’s interest in the outstanding Letter of Credit Accommodations, in eachcase as the same may be required to be adjusted from time to time in accordance with the terms hereof.

1.125 “Revolving Loan Credit Facility” shall mean the Revolving Loans and Letter of Credit Accommodations providedto or for the benefit of Borrowers pursuant to the terms of this Agreement.

1.126 “Revolving Loan Lender” shall mean any Lender having a Revolving Loan Commitment.

1.127 “Revolving Loan Threshold Limit” shall mean the amount, calculated at any time, equal to Eight Hundred MillionDollars ($800,000,000); unless Administrative Borrower shall have exercised its right to reduce such amount pursuant toSection 2.1(c) hereof, in which event Revolving Loan Threshold Limit shall mean such reduced amount.

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1.128 “Revolving Loan Limit” shall mean the amount, calculated at any time, equal to (a) the Revolving Loan ThresholdLimit minus (b) the then outstanding principal amount of the Term Loan.

1.129 “Revolving Loans” shall mean the loans now or hereafter made by or on behalf of any Revolving Loan Lender or byAdministrative and Collateral Agent for the ratable account of any Revolving Loan Lender on a revolving basis pursuant to theRevolving Loan Credit Facility (involving advances, repayments and readvances) as set forth in Section 2.1 hereof.

1.130 “Seasonal Period” shall mean, collectively, (i) the period beginning on January 1 and ending on June 30 of eachyear; and (ii) the period beginning on November 1 and ending on December 31 of each year.

1.131 “Seller” shall mean Georgia-Pacific Corporation, a Georgia corporation, and Georgia-Pacific Building MaterialsSales, Ltd., a company organized under the laws of New Brunswick, and their respective successors and assigns.

1.132 “Settlement Period” shall have the meaning set forth in Section 6.10(b) hereof.

1.133 “Solvent” shall mean, at any time with respect to any Person, that at such time such Person (a) is able to pay its debtsas they mature and has (and has a reasonable basis to believe it will continue to have) sufficient capital (and not unreasonablysmall capital) to carry on its business as currently conducted or proposed to be conducted as previously disclosed toAdministrative and Collateral Agent in writing prior to the date hereof or in accordance with Section 9.6, and (b) the assets andproperties of such Person at a fair valuation (and including as assets for this purpose at a fair valuation all rights of subrogation,contribution or indemnification arising pursuant to any guaranties given by such Person) are greater than the Indebtedness ofsuch Person, and including subordinated and contingent liabilities computed at the amount which, such person has a reasonablebasis to believe, represents an amount which can reasonably be expected to become an actual or matured liability (andincluding as to contingent liabilities arising pursuant to any guaranty the face amount of such liability as reduced to reflect theprobability of it becoming a matured liability).

1.134 “Special Agent Advances” shall have the meaning set forth in Section 12.11(a) hereof.

1.135 “Sponsor” shall mean Cerberus Capital Management, L.P., a Delaware limited partnership.

1.136 “Sponsor Affiliated Lenders” shall mean Ableco Finance LLC, a Delaware limited liability company, MadeleineL.L.C., a New York limited liability company, and funds and managed accounts which are managed or advised by such Person,Sponsor or an Affiliate of such Person or Sponsor.

1.137 “Sponsor Portfolio Company” shall mean any Person that is an Affiliate of any Borrower solely due to the fact thatsuch Person is controlled, directly or indirectly, by Sponsor and which is not otherwise involved in such Borrower’s business inany capacity.

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1.138 “Stock Acquisition” shall mean the purchase or other acquisition by any Borrower or any Acquisition Subsidiary ofall or substantially all of the Capital Stock of any other Person engaged in substantially the same or a related business asBorrowers.

1.139 “Subsidiary” or “subsidiary” shall mean, with respect to any Person, any corporation, limited liability company,limited liability partnership or other limited or general partnership, trust, association or other business entity of which anaggregate of at least a majority of the outstanding Capital Stock or other interests entitled to vote in the election of the board ofdirectors of such corporation (irrespective of whether, at the time, Capital Stock of any other class or classes of such corporationshall have or might have voting power by reason of the happening of any contingency), managers, trustees or other controllingpersons, or an equivalent controlling interest therein, of such Person is, at the time, directly or indirectly, owned by such Personand/or one or more subsidiaries of such Person.

1.140 “Taxes” shall mean any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and allliabilities with respect thereto, other than Excluded Taxes.

1.141 “Term Loans” shall have the meaning set forth in Section 2.5 hereof; sometimes being referred to herein individuallyas a “Term Loan.”

1.142 “Term Notes” shall mean, collectively, those certain Amended and Restated Term Promissory Notes, dated on orabout the date hereof, issued by Borrowers to each Revolving Loan Lender, as the same now exist or may hereafter be amended,modified, supplemented, extended, renewed, restated or replaced.

1.143 “Transferee” shall have the meaning set forth in Section 6.5(a) hereof.

1.144 “UCC” shall mean the Uniform Commercial Code as in effect in the State of New York, and any successor statute, asin effect from time to time (except that terms used herein which are defined in the Uniform Commercial Code as in effect in theState of New York on the date hereof shall continue to have the same meaning notwithstanding any replacement or amendmentof such statute except as Lender may otherwise determine; provided, that, if, with respect to any financing statement or byreason of any provisions of law, the perfection or the effect of perfection or non-perfection of the security interests granted to theAdministrative and Collateral Agent pursuant to the applicable Financing Agreement is governed by the Uniform CommercialCode as in effect in a jurisdiction of the United States other than the State of New York, then UCC means the UniformCommercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions of each FinancingAgreement and any financing statement relating to such perfection or effect of perfection or non-perfection.

1.145 “Value” shall mean, as determined by Administrative and Collateral Agent in good faith, with respect to Inventory,the lower of (a) cost computed on either a first-in-first-out or rolling average cost basis, in each case in accordance with GAAP or(b) market value; provided, that, for purposes of the calculation of the Borrowing Base, (i) the Value of the Inventory shall notinclude: (A) the portion of the value of Inventory equal to the profit earned by any Affiliate of any Borrower or any Guarantor(other than a Sponsor Portfolio Company) on the sale thereof to any Borrower or (B) write-ups or write-downs in value withrespect to currency exchange rates and (ii) notwithstanding anything to the contrary contained herein, the cost of the Inventoryshall be computed in the same manner and consistent with the most recent appraisal of the Inventory received and accepted byAdministrative and Collateral Agent.

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1.146 “VAT” shall mean Value Added Tax imposed in Canada or any other jurisdiction and any equivalent tax applicablein any jurisdiction (including Goods and Services Tax, Harmonized Sales Tax and Quebec Sales Tax).

1.147 “Voting Stock” shall mean with respect to any Person, (a) one (1) or more classes of Capital Stock of such Personhaving general voting powers to elect at least a majority of the board of directors, managers or trustees of such Person,irrespective of whether at the time Capital Stock of any other class or classes have or might have voting power by reason of thehappening of any contingency, and (b) any Capital Stock of such Person convertible or exchangeable without restriction at theoption of the holder thereof into Capital Stock of such Person described in clause (a) of this definition.

1.148 “Wachovia” shall mean Wachovia Bank, National Association, in its individual capacity, and its successors andassigns.

SECTION 2. CREDIT FACILITIES

2.1 Revolving Loans.

(a) Subject to and upon the terms and conditions contained herein, each Revolving Loan Lender severally (and notjointly) agrees to fund its Pro Rata Share of Revolving Loans to Borrowers from time to time in amounts requested byAdministrative Borrower up to the amount equal to the lesser of: (i) the Borrowing Base or (ii) the Revolving Loan Limit.

(b) Except in Administrative and Collateral Agent’s discretion, with the consent of all Lenders other than the SponsorAffiliated Lenders, (i) the aggregate principal amount of the Revolving Loans and the Letter of Credit Accommodationsoutstanding at any time shall not exceed the Revolving Loan Limit. In the event that the aggregate principal amount of theoutstanding Revolving Loans and Letter of Credit Accommodations exceed the amounts available pursuant to the BorrowingBase (prior to giving effect to Reserves established at the issuance of such Letter of Credit Accommodations), the RevolvingLoan Limit or the sublimits for Letter of Credit Accommodations set forth in Section 2.2(e), as applicable, such event shall notlimit, waive or otherwise affect any rights of any Agent or any Lender in that circumstance or on any future occasions andBorrowers shall, upon demand by Administrative and Collateral Agent, which may be made at any time or from time to time,immediately repay to Administrative and Collateral Agent, for the ratable benefit of the Revolving Loan Lenders, the entireamount of any such excess(es) for which payment is demanded, or, if no Revolving Loans are then outstanding, provide cashcollateral with respect to any Letter of Credit Accommodations outstanding in excess of the Borrowing Base or sublimit forLetter of Credit Accommodations set forth in Section 2.2(e) in an amount equal to one hundred five percent (105%) of theamount of such excess plus the amount of any fees and expenses payable in connection therewith through the end of theexpiration of such Letter of Credit Accommodations.

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(c) At Borrowers’ option, upon not less than five (5) Business Days prior written notice to Administrative andCollateral Agent by Administrative Borrower, Borrowers may permanently reduce the Revolving Loan Threshold Limit;provided, however, (i) no more than twenty (20) such reductions may be made during the term of this Agreement; (ii) suchreductions are requested in increments of $10,000,000 and (iii) the Revolving Loan Threshold Limit may not be reduced to anamount that is less than $250,000,000 unless reduced to zero in connection with the termination of the Agreement inaccordance with the provisions of Section 13.1(a) hereof.

2.2 Letter of Credit Accommodations.

(a) Subject to and upon the terms and conditions contained herein, at the request of Administrative Borrower onbehalf of itself or any other Borrower, Administrative and Collateral Agent agrees, for the ratable risk of each Revolving LoanLender according to its Pro Rata Share, to provide or arrange for Letter of Credit Accommodations for the account suchBorrower containing terms and conditions acceptable to Administrative and Collateral Agent and the issuer thereof. Anypayments made by Administrative and Collateral Agent or any Lender to any issuer thereof and/or related parties in connectionwith the Letter of Credit Accommodations shall constitute additional Revolving Loans to Borrower pursuant to this Section 2.

(b) In addition to any charges, fees or expenses charged by any bank or issuer in connection with the Letter of CreditAccommodations, Borrowers shall pay to Administrative and Collateral Agent: (i) for its own account, a letter of credit fee at arate equal to one-eighth percent (0.125%) per annum on the daily outstanding balance of the Letter of Credit Accommodationsfor the immediately preceding month (or part thereof), payable in arrears as of the first day of each succeeding month; and(ii) for the ratable benefit of Revolving Loan Lenders, a letter of credit fee at a per annum rate equal to the “ApplicableEurodollar Rate Margin” then in effect pursuant to Section 1.71 hereof, on the daily outstanding balance of the Letter of CreditAccommodations for the immediately preceding month (or part thereof), payable in arrears as of the first day of each succeedingmonth; provided, however, Administrative and Collateral Agent may, and upon the written direction of the Required Lendersshall, require Borrowers to pay such letter of credit fees, at a rates that are two (2.0) percentage points higher than the rates setforth above: (A) during the period from and after the date of termination or non-renewal hereof until Administrative andCollateral Agent, for the ratable benefit of Revolving Loan Lenders, has received full and final payment of all Obligations(notwithstanding entry of a judgment against any Borrower or any Guarantor); (B) during the period from and after the date ofthe occurrence of an Event of Default for so long as such Event of Default is continuing as determined by Administrative andCollateral Agent; and (C) with respect to any Letter of Credit Accommodations issued in excess of the sublimit set forth inSection 2.2(e) below. Such letter of credit fees shall be calculated on the basis of a three hundred sixty (360) day year and actualdays elapsed and the obligation of Borrowers to pay such fees shall survive the termination or non-renewal of this Agreement.

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(c) Administrative Borrower shall give Administrative and Collateral Agent two (2) Business Days’ prior writtennotice of their request for the issuance of a Letter of Credit Accommodation. Such notice shall be irrevocable and shall specifythe original face amount of the Letter of Credit Accommodation requested, the effective date (which date shall be a BusinessDay) of issuance of such requested Letter of Credit Accommodation, whether such Letter of Credit Accommodations may bedrawn in a single or in partial draws, the date on which such requested Letter of Credit Accommodation is to expire (which dateshall be a Business Day), the purpose for which such Letter of Credit Accommodation is to be issued, and the beneficiary of therequested Letter of Credit Accommodation. Administrative Borrower shall attach to such notice the proposed terms of the Letterof Credit Accommodation.

(d) In addition to being subject to the satisfaction of the applicable conditions precedent contained in Section 4hereof and the other terms and conditions contained herein, no Letter of Credit Accommodations shall be available unless eachof the following conditions precedent have been satisfied in a manner reasonably satisfactory to Administrative and CollateralAgent in its reasonable credit judgment: (i) Administrative Borrower shall have delivered to the proposed issuer of such Letterof Credit Accommodation at such times and in such manner as such proposed issuer may require, an application in form andsubstance satisfactory to such proposed issuer and Administrative and Collateral Agent for the issuance of the Letter of CreditAccommodation and such other documents as may be required pursuant to the terms thereof, and the form and terms of theproposed Letter of Credit Accommodation shall be satisfactory to Administrative and Collateral Agent and such proposedissuer, (ii) as of the date of issuance, no order of any court, arbitrator or other Governmental Authority shall purport by its termsto enjoin or restrain money center banks generally from issuing letters of credit of the type and in the amount of the proposedLetter of Credit Accommodation, and no law, rule or regulation applicable to money center banks generally and no request ordirective (whether or not having the force of law) from any Governmental Authority with jurisdiction over money center banksgenerally shall prohibit, or request that the proposed issuer of such Letter of Credit Accommodation refrain from, the issuance ofletters of credit generally or the issuance of such Letters of Credit Accommodation; and (iii) Excess Availability, prior to givingeffect to any Reserves with respect to such Letter of Credit Accommodations, on the date of the proposed issuance of any Letterof Credit Accommodations, shall be equal to or greater than an amount equal to the sum of (A) one hundred percent (100%) ofthe face amount thereof plus (B) the amount of all other commitments and obligations made or incurred by Administrative andCollateral Agent and Lenders with respect to charges, fees or expenses charged by any bank or issuer in connection with suchLetter of Credit Accommodation. Effective on the issuance of each Letter of Credit Accommodation, a Reserve shall beestablished in the amount set forth in Section 2.2(d)(iii) above.

(e) Except in Administrative and Collateral Agent’s discretion, with the consent of the Required Lenders, the amountof all outstanding Letter of Credit Accommodations and all other commitments and obligations made or incurred byAdministrative and Collateral Agent or any Lender in connection therewith shall not at any time exceed Thirty Million Dollars($30,000,000).

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(f) Borrowers and Guarantors shall indemnify and hold Administrative and Collateral Agent and Lenders harmlessfrom and against any and all losses, claims, damages, liabilities, costs and expenses which Administrative and Collateral Agentor any Lender may suffer or incur, other than as a result of the gross negligence or willful misconduct of such Person seekingindemnification, in connection with any Letter of Credit Accommodations and any documents, drafts or acceptances relatingthereto, including any losses, claims, damages, liabilities, costs and expenses due to any action taken by any issuer orcorrespondent with respect to any Letter of Credit Accommodation. Each Borrower and each Guarantor assumes all risks withrespect to the acts or omissions of the drawer under or beneficiary of any Letter of Credit Accommodation and for such purposesthe drawer or beneficiary shall be deemed such Borrower’s agent. Each Borrower and each Guarantor assumes all risks for, andagrees to pay (if any), all foreign, Federal, State and local taxes, duties and levies relating to any goods subject to any Letter ofCredit Accommodations or any documents, drafts or acceptances thereunder. Each Borrower and each Guarantor hereby releasesand holds Administrative and Collateral Agent and each Lender harmless from and against any acts, waivers, errors, delays oromissions, whether caused by any Borrower, by any Guarantor, by any issuer or correspondent or otherwise with respect to orrelating to any Letter of Credit Accommodation, except for the gross negligence or willful misconduct of Administrative andCollateral Agent or such Lender as determined pursuant to a final, non-appealable order of a court of competent jurisdiction.The provisions of this Section 2.2(f) shall survive the payment of Obligations and the termination or non-renewal of thisAgreement.

(g) In connection with Inventory purchased pursuant to Letter of Credit Accommodations, Borrowers and Guarantorsshall, at Administrative and Collateral Agent’s request, instruct all suppliers, carriers, forwarders, customs brokers, warehouses orothers receiving or holding cash, checks, Inventory, documents or instruments in which Administrative and Collateral Agent,for itself and the ratable benefit of the Lenders and the Bank Product Providers, holds a security interest to deliver them toAdministrative and Collateral Agent and/or subject to Administrative and Collateral Agent’s order, and if they shall come intosuch Borrower’s or such Guarantor’s possession, to deliver them, upon Administrative and Collateral Agent’s request, toAdministrative and Collateral Agent. Borrowers and Guarantors shall also, at Administrative and Collateral Agent’s request,designate Administrative and Collateral Agent as the consignee on all bills of lading and other negotiable and non-negotiabledocuments.

(h) Each Borrower and each Guarantor hereby irrevocably authorizes and directs any issuer of a Letter of CreditAccommodation to name such Borrower or such Guarantor as the account party therein and to deliver to Administrative andCollateral Agent all instruments, documents and other writings and property received by issuer pursuant to the Letter of CreditAccommodations and to accept and rely upon Administrative and Collateral Agent’s instructions and agreements with respectto all matters arising in connection with the Letter of Credit Accommodations or the applications therefor. Nothing containedherein shall be deemed or construed to grant any Borrower or any Guarantor any right or authority to pledge the credit of anyAgent or any Lender in any manner. Neither Administrative and Collateral Agent nor any Lender shall have any liability of anykind with respect to any Letter of Credit Accommodation provided by an issuer other than Administrative and Collateral Agentor such Lender unless Administrative and Collateral Agent has duly executed and delivered to such issuer the application or aguaranty or indemnification in writing with respect to such Letter of Credit Accommodation. Borrowers and Guarantors shall bebound by any interpretation made in good faith by Administrative and Collateral Agent, or any other issuer or correspondentunder or in connection with any Letter of Credit Accommodation or any documents, drafts or acceptances thereunder,notwithstanding that such interpretation may be inconsistent with any instructions of any Borrower or any Guarantor.

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(i) So long as no Event of Default exists, with respect to any Letter of Credit Accommodation, Borrowers andGuarantors may, after notice to Administrative and Collateral Agent, (i) approve or resolve any questions of non-compliance ofdocuments, (ii) give any instructions as to acceptance or rejection of any documents or goods, (iii) execute any and allapplications for steamship or airway guaranties, indemnities or delivery orders, and (iv) with Administrative and CollateralAgent’s consent, grant any extensions of the maturity of, time of payment for, or time of presentation of, any drafts, acceptances,or documents, and agree to any amendments, renewals, extensions, modifications, changes or cancellations of any of the termsor conditions of any of the applications, Letter of Credit Accommodations, or documents, drafts or acceptances thereunder orany letters of credit included in the Collateral.

(j) At any time an Event of Default exists or has occurred and is continuing, Administrative and Collateral Agent shallhave the right and authority to, and no Borrower or Guarantor shall, without the prior written consent of Administrative andCollateral Agent, (i) approve or resolve any questions of non-compliance of documents, (ii) give any instructions as toacceptance or rejection of any documents or goods, (iii) execute any and all applications for steamship or airway guaranties,indemnities or delivery orders, (iv) grant any extensions of the maturity of, time of payments for, or time of presentation of, anydrafts, acceptances, or documents, and (v) agree to any amendments, renewals, extensions, modifications, changes orcancellations of any of the terms or conditions of any of the applications, Letter of Credit Accommodations, or documents,drafts or acceptances thereunder or any letters of credit included in the Collateral. Administrative and Collateral Agent may takesuch actions either in its own name or in a Borrower’s or a Guarantor’s name.

(k) Any rights, remedies, duties or obligations granted or undertaken by any Borrower or any Guarantor to any issueror correspondent in any application for any Letter of Credit Accommodation, or any other agreement in favor of any issuer orcorrespondent relating to any Letter of Credit Accommodation, shall be deemed to have been granted or undertaken by suchBorrower or such Guarantor to Administrative and Collateral Agent for the ratable benefit of Revolving Loan Lenders. Anyduties or obligations undertaken by Administrative and Collateral Agent or any Revolving Loan Lender to any issuer orcorrespondent in any application for any Letter of Credit Accommodation, or any other agreement by Administrative andCollateral Agent or any Revolving Loan Lender in favor of any issuer or correspondent relating to any Letter of CreditAccommodation, shall be deemed to have been undertaken by Borrowers to Administrative and Collateral Agent or suchRevolving Loan Lender and to apply in all respects to Borrowers.

2.3 Commitments. The aggregate amount of each Revolving Loan Lender’s Pro Rata Share of the Revolving Loans, TermLoan and Letter of Credit Accommodations shall not exceed the amount of such Lender’s Revolving Loan Commitment, as thesame may from time to time be amended in accordance with the terms of this Agreement.

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2.4 Bank Products. Any Borrower or any of their respective Subsidiaries may (but no such Person is required to) requestthat the Administrative and Collateral Agent provide or arrange for such Person to obtain Bank Products from Administrativeand Collateral Agent or its Affiliates, and Administrative and Collateral Agent may, in its sole discretion, provide or arrange forsuch Person to obtain the requested Bank Products. Any Borrower or any of their respective Subsidiaries that obtains BankProducts shall indemnify and hold Administrative and Collateral Agent, each Lender and their respective Affiliates harmlessfrom any and all obligations now or hereafter owing to any other Person by Administrative and Collateral Agent or its Affiliatesin connection with any Bank Products other than for gross negligence or willful misconduct on the part of any such indemnifiedPerson. Each Borrower and each of their respective Subsidiaries acknowledge and agree that the obtaining of Bank Productsfrom the Administrative and Collateral Agent and its Affiliates (a) is in the sole discretion of the Administrative and CollateralAgent or such Affiliate, as the case may be, and (b) is subject to all rules and regulations of the Person that provides the BankProduct.

2.5 Term Loan.

(a) The Original Lenders under the Original Loan Agreement made a term loan to BlueLinx on July 14, 2005, in theaggregate original principal sum of Six Million Dollars ($6,000,000) and with an aggregate outstanding principal balance ofSix Million Dollars ($6,000,000). Upon the effectiveness of this Agreement, each Revolving Loan Lender severally (and notjointly) shall have been deemed to make a term loan to Borrowers (each a “Term Loan” and collectively the “Term Loans”) inan amount equal to such Revolving Loan Lender’s Pro Rata Share of such outstanding principal balance.

(b) The Term Loans are (i) evidenced by the Term Notes duly executed and delivered by Borrowers to each RevolvingLoan Lender, (ii) to be repaid, together with interest and other amounts, in accordance with this Agreement, the Term Notes andthe other Financing Agreements, and (iii) secured by all of the Collateral. The principal amount of the Term Loan shall be dueand payable on the Final Maturity Date (or earlier as provided herein).

SECTION 3. INTEREST AND FEES

3.1 Interest.

(a) Borrowers shall pay to Administrative and Collateral Agent, for the ratable benefit of Lenders, interest on theoutstanding principal amount of the Loans (other than the Letter of Credit Accommodations) at the Interest Rate. All interestaccruing hereunder during the existence of any Event of Default or after the date of any termination or non-renewal hereof shallbe payable on demand.

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(b) Administrative Borrower, on behalf of Borrowers, may from time to time request Eurodollar Rate Loans or mayrequest that Prime Rate Loans be converted to Eurodollar Rate Loans or that any existing Eurodollar Rate Loans continue for anadditional Interest Period. Such request from Administrative Borrower shall specify the amount of the Eurodollar Rate Loans orthe amount of the Prime Rate Loans to be converted to Eurodollar Rate Loans or the amount of the Eurodollar Rate Loans to becontinued (subject to the limits set forth below) and the Interest Period to be applicable to such Eurodollar Rate Loans. Subjectto the terms and conditions contained herein, three (3) Business Days after receipt by Administrative and Collateral Agent ofsuch a request from Administrative Borrower, such Eurodollar Rate Loans shall be made, such Prime Rate Loans shall beconverted to Eurodollar Rate Loans or such Eurodollar Rate Loans shall continue, as the case may be, provided, that, (i) noDefault or Event of Default shall exist or have occurred and be continuing, (ii) no party hereto shall have sent any notice oftermination or, if applicable, non-renewal of this Agreement, (iii) Borrowers shall have complied with such customaryprocedures as are established by Administrative and Collateral Agent and specified by Administrative and Collateral Agent toAdministrative Borrower from time to time for requests by Administrative Borrower for Eurodollar Rate Loans, (iv) no more thansix (6) Interest Periods may be in effect at any one time and no more than two (2) Interest Periods that are fourteen (14) dayInterests Periods may be in effect at any one time, (v) the aggregate amount of all Eurodollar Rate Loans outstanding must be inan amount not less than Ten Million Dollars ($10,000,000) or an integral multiple of One Million Dollars ($1,000,000) inexcess thereof and (vi) Administrative and Collateral Agent and Revolving Loan Lenders shall have determined that the InterestPeriod or Adjusted Eurodollar Rate is available to such Lender and can be readily determined as of the date of the request forsuch Eurodollar Rate Loan by Administrative Borrower. Any request by Administrative Borrower for Eurodollar Rate Loans orto convert Prime Rate Loans to Eurodollar Rate Loans or to continue any existing Eurodollar Rate Loans shall be irrevocable.Notwithstanding anything to the contrary contained herein, Administrative and Collateral Agent, Revolving Loan Lenders andReference Bank shall not be required to purchase United States Dollar deposits in the London interbank market or otherapplicable Eurodollar Rate market to fund any Eurodollar Rate Loans, but the provisions hereof shall be deemed to apply as ifAdministrative and Collateral Agent, Revolving Loan Lenders and Reference Bank had purchased such deposits to fund theEurodollar Rate Loans.

(c) Any Eurodollar Rate Loans shall automatically convert to Prime Rate Loans upon the last day of the applicableInterest Period, unless Administrative and Collateral Agent has received and approved a request to continue such EurodollarRate Loan at least three (3) Business Days prior to such last day in accordance with the terms hereof. Any Eurodollar Rate Loansshall, at Administrative and Collateral Agent’s option, upon notice by Administrative and Collateral Agent to AdministrativeBorrower, convert to Prime Rate Loans in the event that this Agreement shall terminate or, if applicable, not be renewed.Borrowers shall pay to Administrative and Collateral Agent, for the benefit of Lenders, upon demand by Administrative andCollateral Agent to Administrative Borrower (or Administrative and Collateral Agent may, at its option, charge any loanaccount of any Borrower) any amounts required to compensate any Lender, the Reference Bank or any Participant with anyLender for any loss (including loss of anticipated profits), cost or expense incurred by such Person, as a result of the conversionof Eurodollar Rate Loans to Prime Rate Loans pursuant to any of the foregoing, provided that such demand is made within180 days of the incurrence of such loss, costs or expenses. At the request of Administrative Borrower, Administrative andCollateral Agent shall provide to Administrative Borrower all available supporting documentation with respect to such loss,cost or expense.

(d) Interest shall be payable by Borrowers to Administrative and Collateral Agent, for the benefit of Lenders monthlyin arrears not later than the first day of each calendar month and shall be calculated on the basis of a three hundred sixty(360) day year and actual days elapsed. The interest rate on non-contingent Obligations (other than Eurodollar Rate Loans)shall increase or decrease by an amount equal to each increase or decrease in the Prime Rate effective on the first day of themonth after any change in such Prime Rate is announced based on the Prime Rate in effect on the last day of the month in whichany such change occurs.

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(e) No agreements, conditions, provisions or stipulations contained in this Agreement or any of the other FinancingAgreements or any Event of Default, or the exercise by Administrative and Collateral Agent or any Lender of the right toaccelerate the payment or the maturity of all or any portion of the Obligations, or the exercise by Administrative and CollateralAgent or any Lender of any option whatsoever contained in this Agreement or any of the other Financing Agreements, or theprepayment by Borrowers of any of the Obligations, or the occurrence of any event or contingency whatsoever, shall entitleAdministrative and Collateral Agent and Lenders to contract for, charge or receive, in any event, interest exceeding theMaximum Interest Rate. In no event shall Borrowers be obligated to pay interest exceeding such Maximum Interest Rate. Allagreements, conditions or stipulations, if any, which may in any event or contingency whatsoever operate to bind, obligate orcompel Borrowers to pay a rate of interest exceeding the Maximum Interest Rate shall be without binding force or effect, at lawor in equity, to the extent of the excess of interest over such Maximum Interest Rate. In the event any interest is contracted for,charged or received in excess of the Maximum Interest Rate (“Excess”), each Borrower and each Guarantor acknowledges andstipulates that any such contract, charge or receipt shall be the result of an accident and bona fide error, and that any Excessreceived by Administrative and Collateral Agent or any Lender shall be applied, first, to the payment of the then outstandingand unpaid principal hereunder; second, to the payment of the other Obligations then outstanding and unpaid; and third,returned to Borrowers, it being the intent of the parties hereto not to enter at any time into a usurious or otherwise illegalrelationship. Each Borrower and each Guarantor recognizes that, with fluctuations in the rate of interest set forth in thisSection 3.1 of this Agreement and the Maximum Interest Rate, such an unintentional result could inadvertently occur. By theexecution of this Agreement, each Borrower and each Guarantor agrees that (i) the credit or return of any Excess shall constitutethe acceptance by such Borrower of such Excess, and (ii) no Borrower or Guarantor shall seek or pursue any other remedy, legalor equitable, against any Agent or any Lender, based in whole or in part upon contracting for, charging or receiving of anyinterest in excess of the Maximum Interest Rate. For the purpose of determining whether or not any Excess has been contractedfor, charged or received by any Agent or any Lender, all interest at any time contracted for, charged or received by any Agent orany Lender in connection with this Agreement or any of the other Financing Agreements shall be amortized, prorated, allocatedand spread during the entire term of this Agreement in accordance with the amounts outstanding from time to time hereunderand the Maximum Interest Rate from time to time in effect in order to lawfully charge the maximum amount of interestpermitted under applicable law.

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3.2 Changes in Laws and Increased Costs of Loans.

(a) If after the date hereof, either (i) any change in, or in the interpretation of, any law or regulation is introduced,including, without limitation, with respect to reserve requirements, applicable to any Agent, any Lender or any banking orfinancial institution from whom any Agent or any Lender borrows funds or obtains credit (a “Funding Bank”) other than anychange in, or in the interpretation of any Tax and any Excluded Taxes, or (ii) a Funding Bank, any Agent or any Lendercomplies with any future guideline or request from any central bank or other Governmental Authority or (iii) a Funding Bank,any Agent or any Lender determines that the adoption of any applicable law, rule or regulation regarding capital adequacy, orany change therein, or any change in the interpretation or administration thereof by any Governmental Authority, central bankor comparable agency charged with the interpretation or administration thereof has or would have the effect described below, ora Funding Bank, any Agent or any Lender complies with any request or directive regarding capital adequacy (whether or nothaving the force of law) of any such authority, central bank or comparable agency, and in the case of any event set forth in thisclause (iii), such adoption, change or compliance has or would have the direct or indirect effect of reducing the rate of return onsuch Agent’s or such Lender’s capital as a consequence of its obligations hereunder to a level below that which such Agent orsuch Lender could have achieved but for such adoption, change or compliance (taking into consideration the Funding Bank’s,such Agent’s or such Lender’s policies with respect to capital adequacy) by an amount deemed by such Agent or such Lender tobe material, and the result of any of the foregoing events described in clauses (i), (ii) or (iii) is or results in an increase in the costto any Agent or any Lender of funding or maintaining the Loans, then Borrowers and Guarantors shall from time to time upondemand by Administrative and Collateral Agent, for itself or the applicable Lender, pay to Administrative and Collateral Agent,for itself or the applicable Lender, additional amounts sufficient to indemnify Agents or the applicable Lender against suchincreased cost on an after-tax basis (after taking into account applicable deductions and credits in respect of the amountindemnified), provided that such demand is made within 180 days of the incurrence of such loss, costs or expenses. A certificateas to the amount of such increased cost shall be submitted to Administrative Borrower by Administrative and Collateral Agentand shall be conclusive, absent manifest error.

(b) If prior to the first day of any Interest Period, (i) Administrative and Collateral Agent shall have determined ingood faith (which determination shall be conclusive and binding upon Borrowers and Guarantors) that, by reason ofcircumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate forsuch Interest Period, (ii) Administrative and Collateral Agent determines that the Eurodollar Rate determined or to bedetermined for such Interest Period will not adequately and fairly reflect the cost to Administrative and Collateral Agent and/orthe Lenders of making or maintaining Eurodollar Rate Loans during such Interest Period, or (iii) Dollar deposits in the principalamounts of the Eurodollar Rate Loans to which such Interest Period is to be applicable are not generally available in theLondon interbank market, Administrative and Collateral Agent shall give telecopy or telephonic notice thereof toAdministrative Borrower as soon as practicable thereafter, and will also give prompt written notice to Administrative Borrowerwhen such conditions no longer exist. If such notice is given (A) any Eurodollar Rate Loans requested to be made on the firstday of such Interest Period shall be made as Prime Rate Loans, (B) any Loans that were to have been converted on the first dayof such Interest Period to or continued as Eurodollar Rate Loans shall be converted to or continued as Prime Rate Loans and(C) each outstanding Eurodollar Rate Loan shall be converted, on the last day of the then-current Interest Period thereof, toPrime Rate Loans. Until such notice has been withdrawn by Administrative and Collateral Agent, no further Eurodollar RateLoans shall be made or continued as such, nor shall Borrowers have the right to convert Prime Rate Loans to Eurodollar RateLoans.

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(c) Notwithstanding any other provision herein, if the adoption of or any change in any law, treaty, rule or regulationor final, non-appealable determination of an arbitrator or a court or other Governmental Authority or in the interpretation orapplication thereof occurring after the date hereof shall make it unlawful for Administrative and Collateral Agent or any Lenderto make or maintain Eurodollar Rate Loans as contemplated by this Agreement, (i) Administrative and Collateral Agent shallpromptly give written notice of such circumstances to Administrative Borrower (which notice shall be withdrawn wheneversuch circumstances no longer exist), (ii) the commitment of such Lender hereunder to make Eurodollar Rate Loans, continueEurodollar Rate Loans as such and convert Prime Rate Loans to Eurodollar Rate Loans shall forthwith be canceled and, untilsuch time as it shall no longer be unlawful for Administrative and Collateral Agent and/or such Lender to make or maintainEurodollar Rate Loans, such Lender shall then have a commitment only to make a Prime Rate Loan when a Eurodollar RateLoan is requested and (iii) Loans of such Lender then outstanding as Eurodollar Rate Loans, if any, shall be convertedautomatically to Prime Rate Loans on the respective last days of the then current Interest Periods with respect to such Loans orwithin such earlier period as required by law. If any such conversion of a Eurodollar Rate Loan occurs on a day which is not thelast day of the then current Interest Period with respect thereto, Borrowers and Guarantors shall pay to Administrative andCollateral Agent, for the benefit of the Lenders, such amounts, if any, as may be required pursuant to Section 6.3(c) below.

(d) Borrowers and Guarantors shall indemnify and hold harmless Administrative and Collateral Agent and eachLender from any loss or expense which Administrative and Collateral Agent or any Lender may sustain or incur as aconsequence of (i) default by Borrowers in making a borrowing of, conversion into or extension of Eurodollar Rate Loans afterAdministrative Borrower has given a notice requesting the same in accordance with the provisions of this Agreement,(ii) default by Borrowers in making any prepayment of a Eurodollar Rate Loan after Administrative Borrower has given a noticethereof in accordance with the provisions of this Agreement, and (iii) the making of a prepayment of Eurodollar Rate Loans on aday which is not the last day of an Interest Period with respect thereto. With respect to Eurodollar Rate Loans, suchindemnification may include an amount equal to the excess, if any, of (A) the amount of interest which would have accrued onthe amount so prepaid, or not so borrowed, converted or extended, for the period from the date of such prepayment or of suchfailure to borrow, convert or extend to the last day of the applicable Interest Period (or, in the case of a failure to borrow, convertor extend, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rate ofinterest for such Eurodollar Rate Loans provided for herein over (B) the amount of interest (as reasonably determined byAdministrative and Collateral Agent) which would have accrued to Lenders on such amount by placing such amount on depositfor a comparable period with leading banks in the interbank Eurodollar market. This covenant shall survive the termination ornon-renewal of this Agreement and the payment of the Obligations.

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(e) If any Borrower or any Guarantor is required to pay additional amounts to any Lender pursuant to Section 3.2(a)hereof that increase the effective lending rate of such Lender with respect to its share of the Loans to greater than one-eighth(1/8%) percent in excess of the percentage of the effective lending rate of the other Lenders, then such Lender shall usereasonable efforts (consistent with legal and regulatory restrictions) to change the jurisdiction of its lending office with respectto making Eurodollar Rate Loans so as to eliminate any such additional payment by Borrowers and Guarantors which maythereafter accrue, if such change in the judgment of such Lender is not otherwise disadvantageous to such Lender. In the eventthat any one or more Lenders, pursuant to Section 3.2(a) hereof, incur any increased costs (other than increased costs to theextent such increased costs are not a recurring cost) for which any such Lender demands compensation pursuant toSection 3.2(a) hereof which increases the effective lending rate of such Lender with respect to its share of the Loans to greaterthan one-eighth (1/8%) percent in excess of the percentage of the effective lending rate of the other Lenders and such Lenderhas not mitigated such costs within sixty (60) days after receipt by such Lender from Administrative Borrower of a writtennotice that such Lender’s effective lending rate has so exceeded the effective lending rate of the other Lenders, then and in anysuch event, Borrowers may substitute another financial institution which is an Eligible Transferee acceptable to Administrativeand Collateral Agent for such Lender to assume the Revolving Loan Commitment of such Lender and to purchase the Loans ofsuch Lender, without recourse to or warranty by, or expense to, such Lender for a purchase price equal to the outstandingprincipal amount of the Loans owing to such Lender plus any accrued but unpaid interest on such Loans and accrued butunpaid fees and other amounts in respect of such Lender’s Revolving Loan Commitment and share of the Loans (other than anyprepayment penalty or other premiums). Upon such purchase such Lender shall no longer be a party hereto or have any rights orbenefits hereunder (except for rights or benefits that such Lender would retain hereunder and under the other FinancingAgreements upon payment in full of all of the Obligations) and the replacement Lender shall succeed to the rights and benefits,and shall assume the obligations, of such replaced Lender hereunder and thereunder. Administrative and Collateral Agent andLenders shall cooperate with Borrowers to amend the Financing Agreements to reflect such substitution. In no event mayBorrowers replace a Lender that is also an Agent or an issuer of a Letter of Credit Accommodation.

3.3 Fees. In addition to any other fees provided for herein or in any other Financing Agreement, Borrowers agree to pay toAdministrative and Collateral Agent:

(a) for the benefit of the parties specified therein, the fees and other amounts set forth in the Fee Letter in the amountsand at the times specified therein; and

(b) for the ratable benefit of the Revolving Loan Lenders, payable on the first day of each month in arrears while thisAgreement is in effect and for so long thereafter as any of the Obligations are outstanding, an unused line fee at a rate equal toone-quarter of one percent (0.25%) per annum calculated upon the amount by which the Revolving Loan Limit exceeds theaverage daily principal balance of the outstanding Revolving Loans and Letter of Credit Accommodations during theimmediately preceding month, or part thereof.

SECTION 4. CONDITIONS PRECEDENT AND SUBSEQUENT

4.1 Conditions Precedent to Effectiveness of this Agreement. Each of the following is a condition precedent to theeffectiveness of this Agreement and to this Agreement amending and restating the Original Loan Agreement in its entirety:

(a) Administrative and Collateral Agent shall have received, in form and substance reasonably satisfactory toAdministrative and Collateral Agent, all releases, terminations and such other documents as Administrative and CollateralAgent may request to evidence and effectuate the termination of all existing liens and security interests (other than those ofAdministrative and Collateral Agent or any other liens permitted under Section 9.8 hereof) with respect to the assets of eachBorrower and each Guarantor, including, but not limited to, UCC and PPSA termination statements for all such UCC and PPSAfinancing statements previously filed by any Person with respect to any Borrower or any Guarantor;

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(b) Administrative and Collateral Agent shall have received all UCC financing statements and PPSA filingsreasonably required by Administrative and Collateral Agent, each duly authorized or executed (as applicable) by each Borrowerand each Guarantor, and Administrative and Collateral Agent shall have received searches reflecting the filing of all such UCCfinancing statements and PPSA filings, indicating that a valid, perfected, first-priority (under both the UCC and PPSA) lien onthe Collateral has been granted to Administrative and Collateral Agent, for itself and the ratable benefit of the Lenders and theBank Product Providers;

(c) all requisite corporate action and proceedings in connection with this Agreement and the other FinancingAgreements shall be reasonably satisfactory in form and substance to Administrative and Collateral Agent, and Administrativeand Collateral Agent shall have received all information and copies of all documents, including records of requisite corporateaction and proceedings which Administrative and Collateral Agent may have reasonably requested in connection therewith,such documents where requested by Administrative and Collateral Agent or its counsel to be certified by appropriate corporateofficers or Governmental Authority (and including a copy of the certificate of incorporation of each Borrower and eachGuarantor certified by the Secretary of State (or equivalent Governmental Authority) which shall set forth the same completecorporate name of each Borrower and each Guarantor as is set forth herein and such document as shall set forth theorganizational identification number of such Borrower or such Guarantor, if one is issued in its jurisdiction of incorporation);

(d) Administrative and Collateral Agent shall have received, in form and substance reasonably satisfactory toAdministrative and Collateral Agent, all consents, waivers, acknowledgments and other agreements from third persons whichAdministrative and Collateral Agent may deem necessary or desirable in order to permit, protect and perfect Administrative andCollateral Agent’s security interests in and liens upon the Collateral or to effectuate the provisions or purposes of thisAgreement and the other Financing Agreements, including, without limitation, Collateral Access Agreements by owners andlessors of leased premises of each Borrower and each Guarantor, by warehouses at which any Collateral is located and frombailees or other third parties who may from time to time be in possession or control of any portion of the Collateral;

(e) Administrative and Collateral Agent shall have received, in form and substance reasonably satisfactory toAdministrative and Collateral Agent, Deposit Account Control Agreements by and among Administrative and Collateral Agent,each Borrower and each Guarantor, as the case may be, and each bank where such Borrower (or Guarantor) has a deposit account(including, without limitation, the Blocked Accounts), in each case, duly authorized, executed and delivered by such bank andsuch Borrower or such Guarantor (or Administrative and Collateral Agent shall be the bank’s customer with respect to suchdeposit account as Administrative and Collateral Agent may specify);

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(f) Administrative and Collateral Agent shall have received evidence, in form and substance satisfactory toAdministrative and Collateral Agent, that Administrative and Collateral Agent, for itself and the ratable benefit of the Lendersand the Bank Product Providers, has valid perfected and first priority security interests in and liens upon the Collateral and anyother property which is intended to be security for the Obligations or the liability of any Borrower or any Guarantor in respectthereof, subject only to the security interests and liens permitted herein or in the other Financing Agreements;

(g) Administrative and Collateral Agent shall have received and reviewed lien and judgment search results for thejurisdiction of incorporation or organization of each Borrower (other than BlueLinx) and each Guarantor, the jurisdiction of thechief executive office of each Borrower (other than BlueLinx) and each Guarantor and all U.S. and Canadian jurisdictions inwhich assets of each Borrower (other than BlueLinx) and each Guarantor are located, which search results shall be in form andsubstance satisfactory to Administrative and Collateral Agent;

(h) Administrative and Collateral Agent shall have received, in form and substance reasonably satisfactory to them,patent and trademark security agreements executed by each Borrower and each Guarantor (to the extent not previously providedin connection with the Original Loan Agreement) in favor of Administrative and Collateral Agent with regard to all patents,trademarks and rights related thereto held by any Borrower or any Guarantor;

(i) Administrative and Collateral Agent shall have received, in form and substance reasonably satisfactory to them, anamended and restated intercompany subordination agreement duly executed by Borrowers, Guarantors, and each of theirrespective Subsidiaries;

(j) Administrative and Collateral Agent shall have received evidence of insurance and loss payee endorsementsrequired hereunder and under the other Financing Agreements, in form and substance reasonably satisfactory to Administrativeand Collateral Agent, and certificates of such required insurance policies and/or endorsements naming Administrative andCollateral Agent as loss payee and/or additional insured, as applicable, under such required insurance policies;

(k) Administrative and Collateral Agent shall have received, in form and substance satisfactory to Administrative andCollateral Agent, the opinion letter of counsel to each Borrower and each Guarantor with respect to the Financing Agreementsand the security interests and liens of Administrative and Collateral Agent with respect to the Collateral and such other mattersas Administrative and Collateral Agent may request;

(l) Administrative and Collateral Agent shall have received originals of the shares of the stock certificatesrepresenting all of the issued and outstanding shares of the Capital Stock of each Borrower and each Guarantor (other thanBlueLinx) and owned by any Borrower or any Guarantor, in each case together with stock powers duly executed in blank withrespect thereto;

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(m) Administrative and Collateral Agent shall have received, in form and substance satisfactory to Administrative andCollateral Agent, the Term Notes duly executed by Borrowers;

(n) Administrative and Collateral Agent shall have received, in form and substance satisfactory to Administrative andCollateral Agent, the amended and restated Fee Letter duly executed by the Borrowers;

(o) Administrative and Collateral Agent shall have received, in form and substance satisfactory to Administrative andCollateral Agent, an amended and restated stock pledge agreement, duly executed by BlueLinx;

(p) Administrative and Collateral Agent shall have received, in form and substance satisfactory to Administrative andCollateral Agent, a general continuing guaranty, duly executed by BFH1, BFH2, BLX1 and BLX2;

(q) Administrative and Collateral Agent shall have received, in form and substance satisfactory to Administrative andCollateral Agent, a stock pledge agreement, duly executed by BFH1 and BFH2;

(r) the other Financing Agreements and all instruments and documents hereunder and thereunder shall have been dulyexecuted and delivered to Administrative and Collateral Agent, in form and substance satisfactory to Administrative andCollateral Agent.

4.2 Conditions Precedent to All Revolving Loans and Letter of Credit Accommodations. Each of the following is anadditional condition precedent to Lenders (or Administrative and Collateral Agent on behalf of Lenders) making RevolvingLoans and/or providing Letter of Credit Accommodations to Borrowers, including the initial Revolving Loans and Letter ofCredit Accommodations and any future Revolving Loans and Letter of Credit Accommodations:

(a) all representations and warranties contained herein and in the other Financing Agreements shall be true and correctin all material respects with the same effect as though such representations and warranties had been made on and as of the dateof the making of each such Loan or providing each such Letter of Credit Accommodation and after giving effect thereto, exceptto the extent that such representations and warranties expressly relate solely to an earlier date (in which case suchrepresentations and warranties shall have been true and accurate in all material respects on and as of such earlier date);

(b) no law, regulation, order, judgment or decree of any Governmental Authority shall exist, and no action, suit,investigation, litigation or proceeding shall be pending or threatened in any court or before any arbitrator or GovernmentalAuthority, which purports to enjoin, prohibit, restrain or otherwise adversely condition (i) the making of the Revolving Loansor providing the Letter of Credit Accommodations, or (ii) the consummation of the transactions contemplated pursuant to theterms hereof or the other Financing Agreements;

(c) no Material Adverse Change shall have occurred; and

(d) no Default or Event of Default shall exist or have occurred and be continuing on and as of the date of the makingof such Loan or providing each such Letter of Credit Accommodation and after giving effect thereto.

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SECTION 5. GRANT AND PERFECTION OF SECURITY INTEREST

5.1 Grant of Security Interest. To secure payment and performance of all Obligations, each Borrower and each Guarantorhereby grants to Administrative and Collateral Agent, for itself and the ratable benefit of the Lenders and the Bank ProductProviders, a continuing security interest in, a lien upon, and a right of set off against, and hereby collaterally assigns toAdministrative and Collateral Agent, for itself and the ratable benefit of the Lenders and the Bank Product Providers, assecurity, all personal property and trade fixtures and interests in personal property and trade fixtures of each Borrower and eachGuarantor, whether now owned or hereafter acquired or existing, and wherever located (together with all other collateral securityfor the Obligations at any time granted to or held or acquired by Agent or any Lender, collectively, the “Collateral”), including:

(a) all Accounts;

(b) all general intangibles, including, without limitation, all Intellectual Property;

(c) all goods, including, without limitation, Inventory and Equipment;

(d) all trade fixtures;

(e) all chattel paper (including all tangible and electronic chattel paper);

(f) all instruments (including all promissory notes);

(g) all documents;

(h) all deposit accounts;

(i) all letters of credit, banker’s acceptances and similar instruments and including all letter-of-credit rights;

(j) all supporting obligations and all present and future liens, security interests, rights, remedies, title and interest in,to and in respect of Receivables and other Collateral, including (i) rights and remedies under or relating to guaranties, contractsof suretyship, letters of credit and credit and other insurance related to the Collateral, (ii) rights of stoppage in transit, replevin,repossession, reclamation and other rights and remedies of an unpaid vendor, lienor or secured party, (iii) goods described ininvoices, documents, contracts or instruments with respect to, or otherwise representing or evidencing, Receivables or otherCollateral, including returned, repossessed and reclaimed goods, and (iv) deposits by and property of account debtors or otherpersons securing the obligations of account debtors;

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(k) all (i) investment property (including securities, whether certificated or uncertificated, securities accounts, securityentitlements, commodity contracts or commodity accounts) and (ii) monies, credit balances, deposits and other property of anyBorrower or any Guarantor now or hereafter held or received by or in transit to any Agent, any Lender or any of their respectiveAffiliates or at any other depository or other institution from or for the account of any Borrower or any Guarantor, whether forsafekeeping, pledge, custody, transmission, collection or otherwise;

(l) all commercial tort claims, including, without limitation, those identified on Schedule 5.2(g) hereto;

(m) to the extent not otherwise described above, all Receivables;

(n) all Records; and

(o) all products and proceeds of the foregoing, in any form, including insurance proceeds and all claims against thirdparties for loss or damage to or destruction of or other involuntary conversion of any kind or nature of any or all of the otherCollateral.

Notwithstanding anything to the contrary set forth in Section 5.1 hereof, the types or items of Collateral shall not include(x) any rights or interest in any contract, license or license agreement covering personal property of any Borrower or anyGuarantor, so long as under the terms of such contract, license or license agreement, or applicable law with respect thereto, thegrant of a security interest or lien therein to Administrative and Collateral Agent is prohibited and such prohibition has notbeen waived or the consent of the other party to such contract, license or license agreement has not been obtained or a lawfulwaiver of such prohibition under applicable law has not been obtained; provided, that, the foregoing exclusion shall in no waybe construed to apply if (i) any such prohibition is unenforceable under Sections 9-406, 9-407 or 9-408 of the UCC or otherapplicable law or (ii) any such property constitutes or relates to a portion of the Borrowing Base at any time reported byBorrowers to Administrative and Collateral Agent; (y) stock of a CFC or any assets of a CFC except to the extent such stockdoes not exceed 65% of the Voting Stock of a CFC which is a direct Subsidiary of any Borrower or any Guarantor; (z) anyapplication to register any trademark, service mark or other mark (i) prior to the filing under applicable law of a verifiedstatement of use (or the equivalent) for such trademark or service mark or (ii) the granting of a security interest in which wouldbe prohibited by applicable law.

5.2 Perfection of Security Interests.

(a) Each Borrower and each Guarantor irrevocably and unconditionally authorizes Administrative and CollateralAgent (or its agent) to file at any time and from time to time such financing statements with respect to the Collateral namingAdministrative and Collateral Agent or its designee as the secured party and such Borrower or such Guarantor as debtor, asAdministrative and Collateral Agent may require, and including any other information with respect to such Borrower or suchGuarantor or otherwise required by part 5 of Article 9 of the Uniform Commercial Code of such jurisdiction as Administrativeand Collateral Agent may determine or under the PPSA, together with any amendment and continuations with respect thereto,

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which authorization shall apply to all financing statements filed on, prior to or after the date hereof. Each Borrower and eachGuarantor hereby ratifies and approves all financing statements naming Administrative and Collateral Agent or its designee assecured party and such Borrower or such Guarantor as debtor with respect to the Collateral (and any amendments with respect tosuch financing statements) filed by or on behalf of Administrative and Collateral Agent prior to the date hereof and ratifies andconfirms the authorization of Administrative and Collateral Agent to file such financing statements (and amendments, if any).Each Borrower and each Guarantor hereby authorizes Administrative and Collateral Agent to adopt on behalf of such Borroweror such Guarantor any symbol required for authenticating any electronic filing. In the event that the description of the collateralin any financing statement naming Administrative and Collateral Agent or its designee as the secured party and any Borrower orany Guarantor as debtor includes assets and properties of such Borrower or such Guarantor that do not at any time constituteCollateral, whether hereunder, under any of the other Financing Agreements or otherwise, the filing of such financing statementshall nonetheless be deemed authorized by such Borrower or such Guarantor to the extent of the Collateral included in suchdescription and it shall not render the financing statement ineffective as to any of the Collateral or otherwise affect thefinancing statement as it applies to any of the Collateral. In no event shall any Borrower or any Guarantor at any time file, orpermit or cause to be filed, any correction statement or termination statement with respect to any financing statement (oramendment or continuation with respect thereto) naming Administrative and Collateral Agent or its designee as secured partyand any Borrower or any Guarantor as debtor. Upon request, Administrative and Collateral Agent shall provide AdministrativeBorrower with copies of all financing statements filed by Administrative and Collateral Agent hereunder.

(b) No Borrower or Guarantor has any chattel paper (whether tangible or electronic) or instruments as of the datehereof in excess of $2,500,000 in any one case or $5,000,000 in the aggregate, except as set forth on Schedule 5.2(b) hereto. Inthe event that any Borrower or any Guarantor shall be entitled to or shall receive any chattel paper or instruments in excess of$2,500,000 in any one case or $5,000,000 in the aggregate or after the date hereof, or, if an Event of Default shall then exist, ifany Borrower or any Guarantor shall be entitled to or shall receive chattel paper or instruments in any amount which has notpreviously been delivered to Administrative and Collateral Agent, Borrowers and Guarantors shall promptly notifyAdministrative and Collateral Agent thereof in writing. Promptly upon the receipt thereof by or on behalf of any Borrower orany Guarantor (including by any agent or representative), such Borrower or such Guarantor shall deliver, or cause to bedelivered to Administrative and Collateral Agent, all such tangible chattel paper and instruments, accompanied by suchinstruments of transfer or assignment duly executed in blank as Administrative and Collateral Agent may from time to timespecify, in each case except as Administrative and Collateral Agent may otherwise agree. At Administrative and CollateralAgent’s option, each Borrower and each Guarantor shall, or Administrative and Collateral Agent may at any time on behalf ofany Borrower or any Guarantor, cause the original of any such instrument or chattel paper to be conspicuously marked in a formand manner acceptable to Administrative and Collateral Agent with the following legend referring to chattel paper orinstruments as applicable: “This [chattel paper] [instrument] is subject to the security interest of Wachovia Bank, NationalAssociation, as Administrative and Collateral Agent, and any sale, transfer, assignment or encumbrance of this [chattel paper][instrument] violates the rights of such secured party.”

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(c) In the event that any Borrower or any Guarantor shall at any time hold or acquire an interest in any electronicchattel paper or any “transferable record” (as such term is defined in Section 201 of the Federal Electronic Signatures in Globaland National Commerce Act or in Section 16 of the Uniform Electronic Transactions Act as in effect in any relevantjurisdiction), such Borrower or such Guarantor shall promptly notify Administrative and Collateral Agent thereof in writing.Promptly upon Administrative and Collateral Agent’s request, such Borrower or such Guarantor shall take, or cause to be taken,such actions as Administrative and Collateral Agent may reasonably request to give Administrative and Collateral Agentcontrol of such electronic chattel paper under Section 9-105 of the UCC and control of such transferable record underSection 201 of the Federal Electronic Signatures in Global and National Commerce Act or, as the case may be, Section 16 of theUniform Electronic Transactions Act, as in effect in such jurisdiction.

(d) No Borrower or Guarantor has any deposit accounts as of the date hereof, except as set forth in the InformationCertificate. No Borrower or Guarantor shall, directly or indirectly, after the date hereof open, establish or maintain any depositaccount unless each of the following conditions is satisfied: (i) Administrative and Collateral Agent shall have received not lessthan five (5) Business Days prior written notice of the opening or establishing of such account which notice shall specify, inreasonable detail and specificity acceptable to Administrative and Collateral, the name of the account, the owner of the account,the name and address of the bank at which such account is to be opened or established, the individual at such bank with whomsuch Borrower or such Guarantor is dealing and the purpose of the account, (ii) the bank where such account is opened ormaintained shall constitute an Eligible Transferee or otherwise be reasonably acceptable to Administrative and CollateralAgent, and (iii) on or before the opening of such deposit account, such Borrower or such Guarantor shall, as Administrative andCollateral Agent may specify, either (A) deliver to Administrative and Collateral Agent a Deposit Account Control Agreementwith respect to such deposit account duly authorized, executed and delivered by such Borrower or such Guarantor and the bankat which such deposit account is opened and maintained or (B) arrange for Administrative and Collateral Agent, for itself andthe ratable benefit of the Lenders and the Bank Product Providers, to become the customer of the bank with respect to thedeposit account on terms and conditions acceptable to Administrative and Collateral Agent. The terms of this Section 5.2(d)shall not apply to deposit accounts specifically and exclusively used for payroll, payroll taxes and other employee wage andbenefit payments to or for the benefit of any Borrower’s or any Guarantor’s or any of their respective Subsidiaries’ salariedemployees.

(e) No Borrower or Guarantor owns or holds, directly or indirectly, beneficially or as record owner or both, anyinvestment property, as of the date hereof, or have any investment account, securities account, commodity account or othersimilar account with any bank or other financial institution or other securities intermediary or commodity intermediary as of thedate hereof, in each case except as set forth in the Information Certificate.

(i) In the event that any Borrower or any Guarantor shall be entitled to or shall at any time after the date hereofhold or acquire any certificated securities that constitute Collateral, such Borrower or such Guarantor shall promptly endorse,assign and deliver the same to Administrative and Collateral Agent, accompanied by such instruments of transfer or assignmentduly executed in blank as Administrative and Collateral Agent may from time to time specify. If any securities that constituteCollateral, now or hereafter acquired by such Borrower or such Guarantor are uncertificated and are issued to such Borrower orsuch Guarantor or its nominee directly by the issuer thereof, such Borrower or such Guarantor shall immediately notifyAdministrative and Collateral Agent thereof in writing and shall, as Administrative and Collateral Agent may specify, either(A) cause the issuer to agree to comply with instructions from Administrative and Collateral Agent as to such securities, withoutfurther consent of any Borrower or any Guarantor or such nominee, or (B) arrange for Administrative and Collateral Agent, foritself and the ratable benefit of the Lenders and the Bank Product Providers, to become the registered owner of the securities.

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(ii) No Borrower or Guarantor shall, directly or indirectly, after the date hereof open, establish or maintain anyinvestment account, securities account, commodity account or any other similar account (other than a deposit account) with anysecurities intermediary or commodity intermediary unless each of the following conditions is satisfied: (A) Administrative andCollateral Agent shall have received not less than five (5) Business Days prior written notice of the opening or establishing ofsuch account which notice shall specify, in reasonable detail and reasonably specificity acceptable to Administrative andCollateral Agent, the name of the account, the owner of the account, the name and address of the securities intermediary orcommodity intermediary at which such account is to be opened or established, the individual at such intermediary with whomsuch Borrower or such Guarantor is dealing and the purpose of the account, (B) the securities intermediary or commodityintermediary (as the case may be) where such account is opened or maintained shall constitute an Eligible Transferee orotherwise be reasonably acceptable to Administrative and Collateral Agent, and (C) on or before the opening of suchinvestment account, securities account or other similar account with a securities intermediary or commodity intermediary, suchBorrower or such Guarantor shall, as Administrative and Collateral Agent may specify, either (1) execute and deliver, and causeto be executed and delivered to Administrative and Collateral Agent, an Investment Property Control Agreement with respectthereto duly authorized, executed and delivered by such Borrower or such Guarantor and such securities intermediary orcommodity intermediary or (2) arrange for Administrative and Collateral Agent, for itself and the ratable benefit of the Lendersand the Bank Product Providers, to become the entitlement holder with respect to such investment property on terms andconditions acceptable to Administrative and Collateral Agent.

(f) No Borrower or Guarantor is the beneficiary of or otherwise entitled to any right to payment under any letter ofcredit, banker’s acceptance or similar instrument as of the date hereof, except as set forth on Schedule 5.2(f) hereto. In the eventthat any Borrower or any Guarantor shall be entitled to or shall receive any right to payment under any letter of credit, banker’sacceptance or any similar instrument, whether as beneficiary thereof or otherwise after the date hereof, such Borrower or suchGuarantor shall promptly notify Administrative and Collateral Agent thereof in writing. Such Borrower or such Guarantor shall,if requested by Administrative and Collateral Agent, either (i) deliver, or cause to be delivered to Administrative and CollateralAgent, with respect to any such letter of credit, banker’s acceptance or similar instrument, the written agreement of the issuerand any other nominated person obligated to make any payment in respect thereof (including any confirming or negotiatingbank), in form and substance reasonably satisfactory to Administrative and Collateral Agent, consenting to the assignment ofthe proceeds of the letter of credit by such Borrower or such Guarantor to Administrative and Collateral Agent, for itself and theratable benefit of the Lenders and the Bank Product Providers, and agreeing to make all payments thereon directly toAdministrative and Collateral Agent, for itself and the ratable benefit of the Lenders and the Bank Product Providers, or asAdministrative and Collateral Agent may otherwise direct or (ii) cause Administrative and Collateral Agent, for itself and theratable benefit of the Lenders and the Bank Product Providers, to become, at Borrowers’ expense, the transferee beneficiary ofthe letter of credit, banker’s acceptance or similar instrument (as the case may be).

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(g) No Borrower or Guarantor has any commercial tort claims as of the date hereof, except as set forth onSchedule 5.2(g) hereto. In the event that any Borrower or any Guarantor shall at any time after the date hereof have anycommercial tort claims for an amount in excess of $3,500,000 in any one case or in the aggregate, or, if an Event of Defaultexists and any Borrower or any Guarantor has any commercial tort claims not previously reported to Administrative andCollateral Agent, such Borrower or Guarantor shall promptly notify Administrative and Collateral Agent thereof in writing,which notice shall (i) set forth in reasonable detail the basis for and nature of such commercial tort claim and (ii) include theexpress grant by such Borrower or such Guarantor to Administrative and Collateral Agent, for itself and the ratable benefit of theLenders and the Bank Product Providers, of a security interest in such commercial tort claim (and the proceeds thereof). In theevent that such notice does not include such grant of a security interest, the sending thereof by such Borrower or such Guarantorto Administrative and Collateral Agent shall be deemed to constitute a grant of security interest therein to Administrative andCollateral Agent, for itself and the ratable benefit of the Lenders and the Bank Product Providers. Upon the sending of suchnotice, any commercial tort claim described therein shall constitute part of the Collateral and shall be deemed included therein.Without limiting the authorization of Administrative and Collateral Agent provided in Section 5.2(a) hereof or otherwisearising by the execution by such Borrower or such Guarantor of this Agreement or any of the other Financing Agreements,Administrative and Collateral Agent is hereby irrevocably authorized from time to time and at any time to file such financingstatements naming Administrative and Collateral Agent or its designee as secured party and such Borrower or such Guarantor asdebtor, or any amendments to any financing statements, covering any such commercial tort claim as Collateral. In addition,each Borrower and each Guarantor shall promptly upon Administrative and Collateral Agent’s request, execute and deliver, orcause to be executed and delivered, to Administrative and Collateral Agent such other agreements, documents and instrumentsas Administrative and Collateral Agent may reasonably require in connection with such commercial tort claim.

(h) No Borrower or Guarantor has any goods, documents of title or other Collateral in the custody, control orpossession of a third party as of the date hereof, except as set forth in the Information Certificate. In the event that any goods,documents of title or other Collateral of any Borrower or any Guarantor are at any time after the date hereof in the custody,control or possession of any other person not referred to in an Information Certificate or otherwise disclosed to Administrativeand Collateral Agent in writing pursuant to the terms of this Agreement, such Borrower or such Guarantor shall promptly notifyAdministrative and Collateral Agent thereof in writing. During the existence of an Event of Default, promptly uponAdministrative and Collateral Agent’s request, such Borrower and such Guarantor shall deliver to Administrative and CollateralAgent a Collateral Access Agreement duly authorized, executed and delivered by such person and such Borrower or suchGuarantor, and with respect to any Inventory on consignment with any Person, if requested by Administrative and CollateralAgent, such Borrower or such Guarantor shall take all actions reasonably requested by Administrative and Collateral Agent toprotect such Borrower’s or such Guarantor’s and Administrative and Collateral Agent’s interests in such Inventory, includingfiling UCC-1 or PPSA Financing Statements as to such consignment (with such UCC-1 or PPSA Financing Statements listingAdministrative and Collateral Agent as the assignee) and sending notices of such consignment to such consignee’s creditors.

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(i) Each Borrower and each Guarantor shall take any other actions reasonably requested by Administrative andCollateral Agent from time to time to cause the attachment, perfection and first priority of, and the ability of Administrative andCollateral Agent and the Lenders to enforce, the security interests of Administrative and Collateral Agent in any and all of theCollateral, including, without limitation, (i) executing, delivering and, where appropriate, filing financing statements andamendments relating thereto under the UCC, PPSA or other applicable law, to the extent, if any, that any Borrower’s or anyGuarantor’s signature thereon is required therefor, (ii) causing Administrative and Collateral Agent’s name, for itself and in itscapacity as agent for Lenders, to be noted as secured party on any certificate of title for a titled good if such notation is acondition to attachment, perfection or priority of, or ability of Administrative and Collateral Agent to enforce, the securityinterest of Administrative and Collateral Agent and the Lenders in such Collateral, (iii) complying with any provision of anystatute, regulation or treaty of the United States or Canada as to any Collateral if compliance with such provision is a conditionto attachment, perfection or priority of, or ability of Administrative and Collateral Agent and the Lenders to enforce, thesecurity interests of Administrative and Collateral Agent and the Lenders in such Collateral, and (iv) obtaining the consents andapprovals of any Governmental Authority or third party, including, without limitation, any consent of any licensor, lessor orother person obligated on Collateral, and taking all actions required by any earlier versions of the UCC, PPSA or by other law,as applicable in any relevant jurisdiction.

SECTION 6. COLLECTION AND ADMINISTRATION

6.1 Borrowers’ Loan Accounts. Administrative and Collateral Agent shall maintain one or more loan accounts on its booksin which shall be recorded (a) all Loans, other Obligations and the Collateral, (b) all payments made by or on behalf of anyBorrower or any Guarantor and (c) all other appropriate debits and credits as provided in this Agreement, including fees,charges, costs, expenses and interest. All entries in such loan accounts shall be made in accordance with Administrative andCollateral Agent’s customary practices as in effect from time to time.

6.2 Statements. Administrative and Collateral Agent shall render to Administrative Borrower each month a statementsetting forth the balance in Borrowers’ loan account maintained by Administrative and Collateral Agent for Borrowers pursuantto the provisions of this Agreement, including principal, interest, fees, costs and expenses. Each such statement shall be subjectto subsequent adjustment by Administrative and Collateral Agent but shall, absent manifest errors or omissions, be consideredcorrect and deemed accepted by Borrowers and Guarantors and conclusively binding upon Borrowers and Guarantors as anaccount stated except to the extent that Administrative and Collateral Agent receives a written notice from AdministrativeBorrower of any specific exceptions of Administrative Borrower thereto within thirty (30) days after the date such statement hasbeen mailed by Administrative and Collateral Agent. Until such time as Administrative and Collateral Agent shall haverendered to Administrative Borrower a written statement as provided above, the balance in any Borrower’s loan account shall bepresumptive evidence of the amounts due and owing to Agents and Lenders by Borrowers and Guarantors.

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6.3 Collection of Accounts.

(a) Borrowers shall establish and maintain, at its expense, blocked accounts or lockboxes and related blockedaccounts (in either case, “Blocked Accounts”), as Administrative and Collateral Agent may specify, with such banks as arereasonably acceptable to Administrative and Collateral Agent into which Borrowers shall promptly deposit and direct theirrespective account debtors to directly remit all payments on Receivables and all payments constituting proceeds of Inventory orother Collateral in the identical form in which such payments are made, whether by cash, check or other manner. Borrowers shalldeliver, or cause to be delivered to Administrative and Collateral Agent, a Deposit Account Control Agreement duly authorized,executed and delivered by each bank where a Blocked Account is maintained as provided in Section 5.2 hereof or at any timeand from time to time Administrative and Collateral Agent, for itself and the ratable benefit of the Lenders and the Bank ProductProviders, may become bank’s customer with respect to the Blocked Accounts and promptly upon Administrative andCollateral Agent’s request, Borrowers shall execute and deliver such agreements or documents as Administrative and CollateralAgent may require in connection therewith. Notwithstanding anything to the contrary contained herein or in any DepositAccount Control Agreement relating to a Blocked Account, Administrative and Collateral Agent shall not issue to any bank atwhich a Blocked Account is maintained a notice of sole control or other such instruction providing that the funds in suchdeposit accounts are to be automatically on each Business Day be remitted directly to the Payment Account and that Borrowersare not permitted to access or otherwise direct such funds unless either (i) an Event of Default or a Default with respect to non-payment of the Obligations has occurred or (ii) Excess Availability is less than $40,000,000; provided, that, if either (x) suchEvent of Default is subsequently waived in accordance with the terms of this Agreement or such Default did not mature into anEvent of Default or (y) Modified Adjusted Excess Availability is greater than $40,000,000 at all times thereafter for a period of60 consecutive days and no Event of Default or Default with respect to non-payment of the Obligations has occurred,Administrative and Collateral Agent shall promptly rescind such notice of sole control or other such instructions (any suchperiod during which the Blocked Accounts are subject to the sole control of Administrative and Collateral Agent and Borrowersare not permitted to access the Blocked Accounts is referred to herein is a “Blocked Account Activation Period”). Unless aBlocked Account Activation Period shall exist, Borrowers shall be permitted to access and direct the transfer of funds in theBlocked Accounts. Each Borrower and each Guarantor agrees that, during any Blocked Account Activation Period, allpayments made to such Blocked Accounts or other funds received and collected by Administrative and Collateral Agent or anyLender, whether in respect of the Receivables, as proceeds of Inventory or other Collateral or otherwise shall be treated aspayments to Administrative and Collateral Agent and Lenders in respect of the Obligations and therefore shall constitute theproperty of Administrative and Collateral Agent and Lenders to the extent of the then outstanding Obligations.

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(b) For purposes of calculating the amount of the Loans available to Borrowers, payments will be applied (conditionalupon final collection) to the Obligations on the Business Day of receipt by Administrative and Collateral Agent of immediatelyavailable funds in the Payment Account provided such payments and notice thereof are received in accordance withAdministrative and Collateral Agent’s usual and customary practices as in effect from time to time and within sufficient time tocredit Borrowers’ loan accounts on such day, and if not, then on the next Business Day. For the purposes of calculating intereston the Obligations, during any Blocked Account Activation Period, such payments or other funds received from the BlockedAccount will be applied (conditional upon final collection) to the Obligations on the date of receipt of immediately availablefunds by Administrative and Collateral Agent in the Payment Account provided such payments or other funds and noticethereof are received in accordance with Administrative and Collateral Agent’s usual and customary practices as in effect fromtime to time and within sufficient time to credit Borrowers’ loan accounts on such day, and if not, then on the next BusinessDay.

(c) If, during any Blocked Account Activation Period, any Borrower or any Guarantor receives possession of orotherwise has control of any monies, checks, notes, drafts or any other payment relating to and/or proceeds of Accounts or otherCollateral, such Person shall hold such items as trustee for Administrative and Collateral Agent and Lenders and shallimmediately upon receipt thereof, deposit or cause the same to be deposited in the Blocked Accounts, or remit the same or causethe same to be remitted, in kind, to Administrative and Collateral Agent. In no event shall the same be commingled with anyBorrower’s or any Guarantor’s own funds during any Blocked Account Activation Period. Borrowers agree to reimburseAdministrative and Collateral Agent and the Lenders on demand for any amounts owed or paid to any bank or other financialinstitution at which a Blocked Account, other deposit account or investment account is established or any other bank, financialinstitution or other Person involved in the transfer of funds to or from the Blocked Accounts, any other deposit account or anyinvestment account arising out of Administrative and Collateral Agent’s or any Lender’s payments to or indemnification ofsuch bank, financial institution or other Person. The obligation of Borrowers to reimburse Administrative and Collateral Agentand Lenders for such amounts pursuant to this Section 6.3 shall survive the termination or non-renewal of this Agreement.

6.4 Payments.

(a) Borrowers shall pay all Obligations when due. Payments on Obligations shall be made by Borrowers remittingfunds to the Payment Account or, at any time when a Blocked Account Activation Period exists, by payments and proceeds ofCollateral being directly remitted to the Payment Account as provided in Section 6.3 or such other place within the UnitedStates of America as Administrative and Collateral Agent may designate from time to time. Administrative and Collateral Agentshall apply payments received or collected from Borrowers or Guarantors or for the account of Borrowers or Guarantors(including the monetary proceeds of collections or of realization upon any Collateral) to the specific Obligation designated bysuch Borrower or such Guarantor in connection with such payment so long as no Event of Default exists, and otherwise all suchpayments shall be applied as follows:

(i) So long as no Event of Default shall then exist or result from the application of such payment:

(A) first, to pay in full all indemnities or expense reimbursements then due to Administrative and CollateralAgent from Borrowers and Guarantors (other than fees);

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(B) second, ratably to pay in full indemnities or expense reimbursements then due to any other Agent orLenders from Borrowers and Guarantors (other than fees);

(C) third, ratably to pay in full all fees payable by Borrowers under the Financing Agreements then due;

(D) fourth, ratably to pay in full interest due in respect of the Loans;

(E) fifth, to pay or prepay principal in respect of Special Agent Advances;

(F) sixth, to pay principal in respect of the Revolving Loans then outstanding (whether or not then due)until paid in full, and then to pay principal in respect of the Term Loan then outstanding (whether or not then due) until paid infull;

(G) seventh, to cash collateralize any outstanding Letter of Credit Accommodations if required under theterms of this Agreement;

(H) eighth, to pay any Obligations due in respect of the Bank Products; and

(I) ninth, to pay any other Obligations then due, in such order and manner as Administrative and CollateralAgent determines; or

(ii) If an Event of Default shall then exist or will result from the application of such payment:

(A) first, to pay in full the expenses of Administrative and Collateral Agent for the collection andenforcement of the Obligations and for the protection, preservation or sale, disposition or other realization upon the Collateral,including all expenses, liabilities and advances (including Special Agent Advances) incurred or made by or on behalf ofAdministrative and Collateral Agent, in connection therewith (including reasonable attorneys’ fees and legal expenses andother expenses of Administrative and Collateral Agent);

(B) second, to pay all Obligations, other than any Obligations related to the Bank Products, until paid infull, in cash or other immediately available funds, in such order and manner as Administrative and Collateral Agent shall electin its discretion (including cash collateral for any outstanding Letter of Credit Accommodations in accordance with the terms ofthis Agreement);

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(C) third, to pay all Obligations related to the Bank Products, or provide cash collateral therefor up to theamount of the Bank Products Reserve,

(D) fourth, to pay all remaining Obligations related to the Bank Products, and

(E) fifth, ratably to pay in full all other Obligations.

(b) Notwithstanding anything to the contrary contained in this Agreement:

(i) should any payment or distribution on security or instrument or proceeds thereof be received by a Lenderother than in accordance with this Section 6.4, such Lender shall receive and hold the same in trust, for the benefit ofAdministrative and Collateral Agent, the Lenders and the Bank Product Providers, and shall forthwith deliver the same toAdministrative and Collateral Agent (together with any endorsement or assignment of such Lender where necessary), forapplication by Administrative and Collateral Agent to the Obligations in accordance with the terms of this Section 6.4;

(ii) unless so directed by a Borrower, Administrative and Collateral Agent shall not apply any payments which itreceives to any Revolving Loans that are Eurodollar Rate Loans except on the expiration date of the Interest Period applicableto any such Revolving Loans that are Eurodollar Rate Loans and if payments are received or collected from any Borrower thatotherwise would be applied to Eurodollar Rate Loans, provided no Event of Default or Blocked Account Activation Periodexists, Administrative Borrower may instruct Administrative and Collateral Agent to remit such funds to such Borrower,otherwise, such payments shall be held by Administrative and Collateral Agent and shall bear interest at the Federal Funds Rateper annum commencing on the second Business Day following the date such payments are received or collected from suchBorrower and continuing through the date such payments are applied to the Obligations, which shall be upon the expiration ofthe first Interest Period after receipt or collection of such payments, to the extent of the principal amount of the applicableEurodollar Rate Loan or otherwise, in Administrative and Collateral Agent’s sole discretion, remitted to such Borrower; and

(iii) to the extent Borrowers use any proceeds of the Loans to acquire rights in or the use of any Collateral or torepay any Indebtedness used to acquire rights in or the use of any Collateral, payments in respect of the Obligations shall bedeemed applied first to the Obligations arising from Loans that were not used for such purposes and second to the Obligationsarising from Loans the proceeds of which were used to acquire rights in or the use of any Collateral in the chronological order inwhich Borrowers acquired such rights or use.

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(c) At Administrative and Collateral Agent’s option, all principal, interest, fees, costs, expenses and other chargesprovided for in this Agreement or the other Financing Agreements may be charged directly to the loan accounts of Borrowersand Guarantors. Borrowers and Guarantors shall make all payments to Administrative and Collateral Agent and the Lenders onthe Obligations free and clear of, and without deduction or withholding for or on account of, any setoff, counterclaim, defense,duties, taxes (subject to the limitations provided for in Section 6.5 hereof), levies, imposts, fees, deductions, withholding,restrictions or conditions of any kind. If after receipt of any payment of, or proceeds of Collateral applied to the payment of, anyof the Obligations, Administrative and Collateral Agent or any Lender is required to surrender or return such payment orproceeds to any Person for any reason, then the Obligations intended to be satisfied by such payment or proceeds shall bereinstated and continue and this Agreement shall continue in full force and effect as if such payment or proceeds had not beenreceived by such Person. Borrowers and Guarantors shall be liable to pay to Administrative and Collateral Agent and Lenders,and each does hereby indemnify and hold Administrative and Collateral Agent and each Lender harmless for the amount of anypayments or proceeds surrendered or returned, to the extent such payments were required to be made under the terms of thisAgreement. This Section 6.4 shall remain effective notwithstanding any contrary action which may be taken by Administrativeand Collateral Agent or any Lender in reliance upon such payment or proceeds. This Section 6.4 shall survive the payment ofthe Obligations and the termination or non-renewal of this Agreement.

(d) Except as otherwise provided with respect to Defaulting Lenders, aggregate principal payments and interestpayments shall be apportioned ratably among the Lenders (according to their applicable Pro Rata Shares) and payments of thefees (other than fees designated for Administrative and Collateral Agent’s sole and separate account and fees otherwise payablein accordance with the Fee Letter) shall, as applicable, be apportioned ratably among the Lenders.

6.5 Taxes.

(a) Any and all payments by or on behalf of any Borrower or any Guarantor hereunder and under any other FinancingAgreement shall be made in accordance with Section 6.4 and free and clear of and without deduction or withholding for or onaccount of any and all Taxes, excluding: (i) income taxes imposed on the net income of any Lender (or any transferee orassignee of such Lender, including any Participant, any such transferee or assignee being referred to as a “Transferee”),(ii) franchise or similar taxes imposed on or determined by reference to the net income of any Lender (or Transferee orParticipant), in each case by the United States of America or by the jurisdiction under the laws of which such Lender (orTransferee or Participant) (A) is organized or any political subdivision thereof or (B) has its applicable lending office locatedand (iii) to the extent that such tax results from a change in the circumstances of the Lender (or any Transferee or Participant),including a change in the residence, place of organization, or principal place of business of the Lender (or any Transferee orParticipant), or change in the branch or lending office of the Lender (or Transferee or Participant) (collectively, “ExcludedTaxes”). In addition, Borrowers and Guarantors agree to pay to the relevant Governmental Authority, in accordance withapplicable law, any Other Taxes.

(b) If any Borrower or any Guarantor shall be required by law to deduct or withhold in respect of any Taxes or OtherTaxes from or in respect of any sum payable hereunder to any Agent or any Lender, then:

(i) the sum payable shall be increased as necessary so that after making all required deductions and withholdings(including deductions and withholdings applicable to additional sums payable under this Section) such Lender (orAdministrative and Collateral Agent on behalf of such Lender) receives an amount equal to the sum it would have received hadno such deductions or withholdings been made;

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(ii) such Borrower or such Guarantor shall make such deductions and withholdings; and

(iii) such Borrower or such Guarantor shall pay the full amount deducted or withheld to the relevant taxingauthority or other authority in accordance with applicable law.

(c) Within thirty (30) days after the date of any payment by any Borrower or any Guarantor of Taxes or Other Taxes,such Person shall furnish to Administrative and Collateral Agent the original or a certified copy of a receipt evidencingpayment thereof, or other evidence of payment reasonably satisfactory to Administrative and Collateral Agent.

(d) Each Borrower and each Guarantor will indemnify Administrative and Collateral Agent and each Lender (orTransferee) for the full amount of Taxes and Other Taxes paid by Administrative and Collateral Agent or such Lender (orTransferee, as the case may be). If Administrative and Collateral Agent or such Lender (or Transferee) receives a refund inrespect of any Taxes or Other Taxes for which Lender (or Transferee) has received payment from any Borrower or any Guarantorhereunder, so long as no Default or Event of Default shall exist or have occurred and be continuing, Administrative andCollateral Agent or such Lender (as the case may be) shall credit to the loan account of Borrowers the amount of such refundplus any interest received (but only to the extent of indemnity payments made, or additional amounts paid, by any Borrower orany Guarantor under this Section 6.5 with respect to the Taxes or Other Taxes giving rise to such refund). If a Lender (or anyTransferee) claims a tax credit in respect of any Taxes for which it has been indemnified by any Borrower or any Guarantorpursuant to this Section 6.5, such Lender will apply the amount of the actual dollar benefit received by such Lender as a resultthereof, as reasonably calculated by Lender and net of all expenses related thereto, to the Loans. If Taxes or Other Taxes werenot correctly or legally asserted, Administrative and Collateral Agent or such Lender shall, upon Administrative Borrower’srequest and at Borrowers’ expense, provide such documents to Borrowers as Administrative Borrower may reasonably request,to enable Borrowers to contest such Taxes or Other Taxes pursuant to appropriate proceedings then available to Borrowers (solong as providing such documents shall not, in the good faith determination of Administrative and Collateral Agent, have areasonable likelihood of resulting in any liability of Administrative and Collateral Agent or any Lender).

(e) In the event any Lender or Transferee is organized under the laws of a jurisdiction other than the United States, anyState thereof or the District of Columbia (a “Non-U.S. Lender”) such Non-U.S. Lender shall deliver to Adminsitrative Borrowertwo (2) accurate, complete and signed copies of (i) either United States Internal Revenue Service Form W-8ECI or successorform or Form W-8BEN or successor form, or (ii) in the case of a Non-U.S. Lender claiming exemption from U.S. Federalwithholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest”, a Form W-8BEN, or

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any subsequent versions thereof or successors thereto (and, if such Non-U.S. Lender delivers a Form W-8BEN, a certificaterepresenting that such Non-U.S. Lender is not a bank for purposes of Section 881(c) of the Code, is not a ten (10%) percentshareholder (within the meaning of Section 881(c)(3)(B) of the Code) of any Borrower or any Guarantor and is not a controlledforeign corporation described in Section 881(c)(3)(C) of the Code), properly completed and duly executed by such Non-U.S.Lender claiming complete exemption from U.S. Federal withholding tax on payments by any Borrower or any Guarantor underthis Agreement and the other Financing Agreements. Such forms shall be delivered by any Non-U.S. Lender on or before thedate it becomes a party to this Agreement (or, in the case of a Transferee that is a Participant, on or before the date suchParticipant becomes a Transferee hereunder) and on or before the date, if any, such Non-U.S. Lender changes its applicablelending office by designating a different lending office (a “New Lending Office”). In addition, a Non-U.S. Lender shall promptlydeliver such new forms as are required by the Code or the regulations issued thereunder to claim exemption from, or reductionin the rate of, U.S. Federal withholding tax upon the obsolescence or invalidity of any form previously delivered by such Non-U.S. Lender. Notwithstanding any other provision of this Section 6.5(e), a Non-U.S. Lender shall not be required to deliver anyform pursuant to this Section 6.5(e) that such Non-U.S. Lender is not legally able to deliver. Each Lender (or Transferee) that is a“United States person,” as that term is defined under Section 7701(a)(30) of the Code, other than a Lender (or Transferee) thatmay be treated as an exempt recipient based on the indicators described in Treasury Regulation Section 1.6049-4(c)(1)(ii),agrees that it will, no later than the date it becomes a party to this Agreement, deliver to Administrative Borrower andAdministrative and Collateral Agent two (2) accurate, complete and signed copies of United States Internal Revenue ServiceForm W-9 or successor form stating that it is entitled to an exemption from United States backup withholding tax.Notwithstanding the foregoing, any failure by any Lender to deliver any tax form set forth above shall not excuse or otherwiseaffect any Borrower’s or any Guarantor’s performance of its obligations under this Agreement except as set forth inSection 6.5(f)(ii) below.

(f) Borrowers and Guarantors shall not be required to indemnify any Lender or to pay any additional amounts to anyLender, in respect of United States Federal withholding tax pursuant to subsections (a) or (d) above to the extent that (i) theobligation to withhold amounts with respect to United States Federal withholding tax was applicable on the date such Non-U.S.Lender became a party to this Agreement (or, in the case of a Transferee, on the date such Person became a Transferee hereunder)or, with respect to payments to a New Lending Office, the date such Non-U.S. Lender designated such New Lending Office withrespect to a Loan; provided, that, this subsection (f) shall not apply (A) to any Transferee or New Lending Office that becomes aTransferee or New Lending Office as a result of an assignment, participation, transfer or designation made at the request of anyBorrower or any Guarantor and (B) to the extent the indemnity payment or additional amounts any Transferee, acting through aNew Lending Office, would be entitled to receive (without regard to this subsection (f)) do not exceed the indemnity payment oradditional amounts that the person making the assignment, participation or transfer to such Transferee making the designationof such New Lending Office, would have been entitled to receive in the absence of such assignment, participation, transfer ordesignation or (ii) the obligation to pay such additional amounts would not have arisen but for a failure by such Lender tocomply with the provisions of subsection (e) above.

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6.6 Authorization to Make Loans. Administrative and Collateral Agent and each Lender is authorized to provide Loansbased upon telephonic or other instructions received from anyone purporting to be an officer of any Borrower or otherauthorized person or, at the discretion of Administrative and Collateral Agent or any Lender, if such Loans are necessary tosatisfy any Obligations. All requests for Loans hereunder shall specify the date on which the requested Loan is to be made (or inthe case of Letter of Credit Accommodations, established), which day shall be a Business Day, and the amount of the requestedLoan. Requests received after 12:00 noon New York time on any day shall be deemed to have been made as of the opening ofbusiness on the immediately following Business Day. Subject to all applicable provisions of the Agreement regarding theconditions to providing Loans, requests for Loans received prior to 12:00 noon New York time on a Business Day shall be madeby the close of business on such Business Day. All Loans under this Agreement shall be conclusively presumed to have beenmade to, and at the request of and for the benefit of, Borrowers when deposited to the credit of any Borrower or otherwisedisbursed or established in accordance with the instructions of any Borrower or in accordance with the terms and conditions ofthis Agreement.

6.7 Use of Proceeds. All Loans made or provided by or on behalf of Lenders to Borrowers pursuant to the provisions hereofshall be used by Borrowers only for general operating, working capital and other proper corporate purposes of Borrowers nototherwise prohibited by the terms hereof. None of the proceeds will be used, directly or indirectly, for the purpose of purchasingor carrying any margin security or for the purposes of reducing or retiring any indebtedness which was originally incurred topurchase or carry any margin security or for any other purpose which might cause any of the Loans to be considered a “purposecredit” within the meaning of Regulation U of the Board of Governors of the Federal Reserve System, as amended.

6.8 Pro Rata Treatment. Except to the extent otherwise provided in this Agreement: (a) the making and conversion ofRevolving Loans shall be made among the Revolving Loan Lenders based on their respective Pro Rate Shares thereof, and themaking of Term Loans shall be made among the Revolving Loan Lenders based on their respective Pro Rate Shares thereof; and(b) each payment on account of any Obligations to or for the account of one or more of Lenders in respect of any Obligationsdue on a particular day shall be allocated among the Lenders entitled to such payments based on their respective Pro RataShares and shall be distributed accordingly.

6.9 Sharing of Payments, Etc.

(a) Each Borrower and each Guarantor agrees that, in addition to (and without limitation of) any right of setoff,banker’s lien or counterclaim any Agent or Lender may otherwise have, each Lender shall be entitled, at its option (but subject,as among Agents and Lenders, to the provisions of Section 6.9(b) hereof), to offset balances held by it for the account of suchBorrower or such Guarantor at any of its offices, in dollars or in any other currency, against any principal of or interest on anyLoans owed to such Lender or any other amount payable to such Lender hereunder, that is not paid when due (regardless ofwhether such balances are then due to such Borrower or such Guarantor), in which case it shall promptly notify AdministrativeBorrower and Administrative and Collateral Agent thereof; provided, that, such Lender’s failure to give such notice shall notaffect the validity thereof.

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(b) If any Lender (including Administrative and Collateral Agent) shall obtain from any Borrower or any Guarantorpayment of any principal of or interest on any Loan owing to it or payment of any other amount under this Agreement or anyother Financing Agreement through the exercise (in accordance with the terms hereof) of any right of setoff, banker’s lien orcounterclaim or similar right or otherwise (other than from Administrative and Collateral Agent as provided herein), and, as aresult of such payment, such Lender shall have received more than its Pro Rata Share of the principal of the Loans or more thanits share of such other amounts then due hereunder or thereunder by any Borrower or any Guarantor to such Lender than thepercentage thereof received by any other Lender, it shall promptly pay to Administrative and Collateral Agent, for the benefit ofLenders, the amount of such excess and simultaneously purchase from such other Lenders a participation in the Loans or suchother amounts, respectively, owing to such other Lenders (or such interest due thereon, as the case may be) in such amounts, andmake such other adjustments from time to time as shall be equitable, to the end that all Lenders shall share the benefit of suchexcess payment (net of any expenses that may be incurred by such Lender in obtaining or preserving such excess payment) inaccordance with their respective Pro Rata Shares or as otherwise agreed by Lenders. To such end all Lenders shall makeappropriate adjustments among themselves (by the resale of participation sold or otherwise) if such payment is rescinded ormust otherwise be restored.

(c) Each Borrower and each Guarantor agrees that any Lender so purchasing a participation pursuant to subsection(b) above (or direct interest) may exercise, in a manner consistent with this Section, all rights of setoff, banker’s lien,counterclaim or similar rights with respect to such participation as fully as if such Lender were a direct holder of Loans or otheramounts (as the case may be) owing to such Lender in the amount of such participation.

(d) Nothing contained herein shall require any Lender to exercise any such right or shall affect the right of any Lenderto exercise, and retain the benefits of exercising, any such right with respect to any other Indebtedness or obligation of anyBorrower or any Guarantor. If, under any applicable bankruptcy, insolvency or other similar law, any Lender receives a securedclaim in lieu of a setoff to which this Section applies, such Lender shall, to the extent practicable, assign such rights toAdministrative and Collateral Agent, for itself and the ratable benefit of the Lenders and the Bank Product Providers, and, inany event, exercise its rights in respect of such secured claim in a manner consistent with the rights of Lenders entitled underthis Section to share in the benefits of any recovery on such secured claim.

6.10 Settlement Procedures.

(a) In order to administer the Credit Facility in an efficient manner and to minimize the transfer of funds betweenAdministrative and Collateral Agent and Lenders, Administrative and Collateral Agent may, subject to the terms of this Section,make available, on behalf of Lenders, the full amount of the Loans requested or charged to any Borrower’s loan account orotherwise to be advanced by Lenders pursuant to the terms hereof, without any requirement of prior notice to Lenders of theproposed Loans.

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(b) With respect to all Revolving Loans made by Administrative and Collateral Agent on behalf of Revolving LoanLenders as provided in this Section, the amount of each Revolving Loan Lender’s Pro Rata Share of the outstanding RevolvingLoans shall be computed weekly, and shall be adjusted upward or downward on the basis of the amount of the outstandingRevolving Loans as of 5:00 p.m. New York time on the Business Day immediately preceding the date of each settlementcomputation; provided, that, Administrative and Collateral Agent retains the absolute right at any time or from time to time tomake the above described adjustments at intervals more frequent than weekly, but in no event more than twice in any week.Administrative and Collateral Agent shall deliver to each of the Revolving Loan Lenders after the end of each week, or at suchlesser period or periods as Administrative and Collateral Agent shall determine, a summary statement of the amount ofoutstanding Revolving Loans for such period (such week or lesser period or periods being hereinafter referred to as a“Settlement Period”). If the summary statement is sent by Administrative and Collateral Agent and received by a RevolvingLoan Lender prior to 2:00 p.m. New York time, then such Revolving Loan Lender shall make the settlement transfer describedin this Section by no later than 2:00 p.m. New York time on the next Business Day following the date of receipt. If, as of the endof any Settlement Period, the amount of a Lender’s Pro Rata Share of the outstanding Revolving Loans is more than suchLender’s Pro Rata Share of the outstanding Revolving Loans as of the end of the previous Settlement Period, then such Lendershall forthwith (but in no event later than the time set forth in the preceding sentence) transfer to Administrative and CollateralAgent by wire transfer in immediately available funds the amount of the increase. Alternatively, if the amount of a Lender’s ProRata Share of the outstanding Revolving Loans in any Settlement Period is less than the amount of such Lender’s Pro RataShare of the outstanding Revolving Loans for the previous Settlement Period, Administrative and Collateral Agent shallforthwith transfer to such Lender by wire transfer in immediately available funds the amount of the decrease. The obligation ofeach of the Revolving Loan Lenders to transfer such funds and effect such settlement shall be irrevocable and unconditionaland without recourse to or warranty by Administrative and Collateral Agent. Each of Administrative and Collateral Agent andRevolving Loan Lenders agrees to mark its books and records at the end of each Settlement Period to show at all times thedollar amount of its Pro Rate Share of the outstanding Revolving Loans and Letter of Credit Accommodations. Each RevolvingLoan Lender shall only be entitled to receive interest on its Pro Rata Share of the Loans to the extent such Loans have beenfunded by such Lender. Because the Administrative and Collateral Agent on behalf of Revolving Loan Lenders may beadvancing and/or may be repaid Revolving Loans prior to the time when Lenders will actually advance and/or be repaid suchRevolving Loans, interest with respect to Revolving Loans shall be allocated by Administrative and Collateral Agent inaccordance with the amount of Revolving Loans actually advanced by and repaid to each Revolving Loan Lender and theAdministrative and Collateral Agent and shall accrue from and including the date such Revolving Loans are so advanced to butexcluding the date such Revolving Loans are either repaid by Borrowers or actually settled with the applicable Lender asdescribed in this Section.

(c) To the extent that Administrative and Collateral Agent has made any such amounts available and the settlementdescribed above shall not yet have occurred, upon repayment of any Loans by Borrowers, Administrative and Collateral Agentmay apply such amounts repaid directly to any amounts made available by any Administrative and Collateral Agent pursuant tothis Section. In lieu of weekly or more frequent settlements, Administrative and Collateral Agent may at any time require eachLender to provide Administrative and Collateral Agent with immediately available funds representing its Pro Rata Share of eachLoan, prior to Administrative and Collateral Agent’s disbursement of such Loan to Borrowers. In such event, all Loans underthis Agreement shall be made by the Lenders simultaneously and proportionately to their Pro Rata Shares. No Lender shall beresponsible for any default by any other Lender in the other Lender’s obligation to make a Loan requested hereunder nor shallthe Revolving Loan Commitment of any Revolving Loan Lender be increased or decreased as a result of the default by anyother Lender in the other Lender’s obligation to make a Loan hereunder.

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(d) If Administrative and Collateral Agent is not funding a particular Loan to Borrowers pursuant to this Section onany day, Administrative and Collateral Agent may assume that each Lender will make available to Administrative andCollateral Agent such Lender’s Pro Rata Share of the Revolving Loan requested or otherwise made on such day andAdministrative and Collateral Agent may, in its discretion, but shall not be obligated to, cause a corresponding amount to bemade available to Borrowers on such day. If Administrative and Collateral Agent makes such corresponding amount availableto Borrowers and such corresponding amount is not in fact made available to Administrative and Collateral Agent by suchLender, Administrative and Collateral Agent shall be entitled to recover such corresponding amount on demand from suchLender together with interest thereon for each day from the date such payment was due until the date such amount is paid toAdministrative and Collateral Agent at the interest rate provided for in Section 3.1 hereof. During the period in which suchLender has not paid such corresponding amount to Administrative and Collateral Agent, notwithstanding anything to thecontrary contained in this Agreement or any of the other Financing Agreements, the amount so advanced by Administrative andCollateral Agent to Borrowers shall, for all purposes hereof, be a Loan made by Administrative and Collateral Agent for its ownaccount. Upon any such failure by a Lender to pay Administrative and Collateral Agent, Administrative and Collateral Agentshall promptly thereafter notify Administrative Borrower of such failure and Borrowers shall immediately pay suchcorresponding amount to Administrative and Collateral Agent for its own account. A Lender who fails to pay Administrativeand Collateral Agent its Pro Rata Share of any Loans made available by the Administrative and Collateral Agent on suchLender’s behalf, or any Lender who fails to pay any other amount owing to Administrative and Collateral Agent, is a“Defaulting Lender”. Administrative and Collateral Agent shall not be obligated to transfer to a Defaulting Lender anypayments made by or on behalf of any Borrower or any Guarantor to Administrative and Collateral Agent for the DefaultingLender’s benefit, nor shall a Defaulting Lender be entitled to the sharing of any payments hereunder. Amounts payable to aDefaulting Lender shall instead be paid to or retained by Administrative and Collateral Agent. Administrative and CollateralAgent may hold and, in its discretion, re-lend to Borrowers the amount of all such payments received or retained by it for theaccount of such Defaulting Lender. For purposes of voting or consenting to matters with respect to this Agreement and the otherFinancing Agreements and determining Pro Rata Shares, such Defaulting Lender shall be deemed not to be a Lender and suchDefaulting Lender’s Revolving Loan Commitment shall be deemed to be zero (0). This Section shall remain effective withrespect to a Defaulting Lender until such default is cured. The operation of this Section shall not be construed to increase orotherwise affect the Revolving Loan Commitment of any Lender, or relieve or excuse the performance by any Borrower or anyGuarantor of their duties and obligations hereunder.

(e) Nothing in this Section or elsewhere in this Agreement or the other Financing Agreements shall be deemed torequire Administrative and Collateral Agent to advance funds on behalf of any Lender or to relieve any Lender from itsobligation to fulfill its Revolving Loan Commitment hereunder or to prejudice any rights that any Borrower may have againstany Lender as a result of any default by any Lender hereunder in fulfilling its Revolving Loan Commitment.

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6.11 Obligations Several; Independent Nature of Lenders’ Rights. The obligation of each Lender hereunder is several, andno Lender shall be responsible for the obligation or commitment of any other Lender hereunder. Nothing contained in thisAgreement or any of the other Financing Agreements and no action taken by the Lenders pursuant hereto or thereto shall bedeemed to constitute the Lenders to be a partnership, an association, a joint venture or any other kind of entity. The amountspayable at any time hereunder to each Lender shall be a separate and independent debt, and subject to Section 12 hereof, eachLender shall be entitled to protect and enforce its rights arising out of this Agreement and it shall not be necessary for any otherLender to be joined as an additional party in any proceeding for such purpose.

6.12 Appointment of Administrative Borrower as Agent for Requesting Loans and Receipts of Loans and Statements.

(a) Each Borrower hereby irrevocably appoints and constitutes Administrative Borrower as its agent and attorney-in-fact to request and receive Loans and Letter of Credit Accommodations pursuant to this Agreement and the other FinancingAgreements from Administrative and Collateral Agent or any Lender in the name or on behalf of such Borrower. Administrativeand Collateral Agent and Lenders may disburse the Loans to such bank account of Administrative Borrower or a Borrower orotherwise make such Loans to a Borrower and provide such Letter of Credit Accommodations to a Borrower as AdministrativeBorrower may designate or direct, without notice to any other Borrower or Guarantor. Notwithstanding anything to the contrarycontained herein, Administrative and Collateral Agent may at any time and from time to time require that Loans to or for theaccount of any Borrower be disbursed directly to an operating account of such Borrower.

(b) Administrative Borrower hereby accepts the appointment by Borrowers to act as the agent and attorney-in-fact ofBorrowers pursuant to this Section 6.12. Administrative Borrower shall ensure that the disbursement of any Loans to eachBorrower requested by or paid to or for the account of a Borrower, or the issuance of any Letter of Credit Accommodations for aBorrower hereunder, shall be paid to or for the account of such Borrower.

(c) Each Borrower and each Guarantor hereby irrevocably appoints and constitutes Administrative Borrower as itsagent to receive statements on account and all other notices from Administrative and Collateral Agent and Lenders with respectto the Obligations or otherwise under or in connection with this Agreement and the other Financing Agreements.

(d) Any notice, election, representation, warranty, agreement or undertaking by or on behalf of any other Borrower orany Guarantor by Administrative Borrower shall be deemed for all purposes to have been made by such Borrower or suchGuarantor, as the case may be, and shall be binding upon and enforceable against such Borrower or such Guarantor to the sameextent as if made directly by such Borrower or such Guarantor.

(e) No purported termination of the appointment of Administrative Borrower as agent as aforesaid shall be effective,except after ten (10) days’ prior written notice to Administrative and Collateral Agent.

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SECTION 7. COLLATERAL REPORTING AND COLLATERAL COVENANTS

7.1 Collateral Reporting.

(a) Borrowers shall provide Administrative and Collateral Agent with the following documents in a form satisfactoryto Administrative and Collateral Agent:

(i) on a monthly basis, a schedule of sales made, credits issued and cash received;

(ii) as soon as possible after the end of each month (but in any event within ten (10) days after the end thereof),on a monthly basis, (A) perpetual inventory reports, (B) inventory reports by location and category (including identifyingInventory at locations owned and operated by third parties, inventory held by any Borrower or any Guarantor on consignmentand Inventory of any Borrower or any Guarantor held by third Persons on consignment), (C) agings of accounts payable (andincluding information indicating the status of payments to owners and lessors of the leased premises of any Borrower or anyGuarantor) and (D) agings of accounts receivable (together with a reconciliation to the previous month’s aging and generalledger);

(iii) weekly, a detailed calculation of the Borrowing Base; provided, however, if at any time Excess Availabilityis less then $70,000,000 and until such time as Excess Availability has thereafter been $70,000,000 or more for 5 consecutiveBusiness Days, Borrowers shall provide Administrative and Collateral Agent with a detailed calculation of the Borrowing Baseon a daily basis.

(iv) upon Administrative and Collateral Agent’s reasonable request, (A) copies of customer statements, purchaseorders, sales invoices and credit memos, remittance advices and reports, and copies of deposit slips and bank statements,(B) copies of shipping and delivery documents and (C) copies of purchase orders, invoices and delivery documents forInventory and Equipment acquired by any Borrower or any Guarantor; and

(v) such additional, interim or other reports, schedules and calculations (and backup documentation therefor)with regard to the Collateral as Administrative and Collateral Agent may reasonably request from time to time.

(b) If any Borrower’s or any Guarantor’s records or reports of the Collateral are prepared or maintained by anaccounting service, contractor, shipper or other agent, such Borrower and such Guarantor hereby irrevocably authorizes suchservice, contractor, shipper or agent to deliver such records, reports, and related documents to Administrative and CollateralAgent as it may reasonably request and, at any time an Event of Default exists, to follow Administrative and Collateral Agent’sinstructions with respect to further services at such time.

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7.2 Accounts Covenants.

(a) Borrowers shall notify Administrative and Collateral Agent promptly of: (i) any material delay in any Borrower’sperformance of any of its material obligations to any account debtor or the assertion of any claims, offsets, defenses orcounterclaims by any account debtor, or any disputes with account debtors, or any settlement, adjustment or compromisethereof in excess of $1,500,000 in any one case or $2,500,000 in the aggregate at any one time; (ii) all material adverseinformation relating to the financial condition of any account debtor known to any Borrower or any Guarantor; and (iii) anyevent or circumstance which, to any Borrower’s or any Guarantor’s knowledge would cause Administrative and CollateralAgent to consider any then existing Accounts reported as part of the Borrowing Base as no longer constituting EligibleAccounts. No credit, discount, allowance or extension or agreement for any of the foregoing shall be granted by any Borrower orany Guarantor to any account debtor without Administrative and Collateral Agent’s consent, except as generally consistentwith the past practices of the Purchased Business or as set forth in the schedules delivered to Administrative and CollateralAgent pursuant to Section 7.1(a) above. So long as no Event of Default exists or has occurred and is continuing, Borrowers andGuarantors shall have the exclusive right to settle, adjust or compromise any claim, offset, counterclaim or dispute with anyaccount debtor. At any time that an Event of Default exists, Administrative and Collateral Agent shall, at its option, notifyAdministrative Borrower that it intends to, and thereafter shall, have the exclusive right to settle, adjust or compromise anyclaim, offset, counterclaim or dispute with account debtors or grant any credits, discounts or allowances.

(b) With respect to each Account: (i) the amounts shown on any invoice delivered to Administrative and CollateralAgent or schedule thereof delivered to Administrative and Collateral Agent shall be true and complete, (ii) no payments shall bemade thereon except payments immediately deposited or remitted to a Collection Account or otherwise delivered toAdministrative and Collateral Agent pursuant to the terms of this Agreement, (iii) in the case of Eligible Accounts there shall beno setoffs, deductions, contras, defenses, counterclaims or disputes existing or asserted with respect thereto except thosegenerally consistent with the past practices of the Purchased Business or as reported to Administrative and Collateral Agent inaccordance with the terms of this Agreement, and (iv) none of the transactions giving rise thereto will violate any applicableforeign, Federal, State, Provincial or local laws or regulations, all documentation relating thereto will be legally sufficient undersuch laws and regulations and all such documentation will be legally enforceable in accordance with its terms, except asenforceability thereof may be limited by insolvency laws affecting the rights of creditors generally.

(c) Administrative and Collateral Agent shall have the right at any time or times (but, so long as no Default or Eventof Default shall exist, subject to reasonable intervals consistent with Administrative and Collateral Agent’s customarypractices), in the name of a nominee of Administrative and Collateral Agent, or if Administrative and Collateral Agent shallotherwise determine that it is necessary or desirable to do so, then in the name of Administrative and Collateral Agent, to verifythe validity, amount or any other matter relating to any Account or other Collateral, by mail, telephone, facsimile transmissionor otherwise.

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7.3 Inventory Covenants. With respect to the Inventory: (a) each Borrower and each Guarantor shall at all times maintaininventory records reasonably satisfactory to Administrative and Collateral Agent, keeping correct and accurate recordsitemizing and describing the kind, type, quality and quantity of Inventory, such Borrower’s or such Guarantor’s cost thereforand daily withdrawals therefrom and additions thereto; (b) Borrowers and Guarantors shall conduct a physical count of theInventory at least once each year (which may be done by way of a cycle count), but at any time or times as Administrative andCollateral Agent may reasonably request during the existence of an Event of Default, and promptly following such physicalinventory shall supply Administrative and Collateral Agent with a report in the form and with such specificity as may bereasonably satisfactory to Administrative and Collateral Agent concerning such physical count; (c) Borrowers and Guarantorsshall not remove any Inventory from the locations set forth or permitted herein, without the prior written consent ofAdministrative and Collateral Agent, except for sales of Inventory in the ordinary course of its business and except to moveInventory directly from one location set forth or permitted herein to another such location and except for Inventory shippedfrom the manufacturer thereof to such Borrower or such Guarantor which is in transit to the locations set forth or permittedherein; (d) upon Administrative and Collateral Agent’s request, Borrowers shall, at their expense, no more than once in anytwelve (12) month period, but at any time or times as Administrative and Collateral Agent may request on or after an Event ofDefault, deliver or cause to be delivered to Administrative and Collateral Agent a full written appraisal as to the Inventory inform, scope and methodology reasonably acceptable to Administrative and Collateral Agent and by an appraiser acceptable toAdministrative and Collateral Agent, addressed to Administrative and Collateral Agent and Lenders and upon whichAdministrative and Collateral Agent and Lenders are expressly permitted to rely; (e) Borrowers and Guarantors shall produce,use, store and maintain the Inventory with all reasonable care and caution and in accordance with applicable standards of anyinsurance and in conformity with applicable laws (including the requirements of the Federal Fair Labor Standards Act of 1938,as amended and all rules, regulations and orders related thereto); (f) none of the Inventory or other Collateral constitutes farmproducts or the proceeds thereof; (g) Borrowers and Guarantors will hold Agents and each Lender harmless from and indemnifyeach of them with respect to all liability arising from or relating to the production, use, sale or other disposition of the Inventoryunless such liability arises from the gross negligence or willful misconduct of such Agent or Lender; (h) except as disclosed toAdministrative and Collateral Agent in writing or to the extent accounted for in the determination of the Net OrderlyLiquidation Value, Borrowers and Guarantors shall not sell Inventory to any customer on approval, or any other basis whichentitles the customer to return or may obligate any Borrower or any Guarantor to repurchase such Inventory (excludingcustomary warranty terms and returns accepted by such Borrower or such Guarantor in the ordinary course of business);(i) Borrowers shall keep the Eligible Inventory in good and marketable condition; and (j) Borrowers and Guarantors shall not,without prior written notice to Administrative and Collateral Agent or the specific identification of such Inventory with respectthereto provided by Administrative Borrower to Administrative and Collateral Agent pursuant to Section 7.1(a) hereof, acquireor accept any Inventory on consignment or approval.

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7.4 Equipment and Real Property Covenants. With respect to the Equipment and/or Real Property: (a) upon Administrativeand Collateral Agent’s request after an Event of Default, Borrowers shall deliver or cause to be delivered to Administrative andCollateral Agent written appraisals as to the Equipment in form, scope and methodology acceptable to Administrative andCollateral Agent and by an appraiser acceptable to Administrative and Collateral Agent, addressed to Administrative andCollateral Agent and Lenders and upon which Administrative and Collateral Agent and Lenders are expressly permitted to rely;(b) except where failure to do so could not reasonably be expected to cause a Material Adverse Change, each Borrower and eachGuarantor shall keep the Equipment in good order, repair, running and marketable condition (ordinary wear and tear excepted);(c) Borrowers and Guarantors shall use the Equipment and Real Property with all commercially reasonable care and caution andin accordance with applicable standards of any insurance and in conformity with all applicable laws; (d) the Equipment is andshall be used in the business of Borrowers and Guarantors and not for personal, family, household or farming use; (e) Borrowersand Guarantors shall not remove any Equipment from the locations set forth or permitted herein, except to the extent necessaryto have any Equipment repaired or maintained in the ordinary course of its business or to move Equipment directly from onelocation set forth or permitted herein to another such location and except for the movement of motor vehicles used by or for thebenefit of such Borrower or such Guarantor in the ordinary course of business; (f) the Equipment is now and shall remainpersonal property and Borrowers and Guarantors shall not permit any of the Equipment to be or become a part of or affixed toreal property; and (g) each Borrower and each Guarantor assumes all responsibility and liability arising from the use of theEquipment and Real Property.

7.5 Power of Attorney. Each Borrower and each Guarantor hereby irrevocably designates and appoints Administrative andCollateral Agent (and all Persons designated by Administrative and Collateral Agent) as such Borrower’s or such Guarantor’strue and lawful attorney-in-fact, and authorizes Administrative and Collateral Agent, in such Borrower’s, such Guarantor’s orAdministrative and Collateral Agent’s name, to: (a) at any time an Event of Default exists or has occurred and is continuing(i) demand payment on Receivables or other Collateral, (ii) enforce payment of Receivables by legal proceedings or otherwise,(iii) exercise all of such Borrower’s or such Guarantor’s rights and remedies to collect any Receivable or other Collateral,(iv) sell or assign any Receivable upon such terms, for such amount and at such time or times as Administrative and CollateralAgent deems advisable, (v) settle, adjust, compromise, extend or renew an Account, (vi) discharge and release any Receivable,(vii) prepare, file and sign such Borrower’s or such Guarantor’s name on any proof of claim in bankruptcy or other similardocument against an account debtor or other obligor in respect of any Receivables or other Collateral, (viii) notify the postoffice authorities to change the address for delivery of remittances from account debtors or other obligors in respect ofReceivables or other proceeds of Collateral to an address designated by Administrative and Collateral Agent, and open anddispose of all mail addressed to such Borrower or such Guarantor and handle and store all mail relating to the Collateral; and(ix) do all acts and things which are necessary, in Administrative and Collateral Agent’s determination, to fulfill suchBorrower’s or such Guarantor’s obligations under this Agreement and the other Financing Agreements and (b) at any timeduring a Blocked Account Activation Period or during the existence of an Event of Default, to (i) take control in any manner ofany item of payment in respect of Receivables or constituting Collateral or otherwise received in or for deposit in the BlockedAccounts or otherwise received by Administrative and Collateral Agent or any Lender, (ii) have access to any lockbox or postalbox into which remittances from account debtors or other obligors in respect of Receivables or other proceeds of Collateral aresent or received, (iii) endorse such Borrower’s or such Guarantor’s name upon any items of payment in respect of Receivables orconstituting Collateral or otherwise received by or on behalf of Administrative and Collateral Agent or any Lender and depositthe

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same in Administrative and Collateral Agent’s or a Lender’s account for application to the Obligations, (iv) endorse suchBorrower’s or such Guarantor’s name upon any chattel paper, document, instrument, invoice, or similar document or agreementrelating to any Receivable or any goods pertaining thereto or any other Collateral, including any warehouse or other receipts, orbills of lading and other negotiable or non-negotiable documents, (v) clear Inventory the purchase of which was financed withLetter of Credit Accommodations through U.S. Customs or foreign export control authorities in such Borrower’s or suchGuarantor’s name, Administrative and Collateral Agent’s name or the name of Administrative and Collateral Agent’s designee,and to sign and deliver to customs officials powers of attorney in such Borrower’s or such Guarantor’s name for such purpose,and to complete in such Borrower’s, such Guarantor’s or Administrative and Collateral Agent’s name, any order, sale ortransaction, obtain the necessary documents in connection therewith and collect the proceeds thereof, (vi) sign such Borrower’sor such Guarantor’s name on any verification of Receivables and notices thereof to account debtors or any secondary obligorsor other obligors in respect thereof. Each Borrower and each Guarantor hereby releases Administrative and Collateral Agent andeach Lender and its officers, employees and designees from any liabilities arising from any act or acts under this power ofattorney and in furtherance thereof, whether of omission or commission, except as a result of Administrative and CollateralAgent’s or such Lender’s own gross negligence or willful misconduct as determined pursuant to a final non-appealable order ofa court of competent jurisdiction.

7.6 Right to Cure. Administrative and Collateral Agent may, at its option, (a) upon reasonable prior notice toAdministrative Borrower, cure any default by any Borrower or any Guarantor under any material agreement with a third partythat affects the Collateral, its value or the ability of Administrative and Collateral Agent or any Lender to collect, sell orotherwise dispose of the Collateral or the rights and remedies of Administrative and Collateral Agent or any Lender therein orthe ability of any Borrower or any Guarantor to perform its obligations hereunder or under the other Financing Agreements,(b) upon reasonable prior notice to Administrative Borrower, pay or bond on appeal any judgment entered against any Borroweror any Guarantor, (c) after failure by any Borrower or any Guarantor to do so pursuant to the terms of this Agreement, dischargetaxes, liens, security interests or other encumbrances at any time levied on or existing with respect to the Collateral and (d) uponreasonable prior notice to Administrative Borrower, pay any amount, incur any expense or perform any act which, inAdministrative and Collateral Agent’s judgment, is necessary or appropriate to preserve, protect, insure or maintain theCollateral and the rights of Administrative and Collateral Agent and Lenders with respect thereto. Administrative and CollateralAgent and Lenders may add any amounts so expended to the Obligations and charge Borrowers’ accounts therefor, suchamounts to be repayable by Borrowers on demand. Administrative and Collateral Agent and Lenders shall be under noobligation to effect such cure, payment or bonding and shall not, by doing so, be deemed to have assumed any obligation orliability of any Borrower or any Guarantor. Any payment made or other action taken by Administrative and Collateral Agent orany Lender under this Section shall be without prejudice to any right to assert an Event of Default hereunder and to proceedaccordingly.

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7.7 Access to Premises. From time to time as reasonably requested by Administrative and Collateral Agent, at the cost andexpense of Borrowers (subject to applicable limitations thereon set forth in this Agreement, including Section 9.20 hereof),(a) Administrative and Collateral Agent or its designee shall have complete access to all of each Borrower’s and eachGuarantor’s premises during normal business hours and after not less than 2 Business Days’ notice to Administrative Borrower,or at any time and without notice to any Borrower or any Guarantor if an Event of Default exists or has occurred and iscontinuing, for the purposes of inspecting, verifying and auditing the Collateral and all of each Borrower’s and eachGuarantor’s books and records, including the Records, and (b) each Borrower and each Guarantor shall promptly furnish toAdministrative and Collateral Agent such copies of such books and records or extracts therefrom as Administrative andCollateral Agent may reasonably request, and (c) Administrative and Collateral Agent or its designee may use during normalbusiness hours such of any Borrower’s or any Guarantor’s personnel, equipment, supplies and premises as may be reasonablynecessary for the foregoing and if an Event of Default exists or has occurred and is continuing for the collection of Receivablesand realization of other Collateral.

SECTION 8. REPRESENTATIONS AND WARRANTIES

Each Borrower and each Guarantor hereby represents and warrants to Agents and Lenders the following (which shallsurvive the execution and delivery of this Agreement), the truth and accuracy of which are a continuing condition to providingLoans to Borrowers:

8.1 Corporate Existence; Power and Authority. Each Borrower and each Guarantor is duly organized and in good standingunder the laws of its state of incorporation or formation and is duly qualified and in good standing in all states or otherjurisdictions where the nature and extent of the business transacted by it or the ownership of assets makes such qualificationnecessary, except for those jurisdictions in which the failure to so qualify would not cause a Material Adverse Change. Theexecution, delivery and performance of this Agreement, the other Financing Agreements and the transactions contemplatedhereunder and thereunder (a) are all within each Borrower’s and each Guarantor’s corporate powers, (b) have been dulyauthorized, (c) are not in contravention of law or the terms of any Borrower’s or any Guarantor’s certificate of incorporation orformation, by-laws, partnership agreement, operating agreement, or other organizational documentation, or any indenture,agreement or undertaking to which such Borrower or such Guarantor is a party or by which such Borrower or such Guarantor orits property are bound and (d) will not result in the creation or imposition of, or require or give rise to any obligation to grant,any lien, security interest, charge or other encumbrance upon any property of such Borrower or such Guarantor except pursuantto the Financing Agreements. This Agreement and the other Financing Agreements to which any Borrower or any Guarantor is aparty constitute legal, valid and binding obligations of such Borrower and such Guarantor enforceable in accordance with theirrespective terms except as such enforceability may be limited by bankruptcy, insolvency, moratorium or similar laws limitingcreditors’ rights generally or by general equitable principles.

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8.2 Name; State of Organization; Chief Executive Office; Collateral Locations.

(a) The exact legal name of each Borrower and each Guarantor is as set forth on the signature pages of this Agreementand in the Information Certificate. No Borrower or Guarantor has, during the five years immediately prior to the date of thisAgreement, been known by or used any other corporate or fictitious name or been a party to any merger or consolidation, oracquired all or substantially all of the assets of any Person, or acquired any of its property or assets out of the ordinary course ofbusiness, except as set forth in the Information Certificate.

(b) Each Borrower and each Guarantor is an organization of the type and organized in the jurisdiction set forth in theInformation Certificate. The Information Certificate accurately sets forth the organizational identification number of eachBorrower and each Guarantor or accurately states that such Borrower or such Guarantor has none and accurately sets forth thefederal employer identification number of each Borrower and each Guarantor.

(c) The chief executive office and mailing address of each Borrower and each Guarantor and each Borrower’s and eachGuarantor’s Records concerning Accounts are located only at the address identified as such in the Information Certificate andits only other places of business and the only other locations of Collateral, if any, are the addresses set forth in such InformationCertificate, subject to the right of Borrowers and Guarantors to establish new locations in accordance with Section 9.2 below.The Information Certificate correctly identifies any of such locations which are not owned by any Borrower or any Guarantorand sets forth the owners and/or operators thereof.

8.3 Financial Statements. All financial statements relating to each Borrower and each Guarantor which have been or mayhereafter be delivered by any Borrower or any Guarantor to Agents or any Lender have been prepared in accordance with GAAP(except as to any interim financial statements, to the extent such statements are subject to normal year-end adjustments and donot include any notes) and fairly present the financial condition and the results of operation of such Borrower or such Guarantoras at the dates and for the periods set forth therein.

8.4 Priority of Liens; Title to Properties. The security interests and liens granted to Administrative and Collateral Agent, foritself and the ratable benefit of the Lenders and the Bank Product Providers, under this Agreement and the other FinancingAgreements constitute valid and perfected first priority liens and security interests in and upon the Collateral subject only to theliens indicated on Schedule 8.4 hereto and the other liens permitted under Section 9.8 hereof. Each Borrower and eachGuarantor has good and marketable fee simple title to or valid leasehold interests in all of its Real Property and good, valid andmerchantable title to all of its other properties and assets subject to no liens, mortgages, pledges, security interests,encumbrances or charges of any kind, except those granted to Administrative and Collateral Agent, for itself and the ratablebenefit of the Lenders and the Bank Product Providers, and such others as are specifically listed on Schedule 8.4 hereto orpermitted under Section 9.8 hereof.

8.5 Tax Returns. Except where failure to do so would not cause a Material Adverse Change, each Borrower and eachGuarantor has filed, or caused to be filed, in a timely manner all tax returns, reports and declarations which are required to befiled by it. All information in such tax returns, reports and declarations is complete and accurate in all material respects. Exceptwhere failure to do so would not cause a Material Adverse Change, each Borrower and each Guarantor has paid or caused to bepaid all taxes due and payable or claimed due and payable in any assessment received by it, except taxes the validity of whichare being contested in good faith by appropriate proceedings diligently pursued and available to such Borrower or suchGuarantor and with respect to which adequate reserves have been set aside on its books. Adequate provision has been made forthe payment of all accrued and unpaid Federal, State, Provincial, county, local, foreign and other taxes whether or not yet dueand payable and whether or not disputed.

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8.6 Litigation. Except as set forth in the Information Certificate, there is no present investigation by any GovernmentalAuthority pending, or to the best of any Borrower’s or any Guarantor’s knowledge threatened, against or affecting any Borroweror any Guarantor, its or their assets or business and there is no action, suit, proceeding or claim by any Person pending, or to thebest of any Borrower’s or any Guarantor’s knowledge threatened, against any Borrower, any Guarantor or any of its or theirassets or goodwill, or against or affecting any transactions contemplated by this Agreement, which if adversely determinedagainst any Borrower or any Guarantor would cause a Material Adverse Change.

8.7 Compliance with Other Agreements and Applicable Laws. No Borrower or Guarantor is in default under, or in violationof any of the terms of, any agreement, contract, instrument, lease or other commitment to which it is a party or by which it or anyof its assets are bound where such default or violation could reasonably be expected to cause a Material Adverse Change, and,except where failure to do so would not cause a Material Adverse Change, each Borrower and each Guarantor is in compliancewith all applicable provisions of laws, rules, regulations, licenses, permits, approvals and orders of any foreign, Federal, State,Provincial or local Governmental Authority.

8.8 Environmental Compliance.

(a) Except as set forth on Schedule 8.8 hereto, to the best of each Borrower’s and each Guarantor’s knowledge, noBorrower or Guarantor or any of their respective Subsidiaries has generated, used, stored, treated, transported, handled, disposedof or arranged for the disposal of any Hazardous Materials, on or off its premises (whether or not owned by it) in any mannerwhich at any time violates any applicable Environmental Law or any license, permit, certificate, approval or similarauthorization thereunder and the operations of each Borrower, each Guarantor and each of their respective Subsidiariescomplies in all respects with all Environmental Laws and all licenses, permits, certificates, approvals and similar authorizationsthereunder except, in each case, where such violation or non-compliance could not reasonably be expected to cause a MaterialAdverse Change.

(b) Except as set forth on Schedule 8.8 hereto, there has been no investigation, proceeding, complaint, order,directive, claim, citation or written notice by any Governmental Authority or any other person nor is any pending or to the bestof each Borrower’s and each Guarantor’s knowledge threatened, with respect to any material violation of the requirements ofany Environmental Law by any Borrower, any Guarantor or any Subsidiary of any Borrower or any Guarantor or the release,spill or discharge, threatened or actual, of any Hazardous Material or the generation, use, storage, treatment, transportation,handling or disposal of any Hazardous Materials in material violation of any Environmental Law or any other environmentalmatter, which has caused or could reasonably be expected to cause a Material Adverse Change.

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(c) To the best of each Borrower’s and each Guarantor’s knowledge, no Borrower or Guarantor or any of theirrespective Subsidiaries has any material liability (contingent or otherwise) in connection with a release, spill or discharge,threatened or actual, of any Hazardous Materials or the generation, use, storage, treatment, transportation, manufacture,handling, production or disposal of any Hazardous Materials in material violation of any Environmental Law which has causedor could reasonably be expected to cause a Material Adverse Change.

(d) Each Borrower, each Guarantor and each of their respective Subsidiaries have all licenses, permits, certificates,approvals or similar authorizations required to be obtained or filed in connection with the operations of such Borrower, suchGuarantor or such Subsidiary under any Environmental Law where failure to obtain such permits has caused or could reasonablybe expected to cause a Material Adverse Change and all of such licenses, permits, certificates, approvals or similarauthorizations are valid and in full force and effect where failure to have such permits has caused or could reasonably beexpected to cause a Material Adverse Change.

8.9 Employee Benefits.

(a) Each Plan is in substantial compliance with the applicable provisions of ERISA, the Code and other Federal orState law. Each Plan which is intended to qualify under Section 401(a) of the Code has received or Borrowers and Guarantorswill file an application to receive a favorable determination letter from the Internal Revenue Service within the remedialamendment period prescribed by Section 401(b) of the Code and to the best of each Borrower’s and each Guarantor’sknowledge, nothing has occurred which would cause the loss of such qualification. Each Borrower and each Guarantor and theirrespective ERISA Affiliates have made all required contributions to any Plan subject to Section 412 of the Code, and noapplication for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been madewith respect to any Plan. As of December 31, 2003, the liabilities of all Plans subject to Title IV of ERISA did not exceed theassets of all such Plans by more than $17,500,000 (determined in accordance with the assumptions used for Plan termination bythe Pension Benefit Guaranty Corporation).

(b) There are no pending, or to the best of each Borrower’s and each Guarantor’s knowledge, threatened, claims,actions or lawsuits, or action by any Governmental Authority, with respect to any Plan. There has been no prohibitedtransaction or violation of the fiduciary responsibility rules with respect to any Plan.

(c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no Borrower, Guarantor, or any of theirrespective ERISA Affiliates have incurred or reasonably expect to incur, any material liability under Title IV of ERISA withrespect to any Plan (other than premiums due and not delinquent under Section 4007 of ERISA and any contributions to bemade timely under the Code and ERISA); (iii) no Borrower, Guarantor or any of their respective ERISA Affiliates have incurredor reasonably expect to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 ofERISA, would result in such liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (iv) noBorrower, Guarantor or any of their respective ERISA Affiliates have engaged in a transaction that could be subject toSection 4069 or 4212(c) of ERISA.

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8.10 Bank Accounts. All of the deposit accounts, investment accounts or other accounts in the name of or used by anyBorrower or any Guarantor maintained at any bank or other financial institution are set forth in the Information Certificate ofsuch Borrower or such Guarantor, subject to the right of each Borrower and each Guarantor to establish new accounts inaccordance with Section 5.2 hereof.

8.11 Intellectual Property. To the best of each Borrower’s and each Guarantor’s knowledge, each Borrower and eachGuarantor owns or licenses or otherwise has the right to use all Intellectual Property necessary for the operation of its business aspresently conducted or proposed to be conducted. As of the date hereof, no Borrower or Guarantor has any Intellectual Propertyregistered, or subject to pending applications, in the United States Patent and Trademark Office or any similar office or agencyin the United States, any State thereof, any political subdivision thereof or in any other country, other than those described inthe Information Certificate and has not granted any material written licenses with respect thereto other than as set forth in suchInformation Certificate. To the best of each Borrower’s and each Guarantor’s knowledge, no event has occurred which permits orwould permit after notice or passage of time or both, the revocation, suspension or termination of such rights. To the best ofeach Borrower’s and each Guarantor’s knowledge, no slogan or other advertising device, product, process, method, substance orother Intellectual Property or goods bearing or using any Intellectual Property presently contemplated to be sold by oremployed by such Borrower or such Guarantor infringes any patent, trademark, servicemark, tradename, copyright, license orother Intellectual Property owned by any other Person presently and no claim or litigation is pending or threatened in writingagainst or affecting any Borrower or any Guarantor contesting its right to sell or use any such Intellectual Property. TheInformation Certificate sets forth all Material Contracts of each Borrower and each Guarantor pursuant to which any Borrower orany Guarantor has a license or other right to use any trademarks, logos, designs, representations or other Intellectual Propertyowned by another person as in effect on the date hereof and the dates of the expiration of such agreements or other arrangementsof each Borrower and each Guarantor as in effect on the date hereof (collectively, together with such agreements or otherarrangements as may be entered into by any Borrower or any Guarantor after the date hereof, collectively, the “LicenseAgreements” and individually, a “License Agreement”). No trademark, servicemark or other Intellectual Property currently usedby any Borrower or any Guarantor which is owned by another person, or owned by any Borrower or any Guarantor subject toany security interest, lien, collateral assignment, pledge or other encumbrance in favor of any person other than Administrativeand Collateral Agent, for itself and the ratable benefit of the Lenders and the Bank Product Providers, or any other lien orsecurity interest permitted under this Agreement, is affixed to any Eligible Inventory, except to the extent Administrative andCollateral Agent has received Licensor Agreement with respect thereto or would otherwise be permitted to sell or dispose ofsuch Inventory under applicable laws.

8.12 Subsidiaries; Affiliates; Capitalization; Solvency.

(a) No Borrower or Guarantor has any direct or indirect Subsidiaries or Affiliates (other than Sponsor PortfolioCompanies) and is not engaged in any joint venture or partnership except as set forth in the Information Certificate, subject tothe right of Borrowers and Guarantors to form or acquire Subsidiaries in accordance with Section 9.10 hereof.

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(b) Each Borrower and each Guarantor is the record and beneficial owner of all of the issued and outstanding shares ofCapital Stock of each of the Subsidiaries listed in the Information Certificate as being owned by such Borrower or suchGuarantor and there are no proxies, irrevocable or otherwise, with respect to such shares and no equity securities of any of suchSubsidiaries are or may become required to be issued by reason of any options, warrants, rights to subscribe to, calls orcommitments of any kind or nature and there are no contracts, commitments, understandings or arrangements by which any suchSubsidiary is or may become bound to issue additional shares of it Capital Stock or securities convertible into or exchangeablefor such shares.

(c) As of the date hereof, the issued and outstanding shares of Capital Stock of each Borrower and each Guarantor aredirectly and beneficially owned and held by the Persons indicated in the Information Certificate, and in each case all of suchshares have been duly authorized and are fully paid and non-assessable, free and clear of all claims, liens, pledges andencumbrances of any kind, except as disclosed in writing to Agents prior to the date hereof.

(d) Each Borrower and each Guarantor is Solvent and will continue to be Solvent after the creation of the Obligations,the security interests of Administrative and Collateral Agent, for itself and the ratable benefit of the Lenders and the BankProduct Providers, and the other transaction contemplated hereunder.

8.13 Labor Disputes.

(a) Set forth on Schedule 8.13 hereto is a list (including dates of termination) of all collective bargaining or similaragreements between or applicable to any Borrower or any Guarantor and any union, labor organization or other bargainingagent in respect of the employees of any Borrower or any Guarantor on the date hereof.

(b) There is (i) no significant unfair labor practice complaint pending against any Borrower or any Guarantor or, to thebest of any Borrower’s or any Guarantor’s knowledge, threatened against it, before the National Labor Relations Board, and nosignificant grievance or significant arbitration proceeding arising out of or under any collective bargaining agreement ispending on the date hereof against any Borrower or any Guarantor or, to best of each Borrower’s and each Guarantor’sknowledge, threatened against it, and (ii) no significant strike, labor dispute, slowdown or stoppage is pending against anyBorrower or any Guarantor or, to the best of each Borrower’s and each Guarantor’s knowledge, threatened against any Borroweror any Guarantor.

8.14 Restrictions on Subsidiaries. Except for restrictions contained in this Agreement or any other agreement with respectto Indebtedness of any Borrower or any Guarantor permitted hereunder as in effect on the date hereof, there are no contractual orconsensual restrictions in any Material Contract or charter document of any Borrower or any Guarantor or any of their respectiveSubsidiaries which prohibit or otherwise restrict (a) the transfer of cash or other assets (i) between any Borrower or any Guarantorand any of its or their Subsidiaries or (ii) between any Subsidiaries of any Borrower or any Guarantor or (b) the ability of anyBorrower or any Guarantor or any of its or their Subsidiaries to incur Indebtedness or grant security interests to Administrativeand Collateral Agent, for itself and the ratable benefit of the Lenders and the Bank Product Providers, in the Collateral.

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8.15 Material Contracts. Schedule 8.15 hereto sets forth all Material Contracts to which any Borrower or any Guarantor is aparty or is bound as of the date hereof. Each Borrower and each Guarantor has delivered true, correct and complete copies ofsuch Material Contracts to Agents on or before the date hereof. No Borrower or Guarantor is in breach of or in default under anyMaterial Contract and no Borrower or Guarantor has received any notice of the intention of any other party thereto to terminateany Material Contract (except where such breach, default or termination would not cause a Material Adverse Change).

8.16 Payable Practices. Except as disclosed to Administrative and Collateral Agent in writing, no Borrower or Guarantorhas made any material change in the historical accounts payable practices of the Purchased Business from those generally ineffect immediately prior to the Original Closing Date.

8.17 Acquisition of Purchased Assets.

(a) The Purchase Agreements and the transactions contemplated thereunder have been duly executed, delivered andperformed by BlueLinx (or its Affiliates or Subsidiaries) and, to its knowledge, the Seller, in accordance with their terms in allmaterial respects, including the fulfillment (not merely the waiver, except as may be disclosed to Agents) of all conditionsprecedent set forth therein and giving effect to the terms of the Purchase Agreements and the assignments to be executed anddelivered by Seller (or any of its Affiliates or Subsidiaries) thereunder, BlueLinx acquired and has good and marketable title tothe Purchased Assets, free and clear of all claims, liens, pledges and encumbrances of any kind, except as permitted hereunder.

(b) All actions and proceedings (other than obtaining any consents thereto where failure to do so would not cause aMaterial Adverse Effect), required by the Purchase Agreements, applicable law or regulation (including, but not limited to,compliance with the Hart-Scott-Rodino Anti-Trust Improvements Act of 1976, as amended, and any similar laws of Canadaregarding sales of assets or combinations of business entities) have been taken and the transactions required thereunder havebeen duly and validly taken and consummated.

(c) No court of competent jurisdiction has issued any injunction, restraining order or other order which prohibitsconsummation of the transactions described in the Purchase Agreements and no governmental or other action or proceeding has,to BlueLinx’s knowledge, been threatened or commenced, seeking any injunction, restraining order or other order which seeksto void or otherwise modify the transactions described in the Purchase Agreements, all consents thereto from all applicableGovernmental Authorities and other third parties, except where failure to obtain would not cause a Material Adverse Change,have been obtained and all waiting periods imposed by applicable law with regard thereto have expired.

(d) BlueLinx has delivered, or caused to be delivered, to Agents, true, correct and complete copies of the PurchaseAgreements. The Purchase Agreements have not been amended, supplemented, waived or otherwise modified in any materialrespect without, in the case of the Purchase Agreements, the prior written consent of Agents if such amendment, supplement,waiver or other modification would, as determined by the Agents in their reasonable discretion, cause a Material AdverseChange. No material default exists under any Purchase Agreement by BlueLinx or, to BlueLinx’s knowledge, Seller.

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8.18 Accuracy and Completeness of Information. All information furnished by or on behalf of any Borrower or anyGuarantor in writing to any Agent or any Lender in connection with this Agreement or any of the other Financing Agreementsor any transaction contemplated hereby or thereby, including all information on the Information Certificate, is true and correctin all material respects on the date as of which such information is dated or certified and does not, taken as a whole, omit anymaterial fact necessary in order to make such information not misleading. To the extent any Borrower or any Guarantorfurnishes any projections of the financial position and results of operations of any Borrower or any Guarantor and any of theirrespective Subsidiaries for, or as at the end of, certain future periods, such projections were believed at the time furnished to bereasonable, have been or will have been prepared on a reasonable basis and in good faith by such Borrower or such Guarantorand have been or will be based on assumptions believed by such Borrower or such Guarantor to be reasonable at the time madeand upon the best information then reasonably available to such Borrower or such Guarantor.

8.19 Survival of Warranties; Cumulative. All representations and warranties contained in this Agreement or any of theother Financing Agreements shall survive the execution and delivery of this Agreement and shall be deemed to have been madeagain to Agents and Lenders on the date of each additional borrowing or other credit accommodation hereunder and shall beconclusively presumed to have been relied on by Agents and Lenders regardless of any investigation made or informationpossessed by any Agent or Lender. The representations and warranties set forth herein shall be cumulative and in addition toany other representations or warranties which any Borrower or any Guarantor shall now or hereafter give, or cause to be given, toany Agent or Lender.

SECTION 9. AFFIRMATIVE AND NEGATIVE COVENANTS

9.1 Maintenance of Existence.

(a) Except as otherwise permitted under the terms of this Agreement, each Borrower and each Guarantor shall at alltimes preserve, renew and keep in full, force and effect its corporate existence and rights and franchises with respect thereto andmaintain in full force and effect all permits, licenses, trademarks, tradenames, approvals, authorizations, leases and contractsnecessary to carry on the business as presently or proposed to be conducted.

(b) No Borrower or Guarantor shall change its name unless each of the following conditions is satisfied:(i) Administrative and Collateral Agent shall have received not less than thirty (30) days prior written notice fromAdministrative Borrower of such proposed change in its corporate name, which notice shall accurately set forth the new name;and (ii) Administrative and Collateral Agent shall have received a copy of the amendment to the Certificate of Incorporation orFormation of such Borrower or such Guarantor providing for the name change certified by the Secretary of State of thejurisdiction of incorporation or organization of such Borrower or such Guarantor as soon as it is available.

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(c) No Borrower or Guarantor shall change its chief executive office or its mailing address or organizationalidentification number (or if it does not have one, shall not acquire one) unless Administrative and Collateral Agent shall havereceived not less than thirty (30) days’ prior written notice from Administrative Borrower of such proposed change, whichnotice shall set forth such information with respect thereto as Administrative and Collateral Agent may require andAdministrative and Collateral Agent shall have received such agreements as Administrative and Collateral Agent mayreasonably require in connection therewith. No Borrower or Guarantor shall change its type of organization, jurisdiction oforganization or other legal structure without the prior written consent of Administrative and Collateral Agent, such consent notto be unreasonably withheld, conditioned or delayed.

9.2 New Collateral Locations. Each Borrower and each Guarantor may only establish new locations of its business orCollateral so long as such new location is within the United States of America and provided such Borrower or such Guarantor(a) gives Administrative and Collateral Agent thirty (30) days prior written notice of the intended opening of any such newlocation (or ten (10) days prior written notice of the intended opening if such new location is acquired in connection with aPermitted Acquisition) and (b) executes and delivers, or causes to be executed and delivered, to Administrative and CollateralAgent such agreements, documents, and instruments as Administrative and Collateral Agent may deem necessary or desirable toprotect its interests in the Collateral at such location; provided, however, no Borrower or Guarantor shall be required to complywith the provisions of this Section 9.2 to the extent (x) such new location of Collateral is within the United States of America,(y) such new location of Collateral is not leased or otherwise controlled by any Borrower or any Guarantor and (z) if such newand un-reported location(s) contain(s) Collateral having a value in excess of $3,750,000 for any one location or $7,500,000 inthe aggregate for all such locations, Administrative Borrower has provided Administrative and Collateral Agent with five(5) days prior written notice of the intended opening of such new location.

9.3 Compliance with Laws, Regulations, Etc.

(a) Each Borrower and each Guarantor shall, and shall cause each of its Subsidiaries to, at all times, comply with alllaws, rules, regulations, licenses, permits, approvals and orders applicable to it and duly observe all requirements of any foreign,Federal, State or local Governmental Authority except where failure to do so could not reasonably be expected to cause aMaterial Adverse Change.

(b) Each Borrower and each Guarantor shall give written notice to Administrative and Collateral Agent promptlyupon any Borrower’s or any Guarantor’s receipt of any notice of, or any Borrower’s or any Guarantor’s otherwise obtainingknowledge of, (i) the occurrence of any event involving the release, spill or discharge, threatened or actual, of any HazardousMaterial in material violation of any Environmental Law which is required by law to be reported to the Governmental Authorityhaving jurisdiction over such event or (ii) any investigation, proceeding, complaint, order, directive, claims, citation or writtennotice with respect to: (A) any material violation of any applicable Environmental Law by any Borrower or any Guarantor or(B) the release, spill or discharge, threatened or actual, of any Hazardous Material other than in the ordinary course of businessand other than as permitted under any applicable Environmental Law. Copies of all material environmental surveys, audits,assessments, feasibility studies and results of remedial investigations conducted by or on behalf of any Borrower or anyGuarantor shall be promptly furnished, or caused to be furnished, by such Borrower or such Guarantor to Administrative andCollateral Agent. Each Borrower and each Guarantor shall take all reasonably prompt and appropriate action to respond to anynon-compliance with any of the Environmental Laws and shall regularly report to Administrative and Collateral Agent onmaterial activities or events composing such response.

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(c) Without limiting the generality of the foregoing, whenever Administrative and Collateral Agent reasonablydetermines that there is material violation, or any condition which requires any action by or on behalf of any Borrower or anyGuarantor in order to avoid any violation, of any Environmental Law which could reasonably be expected to cause a MaterialAdverse Change, Borrowers shall, at Administrative and Collateral Agent’s request and Borrowers’ expense: (i) cause anindependent environmental engineer acceptable to Administrative and Collateral Agent to conduct such tests or studies of thesite where material violation or alleged material violation of such Environmental Laws has occurred as may be appropriate andas to such material violation, prepare and deliver to Administrative and Collateral Agent a report setting forth the results of suchtests or studies, a proposed plan for responding to any environmental problems described therein, and an estimate of the coststhereof and (ii) provide to Administrative and Collateral Agent a supplemental report of such engineer whenever the scope ofsuch material violation, or such Borrower’s or such Guarantor’s response thereto or the estimated costs thereof, shall change inany material respect.

(d) Each Borrower and each Guarantor shall indemnify and hold harmless Agents, Lenders and their respectivedirectors, officers, employees, agents, invitees, representatives, successors and assigns, from and against any and all losses,claims, damages, liabilities, costs, and expenses (including attorneys’ fees and legal expenses) directly or indirectly arising outof or attributable to the use, generation, manufacture, reproduction, storage, release, threatened release, spill, discharge, disposalor presence of a Hazardous Material, including the costs of any required or necessary repair, cleanup or other remedial work withrespect to any property of any Borrower or any Guarantor and the preparation and implementation of any closure, remedial orother required plans; provided, however, Borrowers and Guarantors need not indemnity any such Person for losses, claims,damages, liabilities costs or expenses arising from such Person’s gross negligence or willful misconduct. All representations,warranties, covenants and indemnifications in this Section 9.3 shall survive the payment of the Obligations and the terminationor non-renewal of this Agreement.

9.4 Payment of Taxes and Claims. Each Borrower and each Guarantor shall, and shall cause each of its Subsidiaries to, dulypay and discharge all taxes, assessments, contributions and governmental charges upon or against it or its properties or assets,except (i) for taxes the validity of which are being contested in good faith by appropriate proceedings diligently pursued andavailable to such Borrower, such Guarantor or such Subsidiary, as the case may be and with respect to which adequate reserveshave been set aside on its books in accordance with GAAP and (ii) as could not reasonably be expected to cause a MaterialAdverse Change.

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9.5 Insurance. Each Borrower and each Guarantor shall at all times maintain with financially sound and reputable insurersinsurance with respect to the Collateral against loss or damage and all other insurance of the kinds and in the amountscustomarily insured against or carried by corporations of established reputation engaged in the same or similar businesses andsimilarly situated. Said policies of insurance shall be reasonably satisfactory to Administrative and Collateral Agent as to form,amount and insurer. Each Borrower and each Guarantor shall furnish certificates, policies or endorsements to Administrative andCollateral Agent as Administrative and Collateral Agent shall require as proof of such insurance, and, if any Borrower or anyGuarantor fails to do so, Administrative and Collateral Agent is authorized, but not required, to obtain such insurance at theexpense of such Borrower or such Guarantor. All such policies shall provide for at least 10 days prior written notice toAdministrative and Collateral Agent of any cancellation or reduction of coverage due to non-payment of premiums and at least30 days prior written notice to Administrative and Collateral Agent of any other cancellation or reduction of coverage and thatAdministrative and Collateral Agent may act as attorney for any Borrower or any Guarantor in obtaining, and at any time anEvent of Default exists or has occurred and is continuing, adjusting, settling, amending and canceling such insurance. EachBorrower and each Guarantor shall cause Administrative and Collateral Agent to be named as a loss payee for property andcasualty insurance and an additional insured for liability insurance (but without any liability for any premiums) under suchinsurance policies of Borrowers and Guarantors and each Borrower and each Guarantor shall obtain non-contributory lender’sloss payable endorsements to all such insurance policies in form and substance satisfactory to Administrative and CollateralAgent. Such lender’s loss payable endorsements shall specify that the proceeds of such insurance shall be payable toAdministrative and Collateral Agent, for itself and the ratable benefit of the Lenders and the Bank Product Providers, as itsinterests may appear and further specify that Administrative and Collateral Agent shall be paid regardless of any act or omissionby any relevant Person. At its option, Administrative and Collateral Agent may (a) apply any insurance proceeds received byAdministrative and Collateral Agent with respect to Accounts, Inventory or any other assets or events, at any time to the cost ofrepairs or replacement of Collateral and/or to payment of the Obligations, whether or not then due, in any order and in suchmanner as Administrative and Collateral Agent may determine or hold such proceeds as cash collateral for the Obligations or(b) if an Event of Default then exists, apply any insurance proceeds received by Administrative and Collateral Agent to the costof repairs or replacement of Collateral and/or to payment of the Obligations, whether or not then due, in any order and in suchmanner as Administrative and Collateral Agent may determine or hold such proceeds as cash collateral for the Obligations.Upon application of such proceeds to the Obligations, Loans may be available subject and pursuant to the terms hereof to beused for the costs of repair or replacement of the Collateral lost or damages resulting in the payment of such insurance proceeds.So long as no Event of Default exists, all other insurance proceeds may be collected by Borrowers and Guarantors.

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9.6 Financial Statements and Other Information.

(a) Each Borrower and each Guarantor shall, and shall cause each of its and their Subsidiaries to, keep proper booksand records in which true and complete entries shall be made of all dealings or transactions of or in relation to the Collateral andthe business of each Borrower, each Guarantor and each of their respective Subsidiaries in accordance with GAAP. Borrowersand Guarantors shall promptly furnish to Administrative and Collateral Agent any and all financial or other information asAdministrative and Collateral Agent may reasonably request relating to the Collateral and the assets, business and operations ofBorrowers and Guarantors, and to notify the auditors and accountants of Borrowers and Guarantors that Administrative andCollateral Agent is authorized to obtain such information directly from them. Without limiting the foregoing, Borrowers shallfurnish or cause to be furnished to Administrative and Collateral Agent, the following: (i) within thirty (30) days after the end ofeach fiscal month (or within forty-five (45) days if such fiscal month end is also a fiscal quarter end), unaudited consolidatedfinancial statements (including in each case balance sheets, statements of income and loss, statements of cash flow, andstatements of shareholders’ equity), all in reasonable detail, fairly presenting the financial position and the results of theoperations of BlueLinx and its Subsidiaries as of the end of and through such fiscal month (or quarter), certified to be correct bythe chief financial officer of BlueLinx, subject to normal year-end adjustments and lack of footnotes and, if a CompliancePeriod is then in effect, accompanied by a compliance certificate substantially in the form of Exhibit C hereto, along with aschedule in form reasonably satisfactory to Administrative and Collateral Agent of the calculations used in determining, as ofthe end of such month (or quarter), whether Borrowers were in compliance with the covenants set forth in Section 9.17 of thisAgreement for such month (or quarter); and (ii) within ninety (90) days after the end of each fiscal year, audited consolidatedfinancial statements of BlueLinx and its Subsidiaries (including in each case balance sheets, statements of income and loss,statements of cash flow and statements of shareholders’ equity), and the accompanying notes thereto, all in reasonable detail,fairly presenting the financial position and the results of the operations of BlueLinx and its Subsidiaries as of the end of and forsuch fiscal year, together with (A) the unqualified opinion of independent certified public accountants, which accountants shallbe an independent accounting firm selected by Borrowers and reasonably acceptable to Administrative and Collateral Agent,that such financial statements have been prepared in accordance with GAAP, and present fairly the results of operations andfinancial condition of BlueLinx and its Subsidiaries as of the end of and for the fiscal year then ended and (B) any managementletters that may be issued with regard to the Borrowers or Guarantors.

(b) Borrowers and Guarantors shall promptly notify Administrative and Collateral Agent in writing of the details of(i) any loss, damage, investigation, action, suit, proceeding or claim relating to the Collateral, or any other property which issecurity for the Obligations, which constitutes a Material Adverse Change, (ii) any Material Contract of any Borrower or anyGuarantor being terminated (where such termination would cause a Material Adverse Change) or amended (in any way thatwould materially and adversely alter such Borrower’s or such Guarantor’s rights or obligations thereunder, in which event suchBorrower or such Guarantor shall provide Administrative and Collateral Agent a copy of such amendment) or any new MaterialContract being entered into (in which event such Borrower or such Guarantor shall provide Administrative and Collateral Agentwith a copy of such new Material Contract or amendment), (iii) any order, judgment or decree in excess of Five Million Dollars($5,000,000) having been entered against any Borrower, any Guarantor, or any of their respective properties or assets, (iv) anynotification of the violation of any laws or regulation received by any Borrower or any Guarantor where such violation couldreasonably be expected to cause a Material Adverse Change, (v) any ERISA Event, (vi) the occurrence of any Default or Eventof Default and (vii) any notice of a material default or of termination received by any Borrower or any Guarantor with respect toany Purchase Agreement or Affiliate Lease.

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(c) Borrowers shall promptly after the sending or filing thereof furnish or cause to be furnished to Administrative andCollateral Agent copies of all reports which BlueLinx or Parent sends to its stockholders generally and copies of all reports andregistration statements which BlueLinx or Parent files with the Securities and Exchange Commission, any national securitiesexchange or the National Association of Securities Dealers, Inc.

(d) Borrowers and Guarantors shall furnish or cause to be furnished to Administrative and Collateral Agent suchinformation with respect to the Collateral and the business of Borrowers and Guarantors, as Administrative and Collateral Agentmay reasonably request, including, without limitation, at least 30 days before the beginning of each Borrower’s and eachGuarantor’s fiscal year, updated projections for such fiscal year (including balance sheets and statements of operations,stockholders’ equity and cash flows and Borrowing Base and Excess Availability projections on a month-by-month basis).Agents and Lenders are hereby authorized to deliver a copy of any financial statement or any other information relating to anyBorrower or any Guarantor to any court or other Governmental Authority, Affiliate of any Agent or any Lender or to anyParticipant or assignee or prospective Participant or assignee. Each Borrower and each Guarantor hereby irrevocably authorizesand directs all accountants or auditors to deliver to Administrative and Collateral Agent, at Borrowers’ expense, copies of thefinancial statements of each Borrower and each Guarantor and any reports or management letters prepared by such accountantsor auditors on behalf of any Borrower or any Guarantor and to disclose to Administrative and Collateral Agent such informationas they may have regarding the business of any Borrower or any Guarantor. Any documents, schedules, invoices or other papersdelivered to Agents may be destroyed or otherwise disposed of by Agents one (1) year after the same are delivered to Agents,except as otherwise designated by Administrative Borrower to Agents in writing.

9.7 Sale of Assets, Consolidation, Merger, Dissolution, Etc. Each Borrower and each Guarantor shall not, and shall notpermit any of its Subsidiaries to (and Agents and Lenders do not authorize any Borrower, any Guarantor or any of theirrespective Subsidiaries to), directly or indirectly:

(a) merge into or with, consolidate or amalgamate with any other Person or permit any other Person to merge into orwith or consolidate with it; provided, that,

(i) any Subsidiary of any Borrower or any Guarantor that is not another Guarantor or another Borrower maymerge with or into or consolidate with any other Subsidiary of any Borrower or any Guarantor that is not another Guarantor oranother Borrower,

(ii) upon the prior written consent of Administrative and Collateral Agent, such consent not to be unreasonablywithheld, a domestic Subsidiary of any Borrower (other than another Borrower or a Guarantor) may merge with and into suchBorrower with such Borrower being the surviving entity,

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(iii) any Borrower may merge with and into another Borrower so long as (A) as of the effective date of the mergerand after giving effect thereto, no Default or Event of Default shall exist or have occurred, (B) Administrative Borrower providesAdministrative and Collateral Agent not less than 10 Business Days’ prior written notice thereof, (C) Borrowers and Guarantorsexecute and deliver, prior to or simultaneously with any such action, any and all documents and agreements requested byAdministrative and Collateral Agent to confirm the continuation and preservation of all security interests and liens granted toAdministrative and Collateral Agent hereunder, and (D) Administrative and Collateral Agent shall have received, true, correctand complete copies of all agreements, documents and instruments relating to such merger, including, but not limited to, thecertificate or certificates of merger to be filed with each appropriate Secretary of State (with a copy as filed promptly after suchfiling), and

(iv) any Guarantor may merge with and into another Guarantor so long as (1) as of the effective date of themerger and after giving effect thereto, no Default or Event of Default shall exist or have occurred, (2) Administrative Borrowerprovides Administrative and Collateral Agent not less than 10 Business Days’ prior written notice thereof, (3) Borrowers andGuarantors execute and deliver, prior to or simultaneously with any such action, any and all documents and agreementsrequested by Administrative and Collateral Agent to confirm the continuation and preservation of all security interests and liensgranted to Administrative and Collateral Agent hereunder, and (4) Administrative and Collateral Agent shall have received,true, correct and complete copies of all agreements, documents and instruments relating to such merger, including, but notlimited to, the certificate or certificates of merger to be filed with each appropriate Secretary of State (with a copy as filedpromptly after such filing); or

(b) sell, issue, assign, lease, license, transfer, abandon, sell and leaseback or otherwise dispose of any Capital Stock orIndebtedness to any other Person or any of its assets to any other Person, except for:

(i) sales of Inventory in the ordinary course of business,

(ii) the disposition of worn-out or obsolete Equipment so long as (A) any proceeds are deposited to the BlockedAccount, and (B) such sales do not involve Equipment having an aggregate fair market value in excess of Twenty MillionDollars ($20,000,000) for all such Equipment disposed of in any fiscal year of Borrowers and Guarantors; provided, however, ifsuch sales of Equipment in any fiscal year involve Equipment having an aggregate fair market value of less than $20,000,000(such difference referred to herein as an “Unused Equipment Sale Allowance”), up to $10,000,000 of such Unused EquipmentSale Allowance may be sold in the succeeding fiscal year;

(iii) the disposition of assets other than Accounts, Inventory or worn-out or obsolete Equipment so long as(A) any proceeds are deposited to the Blocked Account, and (B) such sales do not involve assets having an aggregate fairmarket value in excess of Twenty Million Dollars ($20,000,000) for all such assets disposed of in any fiscal year of Borrowersand Guarantors;

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(iv) the issuance and sale by any Borrower or any Guarantor of Capital Stock of such Borrower or such Guarantorafter the date hereof; provided, that, (A) Administrative and Collateral Agent shall have received not less than ten (10) BusinessDays prior written notice of such issuance and sale by such Borrower or such Guarantor, which notice shall specify the parties towhom such shares are to be sold, the terms of such sale, the total amount which it is anticipated will be realized from theissuance and sale of such stock and the net cash proceeds which it is anticipated will be received by such Borrower or suchGuarantor from such sale, (B) such Borrower or such Guarantor shall not be required to pay any cash dividends or repurchase orredeem such Capital Stock or make any other payments in respect thereof, (C) the terms of such Capital Stock, and the terms andconditions of the purchase and sale thereof, shall not include any terms that include any limitation on the right of suchBorrower or such Guarantor to request or receive Loans or the right of such Borrower or such Guarantor to amend or modify anyof the terms and conditions of this Agreement or any of the other Financing Agreements or otherwise in any way relate to oraffect the arrangements of such Borrower or such Guarantor with Agents and Lenders or are more restrictive or burdensome tosuch Borrower or such Guarantor than the terms of any Capital Stock in effect on the date hereof, (D) no Event of Default wouldoccur as a result of such sale or issuance, and (E) except as Administrative and Collateral Agent and the Lenders may otherwiseagree in writing, if an Event of Default exists on the date of such issuance and sale or after giving effect thereto, all of theproceeds of such sale and issuance shall be paid to Administrative and Collateral Agent for application to the Obligations inaccordance with the terms of Section 6.4(a) hereof;

(v) the sale and leaseback of Equipment so long as (A) any proceeds are deposited to the Blocked Account, and(B) such sale and leaseback transactions do not involve Equipment having an aggregate fair market value in excess of TenMillion Dollars ($10,000,000) for all such Equipment sold and leased in such transactions in any fiscal year of Borrowers andGuarantors;

(vi) the sale, lease, transfer or other disposition of assets by a Borrower to another Borrower so long as at the timeof any such sale, lease, transfer or other disposition, no Default or Event of Default exists or is continuing; and

(vii) the sale, lease, transfer or other disposition of assets by a Guarantor to another Guarantor so long as at thetime of any such sale, lease, transfer or other disposition, no Default or Event of Default exists or is continuing;

(c) wind up, liquidate or dissolve except in the case of Subsidiaries of any Borrower or any Guarantor that are not aBorrower or a Guarantor;

(d) agree to do any of the foregoing; provided, however, any Borrower, any Guarantor or any of their respectiveSubsidiaries may enter into agreements to effectuate any transaction otherwise prohibited by this Section 9.7 so long as(i) concurrently with or promptly after entering into any such agreement, such Borrower, such Guarantor or such Subsidiarygives Administrative and Collateral Agent written notice thereof to the extent not prohibited by any confidentiality provisionsrelating thereto and binding on such Borrower, such Guarantor or such Subsidiary, and (ii) the consummation of transactionscontemplated by any such agreement is conditioned upon obtaining the consent of Administrative and Collateral Agent andsuch Lenders as may be required pursuant to Section 11.3 hereof or repaying the Obligations in full and terminating thisAgreement in accordance with its terms.

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To the extent Administrative and Collateral Agent and any Lenders whose consent is required pursuant to Section 11.3 hereofwaive the provisions of this Section 9.7 with respect to the sale of any Collateral, or any Collateral is sold to a Person aspermitted by this Section 9.7, to the extent the proceeds of any such sale are remitted to Administrative and Collateral Agentpursuant to all applicable terms of this Agreement, such Collateral shall be sold free and clear of the liens created by theFinancing Agreements (and, in the event that such Collateral consists of all of the capital stock of a Person that is a Guarantor,such Person, and the assets of such Person, shall be released from the Financing Agreements to which it is a party), andAdministrative and Collateral Agent shall be authorized to take any actions deemed appropriate in order to effect the foregoing.

9.8 Encumbrances. Each Borrower and each Guarantor shall not, and shall not permit any of its Subsidiaries to, create,incur, assume, suffer or permit to exist any security interest, mortgage, pledge, lien, charge or other encumbrance of any naturewhatsoever on any of its assets or properties, including the Collateral or file or permit the filing of, or permit to remain in effect,any financing statement or other similar notice of any security interest or lien with respect to such assets or properties, except:

(a) the security interests and liens of Administrative and Collateral Agent, for itself and the ratable benefit of theLenders and Bank Product Providers;

(b) liens securing the payment of taxes, either not yet overdue or the validity of which are being contested in goodfaith by appropriate proceedings diligently pursued and available to such Borrower, such Guarantor or such Subsidiary, as thecase may be and with respect to which adequate reserves have been set aside on its books;

(c) statutory liens (other than liens securing the payment of taxes) arising in the ordinary course of such Borrower’s,such Guarantor’s or such Subsidiary’s business to the extent: (i) such liens secure Indebtedness which is not overdue or (ii) suchliens secure Indebtedness relating to claims or liabilities which are fully insured or bonded and being defended at the sole costand expense and at the sole risk of the insurer or being contested in good faith by appropriate proceedings diligently pursuedand available to such Borrower, such Guarantor or such Subsidiary, in each case prior to the commencement of foreclosure orother similar proceedings and with respect to which adequate reserves have been set aside on its books;

(d) zoning restrictions, easements, licenses, covenants and other restrictions affecting the use of Real Property whichdo not interfere in any material respect with the use of such Real Property or ordinary conduct of the business of such Borrower,such Guarantor or such Subsidiary as presently conducted thereon or materially impair the value of the Real Property whichmay be subject thereto;

(e) purchase money security interests in Equipment (including Capital Leases) and purchase money mortgages onReal Property to secure Indebtedness permitted under Sections 9.9(a) and 9.9(c) hereof;

(f) Intentionally Omitted;

(g) the security interests and liens set forth on Schedule 8.4 hereto;

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(h) renewals and extensions of any of the foregoing security interests and liens so long as the aggregate principalamount of the Indebtedness (plus any accrued and unpaid fees and interest), if any, secured thereby is not increased and suchrenewal or extension does not encumber additional assets of such Borrower, such Guarantor or such Subsidiary;

(i) leases or subleases granted to third Persons that do not materially interfere with the conduct of the business of suchBorrower, such Guarantor or such Subsidiary;

(j) security interests in and liens on property or assets acquired pursuant to an acquisition permitted by Section 9.10hereof, or on property or assets of a Person in existence at the time such Person is acquired pursuant to an acquisition permittedby Section 9.10 hereof so long as: (i) any Indebtedness that is secured by such security interests and liens is otherwise permittedunder Section 9.9 hereof and (ii) such security interests and liens are not incurred in connection with, or in contemplation of,such acquisition and do not attach to any other asset of any Borrower or any Guarantor or such acquired Person or otherwiseviolate any of the provisions of this Agreement;

(k) pledges and deposits of cash by any Borrower or any Guarantor after the date hereof in the ordinary course ofbusiness and commercially reasonable in connection with workers’ compensation, unemployment insurance and other types ofsocial security benefits or in connection with obligations under Hedging Transactions;

(l) judgments liens arising in connection with legal proceedings that do not constitute an Event of Default; provided,that, (i) such liens are being contested in good faith and by appropriate proceedings diligently pursued, (ii) adequate reserves orother appropriate provision, if any, as are required by GAAP have been established therefor, (iii) a stay of enforcement of anysuch liens is in effect and (iv) Administrative and Collateral Agent may establish a Reserve with respect thereto; and

(m) liens on assets other than Accounts, collections on Accounts or Inventory to the extent such liens do not secureobligations in excess of $10,000,000 in the aggregate at any one time outstanding.

9.9 Indebtedness. Each Borrower and each Guarantor shall not, and shall not permit any of its Subsidiaries to, incur, create,assume, become or be liable in any manner with respect to, suffer or permit to exist, any Indebtedness or guarantee, assume,endorse, or otherwise become responsible for (directly or indirectly) the performance, dividends or other obligations of anyPerson, except:

(a) the Obligations;

(b) purchase money Indebtedness (including Capital Leases) arising after the date hereof to the extent secured bypurchase money security interests in Equipment (including Capital Leases) not to exceed Twenty Million Dollars($20,000,000) in the aggregate at any time outstanding so long as such security interests do not apply to any property of anyBorrower, any Guarantor or any of their respective Subsidiaries other than the Equipment so acquired, and the Indebtednesssecured thereby does not exceed the cost of the Equipment so acquired;

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(c) purchase money mortgages on Real Property not to exceed Thirty-Five Million Dollars ($35,000,000) in theaggregate at any time outstanding so long as such mortgages do not apply to any property of any Borrower, any Guarantor orany of their respective Subsidiaries other than the Real Property so acquired, and the Indebtedness secured thereby does notexceed the cost of the Real Property so acquired;

(d) guaranties by any Subsidiaries of any Borrower or any Guarantor of the Obligations in favor of Administrative andCollateral Agent, for itself and the ratable benefit of the Lenders and the Bank Product Providers;

(e) Indebtedness with respect to any Hedging Transactions; provided, that, such arrangements are: (i) with any BankProduct Provider, any Person that constitutes an Eligible Transferee or any other bank or other financial institution that hascombined capital and unimpaired surplus of not less than Five Hundred Million Dollars ($500,000,000), (ii) were entered intofor the purpose of protecting such Borrower, such Guarantor or such Subsidiary against fluctuations in interest rates and not forspeculative purposes and (iii) except with respect to Indebtedness owed to Bank Product Providers or secured by pledges ordeposits of cash pursuant to Section 9.8(k), Indebtedness arising thereunder or in connection therewith is unsecured;

(f) the issuance by Borrower, and guaranties thereof by its Subsidiaries, of no more than $400,000,000 in seniorunsecured notes on terms and conditions reasonably satisfactory to Administrative and Collateral Agent so long as: (i) noDefault or Event of Default exists at the time such notes are issued or would occur as a result thereof; (ii) the net cash proceedsof such notes are used first to repay the obligations of Borrower under the Term Loan Agreement, and any remaining proceedsare remitted to Administrative and Collateral Agent for application to the Obligations as set forth in Section 6.4(a) hereof;(iii) prior to its incurrence, Administrative and Collateral Agent shall have received such information with regard to such notesas it may reasonably request, including, without limitation, true, correct and complete copies of all agreements, documents andinstruments evidencing or otherwise related to such Indebtedness; (iv) Borrower does not, directly or indirectly, (A) without theprior written consent of Administrative and Collateral Agent, amend, modify, alter or change the terms of such notes or anyagreement, document or instrument related thereto in a manner materially more adverse to the Lenders or so as to make the termsthereof materially more burdensome or restrictive to Borrower, in each case, than the terms thereof in effect prior to suchamendment, modification, alteration or change, or (B) redeem, retire, defease, purchase or otherwise acquire such notes (exceptpursuant to regularly scheduled payments permitted under the terms of this Agreement and any subordination agreement relatedto such notes), or set aside or otherwise deposit or invest any sums for such purpose, and (v) Borrower shall furnish toAdministrative and Collateral Agent all material notices or demands in connection with such Indebtedness either received byBorrower or on its behalf promptly after the receipt thereof, or sent by Borrower or on its behalf concurrently with the sendingthereof, as the case may be;

(g) Intentionally Omitted;

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(h) the Indebtedness set forth on Schedule 9.9 hereto; provided, that, (i) Borrowers and Guarantors may only makeregularly scheduled payments of principal and interest in respect of such Indebtedness in accordance with the terms of theagreement or instrument evidencing or giving rise to such Indebtedness as in effect on the date hereof, (ii) Borrowers andGuarantors shall not, directly or indirectly, (A) without the prior written consent of Administrative and Collateral Agent, amend,modify, alter or change the terms of such Indebtedness in a manner materially more adverse to the Lenders or so as to make theterms thereof materially more burdensome or restrictive to Borrowers and Guarantors, in each case, than the terms thereof ineffect prior to such amendment, modification, alteration or change, or (B) redeem, retire, defease, purchase or otherwise acquiresuch Indebtedness, or set aside or otherwise deposit or invest any sums for such purpose, (iii) Borrowers and Guarantors shallfurnish to Administrative and Collateral Agent all notices or demands in connection with such Indebtedness either received byany Borrower, any Guarantor or on any of their behalf, promptly after the receipt thereof, or sent by any Borrower, any Guarantoror on any of their behalf, concurrently with the sending thereof, as the case may be and (iv) with respect to Indebtedness arisingin connection with the letters of credit listed on Schedule 9.9 hereto: (A) in no event may such Indebtedness be secured or cash-collateralized and (B) such Indebtedness may not be renewed, extended, replaced or otherwise continue to be outstandingbeyond the maturity dates of such letters of credit set forth on Schedule 9.9 hereto;

(i) so long as the aggregate amount thereof does not exceed $5,000,000 at any time, Indebtedness with respect tosurety bonds, appeal bonds or like instruments acquired in the ordinary course of business or in connection with theenforcement of rights or claims of any Borrower, any Guarantor or any of their respective Subsidiaries or in connection withjudgments that do not result in a Default or an Event of Default;

(j) to the extent subject to the intercompany subordination agreement described in Section 4.1(i) and otherwisepermitted under Section 9.10 hereof (i) Indebtedness of any Borrower or any Guarantor or any of their respective Subsidiaries toany other Subsidiary or any Borrower or any Guarantor, or (ii) Indebtedness of BlueLinx to Parent;

(k) unsecured guaranties by any Borrower of Indebtedness or other obligations of its Subsidiaries that are permitted tobe incurred hereunder;

(l) Indebtedness of a Subsidiary of any Borrower acquired pursuant to the terms of Section 9.10 hereof, or assumed byany Borrower in connection with the acquisition of an asset pursuant to the terms of Section 9.10 hereof, so long as suchIndebtedness was not incurred in connection with, or in contemplation of, such acquisition or such investment and otherwisedoes not violate any provision of this Agreement;

(m) Indebtedness owing in connection with the liens permitted under Sections 9.8(b), 9.8(c), 9.8(k) or 9.8(m);

(n) up to $5,000,000, in the aggregate at any one time outstanding, of Indebtedness representing the unpaid balanceof the purchase price of any property or services that constitutes an account payable to a trade creditor (whether or not anAffiliate) which (i) was created, incurred, assumed or guaranteed by a Borrower or a Guarantor in the ordinary course of businessof such Borrower or such Guarantor in connection with obtaining goods, materials or services, (ii) is overdue by more thanninety (90) days and (iii) is not being contested by such Borrower or such Guarantor in good faith;

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(o) unsecured Indebtedness of any Borrower or any Guarantor to any third person (other than another Borrower orGuarantor) arising after the date hereof in an amount at any one time outstanding not to exceed Twenty-Five Million Dollars($25,000,000) in the aggregate for all such Indebtedness to all such third persons; provided, that, (i) Borrowers and Guarantorsmay only make regularly scheduled payments of principal and interest in respect of such Indebtedness in accordance with theterms of the agreement or instrument evidencing or giving rise to such Indebtedness, (ii) Each Borrower and each Guarantorshall not, directly or indirectly, (A) without the prior written consent of Administrative and Collateral Agent, amend, modify,alter or change the terms of such Indebtedness in a manner materially more adverse to the Lenders or so as to make the termsthereof materially more burdensome or restrictive to such Borrower or such Guarantor, in each case, than the terms thereof ineffect prior to such amendment, modification, alteration or change, or (B) redeem, retire, defease, purchase or otherwise acquiresuch Indebtedness, or set aside or otherwise deposit or invest any sums for such purpose, and (iii) Borrowers and Guarantorsshall furnish to Administrative and Collateral Agent all material notices or demands in connection with such Indebtednesseither received by any Borrower, any Guarantor or on any of their behalf, promptly after the receipt thereof, or sent by anyBorrower, any Guarantor or on any of their behalf, concurrently with the sending thereof, as the case may be;

(p) unsecured Indebtedness of any Borrower to sellers incurred as part of the purchase price in connection with anyPermitted Acquisitions not to exceed Twenty-Five Million Dollars ($25,000,000) in the aggregate among all Borrowers at anyone time outstanding, so long as such Indebtedness is subordinated to the Obligations under terms and conditions reasonablysatisfactory to Administrative and Collateral Agent; and

(q) any Indebtedness of BlueLinx consisting of a Mortgage Proceeds Investment; provided, that, BlueLinx shall notmake any repayments with respect thereto unless: (i) Modified Adjusted Excess Availability after giving effect to any suchrepayment is equal to or greater than $120,000,000; (b) both before and after giving effect to any such repayment, Borrowers’Fixed Charge Coverage Ratio for the immediately trailing twelve month period, on a consolidated basis, is equal to or greaterthan 1.1:1.0 (for purposes of this Section 9.9(q) only, Fixed Charge Coverage Ratio shall be calculated by excluding theamount of any such repayment and by adjusting the interest component of the calculation to include any interest paymentswhich would have been made by the Borrowers had the amount of Mortgage Proceeds Investment which is being repaid neverbeen loaned to the BlueLinx); (c) Administrative Borrower shall have provided Administrative and Collateral Agent with atleast ten (10) Business Days prior written notice of any such repayment; (d) no Default or Event of Default shall have occurredand be continuing or would result from such repayment; and (e) prior to the making of any such repayment, Administrative andCollateral Agent shall have received Borrowers’ unaudited internally prepared financial statements for the month immediatelypreceding the date of such prepayment, accompanied by a certificate of Administrative Borrower’s chief financial officer as toBorrowers’ compliance with the terms of this Section 9.9(q) together with such supporting documentation therefor asAdministrative and Collateral Agent may reasonably request.

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9.10 Loans, Investments, Etc. Each Borrower and each Guarantor shall not, and shall not permit any of its Subsidiaries to,directly or indirectly, make, or suffer or permit to exist, any loans or advance money or property to any Person, or anyinvestment in (by capital contribution, dividend or otherwise) or purchase or repurchase the Capital Stock or Indebtedness or allor a substantial part of the assets or property of any Person, or form or acquire any Subsidiaries, or agree to do any of theforegoing, except:

(a) the endorsement of instruments for collection or deposit in the ordinary course of business;

(b) investments in cash or Cash Equivalents so long as the terms and conditions of Section 5.2 hereof shall have beensatisfied with respect to the deposit account or investment account in which such cash or Cash Equivalents are held; provided,however, such cash or Cash Equivalents must be held in a savings or investment account which is subject to Administrative andCollateral Agent’s first priority perfected security interest if any Revolving Loans or Term Loans are then outstanding;

(c) the existing equity investments of each Borrower and each Guarantor as of the date hereof in their respectiveSubsidiaries, provided, that, no Borrower or Guarantor shall have any obligation to make any other investment in, or loans to, orother payments in respect of, any of such Subsidiaries;

(d) stock or obligations issued to any Borrower or any Guarantor by any Person (or the representative of such Person)in respect of Indebtedness of such Person owing to such Borrower or such Guarantor in connection with the insolvency,bankruptcy, receivership or reorganization of such Person or a composition or readjustment of the debts of such Person;provided, that, the original of any such stock or instrument having a principal amount in excess of $1,000,000 evidencing suchobligations shall be promptly delivered to Administrative and Collateral Agent, upon Administrative and Collateral Agent’srequest, together with such stock power, assignment or endorsement by such Borrower or such Guarantor as Administrative andCollateral Agent may request;

(e) obligations of account debtors to any Borrower or any Guarantor arising from Accounts which are past dueevidenced by a promissory note made by such account debtor payable to such Borrower or such Guarantor; provided, that,promptly upon the receipt of the original of any such promissory note by such Borrower or such Guarantor having a principalamount in excess of $1,000,000, such promissory note shall be endorsed to the order of Administrative and Collateral Agent bysuch Borrower or such Guarantor and promptly delivered to Administrative and Collateral Agent as so endorsed;

(f) the loans and advances set forth on Schedule 9.10 hereto; provided, that, as to such loans and advances,(i) Borrowers and Guarantors shall not, directly or indirectly, amend, modify, alter or change the terms of such loans andadvances or any agreement, document or instrument related thereto and (ii) Borrowers and Guarantors shall furnish toAdministrative and Collateral Agent all notices or demands in connection with such loans and advances either received by anyBorrower, any Guarantor or on any of their behalf, promptly after the receipt thereof, or sent by any Borrower, any Guarantor oron any of their behalf, concurrently with the sending thereof, as the case may be;

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(g) loans and advances by any Borrower or any Guarantor to officers and employees of such Borrower or suchGuarantor so long as such loans are made in the ordinary course of such Borrower’s or such Guarantor’s business and withrespect to activities arising from such persons employment by such Borrower or such Guarantor;

(h) loans and advances by BlueLinx to BlueLinx Building Products Canada Ltd., a company organized under thelaws of British Columbia, not to exceed $10,000,000 in the aggregate at any one time outstanding; and

(i) Permitted Acquisitions; provided, however, in the case of a Permitted Acquisition which is an Asset Acquisition,the assets acquired by any Borrower shall not be included in the calculation of the Borrowing Base until the Administrative andCollateral Agent shall have had the opportunity to perform a field examination and appraisal through its examiners or throughrepresentatives that it may retain in order to determine the eligibility of such assets for inclusion in the calculation of theBorrowing Base;

(j) any Borrower may form an Acquisition Subsidiary so long as; (i) Administrative Borrower provides Administrativeand Collateral Agent with prior written notice of the formation of any Acquisition Subsidiary; (ii) no Default or Event of Defaulthas occurred and is continuing or would result from the formation of such Acquisition Subsidiary; (iii) Administrative andCollateral Agent, for the ratable benefit of the Lenders and the Bank Product Providers, shall be granted a first priority securityinterest (subject to the security interests, mortgages, pledges, liens, charges and other encumbrances otherwise permitted underSection 9.8 hereof) in all assets (including any Capital Stock) of such Acquisition Subsidiary and such Borrower shall causesuch Acquisition Subsidiary to execute any documents and take all actions that may be required under applicable law or thatAdministrative and Collateral Agent may reasonably request, in order to grant, preserve, protect and perfect such securityinterest, all in form and substance satisfactory to Administrative and Collateral Agent; and (iv) either (A) such Borrower shallcause such newly formed Acquisition Subsidiary to execute a (1) general continuing guaranty in favor of Administrative andCollateral Agent, for itself and the ratable benefit of the Lenders and the Bank Product Providers, in form and substancesatisfactory to Administrative and Collateral Agent, and (2) a joinder to this Agreement, in form and substance satisfactory toAdministrative and Collateral Agent, whereby such newly formed Acquisition Subsidiary acknowledges and agrees that it is a“Guarantor” hereunder; or (B) such newly formed Acquisition Subsidiary shall execute a joinder to this Agreement, in form andsubstance satisfactory to Administrative and Collateral Agent, whereby such newly formed Acquisition Subsidiaryacknowledges and agrees that it is a “Borrower” hereunder subject to the terms hereunder and subject to such newly formedAcquisition Subsidiary and Borrowers executing such documentation requested by Administrative Agent in its reasonablediscretion.

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9.11 Dividends and Redemptions. Each Borrower and each Guarantor shall not, and shall not permit any of its Subsidiariesto, directly or indirectly, declare or pay any dividends on account of any shares of any class of Capital Stock of such Borrower,such Guarantor or such Subsidiary, as the case may be, now or hereafter outstanding, or set aside or otherwise deposit or investany sums for such purpose, or redeem, retire, defease, purchase or otherwise acquire any shares of any class of Capital Stock (orset aside or otherwise deposit or invest any sums for such purpose) for any consideration or apply or set apart any sum, or makeany other distribution (by reduction of capital or otherwise) in respect of any such shares or agree to do any of the foregoing,except:

(a) in any case, dividends may be made in the form of shares of Capital Stock consisting of common stock;

(b) any Subsidiary of any Borrower may pay dividends to such Borrower;

(c) BlueLinx may pay in kind dividends to Parent upon any issuance of Capital Stock permitted under the terms ofthis Agreement;

(d) BlueLinx may pay dividends to Parent (i) in an amount equal to the sum of the federal, state and local income taxliability of Parent that is attributable to BlueLinx and its Subsidiaries and (ii) for general administrative expenses of Parentand/or general operating expenses incurred by Parent on behalf of Bluelinx and its Subsidiaries in an amount not to exceed$2,500,000 in any fiscal year;

(e) commencing at the conclusion of BlueLinx’s fiscal year ending 2004, BlueLinx may pay dividends to Parent in anaggregate amount not to exceed the sum of (x) 50% of BlueLinx’s cumulative Net Income earned since the Original ClosingDate; (y) 50% of the first $100,000,000 of capital contributions made by Parent to BlueLinx after October 26, 2004; and(z) 100% of each capital contribution made by Parent to BlueLinx after such first $100,000,000 of capital contributions; solong as: (i) BlueLinx does not pay dividends to Parent in excess of Twenty-Five Million Dollars ($25,000,000) in the aggregatein any fiscal year of BlueLinx; (ii) no Default or Event of Default exists at the time of any such dividend or would occur aftergiving effect thereto; (iii) both immediately before and after giving effect to any such dividend, Modified Adjusted ExcessAvailability is at least $70,000,000; and (iv) prior to the making of any such dividend, Administrative and Collateral Agentshall have received BlueLinx’s unaudited internally prepared financial statements for the fiscal quarter immediately precedingthe date of such dividend, accompanied by a certificate of BlueLinx’s chief financial officer as to BlueLinx’s compliance withthe terms of this Section 9.11(e) together with such supporting documentation therefor as Administrative and Collateral Agentmay reasonably request; and

(f) in addition to any dividends permitted under Section 9.11(e), BlueLinx may pay dividends to Parent to repay anycapital contribution consisting of a Mortgage Proceeds Investment so long as (a) Modified Adjusted Excess Availability aftergiving effect to any such repayment is equal to or greater than $120,000,000; (b) both before and after giving effect to any suchrepayment, BlueLinx’s Fixed Charge Coverage Ratio for the immediately trailing twelve month period, on a consolidated basis,is equal to or greater than 1.1:1.0 (for purposes of this Section 9.11(f) only, Fixed Charge Coverage Ratio shall be calculated byexcluding the amount of any such repayment and by adjusting the interest component of the calculation to include any interestpayments which would have been made by the Borrowers had the amount of Mortgage Proceeds Investment which is beingrepaid never been invested in BlueLinx); (c) Administrative Borrower shall have provided Administrative and Collateral Agentwith at least ten (10) Business Days prior written notice of any such repayment; (d) no Default or Event of Default shall haveoccurred and be continuing or would result from such repayment; and (e) prior to the making of any such repayment,Administrative and Collateral Agent shall have received BlueLinx’s unaudited internally prepared financial statements for themonth immediately preceding the date of such prepayment, accompanied by a certificate of BlueLinx’s chief financial officer asto BlueLinx’s compliance with the terms of this Section 9.11(f) together with such supporting documentation therefor asAdministrative and Collateral Agent may reasonably request.

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9.12 Transactions with Affiliates. Each Borrower and each Guarantor shall not, directly or indirectly, (a) purchase, acquireor lease any property from, or sell, transfer or lease any property to, any Affiliate or agent of such Borrower or such Guarantor,except in the ordinary course of and pursuant to the reasonable requirements of such Borrower’s or such Guarantor’s businessand upon fair and reasonable terms no less favorable to such Borrower or such Guarantor than such Borrower or such Guarantorwould obtain in a comparable arm’s length transaction with a Person that is not an Affiliate or agent of such Borrower or suchGuarantor or (b) make any payments of management, consulting or other fees for management or similar services, or of anyIndebtedness owing to any officer, employee, shareholder, director or other Affiliate of such Borrower or such Guarantor except(i) reasonable compensation to officers, employees and directors for services rendered to such Borrower or such Guarantor in theordinary course of business; (ii) so long as Sponsor owns Capital Stock of Parent, management fees of no more than $1,000,000per fiscal year paid by BlueLinx to Sponsor; (iii) payments required to be made under the Affiliate Leases to the extent theAffiliate Leases comply with the provisions of Section 9.12(a) hereof; (iv) amounts payable to any Sponsor Affiliated Lenderpursuant to this Agreement; and (iv) any amounts permitted to be paid pursuant to Section 9.11.

9.13 Compliance with ERISA. Each Borrower and each Guarantor shall and shall cause each of its ERISA Affiliates to:(a) maintain each Plan (other than a Multiemployer Plan) in compliance in all material respects with the applicable provisionsof ERISA, the Code and other Federal and State law; (b) cause each Plan which is qualified under Section 401(a) of the Code tomaintain such qualification; (c) not terminate any of such Plans so as to incur any liability to the Pension Benefit GuarantyCorporation; (d) not allow or suffer to exist any prohibited transaction involving any of such Plans or any trust createdthereunder which would subject such Borrower, such Guarantor or such ERISA Affiliate to a tax or penalty or other liability onprohibited transactions imposed under Section 4975 of the Code or ERISA; (e) make all required contributions to any Planwhich it is obligated to pay under Section 302 of ERISA, Section 412 of the Code or the terms of such Plan; (f) not allow orsuffer to exist any accumulated funding deficiency, whether or not waived, with respect to any such Plan; or (g) not allow orsuffer to exist any occurrence of a reportable event or any other event or condition which presents a material risk of terminationby the Pension Benefit Guaranty Corporation of any such Plan that is a single employer plan, which termination could result inany liability to the Pension Benefit Guaranty Corporation.

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9.14 End of Fiscal Years and Fiscal Quarters; Changes in Accounting Practices.

(a) Each Borrower and each Guarantor shall, for financial reporting purposes, cause its, and each of its Subsidiaries’(i) fiscal years to end on the dates set forth on Schedule 9.14 hereto as fiscal year ends, (ii) fiscal quarters to end on the dates setforth on Schedule 9.14 hereto as fiscal quarter ends and (iii) fiscal months to end on the dates set forth on Schedule 9.14 heretoas fiscal month ends.

(b) Each Borrower and each Guarantor shall not materialy change any of its accounting policies except as may berequired or permitted in accordance with GAAP.

9.15 Change in Business. Each Borrower and each Guarantor shall not engage in any business other than the business ofsuch Borrower or such Guarantor on the date hereof and any business reasonably related, ancillary or complimentary to thebusiness in which such Borrower or such Guarantor is engaged on the date hereof.

9.16 Limitation of Restrictions Affecting Subsidiaries. Each Borrower and each Guarantor shall not, directly, or indirectly,create or otherwise cause or suffer to exist any encumbrance or restriction which prohibits or limits the ability of any Subsidiaryof such Borrower or such Guarantor to (a) pay dividends or make other distributions or pay any Indebtedness owed to suchBorrower or such Guarantor or any Subsidiary of such Borrower or such Guarantor; (b) make loans or advances to such Borroweror such Guarantor or any Subsidiary of such Borrower or such Guarantor, or (c) create, incur, assume or suffer to exist any lienupon any of its property, assets or revenues, whether now owned or hereafter acquired, other than encumbrances and restrictions(i) that are void or ineffective under applicable law or (ii) arising under (A) applicable law, (B) this Agreement, (C) customaryprovisions restricting subletting or assignment of any lease governing a leasehold interest of such Borrower or such Guarantoror any Subsidiary of such Borrower or such Guarantor, (D) customary restrictions on dispositions of real property interests foundin reciprocal easement agreements of such Borrower or such Guarantor or any Subsidiary of such Borrower or such Guarantor,(E) any agreement relating to permitted Indebtedness incurred by a Subsidiary of such Borrower or such Guarantor prior to thedate on which such Subsidiary was acquired by such Borrower or such Guarantor and outstanding on such acquisition date, and(F) the extension or continuation of contractual obligations in existence on the date hereof; provided, that, any suchencumbrances or restrictions contained in such extension or continuation are no less favorable to Administrative and CollateralAgent and Lenders than those encumbrances and restrictions under or pursuant to the contractual obligations so extended orcontinued.

9.17 Financial Covenants. During a Compliance Period, Borrowers and Guarantors shall, when measured as of the monthmost recently ended:

(a) Fixed Charge Coverage Ratio. Maintain, on a consolidated basis, their Fixed Charge Coverage Ratio at not lessthan 1.1 to 1.0.

(b) Capital Expenditures. Not incur Capital Expenditures of more than $20,000,000 in any fiscal year in the aggregatefor all Borrowers and Guarantors; provided, however, if Capital Expenditures of less than $20,000,000 are incurred in any fiscalyear (such difference referred to herein as an “Unused CapEx Allowance”), up to $10,000,000 of the amount of such UnusedCapEx Allowance may be incurred in the succeeding fiscal year.

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9.18 License Agreements.

(a) Except where failure to do so could not reasonably be expected to cause a Material Adverse Change and withrespect to License Agreements that are Material Contracts, each Borrower and each Guarantor shall (i) promptly and faithfullyobserve and perform all of the terms, covenants, conditions and provisions of such License Agreement to be observed andperformed by it, at the times set forth therein, if any, (ii) not do, permit, suffer or refrain from doing anything that couldreasonably be expected to result in a default under or breach of any of the terms of such License Agreement, (iii) not cancel,surrender, modify, amend, waive or release such License Agreement in any respect or any material term, provision or right of thelicensee thereunder in any respect, or consent to or permit to occur any of the foregoing, (iv) give Administrative and CollateralAgent prompt written notice of such License Agreement entered into by such Borrower or such Guarantor after the date hereof,together with a true, correct and complete copy thereof and such other information with respect thereto as Administrative andCollateral Agent may reasonably request, (v) give Administrative and Collateral Agent prompt written notice of any breach ofany obligation, or any default, by any party under such License Agreement, and deliver to Administrative and Collateral Agent(promptly upon the receipt thereof by such Borrower or such Guarantor in the case of a notice to such Borrower or suchGuarantor, and concurrently with the sending thereof in the case of a notice from such Borrower or such Guarantor) a copy ofeach notice of default and every other notice and other communication received or delivered by such Borrower or suchGuarantor in connection with such License Agreement which relates to any adverse change in the right of any Borrower or anyGuarantor to continue to use the property subject to such License Agreement, and (vi) furnish to Administrative and CollateralAgent, promptly upon the request of Administrative and Collateral Agent, such information and evidence as Administrative andCollateral Agent may require from time to time concerning the observance, performance and compliance by such Borrower orsuch Guarantor or the other party or parties thereto with the terms, covenants or provisions of such License Agreement.

(b) Except where failure to do so could not reasonably be expected to cause a Material Adverse Change and withrespect to License Agreements that are Material Contracts, each Borrower and each Guarantor will either exercise any option torenew or extend the term of such License Agreement in such manner as will cause the term of such License Agreement to beeffectively renewed or extended for the period provided by such option and give prompt written notice thereof toAdministrative and Collateral Agent or give Administrative and Collateral Agent prior written notice that such Borrower orsuch Guarantor does not intend to renew or extend the term of any such License Agreement or that the term thereof shallotherwise be expiring, not less than sixty (60) days prior to the date of any such non-renewal or expiration. In the event of thefailure of any Borrower or any Guarantor to extend or renew any such License Agreement, Administrative and Collateral Agentshall have, and is hereby granted, the irrevocable right and authority, at its option, to renew or extend the term of such LicenseAgreement, whether in its own name as agent for the Lenders, or in the name of a designee or nominee of Administrative andCollateral Agent or in the name of any Borrower or any Guarantor, as Administrative and Collateral Agent shall determine atany time that an Event of Default shall exist or have occurred and be continuing. Administrative and Collateral Agent may, butshall not be required to, perform any or all of such obligations of any Borrower or any Guarantor under any of such LicenseAgreement, including, but not limited to, the payment of any or all sums due from any Borrower or any Guarantor thereunder.Any sums so paid by Administrative and Collateral Agent shall constitute part of the Obligations.

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9.19 After Acquired Real Property. If any Borrower or any Guarantor hereafter acquires any Real Property, fixtures orsimilar property and such Real Property, fixtures or other property at any one location has a fair market value in an amountequal to or greater than Five Million Dollars ($5,000,000) (or if an Event of Default exists, then regardless of the fair marketvalue of such assets), without limiting any other rights of Administrative and Collateral Agent, or duties or obligations of suchBorrower or such Guarantor, upon Administrative and Collateral Agent’s request, such Borrower or such Guarantor shall executeand deliver to Administrative and Collateral Agent a mortgage, deed of trust or deed to secure debt, as Administrative andCollateral Agent may determine, in form and substance satisfactory to Administrative and Collateral Agent and in formappropriate for recording in the real estate records of the jurisdiction in which such Real Property or other property is locatedgranting to Administrative and Collateral Agent, for itself and the ratable benefit of the Lenders and the Bank ProductProviders, a first and only lien and mortgage on and security interest in such Real Property, fixtures or other property (except assuch Borrower or such Guarantor would otherwise be permitted to incur hereunder or as otherwise consented to in writing byAdministrative and Collateral Agent) and such other agreements, documents and instruments as Administrative and CollateralAgent may require in connection therewith.

9.20 Costs and Expenses. Borrowers and Guarantors shall pay to Administrative and Collateral Agent, for itself and theratable benefit of the Lenders and the Bank Product Providers, on demand and if requested, accompanied by an invoice inreasonable detail, all costs, expenses, filing fees and filing or recording taxes paid or payable by any Agent in connection withthe preparation, negotiation, execution, delivery, recording, administration, collection, liquidation, enforcement and defense ofthe Obligations, Administrative and Collateral Agent’s and Lender’s rights in the Collateral, this Agreement, the otherFinancing Agreements and all other documents related hereto or thereto, including any amendments, supplements or consentswhich may hereafter be contemplated (whether or not executed) or entered into in respect hereof and thereof, including: (a) allcosts and expenses of filing or recording (including Uniform Commercial Code financing statement filing taxes and fees,documentary taxes, recording taxes and fees, if applicable); (b) costs and expenses and fees for insurance premiums,environmental audits, surveys, assessments, engineering reports and inspections, background checks, appraisal fees and searchfees, costs and expenses of remitting loan proceeds, collecting checks and other items of payment, and establishing andmaintaining the Blocked Accounts, together with Administrative and Collateral Agent’s customary charges and fees withrespect thereto; (c) charges, fees or expenses charged by any bank or issuer in connection with the Letter of CreditAccommodations; (d) costs and expenses of preserving and protecting the Collateral; (e) costs and expenses paid or incurred inconnection with obtaining payment of the Obligations, enforcing the security interests and liens of Administrative andCollateral Agent, for itself and the ratable benefit of the Lenders and the Bank Product Providers, selling or otherwise realizingupon the Collateral, and otherwise enforcing the provisions of this Agreement and the other Financing Agreements or defendingany claims made or threatened against any Agent and/or Lenders arising out of the transactions contemplated hereby andthereby (including preparations for and consultations concerning any such matters); (f) all out-of-pocket expenses and costsheretofore and from time to time hereafter incurred by Administrative and Collateral Agent or any Lender during the course ofperiodic field examinations of the Collateral and such Borrower’s or such Guarantor’s operations, plus a per diem charge at thethen standard rate of Administrative and Collateral Agent, per person per day for Administrative and Collateral Agent’sexaminers in the field and office (which rate is currently $850 per person per day); provided, however, unless an Event ofDefault exists, Borrowers and Guarantors shall not be required to pay such costs and expenses associated with more than 3 suchfield examinations per year; and (g) the reasonable fees and disbursements of counsel (including legal assistants) to any Agentin connection with any of the foregoing.

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9.21 Further Assurances. At the request of Administrative and Collateral Agent at any time and from time to time, eachBorrower and each Guarantor shall, at its expense, duly execute and deliver, or cause to be duly executed and delivered, suchfurther agreements, documents and instruments, and do or cause to be done such further acts as may be necessary or proper toevidence, perfect, maintain and enforce the security interests and the priority thereof in the Collateral and to otherwiseeffectuate the provisions or purposes of this Agreement or any of the other Financing Agreements, including, without limitation,upon Administrative and Collateral Agent’s request, executing and delivering, or causing to be executed and delivered, suchother agreements, documents and instruments as may be required by Administrative and Collateral Agent to perfect the securityinterests of Administrative and Collateral Agent, for itself and the ratable benefit of the Lenders and the Bank Product Providers,in those Accounts of an account debtor with its chief executive office or principal place of business in Canada in accordancewith the applicable laws of the Province of Canada in which such chief executive office or principal place of business is locatedand taking or causing to be taken such other and further actions as Administrative and Collateral Agent may reasonably requestto enable Administrative and Collateral Agent, as secured party with respect thereto, to collect such Accounts under theapplicable Federal or Provincial laws of Canada. If requested by Administrative and Collateral Agent, each Borrower and eachGuarantor agrees to cause a certificate to be issued by one of its officer representing that, as of such date, all conditionsprecedent to providing Loans contained herein are satisfied.

SECTION 10. EVENTS OF DEFAULT AND REMEDIES

10.1 Events of Default. The occurrence or existence of any one or more of the following events are referred to hereinindividually as an “Event of Default”, and collectively as “Events of Default”:

(a) (i) any Borrower fails to pay any of the Obligations pursuant to Section 2.1(b) within one (1) Business Day afterdemand therefor, (ii) any Borrower fails to pay any of the other Obligations (including amounts due pursuant to Section 9.20)within two (2) Business Days after the same becomes due and payable, (iii) any Borrower or any Guarantor fails to perform anyof the covenants contained in Sections 9.3, 9.4, 9.5, 9.6, 9.13, 9.14, 9.16, 9.18, 9.19 or 9.21 of this Agreement or any of theaffirmative covenants set forth in any other Financing Agreement (other than payment obligations) and such failure continuesfor ten (10) Business Days; provided, that, such ten (10) Business Day period shall not apply in the case of: (A) any failure toobserve any such covenant which is not capable of being cured at all or within such ten (10) Business Day period or which hasbeen the subject of a prior failure within a six (6) month period or (B) an intentional breach by any Borrower or any Guarantor ofany such covenant or (iv) any Borrower or any Guarantor fails to perform any of the terms, covenants, conditions or provisionscontained in this Agreement or any of the other Financing Agreements other than those described in subsections (i), (ii) or(iii) of this Section 10.1(a);

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(b) any representation or warranty made by any Borrower or any Guarantor to any Agent or any Lender in thisAgreement, the other Financing Agreements or any other agreement, schedule, confirmatory assignment or otherwise shall whenmade or deemed made be false or misleading in any material respect;

(c) any Guarantor revokes or terminates or fails to perform any of the material terms, covenants, conditions orprovisions of any guaranty, endorsement or other agreement of such party in favor of Administrative and Collateral Agent orany Lender;

(d) any judgments for the payment of money are rendered against any Borrower or any Guarantor in excess of FiveMillion Dollars ($5,000,000) in any one case or Ten Million Dollars ($10,000,000) in the aggregate which remain undischargedor unvacated for a period in excess of sixty (60) days or execution thereof is not at any time effectively stayed, or any otherjudgment other than for the payment of money, injunction, attachment, garnishment or execution is rendered against anyBorrower or any Guarantor or any of their assets which constitutes a Material Adverse Change;

(e) any Borrower or any Guarantor dissolves or suspends or discontinues doing business except as permitted bySection 9.7 hereunder;

(f) any Borrower or any Guarantor becomes insolvent (however defined or evidenced), makes an assignment for thebenefit of creditors, makes or sends notice of a bulk transfer or calls a meeting of its creditors or principal creditors;

(g) a case or proceeding under the bankruptcy laws of the United States of America now or hereafter in effect or underany insolvency, reorganization, receivership, readjustment of debt, dissolution or liquidation law or statute of any jurisdictionnow or hereafter in effect (whether at law or in equity) is filed against any Borrower or any Guarantor or all or any part of theirrespective properties and such petition or application is not dismissed within forty-five (45) days after the date of its filing orany Borrower or any Guarantor shall file any answer admitting or not contesting such petition or application or indicates itsconsent to, acquiescence in or approval of, any such action or proceeding or the relief requested is granted sooner;

(h) a case or proceeding under the bankruptcy laws of the United States of America now or hereafter in effect or underany insolvency, reorganization, receivership, readjustment of debt, dissolution or liquidation law or statute of any jurisdictionnow or hereafter in effect (whether at a law or equity) is filed by any Borrower or any Guarantor or for all or any part of itsproperty; or

(i) any default occurs with respect any Indebtedness of any Borrower or any Guarantor (other than Indebtedness owinghereunder), in any case in an amount in excess of Ten Million Dollars ($10,000,000), which default continues for more than theapplicable cure period, if any, with respect thereto;

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(j) any material provision hereof or of any of the other Financing Agreements shall for any reason cease to be valid,binding and enforceable with respect to any party hereto or thereto (other than Agents and Lenders) in accordance with itsterms, or any such party shall challenge the enforceability hereof or thereof, or shall assert in writing, or take any action or fail totake any action based on the assertion that any material provision hereof or of any of the other Financing Agreements hasceased to be or is otherwise not valid, binding or enforceable in accordance with its terms, or any security interest provided forherein or in any of the other Financing Agreements shall cease to be a valid and perfected first priority security interest in any ofthe Collateral purported to be subject thereto (except as otherwise permitted herein or therein);

(k) an ERISA Event shall occur which (i) results in or could reasonably be expected to result in liability of anyBorrower or any Guarantor in an aggregate amount in excess of Ten Million Dollars ($10,000,000) which is not removed orresolved without liability to such Borrower or such Guarantor or reasonably likely to be removed or resolved without liabilityto such Borrower or such Guarantor within forty-five (45) days after the date such liability is incurred or (ii) results in a lien infavor of the Pension Benefit Guaranty Corporation;

(l) any Change of Control shall occur; or

(m) the indictment by any Governmental Authority of any Borrower or any Guarantor of which any Borrower, anyGuarantor or any Agent receives notice, in either case, as to which there is a reasonable possibility of an adverse determination,in the good faith determination of Administrative and Collateral Agent, under any criminal statute, or commencement by anyGovernmental Authority of criminal or civil proceedings against any Borrower or any Guarantor, pursuant to which statute orproceedings the penalties or remedies sought or available include forfeiture of (i) any of the Collateral having a value in excessof Five Million Dollars ($5,000,000) or (ii) any other property of any Borrower or any Guarantor which is necessary or materialto the conduct of its business.

10.2 Remedies.

(a) At any time an Event of Default exists or has occurred and is continuing, Agents and Lenders shall have all rightsand remedies provided in this Agreement, the other Financing Agreements, the UCC, the PPSA and other applicable law, all ofwhich rights and remedies may be exercised without notice to or consent by any Borrower or any Guarantor, except as suchnotice or consent is expressly provided for hereunder or required by applicable law. All rights, remedies and powers granted toany Agent or any Lender hereunder, under any of the other Financing Agreements, the UCC, the PPSA or other applicable law,are cumulative, not exclusive and enforceable, in Administrative and Collateral Agent’s discretion, alternatively, successively,or concurrently on any one or more occasions, and shall include, without limitation, the right to apply to a court of equity for aninjunction to restrain a breach or threatened breach by any Borrower or any Guarantor of this Agreement or any of the otherFinancing Agreements. Subject to Section 12 hereof, Administrative and Collateral Agent shall, upon the direction of theRequired Lenders, at any time or times an Event of Default exists or has occurred and is continuing, proceed directly againstany Borrower or any Guarantor to collect the Obligations without prior recourse to any other Borrower or Guarantor or any ofthe Collateral.

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(b) Without limiting the foregoing, at any time an Event of Default exists or has occurred and is continuing,Administrative and Collateral Agent may, to the extent permitted by applicable law, and upon the direction of the RequiredLenders, shall (i) accelerate the payment of all Obligations and demand immediate payment thereof to Administrative andCollateral Agent, for itself and the ratable benefit of the Lenders and the Bank Product Providers, (provided, that, upon theoccurrence of any Event of Default described in Sections 10.1(g) and 10.1(h), all Obligations shall automatically becomeimmediately due and payable), (ii) with or without judicial process or the aid or assistance of others, enter upon any premises onor in which any of the Collateral may be located and take possession of the Collateral or complete processing, manufacturingand repair of all or any portion of the Collateral, (iii) require any Borrower or any Guarantor, at its expense, to assemble andmake available to Administrative and Collateral Agent any part or all of the Collateral at any place and time designated byAdministrative and Collateral Agent, (iv) collect, foreclose, receive, appropriate, setoff and realize upon any and all Collateral,(v) remove any or all of the Collateral from any premises on or in which the same may be located for the purpose of effecting thesale, foreclosure or other disposition thereof or for any other purpose, (vi) sell, lease, transfer, assign, deliver or otherwisedispose of any and all Collateral (including entering into contracts with respect thereto, public or private sales at any exchange,broker’s board, at any office of Administrative and Collateral Agent or elsewhere) at such prices or terms as Administrative andCollateral Agent may deem reasonable, for cash, upon credit or for future delivery, with Administrative and Collateral Agent orany Lender having the right to purchase the whole or any part of the Collateral at any such public sale, all of the foregoingbeing free from any right or equity of redemption of any Borrower or any Guarantor, which right or equity of redemption ishereby expressly waived and released by each Borrower and each Guarantor and/or (vii) terminate this Agreement. If any of theCollateral is sold or leased by Administrative and Collateral Agent upon credit terms or for future delivery, the Obligations shallnot be reduced as a result thereof until payment therefor is finally collected by Administrative and Collateral Agent, for itselfand the ratable benefit of the Lenders and the Bank Product Providers. If notice of disposition of Collateral is required by law,ten (10) days prior notice by Administrative and Collateral Agent to Administrative Borrower designating the time and place ofany public sale or the time after which any private sale or other intended disposition of Collateral is to be made, shall bedeemed to be reasonable notice thereof and each Borrower and each Guarantor waives any other notice. In the eventAdministrative and Collateral Agent institutes an action to recover any Collateral or seeks recovery of any Collateral by way ofprejudgment remedy, each Borrower and each Guarantor waives the posting of any bond which might otherwise be required. Atany time an Event of Default exists or has occurred and is continuing, upon Administrative and Collateral Agent’s request,Borrowers will either, as Administrative and Collateral Agent shall specify, furnish cash collateral to the issuer to be used tosecure and fund Administrative and Collateral Agent’s and/or Lenders’ reimbursement obligations to the issuer in connectionwith any Letter of Credit Accommodations or furnish cash collateral to Administrative and Collateral Agent, for itself and theratable benefit of the Revolving Loan Lenders, for the Letter of Credit Accommodations. Such cash collateral shall be in theamount equal to one hundred five percent (105%) of the amount of the Letter of Credit Accommodations plus the amount ofany fees and expenses payable in connection therewith through the end of the expiration of such Letter of CreditAccommodations.

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(c) Administrative and Collateral Agent may, at any time or times that an Event of Default exists or has occurred andis continuing, enforce any Borrower’s or any Guarantor’s rights against any account debtor, secondary obligor or other obligorin respect of any of the Accounts or other Receivables. Without limiting the generality of the foregoing, Administrative andCollateral Agent may at such time or times (i) notify any or all account debtors, secondary obligors or other obligors in respectthereof that the Receivables have been assigned to Administrative and Collateral Agent, for itself and the ratable benefit of theLenders and the Bank Product Providers, and that Administrative and Collateral Agent, for itself and the ratable benefit of theLenders and the Bank Product Providers, has a security interest therein and Administrative and Collateral Agent may direct anyor all account debtors, secondary obligors and other obligors to make payment of Receivables directly to Administrative andCollateral Agent, (ii) extend the time of payment of, compromise, settle or adjust for cash, credit, return of merchandise orotherwise, and upon any terms or conditions, any and all Receivables or other obligations included in the Collateral andthereby discharge or release the account debtor, any secondary obligors or other obligors in respect thereof without affectingany of the Obligations, (iii) demand, collect or enforce payment of any Receivables or such other obligations, but without anyduty to do so, and Administrative and Collateral Agent shall not be liable for its failure to collect or enforce the payment thereofnor for the negligence of its agents or attorneys with respect thereto and (iv) take whatever other action Administrative andCollateral Agent may deem necessary or desirable for the protection of its and Lenders’ interests. At any time that an Event ofDefault exists or has occurred and is continuing, at Administrative and Collateral Agent’s request, all invoices and statementssent to any account debtor shall state that the Accounts and such other obligations have been assigned to Administrative andCollateral Agent and are payable directly and only to Administrative and Collateral Agent and Borrowers and Guarantors shalldeliver to Administrative and Collateral Agent such originals of documents evidencing the sale and delivery of goods or theperformance of services giving rise to any Accounts as Administrative and Collateral Agent may require. In the event anyaccount debtor returns Inventory when an Event of Default exists or has occurred and is continuing, Borrowers shall, uponAdministrative and Collateral Agent’s request, hold the returned Inventory in trust for Administrative and Collateral Agent andLenders, segregate all returned Inventory from all of its other property, dispose of the returned Inventory solely according toAdministrative and Collateral Agent’s instructions, and not issue any credits, discounts or allowances with respect theretowithout Administrative and Collateral Agent’s prior written consent.

(d) To the extent that applicable law imposes duties on Administrative and Collateral Agent or Lenders to exerciseremedies in a commercially reasonable manner (which duties cannot be waived under such law), each Borrower and eachGuarantor acknowledges and agrees, to the extent permitted by applicable law, that it is not commercially unreasonable forAdministrative and Collateral Agent or any Lender (i) to fail to incur expenses reasonably deemed significant by such Person toprepare Collateral for disposition or otherwise to complete raw material or work in process into finished goods or other finishedproducts for disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if notrequired by other law, to fail to obtain consents of any Governmental Authority or other third party for the collection ordisposition of Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against account debtors,secondary obligors or other persons obligated on Collateral or to remove liens or encumbrances on or any adverse claimsagainst Collateral, (iv) to exercise collection remedies against account debtors and other persons obligated on Collateraldirectly or through the use of collection agencies and other collection specialists, (v) to advertise dispositions of Collateralthrough

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publications or media of general circulation, whether or not the Collateral is of a specialized nature, (vi) to contact otherpersons, whether or not in the same business as any Borrower or any Guarantor, for expressions of interest in acquiring all or anyportion of the Collateral, (vii) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether ornot the collateral is of a specialized nature, (viii) to dispose of Collateral by utilizing Internet sites that provide for the auctionof assets of the types included in the Collateral or that have the reasonable capability of doing so, or that match buyers andsellers of assets, (ix) to dispose of assets in wholesale rather than retail markets, (x) to disclaim disposition warranties, (xi) topurchase insurance or credit enhancements to insure such Person against risks of loss, collection or disposition of Collateral orto provide to such Person a guaranteed return from the collection or disposition of Collateral, or (xii) to the extent deemedappropriate by such Person, to obtain the services of other brokers, investment bankers, consultants and other professionals toassist such Person in the collection or disposition of any of the Collateral. Each Borrower and each Guarantor acknowledgesthat the purpose of this Section is to provide non-exhaustive indications of what actions or omissions by Administrative andCollateral Agent or any Lender would not be commercially unreasonable in such Person’s exercise of remedies against theCollateral and that other actions or omissions by such Person shall not be deemed commercially unreasonable solely on accountof not being indicated in this Section. Without limitation of the foregoing, nothing contained in this Section shall be construedto grant any rights to any Borrower or any Guarantor or to impose any duties on Administrative and Collateral Agent or anyLender that would not have been granted or imposed by this Agreement or by applicable law in the absence of this Section.

(e) For the purpose of enabling Administrative and Collateral Agent and Lenders to exercise the rights and remedieshereunder, each Borrower and each Guarantor hereby grants to Administrative and Collateral Agent, for itself and the ratablebenefit of the Lenders and the Bank Product Providers, to the extent assignable, an irrevocable, non-exclusive license(exercisable without payment of royalty or other compensation to any Borrower or any Guarantor) to use, assign, license orsublicense any of the trademarks, service-marks, trade names, business names, trade styles, designs, logos and other source ofbusiness identifiers and other Intellectual Property and general intangibles now owned or hereafter acquired by any Borrower orany Guarantor, wherever the same maybe located, including in such license reasonable access to all media in which any of thelicensed items may be recorded or stored and to all computer programs used for the compilation or printout thereof.

(f) Administrative and Collateral Agent may apply the cash proceeds of Collateral actually received by it from anysale, lease, foreclosure or other disposition of the Collateral to payment of the Obligations, in whole or in part and in such orderas Administrative and Collateral Agent may elect, whether or not then due. Borrowers and Guarantors shall remain liable toAdministrative and Collateral Agent and Lenders for the payment of any deficiency with interest at the highest rate provided forherein and all costs and expenses of collection or enforcement, including reasonable attorneys’ fees and legal expenses.

(g) Without limiting the foregoing, during the existence of a Default or Event of Default, Administrative andCollateral Agent may, and upon the direction of the Required Lenders, shall, without notice, (i) cease providing Loans or reducethe lending formulas or amounts of Loans available to Borrowers, (ii) terminate any provision of this Agreement providing forany future Loans to be provided by Administrative and Collateral Agent or Lenders to Borrowers and/or (iii) establish suchReserves as Administrative and Collateral Agent determines without limitation or restriction, notwithstanding anything to thecontrary contained herein.

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SECTION 11. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW

11.1 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver.

(a) The validity, interpretation and enforcement of this Agreement and the other Financing Agreements and anydispute arising out of the relationship between the parties hereto, whether in contract, tort, equity or otherwise, shall begoverned by the internal laws of the State of New York but excluding any principles of conflicts of law or other rule of law thatwould cause the application of the law of any jurisdiction other than the laws of the State of New York.

(b) Borrowers, Guarantors, Agents and Lenders irrevocably consent and submit to the non-exclusive jurisdiction ofthe State of New York and the State and Federal courts located in the Borough of Manhattan, County of New York, State of NewYork, whichever Administrative and Collateral Agent may elect, and waive any objection based on venue or forum nonconveniens with respect to any action instituted therein arising under this Agreement or any of the other Financing Agreementsor in any way connected with or related or incidental to the dealings of the parties hereto in respect of this Agreement or any ofthe other Financing Agreements or the transactions related hereto or thereto, in each case whether now existing or hereafterarising, and whether in contract, tort, equity or otherwise, and agree that any dispute with respect to any such matters shall beheard only in the courts described above (except that Administrative and Collateral Agent or any Lender shall have the right tobring any action or proceeding against any Borrower, any Guarantor or its or their property in the courts of any otherjurisdiction which such Person deems necessary or appropriate in order to realize on the Collateral or to otherwise enforce itsrights against any Borrower, any Guarantor or its or their property).

(c) Each Borrower and each Guarantor hereby waives personal service of any and all process upon it and consents thatall such service of process may be made by certified mail (return receipt requested) directed to its address set forth herein andservice so made shall be deemed to be completed five (5) days after the same shall have been so deposited in the U.S. mails, or,at Administrative and Collateral Agent’s or any Lender’s option, by service upon any Borrower or any Guarantor in any othermanner provided under the rules of any such courts. Within thirty (30) days after such service, such Borrower or such Guarantorshall appear in answer to such process, failing which such Borrower or such Guarantor shall be deemed in default and judgmentmay be entered by Administrative and Collateral Agent or any Lender against such Borrower or such Guarantor for the amountof the claim and other relief requested.

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(d) EACH BORROWER, EACH GUARANTOR, EACH AGENT AND EACH LENDER HEREBY WAIVE ANY RIGHTTO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS AGREEMENTOR ANY OF THE OTHER FINANCING AGREEMENTS OR (ii) IN ANY WAY CONNECTED WITH OR RELATED ORINCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THEOTHER FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASEWHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OROTHERWISE. EACH BORROWER, EACH GUARANTOR, EACH AGENT AND EACH LENDER HEREBY AGREE ANDCONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURTTRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OF A COPY OFTHIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THEWAIVER OF THEIR RIGHT TO TRIAL BY JURY.

(e) No Agent or any Lender shall have any liability to any Borrower or any Guarantor (whether in tort, contract, equityor otherwise) for losses suffered by any Borrower or any Guarantor in connection with, arising out of, or in any way related tothe transactions or relationships contemplated by this Agreement, or any act, omission or event occurring in connectionherewith, unless it is determined by a final and non-appealable judgment or court order binding on such Person, that the losseswere the result of acts or omissions constituting gross negligence or willful misconduct of such Person. Except as prohibited bylaw, each Borrower and each Guarantor waives any right which it may have to claim or recover in any litigation with any Agentor any Lender any special, exemplary, punitive or consequential damages or any damages other than, or in addition to, actualdamages. Each Borrower and each Guarantor: (i) certifies that none of any Agent, any Lender, or any of their respectiverepresentatives, agents or attorneys acting for or on behalf of such Person has, prior to the date hereof, represented, expressly orotherwise, that such Person would not, in the event of litigation, seek to enforce any of the waivers provided for in thisAgreement or any of the other Financing Agreements and (ii) acknowledges that in entering into this Agreement and the otherFinancing Agreements, Agents and Lenders are relying upon, among other things, the waivers and certifications set forth in thisSection 11.1 and elsewhere herein and therein.

11.2 Waiver of Notices. Each Borrower and each Guarantor hereby expressly waives demand, presentment, protest andnotice of protest and notice of dishonor with respect to any and all instruments and chattel paper, included in or evidencing anyof the Obligations or the Collateral, and any and all other demands and notices of any kind or nature whatsoever with respect tothe Obligations, the Collateral and this Agreement, except such as are expressly provided for herein. No notice to or demand onany Borrower or any Guarantor which Administrative and Collateral Agent or any Lender may elect to give shall entitle suchBorrower or such Guarantor to any other or further notice or demand in the same, similar or other circumstances.

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11.3 Amendments and Waivers.

(a) Neither this Agreement nor any other Financing Agreement nor any terms hereof or thereof may be amended,waived, discharged or terminated unless such amendment, waiver, discharge or termination is in writing signed byAdministrative and Collateral Agent and the Required Lenders or at Administrative and Collateral Agent’s option, byAdministrative and Collateral Agent with the authorization of the Required Lenders, and as to amendments to any of theFinancing Agreements (other than with respect to any provision of Section 12 hereof), by any Borrower; except, that:

(i) without the prior written consent of Administrative and Collateral Agent and each Lender other than theSponsor Affiliated Lenders, no such amendment, waiver, discharge or termination shall:

(A) amend, modify or waive any of the provisions of the introductory paragraph of Section 11.3(a) or any ofthe provisions of this Section 11.3(a)(i);

(B) reduce any percentage specified in the definition of Required Lenders or Required Super-MajorityLenders or amend, modify or waive any provision of the definition of Pro Rata Share;

(C) consent to the assignment or transfer by any Borrower or any Guarantor of any of their rights andobligations under this Agreement; or

(D) reduce the Interest Rate or any fees or indemnities related to the Revolving Loans or Letter of CreditAccommodations, amend, modify or waive the provisions of Section 13.1(a) hereof or otherwise extend the Final Maturity Dateor the time of payment of principal of the Revolving Loans, extend the time of payment of interest or any fees related to theRevolving Loans or reduce the principal amount of any Revolving Loans or Letter of Credit Accommodations; or

(E) release all or substantially all of the Collateral;

(ii) without the prior written consent of Administrative and Collateral Agent and the Required Super-MajorityLenders, no such amendment, waiver, discharge or termination shall:

(A) amend, modify or waive any of the provisions of this Section 11.3(a)(ii);

(B) release any Collateral (except as expressly required hereunder or under any of the other FinancingAgreements or applicable law and except as permitted under Section 12.11(b) hereof);

(C) amend, modify or waive any of the provisions of Sections 6.4, 12.8 or 12.11(a) hereof;

(D) increase (1) the advance rates set forth in the definition of Borrowing Base, (2) the Revolving LoanLimit or the Revolving Loan Threshold Limit, or (3) the amount of Revolving Loans or Letter of Credit Accommodationsavailable to Borrowers at any time;

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(E) amend, modify or waive any of the provisions of the definition of Borrowing Base or of any of thedefined terms referred to in the definition of Borrowing Base if the effect thereof increases the amount of the Borrowing Base; or

(F) amend, modify or waive any provision of the definitions of, Blocked Account Activation Period,Modified Adjusted Excess Availability, Compliance Period, Excess Availability or Qualified Cash; and

(iii) Without the prior written consent of the Revolving Loan Lender directly affected thereby, no suchamendment, waiver, discharge or termination shall increase the Revolving Loan Commitment of such Revolving Loan Lenderover the amount thereof then in effect or provided hereunder.

(b) Notwithstanding anything to the contrary contained in Section 11.3(a) above, Administrative and CollateralAgent may, in its discretion and without the consent of the Lenders or the other Agent, amend or otherwise modify theBorrowing Base, the Reserves or any of their respective components which amendments or modifications have the effect ofincreasing the Borrowing Base, decreasing the Reserves or otherwise increasing the amounts available for borrowing hereunderto the extent that such amendment or modification is made to restore the Borrowing Base, Reserves or other components thereofif the reason for such reduction or increase no longer exists, as determined by Administrative and Collateral Agent.

(c) Agents and Lenders shall not, by any act, delay, omission or otherwise be deemed to have expressly or impliedlywaived any of its or their rights, powers and/or remedies unless such waiver shall be in writing and signed as provided herein.Any such waiver shall be enforceable only to the extent specifically set forth therein. A waiver by any Agent or any Lender ofany right, power and/or remedy on any one occasion shall not be construed as a bar to or waiver of any such right, power and/orremedy which any Agent or any Lender would otherwise have on any future occasion, whether similar in kind or otherwise.

(d) Notwithstanding anything to the contrary contained in Section 11.3(a) above, in the event that Borrowers andGuarantors request that this Agreement or any other Financing Agreements be amended or otherwise modified in a mannerwhich would require the unanimous consent of all of the Lenders and such amendment or other modification is agreed to by theAdministrative and Collateral Agent and the Required Lenders, then, Borrowers, Administrative and Collateral Agent and theRequired Lenders, may amend this Agreement without the consent of the Lender or Lenders which did not agree to suchamendment or other modification (collectively, the “Non-Consenting Lenders”) to provide for (i) the termination of theCommitment of each of the Non-Consenting Lenders, (ii) the addition to this Agreement of one or more other Lenders, or anincrease in the Commitment of one or more of the Required Lenders, so that the Commitments, after giving effect to suchamendment, shall be in the same aggregate amount as the Commitments immediately before giving effect to such amendment,(iii) if any Loans are outstanding at the time of such amendment, the making of such additional Loans by such new Lenders orRequired Lenders, as the case may be, as may be necessary to repay in full the outstanding Loans of the Non-ConsentingLenders immediately before giving effect to such amendment, (iv) the payment of all interest, fees and other Obligationspayable or accrued in favor of the Non-Consenting Lenders and (v) such other modifications to this Agreement as Borrowersand the Required Lenders may determine to be appropriate.

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(e) The consent of Administrative and Collateral Agent shall be required for any amendment, waiver or consentaffecting the rights or duties of Administrative and Collateral Agent hereunder or under any of the other Financing Agreements,in addition to the consent of the Lenders otherwise required by this Section. The consent of the applicable Agent shall berequired for any amendment, waiver or consent affecting the rights or duties of such Agent hereunder or under any of the otherFinancing Agreements, in addition to the consent of the Lenders otherwise required by this Section. The exercise byAdministrative and Collateral Agent of any of its rights hereunder with respect to Reserves, Eligible Accounts, EligibleInventory, Eligible Domestic In-Transit Inventory, Eligible International In-Transit Inventory or Eligible Re-Load Inventoryshall not be deemed an amendment to the advance rates for purposes of this Section 11.3.

(f) Notwithstanding anything to the contrary contained in this Agreement or any other Financing Agreement, in noevent shall any Sponsor Affiliated Lender be entitled to (i) consent to any amendment, modification, waiver, consent or othersuch action with respect to any of the terms of this Agreement or any other Financing Agreement, (ii) require any Agent or otherLender to undertake any action (or refrain from taking any action) with respect to this Agreement or any other FinancingAgreement or (iii) otherwise vote on any matter related to this Agreement or any other Financing Agreement; provided,however, no amendment, modification or waiver shall deprive any Sponsor Affiliate Lender of its Pro Rata Share of anypayments to which the Lenders are entitled to share on a pro rata basis hereunder.

(g) Notwithstanding anything to the contrary contained in Section 11.3(a) above, Administrative and CollateralAgent may, in its discretion and without the consent of the Lenders or the other Agents, amend this Agreement or any of theother Financing Agreements to add a Person formed or acquired by any Borrower in connection with a Permitted Acquisition asa “Borrower” or a “Guarantor” hereunder; provided, however, that any Person which is not organized or incorporated under thelaws of the United States of America, any state thereof or the District of Columbia, shall not be added as a “Borrower” hereunderwithout the prior written consent of all Lenders.

11.4 Confidentiality. Each Lender agrees that it will use its reasonable best efforts not to disclose, without the priorconsent of Administrative Borrower, confidential information with respect to any Borrower, any Guarantor or any of theirrespective Subsidiaries which is furnished pursuant to this Agreement and which is specifically designated as confidential inwriting by Administrative Borrower or which such Lender would otherwise reasonably be expected to know is confidential;provided, that, any Lender may disclose any such information (a) to its employees, Affiliates, auditors or counsel, or to anotherLender if the disclosing Lender or such disclosing Lender’s holding or parent company in its sole discretion determines that anysuch party should have access to such information, (b) as has become generally available to the public, (c) as may be required orappropriate in any report, statement or testimony submitted to any Governmental Authority having or claiming to havejurisdiction over such Lender, (d) as may be required or appropriate in response to any summons or subpoena or in connectionwith any litigation, (e) in order to comply with any statute or regulation, and (f) to any prospective or actual assignee orParticipant in connection with any contemplated transfer or participation of any of the Revolving Loan Commitments or anyinterest therein by such Lender, provided, that, such assignee or Participant has been generally advised as to the confidentialityof any such confidential information and such assignee or Participant agrees in writing to abide by the terms of thisSection 11.4.

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11.5 Other Waivers. Each Borrower and each Guarantor waives all rights to interpose any claims, deductions, setoffs orcounterclaims of any nature (other than compulsory counterclaims) in any action or proceeding with respect to this Agreement,the Obligations, the Collateral or any matter arising therefrom or relating hereto or thereto. To the extent permitted byapplicable law, each Borrower and each Guarantor shall not assert, and each Borrower and each Guarantor hereby waives, anyclaim against any Agent and/or any Lender, on any theory of liability, for special, indirect, consequential or punitive damages(as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any of the otherFinancing Agreements or any undertaking or transaction contemplated hereby.

11.6 Indemnification. Each Borrower and each Guarantor shall, jointly and severally, indemnify and hold each Agent andeach Lender, and its directors, agents, employees and counsel, harmless from and against any and all losses, claims, damages,liabilities, reasonable costs or expenses (other than Excluded Taxes or any other Taxes for which Borrowers are not obligated toprovide indemnification pursuant to Section 6.5 hereof) imposed on, incurred by or asserted against any of them in connectionwith any litigation, investigation, claim or proceeding commenced or threatened related to the negotiation, preparation,execution, delivery, enforcement, performance or administration of this Agreement, any other Financing Agreements, or anyundertaking or proceeding related to any of the transactions contemplated hereby or any act, omission, event or transactionrelated or attendant thereto, including amounts paid in settlement, court costs, and the reasonable fees and expenses of counsel,but excluding any losses, claims, damages, liabilities, costs or expenses arising from the gross negligence or willful misconductof any indemnified Person and excluding any indirect, consequential or punitive damages. To the extent that the undertaking toindemnify, pay and hold harmless set forth in this Section may be unenforceable because it violates any law or public policy,Borrowers and Guarantors shall pay the maximum portion which it is permitted to pay under applicable law to Agents andLenders in satisfaction of indemnified matters under this Section. The foregoing indemnity shall survive the payment of theObligations and the termination or non-renewal of this Agreement.

SECTION 12. THE ADMINISTRATIVE AND COLLATERAL AGENT

12.1 Appointment; Powers and Immunities.

(a) Each Lender hereby, and each Bank Product Provider by providing any Bank Products to Borrowers or Guarantors,irrevocably designates, appoints and authorizes Wachovia to act as Administrative and Collateral Agent hereunder and underthe other Financing Agreements with such powers as are specifically delegated to Administrative and Collateral Agent by theterms of this Agreement and of the other Financing Agreements, together with such other powers as are reasonably incidentalthereto. Administrative and Collateral Agent: (i) shall have no duties or responsibilities except those expressly set forth in thisAgreement and in the other Financing Agreements, and shall not by reason of this Agreement or any other Financing Agreementbe a trustee or fiduciary for any Lender or Bank Product Provider; (ii) shall not be responsible to Lenders or Bank ProductProviders for any recitals, statements, representations or warranties contained in this Agreement or in any other FinancingAgreement, or in any certificate or other document referred to or provided for in, or received by any of them under, thisAgreement or any other

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Financing Agreement, or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement orany other Financing Agreement or any other document referred to or provided for herein or therein or for any failure by anyBorrower or any Guarantor or any other Person to perform any of its obligations hereunder or thereunder; and (iii) shall not beresponsible to Lenders or Bank Product Providers for any action taken or omitted to be taken by it hereunder or under any otherFinancing Agreement or under any other document or instrument referred to or provided for herein or therein or in connectionherewith or therewith, except for its own gross negligence or willful misconduct as determined by a final non-appealablejudgment of a court of competent jurisdiction. Administrative and Collateral Agent may employ agents and attorneys-in-factand shall not be responsible for the negligence or misconduct of any such agents or attorneys-in-fact selected by it in goodfaith. Administrative and Collateral Agent may deem and treat the payee of any note as the holder thereof for all purposes hereofunless and until the assignment thereof pursuant to an agreement (if and to the extent permitted herein) in form and substancesatisfactory to Administrative and Collateral Agent shall have been delivered to and acknowledged by Administrative andCollateral Agent.

(b) Without prejudice to the foregoing paragraph, each Lender, each Bank Product Provider by providing any BankProducts to BlueLinx, and the Administrative and Collateral Agent (collectively the “Creditors” for purposes of thisSection 12.1(b) only), hereby designate and appoint Wachovia (and hereby reiterate such designation and appointment made inthe Original Loan Agreement in respect of Congress Financial Corporation, a predecessor of Wachovia (“Congress”)) as theperson holding the power of attorney (fondé de pouvoir) of the Creditors as contemplated under Article 2692 of the Civil Codeof Quebec, to enter into, to take and to hold on their behalf, and for their benefit, a deed of hypothec (“Deed of Hypothec”)executed by BlueLinx under the laws of the Province of Quebec and creating a hypothec (security interest) on BlueLinx’sCollateral located in such Province and to exercise such powers and duties which are conferred upon Wachovia under suchdeed. Each Creditor hereby additionally designates and appoints Wachovia (and hereby reiterate such designation andappointment made in the Original Loan Agreement in respect of Congress) as agent and custodian for and on behalf of each ofthem (i) to hold and to be the sole registered holder of any bond (“Bond”) issued under the Deed of Hypothec, the wholenotwithstanding Section 32 of the Act respecting the special powers of legal persons (Quebec) or any other applicable law, and(ii) to enter into, to take and to hold on their behalf, and for their benefit, a movable hypothec (“Movable Hypothec”) executedby BlueLinx under the laws of the Province of Quebec and pledging the Bond as security for the payment and performance ofthe Obligations (which include any and all obligations under the Deed of Hyphothec). In this respect, (m) Wachovia, as agentand custodian of the Creditors, shall keep a record indicating the names and addresses of, and the pro rata portion of theObligations and indebtedness secured by the Movable Hypothec, owing to the Persons for and on behalf of whom the Bond isso held from time to time, and (n) each Creditor will be entitled to the benefits of any Collateral of BlueLinx charged under theDeed of Hypothec and the Movable Hypothec and will participate in the proceeds of realization of any such Collateral, thewhole in accordance with the terms hereof. Wachovia, in such aforesaid capacities shall (x) have the sole and exclusive rightand authority to exercise, except as may be otherwise specifically restricted by the terms hereof, all rights and remedies given toWachovia with respect to the Collateral under the Deed of Hypothec and Movable Hypothec, applicable law or otherwise, and(y) benefit from and be subject to all provisions hereof with respect to the Administrative and Collateral Agent mutatismutandis, including, without limitation, all such

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provisions with respect to the liability or responsibility to and indemnification by the Lenders and Bank Product Providers. AnyPerson who becomes a Lender or a Bank Product Provider, as the case may be, shall be deemed to have consented to andconfirmed Wachovia as the person holding the power of attorney (fondé de pouvoir) and as the agent and custodian as aforesaidand to have ratified, as of the date it becomes a Lender or a Bank Product Provider, as the case may be, all actions taken byWachovia in such capacities. Wachovia shall be entitled to delegate from time to time any of its powers or duties under theDeed of Hypothec and the Movable Hypothec to any Person and on such terms and conditions as Wachovia may determinefrom time to time. It is hereby understood that (a) the Deed of Hypothec, the Bond and Movable Hypothec executed byBlueLinx prior to the date hereof in favor of Congress continue to be valid and enforceable in accordance with their respectiveterms and remain in full force and effect, and all reference therein to “Congress Financial Corporation” shall be deemed to referto Wachovia, and (b) no novation of any kind has occurred in connection with any of the obligations secured by the Deed ofHypothec nor the Movable Hypothec, any such novation being hereby expressly disclaimed.

12.2 Reliance By Administrative and Collateral Agent. Administrative and Collateral Agent shall be entitled to rely uponany certification, notice or other communication (including any thereof by telephone, telecopy, telex, telegram or cable)believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons, andupon advice and statements of legal counsel, independent accountants and other experts selected by Administrative andCollateral Agent. As to any matters not expressly provided for by this Agreement or any other Financing Agreement,Administrative and Collateral Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder orthereunder in accordance with instructions given by the Required Lenders or all of Lenders as is required in such circumstance,and such instructions of such Lenders and any action taken or failure to act pursuant thereto shall be binding on all Lenders.

12.3 Events of Default.

(a) Administrative and Collateral Agent shall not be deemed to have knowledge or notice of the occurrence of anEvent of Default or other failure of a condition precedent to the Loans hereunder, unless and until Administrative and CollateralAgent has received written notice from a Lender, any Borrower or any Guarantor specifying such Event of Default or anyunfulfilled condition precedent, and stating that such notice is a “Notice of Default or Failure of Condition”. In the event thatAdministrative and Collateral Agent receives such a notice, Administrative and Collateral Agent shall give prompt noticethereof to the Lenders. Administrative and Collateral Agent shall (subject to Section 12.7) take such action with respect to anysuch Event of Default or failure of condition precedent as shall be directed by the Required Lenders; provided, that, unless anduntil Administrative and Collateral Agent shall have received such directions, Administrative and Collateral Agent may (butshall not be obligated to) take such action, or refrain from taking such action, with respect to or by reason of such Event ofDefault or failure of condition precedent, as it shall deem advisable in the best interest of Lenders. Without limiting theforegoing, and notwithstanding the existence or occurrence and continuance of an Event of Default or any other failure tosatisfy any of the conditions precedent set forth in Section 4 of this Agreement to the contrary, subject to the provisions ofSection 12.8 and Section 12.11(a), Administrative and Collateral Agent may, but shall have no obligation to, continue toprovide Loans for the ratable account and risk of Lenders from time to time if Administrative and Collateral Agent believesproviding such Loans is in the best interests of Lenders.

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(b) Except with the prior written consent of Administrative and Collateral Agent, no Lender may assert or exercise anyenforcement right or remedy in respect of the Loans or other Obligations, as against any Borrower or any Guarantor or any of theCollateral or other property of any Borrower or any Guarantor.

12.4 Wachovia in its Individual Capacity. With respect to its Revolving Loan Commitment and the Loans made and Letterof Credit Accommodations issued or caused to be issued by it (and any successor acting as Administrative and CollateralAgent), so long as Wachovia shall be a Lender hereunder, it shall have the same rights and powers hereunder as any otherLender and may exercise the same as though it were not acting as Administrative and Collateral Agent, and the term “Lender” or“Lenders” shall, unless the context otherwise indicates, include Wachovia in its individual capacity as Lender hereunder.Wachovia (and any successor acting as Administrative and Collateral Agent) and its Affiliates may (without having to accounttherefor to any Lender) lend money to, make investments in and generally engage in any kind of business with any Borrower orany Guarantor (and any of their respective Subsidiaries or Affiliates) as if it were not acting as Administrative and CollateralAgent, and Wachovia and its Affiliates may accept fees and other consideration from any Borrower or any Guarantor for servicesin connection with this Agreement or otherwise without having to account for the same to Lenders.

12.5 Indemnification. Lenders agree to indemnify Administrative and Collateral Agent (to the extent not reimbursed byBorrowers and Guarantors hereunder and without limiting the Obligations of any Borrower or any Guarantor hereunder) ratably,in accordance with their Pro Rata Shares, for any and all claims of any kind and nature whatsoever that may be imposed on,incurred by or asserted against Administrative and Collateral Agent (including by any Lender) arising out of or by reason of anyinvestigation in or in any way relating to or arising out of this Agreement or any other Financing Agreement or any otherdocuments contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby (including thecosts and expenses that Administrative and Collateral Agent is obligated to pay hereunder) or the enforcement of any of theterms hereof or thereof or of any such other documents, provided, that, no Lender shall be liable for any of the foregoing to theextent it arises from the gross negligence or willful misconduct of the party to be indemnified as determined by a final non-appealable judgment of a court of competent jurisdiction.

12.6 Non-Reliance on Agents and Other Lenders. Each Lender agrees that it has, independently and without reliance onany Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own creditanalysis of Borrowers and Guarantors and has made its own decision to enter into this Agreement and that it will, independentlyand without reliance upon any Agent or any other Lender, and based on such documents and information as it shall deemappropriate at the time, continue to make its own analysis and decisions in taking or not taking action under this Agreement orany of the other Financing Agreements. Agents shall not be required to keep themselves informed as to the performance or

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observance by any Borrower or any Guarantor of any term or provision of this Agreement or any of the other FinancingAgreements or any other document referred to or provided for herein or therein or to inspect the properties or books of anyBorrower or any Guarantor. Agents will use reasonable efforts to provide Lenders with any information received by Agents fromany Borrower or any Guarantor which is required to be provided to Lenders hereunder and with a copy of any “Notice of Defaultor Failure of Condition” received by any Agent from any Borrower, any Guarantor or any Lender; provided, that, no Agent shallbe liable to any Lender for any failure to do so, except to the extent that such failure is attributable to such Agent’s own grossnegligence or willful misconduct as determined by a final non-appealable judgment of a court of competent jurisdiction. Exceptfor notices, reports and other documents expressly required to be furnished to Lenders by any Agent hereunder, no Agent shallhave any duty or responsibility to provide any Lender with any other credit or other information concerning the affairs,financial condition or business of any Borrower or any Guarantor that may come into the possession of such Agent.

12.7 Failure to Act. Except for action expressly required of Administrative and Collateral Agent hereunder and under theother Financing Agreements, Administrative and Collateral Agent shall in all cases be fully justified in failing or refusing to acthereunder and thereunder unless it shall receive further assurances to its satisfaction from Lenders of their indemnificationobligations under Section 12.5 hereof against any and all liability and expense that may be incurred by it by reason of taking orcontinuing to take any such action.

12.8 Additional Revolving Loans. Administrative and Collateral Agent shall not make any Revolving Loans or provideany Letter of Credit Accommodations to Borrowers on behalf of Lenders intentionally and with actual knowledge that suchRevolving Loans or Letter of Credit Accommodations would cause the aggregate amount of the total outstanding RevolvingLoans and Letter of Credit Accommodations to Borrowers to exceed the Borrowing Base, without the prior consent of theRequired Super-Majority Lenders, except, that, Administrative and Collateral Agent may make such additional RevolvingLoans or provide such additional Letter of Credit Accommodations on behalf of Revolving Loan Lenders, intentionally andwith actual knowledge that such Revolving Loans or Letter of Credit Accommodations will cause the total outstandingRevolving Loans and Letter of Credit Accommodations to Borrowers exceed the Borrowing Base as Administrative andCollateral Agent may deem necessary or advisable in its discretion, provided, that, (a) without the consent of the RequiredSuper-Majority Lenders: (i) the total principal amount of the additional Revolving Loans or additional Letter of CreditAccommodations to Borrowers which Administrative and Collateral Agent may make or provide after obtaining such actualknowledge that the aggregate principal amount of the Revolving Loans equal or exceed the Borrowing Base, together with theSpecial Agent Advances then outstanding, shall not exceed the amount equal to ten (10%) percent of the Borrowing Base at thetime and shall not cause the total principal amount of the Revolving Loans and Letter of Credit Accommodations to exceed theRevolving Loan Limit and (ii) Administrative and Collateral Agent shall not make any such additional Revolving Loans orLetter of Credit Accommodations more than ninety (90) days from the date of the first such additional Revolving Loans orLetter of Credit Accommodations and (b) at the direction of the Required Lenders, Administrative and Collateral Agent shallcease making such additional Revolving Loans or Letter of Credit Accommodations. Each Revolving Lender shall be obligatedto pay Administrative and Collateral Agent the amount of its Pro Rata Share of any such additional Revolving Loans or Letterof Credit Accommodations provided that Administrative and Collateral Agent is acting in accordance with the terms of thisSection 12.8.

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12.9 Concerning the Collateral and the Related Financing Agreements. Each Lender authorizes and directs Administrativeand Collateral Agent to enter into this Agreement and the other Financing Agreements relating to the Collateral for its ratablebenefit. Each Lender agrees that any action taken by Administrative and Collateral Agent or Required Lenders in accordancewith the terms of this Agreement or the other Financing Agreements relating to the Collateral, and the exercise byAdministrative and Collateral Agent or Required Lenders of their respective powers set forth therein or herein, together withsuch other powers that are reasonably incidental thereto, shall be binding upon all of the Lenders.

12.10 Field Audits; Examination Reports and other Information; Disclaimer by Lenders. By signing this Agreement, eachLender:

(a) is deemed to have requested that Administrative and Collateral Agent furnish Lender, promptly after it becomesavailable, a copy of each field audit or examination report and a weekly report with respect to the Borrowing Base prepared byAdministrative and Collateral Agent (each field audit or examination report and weekly report with respect to the BorrowingBase being referred to herein as a “Report” and collectively, the “Reports”);

(b) expressly agrees and acknowledges that Administrative and Collateral Agent (i) does not make any representationor warranty as to the accuracy of any Report, or (ii) shall not be liable for any information contained in any Report; provided,that, nothing contained in this Section 12.10 shall be construed to limit the liability of Administrative and Collateral Agentunder Section 12.1(c) hereof in the event of the gross negligence or willful misconduct of Administrative and Collateral Agentas determined pursuant to a final non-appealable order of a court of competent jurisdiction;

(c) expressly agrees and acknowledges that the Reports are not comprehensive audits or examinations, thatAdministrative and Collateral Agent or other party performing any audit or examination will inspect only specific informationregarding Borrowers and Guarantors and will rely significantly upon Borrowers’ and Guarantors’ books and records, as well ason representations of Borrowers’ and Guarantors’ personnel; and

(d) agrees to keep all Reports confidential and strictly for its internal use in accordance with the terms ofSection 11.3(a) hereof, and not to distribute or use any Report in any other manner.

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12.11 Collateral Matters.

(a) Administrative and Collateral Agent may, at its option, from time to time, at any time on or after an Event ofDefault and for so long as the same is continuing or upon any other failure of a condition precedent to the Loans hereunder,make such disbursements and advances (“Special Agent Advances”) which Administrative and Collateral Agent, in itsreasonable credit judgment, deems necessary or desirable either (i) to preserve or protect the Collateral or any portion thereof or(ii) to pay any other amount chargeable to Borrowers or Guarantors pursuant to the terms of this Agreement consisting of costs,fees and expenses and payments to any issuer of Letter of Credit Accommodations; provided that, without the consent of theRequired Super-Majority Lenders, in no event shall the aggregate amount of Special Agent Advances, together with theRevolving Loans and Letter of Credit Accommodations made pursuant to Section 12.8 hereof, exceed an amount equal to tenpercent (10%) of the Borrowing Base at any time or cause the total principal amount of the Revolving Loans and Letter ofCredit Accommodations to exceed the Revolving Loan Limit. Special Agent Advances shall be repayable on demand and besecured by the Collateral. Administrative and Collateral Agent shall notify each Lender and Administrative Borrower in writingof each such Special Agent Advance, which notice shall include a description of the purpose of such Special Agent Advance.Without limitation of its obligations pursuant to Section 6.10, each Lender agrees that it shall make available to Administrativeand Collateral Agent, upon Administrative and Collateral Agent’s demand, in immediately available funds, the amount equal tosuch Lender’s Pro Rata Share of each such Special Agent Advance. If such funds are not made available to Administrative andCollateral Agent by such Lender, Administrative and Collateral Agent shall be entitled to recover such funds, on demand fromsuch Lender together with interest thereon, for each day from the date such payment was due until the date such amount is paidto Administrative and Collateral Agent at the Interest Rate then payable by Borrowers in respect of the Revolving Loans as setforth in Section 3.1 hereof.

(b) Lenders hereby irrevocably authorize Administrative and Collateral Agent, at its option and in its discretion torelease any security interest in, mortgage or lien upon, any of the Collateral: (i) upon termination of the Revolving LoanCommitments and payment and satisfaction of all of the Obligations and delivery of cash collateral to the extent required underSection 13.1 hereof, (ii) constituting property being sold or disposed of in compliance with the applicable terms of thisAgreement or any consent granted in connection with this Agreement, (iii) constituting property in which no Borrower or anyGuarantor owned an interest at the time the security interest, mortgage or lien was granted or at any time thereafter, (iv) having avalue of less than $25,000,000 or (v) in accordance with the terms of Sections 11.3(a)(i)(E) or 11.3(a)(ii)(B). Except as providedabove, Administrative and Collateral Agent will not release any security interest in, mortgage or lien upon, any of the Collateralwithout the prior written authorization of all of Lenders (and any Lender may require that the proceeds from any sale or otherdisposition of the Collateral to be so released be applied to the Obligations in a manner satisfactory to such Lender). Uponrequest by Administrative and Collateral Agent at any time, Lenders will promptly confirm in writing Administrative andCollateral Agent’s authority to release particular types or items of Collateral pursuant to this Section.

(c) Without in any manner limiting Administrative and Collateral Agent’s authority to act without any specific orfurther authorization or consent by the Required Lenders, each Lender agrees to confirm in writing, upon request byAdministrative and Collateral Agent, the authority to release Collateral conferred upon Administrative and Collateral Agentunder this Section. Administrative and Collateral Agent shall (and is hereby irrevocably authorized by Lenders to) execute suchdocuments as may be necessary to evidence the release of the security interest, mortgage or liens granted to Administrative andCollateral Agent, for itself and the ratable benefit of the Lenders and the Bank Product Providers, upon any Collateral to theextent set forth above; provided, that, (i) Administrative and Collateral Agent shall not be required to execute any suchdocument on terms which, in Administrative and Collateral Agent’s opinion, would expose Administrative and CollateralAgent to liability or create any obligations or entail any consequence other than the release of such security interest, mortgageor liens without recourse or warranty and (ii) such release shall not in any manner discharge, affect or impair the Obligations orany security interest, mortgage or lien upon (or obligations of any Borrower or any Guarantor in respect of) the Collateralretained by such Borrower or such Guarantor.

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(d) Except as expressly required under the terms of this Agreement, Administrative and Collateral Agent shall have noobligation whatsoever to any Lender or any other Person to investigate, confirm or assure that the Collateral exists or is ownedby any Borrower or any Guarantor or is cared for, protected or insured or has been encumbered, or that any particular items ofCollateral meet the eligibility criteria applicable in respect of the Loans hereunder, or whether any particular reserves areappropriate, or that the liens and security interests granted to Administrative and Collateral Agent herein or pursuant hereto orotherwise have been properly or sufficiently or lawfully created, perfected, protected or enforced or are entitled to any particularpriority, or to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or to continueexercising, any of the rights, authorities and powers granted or available to Administrative and Collateral Agent in thisAgreement or in any of the other Financing Agreements, it being understood and agreed that in respect of the Collateral, or anyact, omission or event related thereto, Administrative and Collateral Agent may act in any manner it may deem appropriate, inits discretion, given Administrative and Collateral Agent’s own interest in the Collateral as a Lender and that Administrativeand Collateral Agent shall have no duty or liability whatsoever to any other Lender.

12.12 Agency for Perfection. Administrative and Collateral Agent and each Lender hereby appoints each Lender as agentfor the purpose of perfecting the security interests in and liens upon the Collateral of Administrative and Collateral Agent, foritself and the ratable benefit of the Lenders and the Bank Product Providers, in assets which, in accordance with Article 9 of theUCC can be perfected only by possession. Should any Lender obtain possession of any such Collateral, such Lender shall notifyAdministrative and Collateral Agent thereof, and, promptly upon Administrative and Collateral Agent’s request therefor shalldeliver such Collateral to Administrative and Collateral Agent or in accordance with Administrative and Collateral Agent’sinstructions. Each Lender confirms the appointment by Administrative and Collateral Agent of any Person as it’s or the Lenders’agent for the purpose of perfecting the security interests granted under this Agreement and the other Financing Agreements.

12.13 Failure to Respond Deemed Consent. In the event any Lender’s consent is required pursuant to the provisions of thisAgreement and such Lender does not respond to any request by Administrative and Collateral Agent for such consent within ten(10) days after such request is made to such Lender, such failure to respond shall be deemed a consent.

12.14 Legal Representation of Agents. In connection with the negotiation, drafting, and execution of this Agreement andthe other Financing Agreements, or in connection with future legal representation relating to loan administration, amendments,modifications, waivers, or enforcement of remedies, Mayer, Brown, Rowe & Maw LLP (“MBR&M”) only has represented andonly shall represent Wachovia in its capacity as an Agent and as a Lender. Each other Lender hereby acknowledges thatMBR&M does not represent it in connection with any such matters.

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SECTION 13. TERM OF AGREEMENT; MISCELLANEOUS

13.1 Term.

(a) This Agreement and the other Financing Agreements shall become effective as of the date set forth on the firstpage hereof and shall continue in full force and effect for a term ending on the Final Maturity Date, unless sooner terminatedpursuant to the terms hereof. Borrowers may, upon not less than ten (10) days prior written notice to Administrative andCollateral Agent, terminate this Agreement and the other Financing Agreements. Upon the effective date of termination of thisAgreement and the other Financing Agreements, Borrowers shall pay to Administrative and Collateral Agent, for itself and theratable benefit of the Lenders and the Bank Product Providers, in full, all outstanding and unpaid Obligations and shall furnishcash collateral to Administrative and Collateral Agent, (or at Administrative and Collateral Agent’s option, a letter of creditissued for the account of Borrowers and at Borrowers’ expense, in form and substance satisfactory to Administrative andCollateral Agent, by an issuer acceptable to Administrative and Collateral Agent and payable to Administrative and CollateralAgent as beneficiary, for itself and the ratable benefit of the Lenders and the Bank Product Providers) in such amounts asAdministrative and Collateral Agent determines are reasonably necessary to secure (or reimburse) Administrative and CollateralAgent and Lenders from loss, cost, damage or expense, including attorneys’ fees and legal expenses, in connection with anycontingent Obligations, including issued and outstanding Letter of Credit Accommodations and checks or other paymentsprovisionally credited to the Obligations and/or as to which Administrative and Collateral Agent and Lenders have not yetreceived final and indefeasible payment and any continuing obligations of Administrative and Collateral Agent or any Lenderto any bank, financial institution or other Person under or pursuant to any Deposit Account Control Agreement or InvestmentProperty Control Agreement. Such payments in respect of the Obligations and cash collateral shall be remitted by wire transferin Federal funds to such bank account of Administrative and Collateral Agent, as Administrative and Collateral Agent may, inits discretion, designate in writing to Administrative Borrower for such purpose. Interest shall be due until and including thenext Business Day, if the amounts so paid by Borrowers to the bank account designated by Administrative and Collateral Agentare received in such bank account later than 12:00 noon, New York time.

(b) No termination of this Agreement or the other Financing Agreements shall relieve or discharge any Borrower orany Guarantor of its duties, obligations and covenants under this Agreement or the other Financing Agreements until allObligations due and owing have been fully and finally discharged and paid (or cash collateralized in accordance with the termsof this Agreement), and the continuing security interest of Administrative and Collateral Agent, for itself and the ratable benefitof the Lenders and the Bank Product Providers, in the Collateral and the rights and remedies of Administrative and CollateralAgent and Lenders hereunder, under the other Financing Agreements and applicable law, shall remain in effect until all suchObligations due and owing have been fully and finally discharged and paid (or cash collateralized in accordance with the termsof this Agreement). Accordingly, each Borrower and each Guarantor waives any rights which it may have under the UCC todemand the filing of termination statements with respect to the Collateral, and neither Administrative and Collateral Agent norany Lender shall be required to send such termination statements to any Borrower or any Guarantor, or to file them with anyfiling office, unless and until this Agreement is terminated in accordance with its terms and all of the Obligations due and owingare paid (or cash collateralized in accordance with the terms of this Agreement) and satisfied in full in immediately availablefunds.

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13.2 Interpretive Provisions.

(a) All terms used herein which are defined in Article 1 or Article 9 of the UCC shall have the meanings given thereinunless otherwise defined in this Agreement.

(b) All references to the plural herein shall also mean the singular and to the singular shall also mean the plural unlessthe context otherwise requires.

(c) All references to any party hereto pursuant to the definitions set forth in the recitals hereto, or to any other personherein, shall include their respective successors and assigns.

(d) The words “hereof”, “herein”, “hereunder”, “this Agreement” and words of similar import when used in thisAgreement shall refer to this Agreement as a whole and not any particular provision of this Agreement and as this Agreementnow exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

(e) The word “including” when used in this Agreement shall mean “including, without limitation”.

(f) All references to the term “good faith” used herein when applicable to any Agent or any Lender shall mean,notwithstanding anything to the contrary contained herein or in the UCC, honesty in fact in the conduct or transactionconcerned. Borrowers and Guarantors shall have the burden of proving any lack of good faith on the part of any Agent or anyLender alleged by any Borrower or any Guarantor at any time.

(g) An Event of Default shall exist or continue or be continuing until such Event of Default is waived in accordancewith Section 11.3 or is cured, if such Event of Default is capable of being cured as determined by Administrative and CollateralAgent.

(h) Any accounting term used in this Agreement shall have, unless otherwise specifically provided herein, themeaning customarily given in accordance with GAAP, and all financial computations hereunder shall be computed unlessotherwise specifically provided herein, in accordance with GAAP as consistently applied and using the same method forinventory valuation as used in the preparation of the financial statements of Borrowers most recently received byAdministrative and Collateral Agent.

(i) In the computation of periods of time from a specified date to a later specified date, the word “from” means “fromand including”, the words “to” and “until” each mean “to but excluding” and the word “through” means “to and including”.

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(j) Unless otherwise expressly provided herein, (i) references herein to any agreement, document or instrument shallbe deemed to include all subsequent amendments, modifications, supplements, extensions, renewals, restatements orreplacements with respect thereto, but only to the extent the same are not prohibited by the terms hereof or of any otherFinancing Agreement, and (ii) references to any statute or regulation are to be construed as including all statutory andregulatory provisions consolidating, amending, replacing, recodifying, supplementing or interpreting the statute or regulation.

(k) The captions and headings of this Agreement are for convenience of reference only and shall not affect theinterpretation of this Agreement.

(l) This Agreement and other Financing Agreements may use several different limitations, tests or measurements toregulate the same or similar matters. All such limitations, tests and measurements are cumulative and shall each be performed inaccordance with their terms.

(m) This Agreement and the other Financing Agreements are the result of negotiations among and have been reviewedby counsel to Agents and Lenders and the other parties, and are the products of all parties. Accordingly, this Agreement and theother Financing Agreements shall not be construed against Agents or Lenders merely because of their involvement in theirpreparation.

13.3 Notices. All notices, requests and demands hereunder shall be in writing and deemed to have been given or made: ifdelivered in person, immediately upon delivery; if by facsimile transmission, immediately upon sending and upon confirmationof receipt; if by nationally recognized overnight courier service with instructions to deliver the next Business Day, one (1)Business Day after sending; and if by certified mail, return receipt requested, five (5) days after mailing. All notices, requestsand demands upon the parties are to be given to the following addresses (or to such other address as any party may designate bynotice in accordance with this Section):

If to any Borrower or any Guarantor: BlueLinx Corporation 4100 Wildwood Parkway Atlanta, Georgia 30339 Attention: David Morris Telephone No.: (770) 221-2668 Telecopy No.: (770) 221-2090 with a copy to: Schulte, Roth & Zabel LLP 919 Third Avenue New York, New York 10022 Attention: Stuart D. Freedman, Esq. Daniel V. Oshinsky, Esq. Telephone No.: (212) 756-2000 Telecopy No.: (212) 593-5955 and a copy to: Cerberus Capital Management, LP 299 Park Avenue, Floors 21-23 New York, New York 10171 Attention: Lenard Tessler Telephone No.: (212) 891-2100 Telecopy No.: (212) 909-1409

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If to Agents: Wachovia Bank, National Association 1133 Avenue of the Americas New York, New York 10036 Attention: Portfolio Manager Telephone No.: (212) 545-4200 Telecopy No.: (212) 545-4283 with a copy to: Mayer, Brown, Rowe & Maw LLP 350 South Grand Avenue, 25th Floor Los Angeles, California 90071 Attention: Marshall C. Stoddard, Jr., Esq. Telephone No.: (213) 229-9500 Telecopy No.: (213) 625-0248

13.4 Partial Invalidity. If any provision of this Agreement is held to be invalid or unenforceable, such invalidity orunenforceability shall not invalidate this Agreement as a whole, but this Agreement shall be construed as though it did notcontain the particular provision held to be invalid or unenforceable and the rights and obligations of the parties shall beconstrued and enforced only to such extent as shall be permitted by applicable law.

13.5 Successors. This Agreement, the other Financing Agreements and any other document referred to herein or thereinshall be binding upon and inure to the benefit of and be enforceable by Agents, Lenders, Bank Product Providers, Borrowers,Guarantors and their respective successors and assigns, except that no Borrower or Guarantor may assign its rights under thisAgreement, the other Financing Agreements and any other document referred to herein or therein without the prior writtenconsent of Administrative and Collateral Agent and Lenders. No Lender may assign its rights and obligations under thisAgreement (or any part thereof) without the prior written consent of all Lenders other than the Sponsor Affiliated Lenders andAdministrative and Collateral Agent, except as permitted under Section 13.6 hereof. Any purported assignment by a Lenderwithout such prior express consent or compliance with Section 13.6 where applicable, shall be void. The terms and provisionsof this Agreement and the other Financing Agreements are for the purpose of defining the relative rights and obligations ofBorrowers, Guarantors, Agents and Lenders with respect to the transactions contemplated hereby and there shall be no thirdparty beneficiaries of any of the terms and provisions of this Agreement or any of the other Financing Agreements.

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13.6 Assignments; Participations.

(a) Each Lender may (i) assign all or a portion of its rights and obligations under this Agreement (including, withoutlimitation, a portion of its Revolving Loan Commitment, the Loans owing to it and its rights and obligations as a Lender withrespect to Letters of Credit Accommodations) and the other Financing Agreements: (A) to its parent company and/or anyAffiliate of such Lender which is at least fifty (50%) percent owned by such Lender or its parent company or to one or moreLenders or (B) in connection with any merger, consolidation, sale, transfer or other disposition of all or any substantial portionof the business or loan portfolio of such Lender; or (ii) assign all, or if less than all a portion equal to at least $10,000,000 in theaggregate for the assigning Lender or assigning Lenders, of such rights and obligations under this Agreement to one or moreEligible Transferees, each of which assignees shall become a party to this Agreement as a Lender by execution of an Assignmentand Acceptance; provided, that, (A) the consent of Administrative and Collateral Agent shall be required in connection withany assignment to an Eligible Transferee pursuant to clause (ii) above, (B) if such Eligible Transferee is not a bank,Administrative and Collateral Agent shall receive a representation in writing by such Eligible Transferee that either (1) no partof its acquisition of its Loans is made out of assets of any employee benefit plan, or (2) after consultation, in good faith, withBorrowers and provision by Borrowers of such information as may be reasonably requested by such Eligible Transferee, theacquisition and holding of such Revolving Loan Commitments and Loans does not constitute a non-exempt prohibitedtransaction under Section 406 of ERISA and Section 4975 of the Code, or (3) such assignment is an “insurance companygeneral account,” as such term is defined in the Department of Labor Prohibited Transaction Class Exemption 95.60 (issuedJuly 12, 1995) (“PTCE 95-60”), and, as of the date of the assignment, there is no “employee benefit plan” with respect to whichthe aggregate amount of such general account’s reserves and liabilities for the contracts held by or on behalf of such “employeebenefit plan” and all other “employee benefit plans” maintained by the same employer (and affiliates thereof as defined inSection V(a)(1) of PTCE 95-60) or by the same employee organization (in each case determined in accordance with theprovisions of PTCE 95-60) exceeds ten (10%) percent of the total reserves and liabilities of such general account (as determinedunder PTCE 95-60) (exclusive of separate account liabilities) plus surplus as set forth in the National Association of InsuranceCommissioners Annual Statement filed with the state of domicile of such Eligible Transferee, and (C) such transfer orassignment will not be effective until recorded by Administrative and Collateral Agent on the Register and Administrative andCollateral Agent has received, for its own account, payment of a processing fee from the assigning Lender or the assignee in theamount of $5,000. As used in this Section, the term “employee benefit plan” shall have the meaning assigned to it in Title I ofERISA and shall also include a “plan” as defined in Section 4975(e)(1) of the Code.

(b) Administrative and Collateral Agent shall maintain a register of the names and addresses of Lenders, theirRevolving Loan Commitments and the principal amount of their Loans (the “Register”). Administrative and Collateral Agentshall also maintain a copy of each Assignment and Acceptance delivered to and accepted by them and shall modify the Registerto give effect to each Assignment and Acceptance. Upon their receipt of each Assignment and Acceptance, Administrative andCollateral Agent will give prompt notice thereof to Lenders and deliver to each of them a copy of the executed Assignment andAcceptance. The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and Borrowers,Guarantors, Agents and Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for allpurposes of this Agreement. The Register shall be available for inspection by Borrowers, Guarantors and any Lender at anyreasonable time and from time to time upon reasonable prior notice.

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(c) Upon such execution, delivery, acceptance and recording, from and after the effective date specified in eachAssignment and Acceptance, (i) the assignee thereunder shall be a party hereto and to the other Financing Agreements and, tothe extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, have therights and obligations (including, without limitation, the obligation to participate in Letter of Credit Accommodations) of aLender hereunder and thereunder; provided, however, if at the time of such assignment, such assigning Lender is not thenentitled to receive any amounts pursuant to Section 6.5 hereof, Borrowers and Guarantors shall not be obligated to make anypayments to such assignee under Section 6.5 hereof if the assignee would otherwise be entitled to receive such amounts at thetime of such assignment and (ii) the assigning Lender shall, to the extent that rights and obligations hereunder have beenassigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under thisAgreement.

(d) By execution and delivery of an Assignment and Acceptance, the assignor and assignee thereunder confirm to andagree with each other and the other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, theassigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warrantiesor representations made in or in connection with this Agreement or any of the other Financing Agreements or the execution,legality, enforceability, genuineness, sufficiency or value of this Agreement or any of the other Financing Agreements furnishedpursuant hereto, (ii) the assigning Lender makes no representation or warranty and assumes no responsibility with respect to thefinancial condition of any Borrower, any Guarantor or any of their respective Subsidiaries or the performance or observance byany Borrower or any Guarantor of any of the Obligations; (iii) such assignee confirms that it has received a copy of thisAgreement and the other Financing Agreements, together with such other documents and information it has deemed appropriateto make its own credit analysis and decision to enter into such Assignment and Acceptance, (iv) such assignee will,independently and without reliance upon the assigning Lender, any Agent or any other Lender and based on such documentsand information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking actionunder this Agreement and the other Financing Agreements, (v) such assignee appoints and authorizes Administrative andCollateral Agent to take such action as agent on its behalf and to exercise such powers under this Agreement and the otherFinancing Agreements as are delegated to Administrative and Collateral Agent by the terms hereof and thereof, together withsuch powers as are reasonably incidental thereto, (vi) such assignee appoints and authorizes each Agents to take such action asagent on its behalf and to exercise such powers under this Agreement and the other Financing Agreements as are delegated tosuch Agent by the terms hereof and thereof, together with such powers as are reasonably incidental thereto, and (vii) suchassignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of this Agreementand the other Financing Agreements are required to be performed by it as a Lender. Agents and Lenders may furnish anyinformation concerning any Borrower, any Guarantor or their respective Subsidiaries in the possession of Agents or any Lenderfrom time to time to assignees and Participants.

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(e) Each Lender may sell participations to one or more banks or other entities in or to all or a portion of its rights andobligations under this Agreement and the other Financing Agreements (including, without limitation, all or a portion of itsRevolving Loan Commitments and the Loans owing to it and its participation in the Letter of Credit Accommodations, withoutthe consent of Administrative and Collateral Agent or the other Lenders); provided, that, (i) such Lender’s obligations underthis Agreement (including, without limitation, its Revolving Loan Commitment hereunder) and the other FinancingAgreements shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for theperformance of such obligations, and Borrowers, Guarantors, Agents and the other Lenders shall continue to deal solely anddirectly with such Lender in connection with such Lender’s rights and obligations under this Agreement and the otherFinancing Agreements, (iii) the Participant shall not have any rights under this Agreement or any of the other FinancingAgreements (the Participant’s rights against such Lender in respect of such participation to be those set forth in the agreementexecuted by such Lender in favor of the Participant relating thereto) and all amounts payable by any Borrower or any Guarantorhereunder shall be determined as if such Lender had not sold such participation, (iv) if such Participant is not a bank, representthat either (A) no part of its acquisition of its participation is made out of assets of any employee benefit plan, or (B) afterconsultation, in good faith, with Borrowers and provision by Borrowers of such information as may be reasonably requested bythe Participant, the acquisition and holding of such participation does not constitute a non-exempt prohibited transaction underSection 406 of ERISA and Section 4975 of the Code, or (C) such participation is an “insurance company general account, “ assuch term is defined in the “PTCE 95-60”, and, as of the date of the transfer there is no “employee benefit plan” with respect towhich the aggregate amount of such general account’s reserves and liabilities for the contracts held by or on behalf of such“employee benefit plan” and all other “employee benefit plans” maintained by the same employer (and affiliates thereof asdefined in Section V(a)(1) of PTCE 95-60) or by the same employee organization (in each case determined in accordance withthe provisions of PTCE 95-60) exceeds ten (10%) percent of the total reserves and liabilities of such general account (asdetermined under PTCE 95-60) (exclusive of separate account liabilities) plus surplus as set forth in the National Association ofInsurance Commissioners Annual Statement filed with the state of domicile of the Participant and (v) the agreements betweensuch Lender and such Participant shall not grant such Participant the right to consent to or vote on (A) any matters other thanthose set forth in Section 11.3(a)(i) hereof or (B) if such Participant is a Sponsor Affiliate Lender, any matters which pursuant toSection 11.3(f) hereof, a Sponsor Affiliate Lender is not permitted to consent to or vote on.

(f) Nothing in this Agreement shall prevent or prohibit any Lender from pledging its Loans hereunder to a FederalReserve Bank in support of borrowings made by such Lenders from such Federal Reserve Bank.

(g) Borrowers and Guarantors shall assist Agents or any Lender permitted to sell assignments or participations underthis Section 13.6 in whatever manner reasonably necessary in order to enable or effect any such assignment or participation,including (but not limited to) the execution and delivery of any and all agreements, notes and other documents and instrumentsas shall be requested and the delivery of informational materials, appraisals or other documents for, and the participation ofrelevant management in meetings and conference calls with, potential assignees or Participants. Each Borrower and eachGuarantor shall certify the correctness, completeness and accuracy of all descriptions of such Borrower and such Guarantor andits affairs provided, prepared or reviewed by such Borrower or such Guarantor that are contained in any selling materials and allother information provided by it and included in such materials.

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(h) Administrative and Collateral Agent agrees that, so long as an Event of Default does not then exist, Administrativeand Collateral Agent shall not, without the prior consent of Administrative Borrower (such consent not to be unreasonablywithheld, conditioned or delayed) assign to any Person (i) its rights and duties as administrative agent for the Lenders withoutalso assigning to such Person its rights and duties as collateral agent for the Lenders and Bank Product Providers, (ii) its rightsand duties as collateral agent for the Lenders and Bank Product Providers without also assigning to such Person its rights andduties as administrative agent for the Lenders, or (iii) its rights and duties as administrative and collateral agent for the Lendersand Bank Product Providers unless such assignment is made (A) to its parent company or any of its Affiliates which is at least50% owned by Administrative and Collateral Agent or its parent or (B) in connection with any merger, consolidation, sale,transfer or other disposition of all or any substantial portion of the business or loan portfolio of Administrative Collateral Agent.Notwithstanding anything to the contrary in this Agreement, in no event shall any Sponsor Affiliate Lender be appointed as, orsucceed to the rights and duties of, the Administrative and Collateral Agent, or any Agent, under this Agreement.

13.7 Participant’s Security Interests. If a Participant shall at any time participate with any Lender in the Loans, eachBorrower and each Guarantor hereby grants to such Participant and such Participant shall have and is hereby given, acontinuing lien on and security interest in any money, securities and other property of such Borrower or such Guarantor in thecustody or possession of such Participant, including the right of setoff, to the extent of such Participant’s participation in theObligations, and such Participant shall be deemed to have the same right of setoff to the extent of its participation in theObligations, as it would have if it were a direct Lender.

13.8 ERISA Representation. Each Lender hereby represents and warrants to Borrowers and Administrative and CollateralAgent that either (a) no part of the Loans made by such Lender are made out of “plan assets” of any employee benefit plansubject to ERISA or any plan subject to Section 4975 of the Code or (b) the making and holding of such Lender’s RevolvingLoan Commitments and Loans does not constitute a non-exempt prohibited transaction under Section 406 of ERISA orSection 4975 of the Code.

13.9 Entire Agreement. This Agreement, the other Financing Agreements, any supplements hereto or thereto, and anyinstruments or documents delivered or to be delivered in connection herewith or therewith represents the entire agreement andunderstanding concerning the subject matter hereof and thereof between the parties hereto, and supersede all other prioragreements, understandings, negotiations and discussions, representations, warranties, commitments, proposals, offers andcontracts concerning the subject matter hereof, whether oral or written. In the event of any inconsistency between the terms ofthis Agreement and any schedule or exhibit hereto, the terms of this Agreement shall govern.

13.10 Counterparts, Etc. This Agreement or any of the other Financing Agreements may be executed in any number ofcounterparts, each of which shall be an original, but all of which taken together shall constitute one and the same agreement.Delivery of an executed counterpart of this Agreement or any of the other Financing Agreements by telefacsimile or asubstantially similar electronic transmission shall have the same force and effect as the delivery of an original executedcounterpart of this Agreement or any of such other Financing Agreements. Any party delivering an executed counterpart of anysuch agreement by telefacsimile or a substantially similar electronic transmission shall also deliver an original executedcounterpart, but the failure to do so shall not affect the validity, enforceability or binding effect of such agreement.

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SECTION 14. JOINT AND SEVERAL LIABILITY; SURETYSHIP WAIVERS.

14.1 Independent Obligations; Subrogation. The Obligations of each Borrower hereunder are joint and several. To themaximum extent permitted by law, each Borrower hereby waives any claim, right or remedy which such Borrower now has orhereafter acquires against any other Borrower that arises hereunder including, without limitation, any claim, remedy or right ofsubrogation, reimbursement, exoneration, contribution, indemnification, or participation in any claim, right or remedy ofAdministrative and Collateral Agent or any Lender against any Borrower or any Collateral which Administrative and CollateralAgent or any Lender now has or hereafter acquires, whether or not such claim, right or remedy arises in equity, under contract,by statute, under common law or otherwise until the Obligations are fully paid and finally discharged. In addition, eachBorrower hereby waives any right to proceed against the other Borrowers, now or hereafter, for contribution, indemnity,reimbursement, and any other suretyship rights and claims, whether direct or indirect, liquidated or contingent, whether arisingunder express or implied contract or by operation of law, which any Borrower may now have or hereafter have as against theother Borrowers with respect to the Obligations until the Obligations are fully paid and finally discharged. Each Borrower alsohereby waives any rights of recourse to or with respect to any asset of the other Borrowers until the Obligations are fully paidand finally discharged.

14.2 Authority to Modify Obligations and Security. Each Borrower authorizes Administrative and Collateral Agent andLenders, without notice or demand and without affecting any Borrowers’ liability hereunder, from time to time, whether beforeor after any notice of termination hereof or before or after any default in respect of the Obligations, to: (a) renew, extend,accelerate, or otherwise change the time for payment of, or otherwise change any other term or condition of, any document oragreement evidencing or relating to any Obligations as such Obligations relate to the other Borrowers, including, withoutlimitation, to increase or decrease the rate of interest thereon; (b) accept, substitute, waive, defease, increase, release, exchangeor otherwise alter any Collateral, in whole or in part, securing the other Borrowers’ Obligations; (c) apply any and all suchCollateral and direct the order or manner of sale thereof as Administrative and Collateral Agent and Lenders, in their solediscretion, may determine; (d) deal with the other Borrowers as Administrative and Collateral Agent or any Lender may elect;(e) in Administrative and Collateral Agent’s and Lenders’ sole discretion, settle, release on terms satisfactory to them, or byoperation of law or otherwise, compound, compromise, collect or otherwise liquidate any of the other Borrowers’ Obligationsand/or any of the Collateral in any manner, and bid and purchase any of the collateral at any sale thereof; (vi) apply any and allpayments or recoveries from the other Borrowers as Administrative and Collateral Agent or Lenders, in their sole discretion, maydetermine, whether or not such indebtedness relates to the Obligations; all whether such Obligations are secured or unsecured orguaranteed or not guaranteed by others; and (vii) apply any sums realized from Collateral furnished by the other Borrowersupon any of its indebtedness or obligations to Administrative and Collateral Agent or Lenders as they in their sole discretion,may determine, whether or not such indebtedness relates to the Obligations; all without in any way diminishing, releasing ordischarging the liability of any Borrower hereunder.

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14.3 Waiver of Defenses. Upon an Event of Default by any Borrower in respect of any Obligations, Administrative andCollateral Agent and Lenders may, at their option and without notice to any Borrower, proceed directly against any Borrower tocollect and recover the full amount of the liability hereunder, or any portion thereof, and each Borrower waives any right torequire Administrative and Collateral Agent or any Lender to: (a) proceed against the other Borrowers or any other personwhomsoever; (b) proceed against or exhaust any Collateral given to or held by Administrative and Collateral Agent or anyLender in connection with the Obligations; (c) give notice of the terms, time and place of any public or private sale of any of theCollateral except as otherwise provided herein; or (d) pursue any other remedy in Administrative and Collateral Agent’s or anyLender’s power whatsoever. A separate action or actions may be brought and prosecuted against any Borrower whether or notaction is brought against the other Borrowers and whether the other Borrowers be joined in any such action or actions; and eachBorrower waives the benefit of any statute of limitations affecting the liability hereunder or the enforcement hereof, and agreesthat any payment of any Obligations or other act which shall toll any statute of limitations applicable thereto shall similarlyoperate to toll such statute of limitations applicable to the liability hereunder.

14.4 Exercise of Administrative and Collateral Agent’s and Lenders’ Rights. Each Borrower hereby authorizes andempowers Administrative and Collateral Agent and Lenders in their sole discretion, without any notice or demand to suchBorrower whatsoever and without affecting the liability of such Borrower hereunder, to exercise any right or remedy whichAdministrative and Collateral Agent or any Lender may have available to them against the other Borrowers.

14.5 Additional Waivers. Each Borrower waives any defense arising by reason of any disability or other defense of theother Borrowers or by reason of the cessation from any cause whatsoever of the liability of the other Borrowers or by reason ofany act or omission of Administrative and Collateral Agent or any Lender or others which directly or indirectly results in or aidsthe discharge or release of the other Borrowers or any Obligations or any Collateral by operation of law or otherwise. TheObligations shall be enforceable against each Borrower without regard to the validity, regularity or enforceability of any of theObligations with respect to any of the other Borrowers or any of the documents related thereto or any collateral securitydocuments securing any of the Obligations. No exercise by Administrative and Collateral Agent or any Lender of, and noomission of Administrative and Collateral Agent or any Lender to exercise, any power or authority recognized herein and noimpairment or suspension of any right or remedy of Administrative and Collateral Agent or any Lender against any Borrower orany Collateral shall in any way suspend, discharge, release, exonerate or otherwise affect any of the Obligations or anyCollateral furnished by the Borrowers or give to the Borrowers any right of recourse against Administrative and CollateralAgent or any Lender. Each Borrower specifically agrees that the failure of Administrative and Collateral Agent or any Lender:(a) to perfect any lien on or security interest in any property heretofore or hereafter given any Borrower to secure payment of theObligations, or to record or file any document relating thereto or (b) to file or enforce a claim against the estate (either inadministration, bankruptcy or other proceeding) of any Borrower shall not in any manner whatsoever terminate, diminish,exonerate or otherwise affect the liability of any Borrower hereunder.

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14.6 Additional Indebtedness . Additional Obligations may be created from time to time at the request of any Borrower andwithout further authorization from or notice to any other Borrower even though the borrowing Borrower’s financial conditionmay deteriorate since the date hereof. Each Borrower waives the right, if any, to require Administrative and Collateral Agent orany Lender to disclose to such Borrower any information it may now have or hereafter acquire concerning the other Borrowers’character, credit, Collateral, financial condition or other matters. Each Borrower has established adequate means to obtain fromthe other Borrowers, on a continuing basis, financial and other information pertaining to such Borrower’s business and affairs,and assumes the responsibility for being and keeping informed of the financial and other conditions of the other Borrowers andof all circumstances bearing upon the risk of nonpayment of the Obligations which diligent inquiry would reveal. NeitherAdministrative and Collateral Agent nor any Lender need inquire into the powers of any Borrower or the authority of any oftheir respective officers, directors, partners or agents acting or purporting to act in their behalf, and any Obligations created inreliance upon the purported exercise of such power or authority is hereby guaranteed. All Obligations of each Borrower toAdministrative and Collateral Agent and Lenders heretofore, now or hereafter created shall be deemed to have been granted ateach Borrower’s special insistence and request and in consideration of and in reliance upon this Agreement.

14.7 Notices, Demands, Etc. Except as expressly provided by this Agreement, neither Administrative and Collateral Agentnor any Lender shall be under any obligation whatsoever to make or give to any Borrower, and each Borrower hereby waivesdiligence, all rights of setoff and counterclaim against Administrative and Collateral Agent or any Lender, all demands,presentments, protests, notices of protests, notices of protests, notices of nonperformance, notices of dishonor, and all othernotices of every kind or nature, including notice of the existence, creation or incurring of any new or additional Obligations.

14.8 Subordination. Except as otherwise provided in this Section 14.8, any indebtedness of any Borrower now or hereafterowing to any other Borrower is hereby subordinated to the Obligations, whether heretofore, now or hereafter created, andwhether before or after notice of termination hereof, and, following the occurrence and during the continuation of an Event ofDefault, no Borrower shall, without the prior consent of Required Lenders, pay in whole or in part any of such indebtedness norwill any such Borrower accept any payment of or on account of any such indebtedness at any time while such Borrower remainsliable hereunder. At the request of Administrative and Collateral Agent, after the occurrence and during the continuance of anEvent of Default, each Borrower shall pay to Administrative and Collateral Agent all or any part of such subordinatedindebtedness and any amount so paid to Administrative and Collateral Agent at its request shall be applied to payment of theObligations. Each payment on the indebtedness of any Borrower to the other Borrowers received in violation of any of theprovisions hereof shall be deemed to have been received by any other Borrower as trustee for Administrative and CollateralAgent and Lenders and shall be paid over to Administrative and Collateral Agent immediately on account of the Obligations,but without otherwise affecting in any manner any such Borrower’s liability under any of the provisions of this Agreement.Each

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Borrower agrees to file all claims against the other Borrowers in any bankruptcy or other proceeding in which the filing ofclaims is required by law in respect of any indebtedness of the other Borrowers to such Borrower, and Administrative andCollateral Agent and Lenders shall be entitled to all of any such Borrower’s rights thereunder. If for any reason any suchBorrower fails to file such claim at least thirty (30) days prior to the last date on which such claim should be filed,Administrative and Collateral Agent, as such Borrower’s attorney-in-fact, is hereby authorized to do so in Borrowers’ name or,in Administrative and Collateral Agent’s discretion, to assign such claim to, and cause a proof of claim to be filed in the nameof, Administrative and Collateral Agent’s nominee. In all such cases, whether in administration, bankruptcy or otherwise, theperson or persons authorized to pay such claim shall pay to Administrative and Collateral Agent the full amount payable on theclaim in the proceeding, and to the full extent necessary for that purpose any such Borrower hereby assigns to Administrativeand Collateral Agent, for itself and the ratable benefit of Lenders, all such Borrower’s rights to any payments or distributions towhich such Borrower otherwise would be entitled. If the amount so paid is greater than any such Borrower’s liability hereunder,Administrative and Collateral Agent will pay the excess amount to the person entitled thereto.

14.9 Revival. If any payments of money or transfers of property made to Administrative and Collateral Agent or anyLender by any Borrower should for any reason subsequently be declared to be fraudulent (within the meaning of any state orfederal law relating to fraudulent conveyances), preferential or otherwise voidable or recoverable in whole or in part for anyreason (hereinafter collectively called “voidable transfers”) under the Bankruptcy Code or any other federal or state law andAdministrative and Collateral Agent or any Lender is required to repay or restore any such voidable transfer, or the amount orany portion thereof, then as to any such voidable transfer or the amount repaid or restored and all reasonable costs and expenses(including reasonable attorneys’ fees) of Administrative and Collateral Agent or any Lender related thereto, such Borrower’sliability hereunder shall automatically be revived, reinstated and restored and shall exist as though such voidable transfer hadnever been made to Administrative and Collateral Agent or such Lender.

14.10 Understanding of Waivers . Each Borrower warrants and agrees that the waivers set forth in this Section 14 are madewith full knowledge of their significance and consequences. If any of such waivers are determined to be contrary to anyapplicable law or public policy, such waivers shall be effective only to the maximum extent permitted by law.

[Signatures follow on next page]

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IN WITNESS WHEREOF, the parties hereto have caused these presents to be duly executed as of the day and year firstabove written. BORROWERS BLUELINX CORPORATION,a Georgia corporation By: /s/ David J. Morris Name: David J. Morris Title: CFO and Treasurer BLUELINX FLORIDA LP,a Florida limited partnership By: BlueLinx Florida Holding No. 2 Inc., its General Partner By: /s/ Barbara V. Tinsley Name: Barbara V. Tinsley Title: Secretary BLUELINX SERVICES, INC.a Georgia corporation By: /s/ Barbara V. Tinsley Name: Barbara V. Tinsley Title: Secretary

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GUARANTORS BLUELINX FLORIDA HOLDING NO. 1 INC., a Georgia corporation By: /s/ Barbara V. Tinsley Name: Barbara V. Tinsley Title: Secretary BLUELINX FLORIDA HOLDING NO. 2 INC., a Georgia corporation By: /s/ Barbara V. Tinsley Name: Barbara V. Tinsley Title: Secretary BLX TEXAS ACQUISITION I LLC, a Georgia limited liability company By: /s/ Barbara V. Tinsley Name: Barbara V. Tinsley Title: Secretary BLX TEXAS ACQUISITION II LLC, a Georgia limited liability company By: /s/ Barbara V. Tinsley Name: Barbara V. Tinsley Title: Secretary

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ADMINISTRATIVE AND COLLATERAL AGENT WACHOVIA BANK, NATIONAL ASSOCIATION,as successor by merger to Congress FinancialCorporation, as Administrative and Collateral Agent By: /s/ James O’Connell Name: James O’Connell Title: Vice President

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DOCUMENTATION AGENTS BANK OF AMERICA, N.A., as a Documentation Agent By: /s/ Robert Scalzitti Name: Robert Scalzitti Title: Vice President WELLS FARGO FOOTHILL, LLC, as a Documentation Agent By: /s/ David Hill Name: David Hill Title: Vice President JPMORGAN CHASE BANK, N.A. (formerly known as JPMorgan Chase Bank), as a Documentation Agent By: /s/ John M. Hariaczyi Name: John M. Hariaczyi Title: Vice President

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LENDERS WACHOVIA BANK, NATIONAL ASSOCIATION, as successor by merger to Congress Financial Corporation, as a Lender By: /s/ James O’Connell Name: James O’Connell Title: Vice President BANK OF AMERICA, N.A., as a Lender By: /s/ Robert Scalzitti Name: Robert Scalzitti Title: Vice President WELLS FARGO FOOTHILL, LLC, as a Lender By: /s/ David Hill Name: David Hill Title: Vice President GENERAL ELECTRIC CAPITAL CORPORATION, as a Lender By: /s/ James R. Persico Name: James R. Persico Title: Duly Authorized Signatory

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GMAC COMMERCIAL FINANCE LLC, as a Lender By: /s/ Robert J. Brandow Name: Robert J. Brandow Title: Director ING CAPITAL LLC, as a Lender By: /s/ Bennett C. Whitehurst Name: Bennett C. Whitehurst Title: Vice President THE CIT GROUP/BUSINESS CREDIT, INC., as a Lender By: /s/ Evelyn Kusold Name: Evelyn Kusold Title: Vice President JPMORGAN CHASE BANK, N.A. (formerly known as JPMorgan Chase Bank), as a Lender By: /s/ John M. Hariaczyi Name: John M. Hariaczyi Title: Vice President

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TABLE OF CONTENTS Page SECTION 1. DEFINITIONS 3 SECTION 2. CREDIT FACILITIES 35

2.1 Revolving Loans 35 2.2 Letter of Credit Accommodations 36 2.3 Commitments 39 2.4 Bank Products 40 2.5 Term Loan 40

SECTION 3. INTEREST AND FEES 40 3.1 Interest 40 3.2 Changes in Laws and Increased Costs of Loans 43 3.3 Fees 45

SECTION 4. CONDITIONS PRECEDENT AND SUBSEQUENT 45 4.1 Conditions Precedent to Initial Revolving Loans and Letter of Credit Accommodations 45 4.2 Conditions Precedent to All Revolving Loans and Letter of Credit Accommodations 48

SECTION 5. GRANT AND PERFECTION OF SECURITY INTEREST 49 5.1 Grant of Security Interest 49 5.2 Perfection of Security Interests 50

SECTION 6. COLLECTION AND ADMINISTRATION 55 6.1 Borrowers’ Loan Account 55 6.2 Statements 55 6.3 Collection of Accounts 56 6.4 Payments 57 6.5 Taxes 60 6.6 Authorization to Make Loans 63 6.7 Use of Proceeds 63 6.8 Pro Rata Treatment 63 6.9 Sharing of Payments, Etc 63 6.10 Settlement Procedures 64 6.11 Obligations Several; Independent Nature of Lenders’ Rights. 67 6.12 Appointment of Administrative Borrower as Agent for Requesting Loans and Receipts of Loans and

Statements 67

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TABLE OF CONTENTS(continued)

Page SECTION 7. COLLATERAL REPORTING AND COLLATERAL COVENANTS 68

7.1 Collateral Reporting 68 7.2 Accounts Covenants 69 7.3 Inventory Covenants 70 7.4 Equipment and Real Property Covenants 71 7.5 Power of Attorney 71 7.6 Right to Cure 72 7.7 Access to Premises 73

SECTION 8. REPRESENTATIONS AND WARRANTIES 73 8.1 Corporate Existence; Power and Authority 73 8.2 Name; State of Organization; Chief Executive Office; Collateral Locations 74 8.3 Financial Statements 74 8.4 Priority of Liens; Title to Properties 74 8.5 Tax Returns 74 8.6 Litigation 75 8.7 Compliance with Other Agreements and Applicable Laws 75 8.8 Environmental Compliance 75 8.9 Employee Benefits 76 8.10 Bank Accounts 77 8.11 Intellectual Property 77 8.12 Subsidiaries; Affiliates; Capitalization; Solvency 77 8.13 Labor Disputes 78 8.14 Restrictions on Subsidiaries 78 8.15 Material Contracts 79 8.16 Payable Practices 79 8.17 Acquisition of Purchased Assets 79 8.18 Accuracy and Completeness of Information 80 8.19 Survival of Warranties; Cumulative 80

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Page SECTION 9. AFFIRMATIVE AND NEGATIVE COVENANTS 80

9.1 Maintenance of Existence 80 9.2 New Collateral Locations 81 9.3 Compliance with Laws, Regulations, Etc. 81 9.4 Payment of Taxes and Claims 82 9.5 Insurance 83 9.6 Financial Statements and Other Information 84 9.7 Sale of Assets, Consolidation, Merger, Dissolution, Etc. 85 9.8 Encumbrances 88 9.9 Indebtedness 89 9.10 Loans, Investments, Etc. 93 9.11 Dividends and Redemptions 95 9.12 Transactions with Affiliates 96 9.13 Compliance with ERISA 96 9.14 End of Fiscal Years and Fiscal Quarters; Changes in Accounting Practices 97 9.15 Change in Business 97 9.16 Limitation of Restrictions Affecting Subsidiaries 97 9.17 Financial Covenants 97 9.18 License Agreements 98 9.19 After Acquired Real Property 99 9.20 Costs and Expenses 99 9.21 Further Assurances 100

SECTION 10. EVENTS OF DEFAULT AND REMEDIES 100 10.1 Events of Default 100 10.2 Remedies 102

SECTION 11. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW 106 11.1 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver 106 11.2 Waiver of Notices 107 11.3 Amendments and Waivers 108

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11.4 Confidentiality 110 11.5 Other Waivers 111 11.6 Indemnification 111

SECTION 12. THE ADMINISTRATIVE AND COLLATERAL AGENT 111 12.1 Appointment; Powers and Immunities 111 12.2 Reliance By Administrative and Collateral Agent 113 12.3 Events of Default 113 12.4 Wachovia in its Individual Capacity 114 12.5 Indemnification 114 12.6 Non-Reliance on Agents and Other Lenders 114 12.7 Failure to Act 115 12.8 Additional Revolving Loans 115 12.9 Concerning the Collateral and the Related Financing Agreements 116 12.10 Field Audits; Examination Reports and other Information; Disclaimer by Lenders 116 12.11 Collateral Matters 117 12.12 Agency for Perfection 118 12.13 Failure to Respond Deemed Consent 118 12.14 Legal Representation of Agents 118

SECTION 13. TERM OF AGREEMENT; MISCELLANEOUS 119 13.1 Term 119 13.2 Interpretive Provisions 120 13.3 Notices 121 13.4 Partial Invalidity 122 13.5 Successors 122 13.6 Assignments; Participations 123 13.7 Participant’s Security Interests 126 13.8 ERISA Representation 126 13.9 Entire Agreement 126 13.10 Counterparts, Etc. 126

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Page SECTION 14. JOINT AND SEVERAL LIABILITY; SURETYSHIP WAIVERS 127

14.1 Independent Obligations; Subrogation 127 14.2 Authority to Modify Obligations and Security 127 14.3 Waiver of Defenses 128 14.4 Exercise of Agent’s and Lenders’ Rights 128 14.5 Additional Waivers 128 14.6 Additional Indebtedness 129 14.7 Notices, Demands, Etc 129 14.8 Subordination 129 14.9 Revival 130 14.10 Understanding of Waivers 130

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INDEX TOEXHIBITS AND SCHEDULES

Exhibit A Form of Assignment and Acceptance Exhibit B Information Certificate Exhibit C Form of Compliance Certificate Schedule 1.29 Collection Accounts Schedule 1.124 Commitments Schedule 5.2(b) Chattel Paper and Instruments Schedule 5.2(f) Letters of Credit, etc. Schedule 5.2(g) Commercial Tort Claims Schedule 8.4 Liens Schedule 8.8 Environmental Disclosures Schedule 8.13 Labor Relations Schedule 8.15 Material Contracts Schedule 9.9 Indebtedness Schedule 9.10 Loans and Advances Schedule 9.14 Fiscal Year, Quarter and Month Ending Dates

Exhibit A

Form of

ASSIGNMENT AND ACCEPTANCE AGREEMENT

This ASSIGNMENT AND ACCEPTANCE (this “Assignment and Acceptance”) dated as of , is madeby and between (the “Assignor”) on the one hand and (the “Assignee”) on the other hand.

W I T N E S S E T H:

WHEREAS, BlueLinx Corporation, a Georgia corporation (“BlueLinx”), BlueLinx Services Inc., a Georgia corporation(“BSI”), and BlueLinx Florida LP, a Florida limited partnership (“BFLP”, and together with BlueLinx and BSI, eachindividually a “Borrower” and collectively, “Borrowers” as further defined in the Loan Agreement, as defined below), BlueLinxFlorida Holding No. 1 Inc., a Georgia corporation (“BFH1”), BlueLinx Florida Holding No. 2 Inc., a Georgia corporation(“BFH2”), BLX Texas Acquisition I LLC, a Georgia limited liability company (“BLX1”), and BLX Texas Acquisition II LLC, aGeorgia limited liability company (“BLX2”, and together with BFH1, BFH2, and BLX1, each individually a “Guarantor” andcollectively, “Guarantors” as further defined in the Loan Agreement, as defined below), the financial institutions from time totime party to the Loan Agreement as lenders (each a “Lender” and collectively, the “Lenders”), Wachovia Bank, NationalAssociation, successor by merger to Congress Financial Corporation (“Wachovia”), as administrative and collateral agent forthe Lenders and for the Bank Product Providers (as defined in the Loan Agreement, as defined below) (in such capacity,“Administrative and Collateral Agent”), Wachovia Capital Markets, LLC, as sole lead arranger for the credit facility (in suchcapacity, “Sole Lead Arranger”) and as sole syndication agent for the credit facility (in such capacity, “Sole SyndicationAgent”), Bank of America, N.A., Wells Fargo Foothill, LLC, and JPMorgan Chase Bank, N.A., formerly known as JPMorganChase Bank, as documentation agents (each a “Documentation Agent” and collectively, “Documentation Agents”, and togetherwith the Administrative and Collateral Agent, the Sole Lead Arranger, and the Sole Syndication Agent, each individually an“Agent” and collectively, “Agents”), have entered into that certain Amended and Restated Loan and Security Agreement, datedas of August 4, 2006 (as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restatedor replaced, the “Loan Agreement”), pursuant to which the Lenders have and may continue to make loans and provide otherfinancial accommodations to Borrowers. Capitalized terms not otherwise defined herein shall have the respective meaningsascribed thereto in the Loan Agreement.

WHEREAS, as provided under the Loan Agreement, Assignor committed to making Loans (the “Committed Loans”) toBorrowers in an aggregate amount not to exceed $ (the “Commitment”);

WHEREAS, Assignor wishes to assign to Assignee [part of] the rights and obligations of Assignor under the LoanAgreement in respect of its Commitment in an amount equal to $ (the “Assigned Commitment Amount”) on theterms and subject to the conditions set forth herein and Assignee wishes to accept assignment of such rights and to assume suchobligations from Assignor on such terms and subject to such conditions;

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, the parties heretoagree as follows:

1. Assignment and Acceptance.

(a) Subject to the terms and conditions of this Assignment and Acceptance, (i) Assignor hereby sells, transfers andassigns to Assignee, and (ii) Assignee hereby purchases, assumes and undertakes from Assignor, without recourse and withoutrepresentation or warranty (except as provided in this Assignment and Acceptance) an interest in (A) the Commitment and eachof the Committed Loans of Assignor and (B) all related rights, benefits, obligations, liabilities and indemnities of Assignorunder and in connection with the Loan Agreement and the other agreements, documents and instruments referred to therein or atany time executed and/or delivered in connection therewith or related thereto (all of the foregoing, together with the LoanAgreement, as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated orreplaced, being collectively referred to herein as the “Financing Agreements”), so that after giving effect thereto, theCommitment of Assignee and the Commitment of Assignor shall be as set forth in clauses (c) and (d) below and the Pro RataShare (as defined in the Loan Agreement) of Assignee shall be percent ( %).

(b) With effect on and after the Effective Date (as defined in Section 5 hereof), Assignee shall be a party to the LoanAgreement and succeed to all of the rights and be obligated to perform all of the obligations of a Lender under the LoanAgreement, including the requirements concerning confidentiality and the payment of indemnification, with a Commitment inan amount equal to the Assigned Commitment Amount. Assignee agrees that it will perform in accordance with their terms all ofthe obligations which by the terms of the Loan Agreement are required to be performed by it as a Lender. It is the intent of theparties hereto that the Commitment of Assignor shall, as of the Effective Date, be reduced by an amount equal to the AssignedCommitment Amount and Assignor shall relinquish its rights and be released from its obligations under the Loan Agreement tothe extent such obligations have been assumed by Assignee; provided, that, Assignor shall not relinquish their rights under theLoan Agreement to the extent such rights relate to the time prior to the Effective Date.

(c) After giving effect to the assignment and assumption set forth herein, on the Effective Date Assignee’sCommitment will be $ .

(d) After giving effect to the assignment and assumption set forth herein, on the Effective Date Assignor’sCommitment will be $ _.

2. Payments. As consideration for the sale, assignment and transfer contemplated in Section 1 hereof, Assignee shall pay toAdministrative and Collateral Agent, for the benefit of Assignor, on the Effective Date in immediately available funds anamount equal to $ , representing Assignee’s Pro Rata Share of the principal amount of all Committed Loans.

3. Reallocation of Payments. Any interest, fees and other payments accrued to the Effective Date with respect to theCommitment, Committed Loans and outstanding Letter of Credit Accommodations shall be for the account of Assignor. Exceptas Assignor or Assignee may otherwise agree in writing (with or without the consent of any Borrower) any interest, fees andother payments accrued on and after the Effective Date with respect to the Assigned Commitment Amount shall be for theaccount of Assignee. Each of Assignor and Assignee agrees that it will hold in trust for the other parties any interest, fees andother amounts which it may receive to which the other party is entitled pursuant to the preceding sentence and pay to the otherparty any such amounts which it may receive promptly upon receipt.

4. Independent Credit Decision. Assignee (a) acknowledges that it has received a copy of the Loan Agreement and theSchedules and Exhibits thereto, together with copies of the most recent financial statements of Borrowers, and such otherdocuments and information as it has deemed appropriate to make its own credit and legal analysis and decision to enter into thisAssignment and Acceptance and (b) agrees that it will, independently and without reliance upon Assignor, any Agent or anyLender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own creditand legal decisions in taking or not taking action under the Loan Agreement.

5. Effective Date; Notices.

(a) As between Assignor and Assignee, the effective date for this Assignment and Acceptance shall be , (the “Effective Date”); provided, that, the following conditions precedent have been satisfied on or before theEffective Date:

(i) this Assignment and Acceptance shall be executed and delivered by Assignor and Assignee;

(ii) the consent of Administrative and Collateral Agent as required for an effective assignment of the AssignedCommitment Amount by Assignor to Assignee shall have been duly obtained and shall be in full force and effect as of theEffective Date;

(iii) written notice of such assignment, together with payment instructions, addresses and related information withrespect to Assignee, shall have been given to Administrative Borrower and Administrative and Collateral Agent; and

(iv) Assignee shall pay to Assignor all amounts due to Assignor under this Assignment and Acceptance.

(b) Promptly following the execution of this Assignment and Acceptance, Assignor shall deliver to AdministrativeBorrower and Administrative and Collateral Agent for acknowledgment by Administrative and Collateral Agent, a Notice ofAssignment in the form attached hereto as Schedule 1.

6. Administrative and Collateral Agent.

(a) Assignee hereby appoints and authorizes Wachovia Bank, National Association, in its capacity as Administrativeand Collateral Agent to take such action as agent on its behalf to exercise such powers under the Loan Agreement as aredelegated to Administrative and Collateral Agent.

(b) [Assignee shall assume no duties or obligations nor shall Assignee accede to any rights held by Assignor in itscapacity as [Administrative and Collateral Agent] [Sole Lead Arranger] [Sole Syndication Agent] [Agent] [DocumentationAgent] under the Loan Agreement.]

7. Withholding Tax. Assignee (a) represents and warrants to Assignor, Agents and Borrowers that under applicable law andtreaties no tax will be required to be withheld by Assignee, Administrative and Collateral Agent or any Borrower with respect toany payments to be made to Assignee hereunder or under any of the Financing Agreements, (b) agrees to furnish toAdministrative and Collateral Agent and Administrative Borrower prior to the time that Administrative and Collateral Agent orany Borrower are required to make any payment of principal, interest or fees hereunder, two accurate, complete and signedoriginals of (i) U.S. Internal Revenue Service Form W-8ECI or successor form, (ii) U.S. Internal Revenue Service Form W-8BENor successor form (wherein Assignee claims entitlement to the benefits of a tax treaty that provides for a complete exemptionfrom U.S. federal income withholding tax on all payments hereunder) or (iii) U.S. Internal Revenue Service Form W-9 orsuccessor form and agrees to provide such forms upon the expiration of any previously delivered form or comparable statementsin accordance with applicable U.S. law and regulations and amendments thereto, duly executed and completed by Assignee,and (c) agrees to comply with all applicable U.S. laws and regulations with regard to such withholding tax exemption.

8. Representations and Warranties.

(a) Assignor represents and warrants that (i) it is the legal and beneficial owner of the interest being assigned by ithereunder and that such interest is free and clear of any security interest, lien, encumbrance or other adverse claim, (ii) it is dulyorganized and existing and it has the full power and authority to take, and has taken, all action necessary to execute and deliverthis Assignment and Acceptance and any other documents required or permitted to be executed or delivered by it in connectionwith this Assignment and Acceptance and to fulfill its obligations hereunder, (iii) no notices to, or consents, authorizations orapprovals of, any Person are required (other than any already given or obtained) for its due execution, delivery and performanceof this Assignment and Acceptance, and apart from any agreements or undertakings or filings required by the Loan Agreement,no further action by, or notice to, or filing with, any Person is required of it for such execution, delivery or performance, and(iv) this Assignment and Acceptance has been duly executed and delivered by it and constitutes the legal, valid and bindingobligation of Assignor, enforceable against Assignor in accordance with the terms hereof, subject, as to enforcement, tobankruptcy, insolvency, moratorium, reorganization and other laws of general application relating to or affecting creditors’rights and to general equitable principles.

(b) Assignor makes no representation or warranty and does not assume any responsibility with respect to anystatements, warranties or representations made in or in connection with the Loan Agreement or any of the other FinancingAgreements or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Agreement or anyother instrument or document furnished pursuant thereto. Assignor makes no representation or warranty in connection with, nordoes it assume any responsibility with respect to, the solvency, financial condition, asset valuation or realization, or statementsof any Borrower, any Guarantor or any of their respective Affiliates, or the performance or observance by any Borrower, anyGuarantor or any other Person, of any of its respective obligations under the Loan Agreement or any other instrument ordocument furnished in connection therewith.

(c) Assignee represents and warrants that (i) it is duly organized and existing and it has full power and authority totake, and has taken, all action necessary to execute and deliver this Assignment and Acceptance and any other documentsrequired or permitted to be executed or delivered by it in connection with this Assignment and Acceptance, and to fulfill itsobligations hereunder, (ii) no notices to, or consents, authorizations or approvals of, any Person are required (other than anyalready given or obtained) for its due execution, delivery and performance of this Assignment and Acceptance, and apart fromany agreements or undertakings or filings required by the Loan Agreement, no further action by, or notice to, or filing with, anyPerson is required of it for such execution, delivery or performance; and (iii) this Assignment and Acceptance has been dulyexecuted and delivered by it and constitutes the legal, valid and binding obligation of Assignee, enforceable against Assigneein accordance with the terms hereof, subject, as to enforcement, to bankruptcy, insolvency, moratorium, reorganization andother laws of general application relating to or affecting creditors’ rights to general equitable principles.

9. Further Assurances. Assignor and Assignee each hereby agree to execute and deliver such other instruments, and takesuch other action, as any party hereto may reasonably request in connection with the transactions contemplated by thisAssignment and Acceptance, including the delivery of any notices or other documents or instruments to any party to the LoanAgreement, which may be required in connection with the assignment and assumption contemplated hereby.

10. Miscellaneous

(a) Any amendment or waiver of any provision of this Assignment and Acceptance must be in writing and signed bythe parties hereto, except as otherwise provided herein. No failure or delay by either party hereto in exercising any right, poweror privilege hereunder shall operate as a waiver thereof and any waiver of any breach of the provisions of this Assignment andAcceptance shall be without prejudice to any rights with respect to any other for further breach thereof.

(b) All payments made hereunder shall be made without any set-off or counterclaim.

(c) Assignor and Assignee shall each pay its own costs and expenses incurred in connection with the negotiation,preparation, execution and performance of this Assignment and Acceptance.

(d) This Assignment and Acceptance may be executed in any number of counterparts and all of such counterpartstaken together shall be deemed to constitute one and the same instrument.

(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCEWITH THE LAW OF THE STATE OF NEW YORK. Each party hereto irrevocably submits to the non-exclusive jurisdiction ofany State or Federal court sitting in the Borough of Manhattan, County of New York, State of New York, over any suit, action orproceeding arising out of or relating to this Assignment and Acceptance and irrevocably agrees that all claims in respect of suchaction or proceeding may be heard and determined in such New York State or Federal court. Each party to this Assignment andAcceptance hereby irrevocably waives, to the fullest extent it may effectively do so, the defense of an inconvenient forum to themaintenance of such action or proceeding.

(f) EACH PARTY HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANYRIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,UNDER, OR IN CONNECTION WITH THIS ASSIGNMENT AND ACCEPTANCE, THE LOAN AGREEMENT, ANY OF THEOTHER FINANCING AGREEMENTS OR ANY RELATED DOCUMENTS AND AGREEMENTS OR ANY COURSE OFCONDUCT, COURSE OF DEALING, OR STATEMENTS (WHETHER ORAL OR WRITTEN).

IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment and Acceptance to be executed anddelivered by their duly authorized officers as of the date first above written. , a By: Name: Title: , a By: Name: Title:

SCHEDULE 1to Assignment and Acceptance

Form of

NOTICE OF ASSIGNMENT AND ACCEPTANCE

,

Wachovia Bank, National Association, as Administrative and Collateral Agent1133 Avenue of the AmericasNew York, New York 10036Attn: Portfolio Manager

BlueLinx Corporation, as Administrative Borrower4100 Wildwood ParkwayAtlanta, Georgia 30339Attn: Lenard Tessler

Re: Notice of and Consent to Assignment and Acceptance Agreement


Reference is hereby made to (a) that certain Amended and Restated Loan and Security Agreement, dated as of August 4,2006 (as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced,the “Loan Agreement”) by and among BlueLinx Corporation, a Georgia corporation (“BlueLinx”), BlueLinx Services Inc., aGeorgia corporation (“BSI”), and BlueLinx Florida LP, a Florida limited partnership (“BFLP”, and together with BlueLinx andBSI, each individually a “Borrower” and collectively, “Borrowers” as therein further defined), BlueLinx Florida Holding No. 1Inc., a Georgia corporation (“BFH1”), BlueLinx Florida Holding No. 2 Inc., a Georgia corporation (“BFH2”), BLX TexasAcquisition I LLC, a Georgia limited liability company (“BLX1”), and BLX Texas Acquisition II LLC, a Georgia limitedliability company (“BLX2”, and together with BFH1, BFH2, and BLX1, each individually a “Guarantor” and collectively,“Guarantors” as therein further defined), the financial institutions from time to time party to the Loan Agreement as lenders(each a “Lender” and collectively, the “Lenders”), Wachovia Bank, National Association, successor by merger to CongressFinancial Corporation (“Wachovia”), as administrative and collateral agent for the Lenders and for the Bank Product Providers(as defined in the Loan Agreement) (in such capacity, “Administrative and Collateral Agent”), Wachovia Capital Markets, LLC,as sole lead arranger for the credit facility (in such capacity, “Sole Lead Arranger”) and as sole syndication agent for the creditfacility (in such capacity, “Sole Syndication Agent”), Bank of America, N.A., Wells Fargo Foothill, LLC, and JPMorgan ChaseBank, N.A., formerly known as JPMorgan Chase Bank, as documentation agents (each a “Documentation Agent” andcollectively, “Documentation Agents”, and together with the Administrative and Collateral Agent, the Sole Lead Arranger, andthe Sole Syndication Agent, each individually an “Agent” and collectively, “Agents”), pursuant to which the Lenders have andmay continue to make loans and provide other financial accommodations to Borrowers, and (b) the other agreements,documents and instruments referred to in the Loan Agreement or at any time executed and/or delivered in connection therewithor related thereto (all of the foregoing, together with the Loan Agreement, as the same now exist or may hereafter be amended,modified, supplemented, extended, renewed, restated or replaced, being collectively referred to herein as the “FinancingAgreements”). Capitalized terms not otherwise defined herein shall have the respective meanings ascribed thereto in the LoanAgreement.

1. We hereby give you notice of, and request Administrative and Collateral Agent’s consent to, the assignment by (the “Assignor”) to (the “Assignee”) such that after giving effect to theassignment, Assignee shall have an interest equal to percent ( %) of the total Commitments pursuant tothe Assignment and Acceptance Agreement attached hereto (the “Assignment and Acceptance”). We understand that Assignor’sCommitment shall be reduced by $ .

2. Assignee agrees that, upon receiving the consent of Administrative and Collateral Agent to such assignment, Assigneewill be bound by the terms of the Loan Agreement as fully and to the same extent as if the Assignee were the Lender originallyholding such interest under the Loan Agreement.

3. The following administrative details apply to Assignee: (a) Notice address: Assignee: Address: Attention: Telephone: Telecopier: (b) Payment instructions: Account No.: At: ABA No.: For Credit To: Reference:

4. You are entitled to rely upon the representations, warranties and covenants of each party to the Assignment andAcceptance as contained therein.

IN WITNESS WHEREOF, Assignor and Assignee have each caused this Notice of Assignment and Acceptance to beexecuted by its duly authorized officials, officers or agents as of the date first above mentioned. Very truly yours, By: Name: Title: By: Name: Title:

ACKNOWLEDGED AND CONSENTED TO:WACHOVIA BANK, NATIONAL ASSOCIATION,as Administrative and Collateral Agent By: Name: Title: ACKNOWLEDGED:

BLUELINX CORPORATION,as Administrative Borrower

By: Name: Title:

Exhibit B

GUIDELINES FOR PREPARATION OF INFORMATION CERTIFICATE

The attached document is a form of Information Certificate, which you should complete carefully, completely andaccurately.

Please note:

1. You should consult your attorneys and accountants in order to complete the Information Certificate.

2. Prepare a separate information certificate for each entity that is a proposed borrower or guarantor.

3. If there is insufficient space provided in the Information Certificate for a response to any question, please includeadditional pages as exhibits to the certificate.

4. Return the Information Certificate to us as soon as possible. The information in it is necessary for us to prepare the loandocumentation.

5. We will rely on the information you give us in the Information Certificate and it may be incorporated into the Loan andSecurity Agreement between us. You should consider your responses to have the importance of your representations in the LoanAgreement.

If you have any questions in connection with the preparation of the Information Certificate, please let us know.

Thank you for your cooperation. We look forward to working with you.

INFORMATION CERTIFICATEOF

Dated: __________, 20__

In order to assist Wachovia Bank, National Association (“you”) in the evaluation of the financing you are considering of _____ (the “Company”), to expedite the preparation of required documentation, and to induce you to provide financing to theCompany, we represent and warrant to you the following information about the Company, its organizational structure and othermatters of interest to you:

1. The Company has been formed by filing the following document with the Secretary of State of the State of _____: o Certificate/Articles of Incorporation o Certificate/Articles of Organization o Other [specify]

The date of formation of the Company by the filing of the document specified above with the Secretary of State was _____, _____.

2. The Company was not formed by filing a document with any Secretary of State. The Company is organized as a [specifytype of organization, (e.g., general partnership, sole proprietorship, etc.)] _____. The Company’s governing document is a[name legal document, if one exists, (e.g., partnership agreement, etc.] _____.

3. The full and exact name of the Company as set forth in the document specified in Item 1 or 2, or (if no document isspecified in Item 1 or 2) the full and exact legal name used in the Company’s business, is:

4. The Company uses and owns the following trade name(s) in the operation of its business (e.g. billing, advertising, etc.;note: do not include names which are product names only):

[Check one of the boxes below.] o We have attached a blank sample of every invoice that uses a tradename. o We do not use any tradename on any invoices.

5. The Company maintains offices, leases or owns real estate, has employees, pays taxes, or otherwise conducts business inthe following States (including the State of its organization):

6. The Company has filed the necessary documents with the Secretary of State to qualify as a foreign corporation in thefollowing States:

7. The Company’s authority to do business has been revoked or suspended, or the Company is otherwise not in goodstanding in the following States:

8. The Company is the owner of the following licenses and permits, issued by the federal, state or local agency or authorityindicated opposite thereto:

Type of License Issuing Agency or Authority

9. In conducting its business activities, the Company is subject to regulation by federal, state or local agencies or authorities(e.g., FDA, EPA, state or municipal liquor licensing agencies, federal or state carrier commissions, etc.) as follows:

Type of Activity Regulatory Agency or Authority

10. The Company has never been involved in a bankruptcy or reorganization except: [explain]

11. Between the date the Company was formed and now, the Company has used other names as set forth below:

Period of Time Prior Name

From to

From to

From to

From to

12. Between the date the Company was formed and now, the Company has made or entered into mergers or acquisitions withother companies as set forth below:

Approximate Date Other Entity Description of Transaction

13. The chief executive office of the Company is located at the street address set forth below, which is in _____ County, inthe State of _____:

14. The books and records of the Company pertaining to accounts, contract rights, inventory, etc. are located at the followingstreet address:

15. In addition to the chief executive office, the Company has inventory, equipment or other assets located at the addresses setforth below. In each case, we have noted whether the location is owned, leased or operated by third parties and the namesand addresses of any mortgagee, lessor or third party operator:

Name and Address of Third Party with Interest in Company’s Interest Location (e.g., owner, lessee or (e.g., mortgagee, lessor or

Street Address with County bailee) warehouseman)

16. In the course of its business, the Company’s inventory and/or other assets are handled by the following customs brokersand/or freight forwarders:

Name Address Type of Service/Assets Handled

17. The places of business or other locations of any assets used by the Company during the last four (4) months other thanthose listed above are as follows:

State & Zip

Street Address City Code County

18. The Company is affiliated with, or has ownership in, the following entities (including subsidiaries): Ownership Chief Executive Jurisdiction of Percentage or

Name of Entity Office Incorporation Relationship

19. The Federal Employer Identification Number of the Company is .

20. Under the Company’s charter documents, and under the laws of the State in which the Company is organized, theshareholders, members or other equity holders do not have to consent in order for the Company to borrow money, incurdebt or obligations, pledge or mortgage the property of the Company, grant a security interest in the property of theCompany or guaranty the debt of obligations of another person or entity.

o True o Incorrect [explain]:

The power to take the foregoing actions is vested exclusively in the [name the body (e.g. Board of Directors) orperson (e.g. general partner, sole Manager) that has such authority].

21. The officers of the Company (or people performing similar functions) and their respective titles are as follows:

Title Name

The following people will have signatory powers as to all your of transactions with the Company:

22. With respect to the officers noted above, such officers are affiliated with or have ownership in the following corporations(indicate name and address of affiliated companies, type of operations, ownership percentage or other relationship):

23. The Company is governed by _____ [insert name of governing body or person (e.g. Board of Directors, sole Manager,General Partner)]. The members of such governing body of the Company are:

24. The name of the stockholders, members, partners or other equity holders of the Company and their equity holdings are asfollows (if equity interests are widely held indicate only equity owners with 10% or more of the equity interests):

Ownership

Name No. of Shares or Units Percentage

25. There are no judgments or litigation pending by or against the Company, its subsidiaries and/or affiliates or any of itsofficers/principals, except as follows:

26. At the present time, there are no delinquent taxes due (including, but not limited to, all payroll taxes, personal propertytaxes, real estate taxes or income taxes) except as follows:

27. The Company’s assets are owned and held free and clear of any security interests, liens or attachments, except as follows: Amount of

Lienholder Assets Pledged Debt Secured

28. The Company has not guaranteed and is not otherwise liable for the obligations of others, except as follows: Amount of

Debtor Creditor Obligation

29. The Company does not own or license any trademarks, patents, copyrights or other intellectual property, except as follows(indicate type of intellectual property and whether owned or licensed, registration number, date of registration, and, iflicensed, the name and address of the licensor):

Type of Registration

Intellectual Number and Date Name and AddressProperty of Registration Owned or Licensed of Licensor

30. The Company owns or uses the following materials (e.g., software, film footage, scripts, etc.) that are subject to registrationwith the United States Copyright Office, though at present copyright registrations have not been filed with respect to suchmaterials:

31. The Company does not have any deposit or investment accounts with any bank, savings and loan or other financialinstitution, except as follows, for the purposes and of the types indicated:

Bank Name and Contact Person and Branch Address Phone Number Account No. Purpose/Type

32. The Company has no processing arrangements for credit card payments or payments made by check (e.g. Telecheck) exceptas follows:

Processor Name Contact Person

and Address and Phone Number Account No.

33. The Company owns or has registered to it the following motor vehicles, the original title certificates for which shall bedelivered to Lender prior to closing:

State Where Titled Name of Registrant

and, if different, as it appears on the Year, Make andRegistered Title Certificate VIN Model

34. With regard to any pension or profit sharing plan:

(a) A determination as to qualification has been issued. (b) Funding is on a current basis and in compliance with established requirements.

35. The Company’s fiscal year ends: .

36. Certified Public Accountants for the Company is the firm of: Name: Address: Telephone: Facsimile: E-Mail: Partner Handling Relationship: Were statements uncertified for any fiscal year?

37. The Company’s counsel with respect to the proposed loan transaction is the firm of: Name: Address: Telephone: Facsimile: E-Mail: Partner Handling Relationship:

38. The Company’s counsel with respect to matters other than the proposed loan transaction, if different, is the firm of: Name: Address: Telephone: Facsimile: E-Mail: Partner Handling Relationship:

We agree to give you prompt written notice of any change or amendment with respect to any of the foregoing information.Until you receive such notice, you will be entitled to rely in all respects on the foregoing information. Very truly yours, [NAME OF PROPOSED BORROWER] By: Title: By: Title:

Exhibit C

Compliance Certificate

To: Wachovia Bank, National Association, as Administrative and Collateral Agent1133 Avenue of the AmericasNew York, New York 10036


Re: Fiscal Period Ending _______________, 20___

The undersigned hereby certifies to you pursuant to Section 9.6 of the Loan Agreement (as defined below) as follows:

1. I am the duly elected Chief Financial Officer of BlueLinx Corporation, a Georgia corporation (“AdministrativeBorrower”). Capitalized terms used herein without definition shall have the meanings given to such terms in the Amended andRestated Loan and Security Agreement, dated as of August 4, 2006 (as amended, modified, supplemented, extended, renewed,restated or replaced from time to time, the “Loan Agreement”), by and among the financial institutions from time to time partiesthereto (each a “Lender” and collectively the “Lenders”), Wachovia Bank, National Association, successor by merger toCongress Financial Corporation (“Wachovia”), as administrative and collateral agent for the Lenders and for the Bank ProductProviders (as defined in the Loan Agreement) (in such capacity, “Administrative and Collateral Agent”), Wachovia CapitalMarkets, LLC, as sole lead arranger for the credit facility (in such capacity, “Sole Lead Arranger”) and as sole syndication agentfor the credit facility (in such capacity, “Sole Syndication Agent”), Bank of America, N.A., Wells Fargo Foothill, LLC, andJPMorgan Chase Bank, N.A., formerly known as JPMorgan Chase Bank, as documentation agents (each a “DocumentationAgent” and collectively, “Documentation Agents”, and together with the Administrative and Collateral Agent, the Sole LeadArranger, and the Sole Syndication Agent, each individually an “Agent” and collectively, “Agents”), Administrative Borrower,BlueLinx Services Inc., a Georgia corporation (“BSI”), and BlueLinx Florida LP, a Florida limited partnership (“BFLP”, andtogether with BlueLinx, BSI, and any other Person that at any time becomes a Borrower under the Loan Agreement inaccordance with the terms thereof, each individually a “Borrower” and collectively, “Borrowers”), BlueLinx Florida HoldingNo. 1 Inc., a Georgia corporation (“BFH1”), BlueLinx Florida Holding No. 2 Inc., a Georgia corporation (“BFH2”), BLX TexasAcquisition I LLC, a Georgia limited liability company (“BLX1”), and BLX Texas Acquisition II LLC, a Georgia limitedliability company (“BLX2”, and together with BFH1, BFH2, BLX1, and any other Person that at any time becomes a Guarantorunder the Loan Agreement in accordance with the terms thereof, each individually a “Guarantor” and collectively,“Guarantors”).

2. I have reviewed the terms of the Loan Agreement, and have made, or have caused to be made under my supervision, areview in reasonable detail of the transactions and the financial condition of the Administrative Borrower and each of itsSubsidiaries, during the immediately preceding fiscal month.

3. The review described in Section 2 above did not disclose the existence during or at the end of such fiscal month, and Ihave no knowledge of the existence and continuance on the date hereof, of any condition or event which constitutes a Defaultor an Event of Default, except as set forth on Schedule I attached hereto. Described on Schedule I attached hereto are theexceptions, if any, to this section 3 listing, in detail, the nature of the condition or event, the period during which it has existedand the action which any Borrower or any Guarantor has taken, is taking, or proposes to take with respect to such condition orevent.

4. I further certify that, based on the review described in Section 2 above, Borrowers and Guarantors have not at any timeduring or at the end of such fiscal month, except specifically described on Schedule II attached hereto or as permitted by theLoan Agreement, done any of the following:

(a) changed their respective corporate names, or transacted business under any trade name, style, or fictitious name,other than those previously described to you and set forth in the Financing Agreements;

(b) changed the location of their respective chief executive offices, changed their respective jurisdictions ofincorporation, changed their respective types of organization or changed the location of or disposed of any of their respectiveproperties or assets (other than pursuant to the sale of Inventory in the ordinary course of such Borrower’s or such Guarantor’sbusiness or as otherwise permitted by Section 9.7 of the Loan Agreement), or established any new asset locations;

(c) materially changed the terms upon which any Borrower or any Guarantor sells goods (including sales onconsignment) or provides services, nor has any vendor or trade supplier to any Borrower or any Guarantor during or at the end ofsuch period materially adversely changed the terms upon which it supplies goods to such Borrower or such Guarantor;

(d) permitted or suffered to exist any security interest in or liens on any of their respective properties, whether real orpersonal, other than as specifically permitted in the Financing Agreements;

(e) received any notice of, or obtained knowledge of any of the following not previously disclosed to Agents: (i) theoccurrence of any event involving the release, spill or discharge of any Hazardous Material in violation of applicableEnvironmental Law in a material respect or (ii) any investigation, proceeding, complaint, order, directive, claims, citation ornotice with respect to: (A) any non-compliance with or violation of any applicable Environmental Law by any Borrower or anyGuarantor in any material respect or (B) the release, spill or discharge of any Hazardous Material in violation of applicableEnvironmental Law in a material respect or (C) the generation, use, storage, treatment, transportation, manufacture, handling,production or disposal of any Hazardous Materials in violation of applicable Environmental Laws in a material respect or(D) any other environmental, health or safety matter, which constitutes a Material Adverse Change or has a material adverseeffect on any properties at which such Borrower or such Guarantor transported, stored or disposed of any Hazardous Materials;or

(f) become aware of, obtained knowledge of, or received notification of, any breach or violation of any materialcovenant contained in any instrument or agreement in respect of Indebtedness for money borrowed by any Borrower or anyGuarantor.

Attached hereto as Schedule III are the calculations used in determining, as of the end of such fiscal period, whetherBorrowers and Guarantors are in compliance with the covenants set forth in Section 9.17 of the Loan Agreement for such fiscalperiod.

The foregoing certifications are made and delivered this _____ day of _____, 20 _____. Very truly yours,

BLUELINX CORPORATION,a Georgia corporation

By: Name: David J. Morris Title: Chief Financial Officer

BLUELINX/WACHOVIA LOAN AND SECURITY AGREEMENT SCHEDULES

SCHEDULE 1.29

Collection Accounts Depository Bank Account Number Bank One, NA **** Wachovia Bank, National Association **** Bank of America, N.A. ****PNC ****Sun Trust ****Wells Fargo **** **** Portions hereof have been omitted and filed separately with the Securities and Exchange Commission pursuant to a

request for confidential treatment in accordance with Rule 24b-2 of the Exchange Act.

SCHEDULE 5.2(b)

Chattel Paper and Instruments

None

SCHEDULE 5.2(f)

Letters of Credit, etc.

Account # Customer Name Amount 12327689 CHARLIES LUMBER & SUPPLY dba O’NEIL LUMBER & MILLWORK $ 50,000 12338232 CUSTOM PARK HOMES $ 25,000 10080263 EAGLE INDUSTRIES $ 90,000 12349158 FOUR STAR BUILDING MATERIALS $ 50,000 12348901 JOBSITE MATERIALS $ 40,000 12307046 SMITH SHEPPARD SUPPLY INC $ 50,000 12348034 V & N CONCRETE PRODUCTS $ 20,000 12349785 MCC BUILDING COMPONENTS $ 50,000 Subtotal Customer LC’s in favor of BlueLinx $ 375,000 12328171 341 LUMBER & TRUSS CO $ 19,100 12307949 BUILDERS CHOICE SUPPLY $ 40,189 10045626 MIKES HARDWARE $ 91,273 12348031 MILL BRANCH INDUSTRIES $ 84,329 12340826 OLM ACQUISITION & OWEN LUMBER $ 338,400 12347516 PROSIDE BUILDING SUPPLY $ 84,759 12332056 C.W. ENTERPRISES dba THE LUMBER YARD $ 137,282 12346844 SUPERIOR KRAFT HOMES, INC $ 41,293 Subtotal Customer Guaranties $ 836,625 Grand Total Letters of Credit and Customer Guaranties $ 1,211,625

*Note: The Guaranty amount equals the A/R balance or amount owing as of 7/20/2006.

SCHEDULE 5.2(g)

Commercial Tort Claims

None

SCHEDULE 8.4Liens

ORIGINAL FILE DATE ANDDEBTOR1 SECURED PARTY COLLATERAL STATE JURISDICTION NUMBER Georgia Pacific Corp.

P.O. Box 659 Belk, AL 35545

Thompson Tractor Co., Inc. P.O. Box 10367

Birmingham, AL 35202

Specific ConstructionEquipment

AL

Secretary ofState

1/5/00 2000-00486 FS

Georgia Pacific

Corporation 7530 Highway 114 Pennington, AL 36916

Fleet Capital Leasing — Technology Finance

P.O. Box 7023 Troy, MI 48007-7023

Konica Copiers in connection with certain Lease Agreement

AL

Secretary ofState

4/11/01 2001-13417 FS

Georgia Pacific



P.O. Box 7023 Troy, MI 48007-7023

Konica Copiers in connectionwith certain Lease Agreement

AL

Secretary ofState

4/11/01 2001-13418 FS

Georgia Pacific



P.O. Box 7023 Troy, MI 48007-7023


AL

Secretary ofState

6/8/01 2001-22125 FS

Georgia Pacific



P.O. Box 7023 Troy, MI 48007-7023


AL

Secretary ofState

6/8/01 2001-22127 FS

Georgia Pacific

P.O. Box 496 Ashdown, AR 71822

Pitney Bowes CreditCorporation

27 Waterview Dr. Shelton, CT 06484

All equipment manufactured,sold or distributed by the

Secured Party in connectionwith certain Lease Agreement

AR

Secretary ofState

4/27/99 1184982

Georgia-Pacific Corp.

100 Supply Rd. Crossett, AR 71635

IBM Credit Corporation 1 North Castle

Dr. Armonk, NY 10504-2575

Specific computer equipmentin connection with certain

Lease Agreement

AR

Secretary ofState

11/10/99 1215820

Georgia-Pacific

Corporation, as Lessee 133 Peachtree StreetNE Atlanta, GA 30303

Newcourt Communications Finance Corporation, as Lessor

2 Gatehall Dr. Parsippany, NJ 07054

Specific electronic equipmentin connection with certain

Lease Agreement

AR

Secretary ofState

8/8/00 01258396

ORIGINAL FILE DATE ANDDEBTOR1 SECURED PARTY COLLATERAL STATE JURISDICTION NUMBER Georgia Pacific

Corporation 24600 Avenue 13 Madera, CA 93687

The Cit Group/Equipment Financing Inc.

P.O. Box 27248 Tempe, AZ 85285

Seven New Hyster Lift Trucks

CA

Secretary of State

6/4/96 9615960177

Georgia-Pacific

Corporation 6300 Regio Ave. Buena Park, CA 90620

Tennant Financial Services 4333 Edgewood Road N.E.

Cedar Rapids, IA 52411

Specific Equipment in connection with

certain Lease Agreement

CA

Secretary of State

9/8/99 9925660681

Georgia-Pacific

Corporation 10399 E. StocktonBlvd. Elk Grove, CA 95624

TMCC Equipment Finance MS R307 P.O. Box 3457

Torrance, CA 90510

One New Toyota Forklift

CA

Secretary of State

8/14/00 0023560034

Georgia-Pacific

Corporation 133 Peachtree Street Atlanta, GA 30303

Allied Packaging Corp. P.O. Box 8010

Phoenix, AZ 85066-8010

Stretch Wrap Machine

CA

Secretary of State

9/9/02 0225360884

Georgia-Pacific


Allied Packaging Corp. P.O. Box 8010

Phoenix, AZ 85066-8010

Stretch Wrap Machine

CA

Secretary of State

6/2/03 0315560509

Georgia-Pacific


Citicorp Del Lease, Inc. as Agent for

Harrison Credit Corp.

One New Caterpillar

FL

Secretary of State

4/2/01 2001000071731

Georgia Pacific

7061 A.C SkinnerPkwy Jacksonville, FL 32256

Atlas Worldwide Leasing, Inc. 8930 Western Way, Suite 14

Jacksonville, FL 32256

Specific Equipment in connection with

certain Lease Agreement

FL

Secretary of State

2/13/03 20030326584X

Georgia-Pacific Corp

County Rd 216E Palatka, FL 32077

IBM Credit Corporation 1 North Castle Drive Armonk, NY 10504

Specific computer equipment in connection with certain

Lease Agreement

FL

Secretary of State

11/1/00 200000248756

Georgia Pacific Corp.

400 S.R. 70 West Lake Placid, FL 33852

Network Capital Alliance, a Division of Sovereign

368 Veterans Memorial HighwayCommack, FL 11725

Specific Equipment

FL

Secretary of State

8/14/00 200000185890

Georgia-Pacific

Corporation County Road 216;No. 155 Palatka, FL 32177

Caterpillar Financial Services Corporation

1800 Parkway Place, Suite 820 Marietta, GA 30067

1 Caterpillar 226 Skid Steer Loader

FL

Secretary of State

7/19/99 990000163614


Corporation 4600 NEExpressway Doraville, GA30340

Barloworld Fleet Leasing, LLC 11301-C Granite Street

Charlotte, NC 28273

One Gene Z45/22 in connection with certain Lease Agreement

GA

GwinnettCounty

12/23/02 012980

Georgia Pacific

100 Supply Rd. Crossett, AR71635

A.W. Chesterton 225 Fallon Rd.

Stoneham, MA 02180

Mechanical Seals and BraidedPacking

GA

UCC CentralIndexingSystem

034-2002-001500 6/24/02

Georgia Pacific

Corp. 4210 N. TrontageRd. Meridian, MS39307

Konica Business Technologies, Inc. 500 Day Hill Rd.

Windsor, CT 06095

Konica Copiers in connection with certain Contract Agreement

GA


007-2003-001933 2/21/03

Georgia Pacific



Windsor, CT 06095

Konica Copy in connection with certain Contract Agreement

GA


007-2003-010061 9/11/03

Georgia Pacific



Windsor, CT 06095


GA


007-2003-010326 9/19/03

Georgia Pacific



Windsor, CT 06095

Konica Copy in connection with certain Contract Agreement

GA


007-2003-010562 9/24/03

Georgia Pacific



Windsor, CT 06095

Konica Copy in connection withcertain Contract Agreement

GA


007-2003-013154 1/20/03

Georgia Pacific



Windsor, CT 06095


GA


007-2004-002982 3/12/04

Georgia Pacific

Corp. 133 Peachtree StNE Atlanta, GA30303

Safeco Credit Co. Inc. Safeco Plaza, A-Bldg.

Seattle, WA 98185

Specific Equipment in connection with certain Lease Agreement

GA


007-99-004811 4/30/99

Georgia Pacific

Corporation 133 PeachtreeStreet Atlanta, GA30303

Hewlett-Packard Company Finance & Remarketing Division

20 Perimeter Summit Blvd. Atlanta, GA 30319

Specific Equipment

GA


007-1999-009377 9/9/99





Specific Equipment

GA


007-1999-009413 9/9/99

Georgia Pacific




Specific Equipment

GA


007-2000-003392 3/24/00

Georgia Pacific




Specific Equipment

GA


007-2000-003393 3/24/00

Georgia Pacific




Specific Equipment

GA


007-2000-003352 3/29/00

Georgia Pacific

Corporation 327 Margaret Street Plattsburgh, GA 12901

Motion Industries, Inc. P.O. Box 1477


Specific Equipment

GA


007-2002-002434 3/4/02

Georgia Pacific




Specific Equipment

GA


044-2001-001661 2/27/01

Georgia Pacific




Specific Equipment

GA


044-2001-002039 3/13/01

Georgia Pacific

Corporation 1650 Lake Cook Rd. Deerfield, IL 60015

Republic Credit Corporation 3300 S Parker Rd.,

Suite 500 Aurora, CO 80014

Specific Equipment

GA


051-2003-00270 4/28/03

Georgia Pacific




Specific Equipment

GA


060-2000-02310112/11/00

Georgia Pacific




Specific Equipment

GA


060-2000-02310212/11/00

ORIGINAL FILE DATE ANDDEBTOR1 SECURED PARTY COLLATERAL STATE JURISDICTION NUMBER Georgia Pacific Corporation

133 Peachtree StreetAtlanta, GA 30303

Hewlett-Packard CompanyFinance & Remarketing

Division 20 Perimeter Summit Blvd.

Atlanta, GA 30319

Specific Equipment

GA

UCC CentralIndexing System

060-2000-02310312/11/00

Georgia Pacific Corporation




Atlanta, GA 30319

Specific Equipment

GA


060-2000-02310412/11/00





Atlanta, GA 30319

Specific Equipment

GA


060-2000-02310512/11/00





Atlanta, GA 30319

Specific Equipment

GA


060-2000-02310612/11/00





Atlanta, GA 30319

Specific Equipment

GA


060-2000-02310712/11/00





Atlanta, GA 30319

Specific Equipment

GA


060-2001-0040122/28/01





Atlanta, GA 30319

Specific Equipment

GA


060-2001-0040267 3/5/01





Atlanta, GA 30319

Specific Equipment

GA


060-2001-0042683/5/01





Atlanta, GA 30319

Specific Equipment

GA


060-2001-0042693/5/01





Atlanta, GA 30319

Specific Equipment

GA


060-2001-0042703/5/01

ORIGINAL FILE DATE ANDDEBTOR1 SECURED PARTY COLLATERAL STATE JURISDICTION NUMBER Georgia Pacific Corporation


Hewlett-Packard Company Finance & Remarketing

Division20 Perimeter Summit Blvd.

Atlanta, GA 30319

Specific Equipment

GA

UCC Central Indexing System

060-2001-0042713/5/01





Atlanta, GA 30319

Specific Equipment

GA


060-2001-004272 3/5/01





Atlanta, GA 30319

Specific Equipment

GA


060-2001-004273 3/5/01





Atlanta, GA 30319

Specific Equipment

GA


060-2001-004749 3/13/01





Atlanta, GA 30319

Specific Equipment

GA


060-2001-014004 8/7/01





Atlanta, GA 30319

Specific Equipment

GA


060-2001-0140668/8/01





Atlanta, GA 30319

Specific Equipment

GA


060-2001-0140678/8/01



Durametal Corporation 9560S.W. Herman Rd. Tualatin, OR

97062

Specific Equipment

GA


060-2001-1850611/23/01


5495 Clyattville Lake Park Rd.Clyattville, GA 31601

Tennant Financial Services 4333 Edgewood Road N.E.


Specific Equipment in connection with certain Lease

Agreement

GA


092-2000-00298511/6/00


d/b/a J&J Mid-South Container1745 Doug Barnard ParkwayAugusta, GA 30906

Barloworld Handling P.O. Box 3109

Cayce/W. Columbia, SC 29171

Specific Equipment

GA


121-2001-0014635/17/01

ORIGINAL FILE DATE ANDDEBTOR1 SECURED PARTY COLLATERAL STATE JURISDICTION NUMBER Georgia-Pacific Corp.

W.9th StreetBrunswick, GA 315203200

IBM Credit Corporation1 North Castle DriveArmonk, NY 10504

Specific Equipment inconnection with certain

Lease Agreement

GA


007-1999-0063476/21/99


4300 Wildwood ParkwayAtlanta, GA 30339



Lease Agreement

GA


007-1999-0081928/10/99


4300 Wildwood ParkwayAtlanta, GA 30339



Lease Agreement

GA


007-1999-008193810/99



Tennant Financial Services4333 Edgewood Rd. N.E.Cedar Rapids, IA 52441

Special Equipment

GA


002-2001-00038110/5/01


133 Peachtree Street, NEAtlanta, GA 30303

Hewlett-Packard Company20 Perimeter Summit Blvd.

Atlanta, GA 30319

Specific Equipment

GA


007-1999-0095949/14/99




Atlanta, GA 30319

Specific Equipment

GA


007-1999-0095959/14/99




Atlanta, GA 30319

Specific Equipment

GA


007-1999-0095979/14/99




Atlanta, GA 30319

Specific Equipment

GA


007-1999-0096689/17/99




Atlanta, GA 30319

Specific Equipment

GA


007-1999-01268612/8/99




Atlanta, GA 30319

Specific Equipment

GA


007-1999-01271312/8/99


133 Peachtree Street,NE Atlanta, GA 30303


Atlanta, GA 30319

Specific Equipment

GA


007-1999-01274212/9/99




Atlanta, GA 30319

Specific Equipment

GA


007-2000-0034043/24/00




Atlanta, GA 30319

Specific Equipment

GA


007-2000-0034053/24/00




Atlanta, GA 30319

Specific Equipment

GA


007-2000-0034063/24/00




Atlanta, GA 30319

Specific Equipment

GA


007-2000-0034073/24/00




Atlanta, GA 30319

Specific Equipment

GA


007-2000-0034083/24/00




Atlanta, GA 30319

Specific Equipment

GA


007-2000-0034093/24/00




Atlanta, GA 30319

Specific Equipment

GA


007-2000-0034113/24/00




Atlanta, GA 30319

Specific Equipment

GA


007-2000-0034123/24/00




Atlanta, GA 30319

Specific Equipment

GA


007-2000-0034133/24/00


133 Peachtree Street,NEAtlanta, GA 30303


Atlanta, GA 30319

Specific Equipment

GA


007-2000-0034143/24/00




Atlanta, GA 30319

Specific Equipment

GA


007-2000-0035523/29/00




Atlanta, GA 30319

Specific Equipment

GA


007-2000-0055875/15/00




Atlanta, GA 30319

Specific Equipment

GA


007-2000-0083147/12/00




Atlanta, GA 30319

Specific Equipment

GA


007-2000-0083157/12/00




Atlanta, GA 30319

Specific Equipment

GA


007-2000-0083167/12/00




Atlanta, GA 30319

Specific Equipment

GA


007-2000-0083177/12/00




Atlanta, GA 30319

Specific Equipment

GA


007-2000-0083187/12/00




Atlanta, GA 30319

Specific Equipment

GA


007-2000-0083767/13/00



Citicorp Del Lease, Inc.As Agent for Harrison Credit Corp.

450 MamaroneckAvenue Harrison, NY 10528

Specific Equipment

GA


007-2001-0029057/13/01


55 Park Place, 6thFloorAtlanta, GA 30348

Harbour Capital Corporation11 Merrill Drive

Hampton, NH 03842

Specific Equipment

GA


007-2001-0043155/3/01



Solarcom LLCOne Sun Court

Norcross, GA 30092

Specific Equipment inconnection with certain Lease

Agreement

GA


007-2001-0084318/2/01



Citicorp Del Lease, Inc.As Agent for Harrison Credit Corp.

450 Mamaroneck AvenueHarrison, NY 10528

Specific Equipment

GA


007-2001-0107159/28/01



IBM Credit Corporation1 North Castle DriveAmonk, NY 10504

Specific Equipment

GA


007-2002-0054905/28/02


440 E 138th StreetChicago, IL 60627

Harris Bank Naperville503 N. Washington Street

Naperville, IL 60566

Specific Equipment inconnection with certain Lease

Agreement

GA


007-2002-0071127/11/02


5600 E. OlympicBlvd.Los Angeles, CA90022

Harris Bank Barrington201 S. Grove AvenueBarrington, IL 60010

Specific Equipment

GA


007-2002-0090259/4/02




Specific Equipment

GA


007-2002-01118911/1/02




Specific Equipment

GA


007-2002-01124011/4/02




Specific Equipment

GA


007-2003-0044524/21/03


2410 NorthhamptonStreetEaston, PA 18042

Greatamerica LeasingCorporation

P.O. Box 609Cedar Rapids, IA 52406

Specific Equipment

GA


007-2003-01205210/27/03




Atlanta, GA 30319

Specific Equipment

GA


044-2001-0017052/28/01




Atlanta, GA 30319

Specific Equipment

GA


044-2001-0017062/28/01




Atlanta, GA 30319

Specific Equipment

GA


044-2001-0017072/28/01




Atlanta, GA 30319

Specific Equipment

GA


044-2001-0017082/28/01




Atlanta, GA 30319

Specific Equipment

GA


044-2001-0017092/28/01




Atlanta, GA 30319

Specific Equipment

GA


044-2001-0017102/28/01




Atlanta, GA 30319

Specific Equipment

GA


044-2001-0017112/28/01




Atlanta, GA 30319

Specific Equipment

GA


060-2000-0137367/24/00




Atlanta, GA 30319

Specific Equipment

GA


060-2000-0137487/24/00




Atlanta, GA 30319

Specific Equipment

GA


060-2000-0137507/24/00




Atlanta, GA 30319

Specific Equipment

GA


060-2000-0137517/24/00




Atlanta, GA 30319

Specific Equipment

GA


060-2000-0173659/18/00




Atlanta, GA 30319

Specific Equipment

GA


060-2000-0173669/18/00




Atlanta, GA 30319

Specific Equipment

GA


060-2000-0173679/18/00




Atlanta, GA 30319

Specific Equipment

GA


060-2000-0173689/18/00




Atlanta, GA 30319

Specific Equipment

GA


060-2000-0173699/18/00




Atlanta, GA 30319

Specific Equipment

GA


060-2000-0173709/18/00




Atlanta, GA 30319

Specific Equipment

GA


060-2000-0173719/18/00




Atlanta, GA 30319

Specific Equipment

GA


060-2000-0179169/26/00




Atlanta, GA 30319

Specific Equipment

GA


060-2000-0179189/26/00




Atlanta, GA 30319

Specific Equipment

GA


060-2000-0179199/26/00




Atlanta, GA 30319

Specific Equipment

GA


060-2000-0179209/26/00




Atlanta, GA 30319

Specific Equipment

GA


060-2000-0179219/26/00




Atlanta, GA 30319

Specific Equipment

GA


060-2000-0179229/26/00




Atlanta, GA 30319

Specific Equipment

GA


060-2000-0179239/26/00




Atlanta, GA 30319

Specific Equipment

GA


060-2000-0179249/26/00




Atlanta, GA 30319

Specific Equipment

GA


060-2000-0179259/26/00




Atlanta, GA 30319

Specific Equipment

GA


060-2000-0179269/26/00




Atlanta, GA 30319

Specific Equipment

GA


060-2001-01891110/9/00




Atlanta, GA 30319

Specific Equipment

GA


060-2001-01891310/9/00



Fleet Business Credit Corp.One South Wacker Dr., Suite

3900Chicago, IL 60606

Specific Equipment

GA


060-2001-0016431/23/01




Atlanta, GA 30319

Specific Inventory

GA


060-2001-0084235/3/01



Tennant Financial Services4333 Edgewood Road N.E.


Specific Equipment

GA


060-2001-01625110/4/01



Associates CommercialCorporation

P.O. Box 168647Irving, TX 750168647

Specific Equipment

GA


060-2002-0026632/26/02




Atlanta, GA 30319

Specific Equipment

GA


060-2002-0031883/8/02




Atlanta, GA 30319

Specific Equipment

GA


060-2002-0031893/8/02




Atlanta, GA 30319

Specific Equipment

GA


060-2002-0031903/8/02




Atlanta, GA 30319

Specific Equipment

GA


060-2002-0031913/8/02




Atlanta, GA 30319

Specific Equipment

GA


060-2002-0031923/8/02




Atlanta, GA 30319

Specific Equipment

GA


060-2002-0032623/11/02




Atlanta, GA 30319

Specific Equipment

GA


060-2002-0032633/11/02




Atlanta, GA 30319

Specific Equipment

GA


060-2002-0032643/11/02

Georgia-Pacific

Corporation1220 Railroad StreetDuluth, MN 55802

The Peltz Group, Inc.4600 N. Port Washington Rd.

Milwaukee, WI 53217

Specific Equipment

GA


060-2002-0109248/1/02



Pope & Talbot, Inc.1500 S.W. First Avenue, Suite

200Portland, OR 97201

Specific Equipment

GA


060-2002-0128679/12/02



Pope & Talbot, Inc.1500 S.W. First Avenue, Suite

200Portland, OR 97201

Specific Equipment

GA


060-2002-0131209/19/02


1203 Fones RoadOlympia, WA 98501

Tennant Financial Services10 Riverview DriveDanbury, CT 06810

Specific Equipment

GA


060-2002-01626311/26/02



Alliance Energy Corp.800 South StreetP.O. Box 9161

Waltham, MA 02454

Specific Equipment

GA


060-2003-0028313/7/03



Toyota Motor CreditCorporation

P.O. Box 3457Torrance, CA 90510

Specific Equipment

GA


060-2003-0036623/24/03



Maxus Leasing Group, Inc.31300 Bainbridge RoadCleveland, OH 44139

Specific Equipment

GA


060-2003-01436811/20/03

Georgia-Pacific

CorporationNorth East 4th andAdamsCamas, WA 98607

Air Liquide America LP10450 SW Tualatin-Sherwood

RoadTualatin, OR 97062

3,000 gal nitrogen vessel

GA


060-2003-01562112/18/03

ORIGINAL FILE DATE ANDDEBTOR1 SECURED PARTY COLLATERAL STATE JURISDICTION NUMBER Georgia-Pacific Corporation

4600 NE ExpresswayDoraville, GA 30340

Barloworld Fleet Leasing, LLC11301-C Granite Street

Charlotte, NC 28273

Specific Equipment

GA


067-2002-01298012/23/02


440 E. 138th StreetChicago, IL 60627

Safeco Credit Co.Safeco Plaza Building A

Seattle, WA 98185

One Compressor(model TS20) inconnection with

certain LeaseAgreement

IL

Secretary ofState

4/30/994029288

Georgia-Pacific Corporation

440 E. 138th StreetChicago, IL 60627

United Financial of Illinois, Inc.800 East Diehl RoadNaperville, IL 60563

One Lighting RetrofitProject in connection

with certain LeaseAgreement

IL

Secretary ofState

5/12/004209256


Old Route 66 & 8th StreetMount Olive, IL 62069

Sun Chemical Corporation135 W. Lake Street

Northlake, IL 60164

Specific electronicequipment and office

furniture

IL

Secretary ofState

7/1/025490758


60 Main StreetWoodland, ME 04694

Associates Commercial Corporation711 P.O. Box 168647

Irving, TX 75016

One Sweeper One Cab& Chassis Truck

ME

Secretary ofState

8/26/981980001282485


60 Main StreetWoodland, ME 04694

Irving Oil Corporation700 Maine Avenue

Bangor, ME 04402-0401

Mechanical TankGauge Tank

Transmitter MiniComputer/Receiver

ME

Secretary ofState

7/19/9919990001326276


951 County StreetMilan, MI 48160

Ervin Leasing Company3893 Research Park Drive

P.O. Box 1689Ann Arbor, MI 48106-1689

1 Bandsaw

MI

Secretary ofState

4/23/01D765997


510 Industrial Park AccessRd.Columbus, MS 39705

Fleet Capital Leasing-Technology Finance

P.O. Box 7023Troy, MI 48007-7023

Konica Copier inconnection with


MS

Secretary ofState

6/8/0101531272

Georgia-Pacific Group

8600 NE 38th StreetKansas City, MO 64161

Mid-Continent Leasing Services, Inc.6045 Martway, Suite 100

Mission, KS

Specific Equipment inconnection with


MO

Secretary ofState

4/10/004036979


327 Margaret StreetPlattsburgh, NY 12901-1719

Weavexx Corporation11120 Capital Blvd.

Wake Forest, NC 27587

Weavexx PaperMachine

NY

Secretary ofState

6/22/01121388


P.O. Box 4892128 Horner Waldorf Rd.Creedmro, NC 27522

Interstate Equipment Co.P.O. Box 868

Statesville, NC 28687

Specific Equipment:Rosco RB-48

NC

Secretary ofState

6/10/9919990056602


200 McDowell RoadAsheboro, NC 27203

Barloworld Fleet Leasing LLC11301-C Granite Street

Charlotte, NC 28273

One (1) JLG 450AJ

NC

Secretary ofState

8/31/0120010518534F

Georgia Pacific

P.O. Box 4892128 Horner Waldorf Rd.Creedmro, NC 27522

Interstate Equipment Co.P.O. Box 868

Statesville, NC 28687


NC

GranvilleCounty

6/10/9999-483


10515 SW Allen Ave.Beaverton, OR 97005

Les Schwab Tire Center10340 SW Canyon Rd.Beaverton, OR 97005

All new and used tirespurchased fromSecured Party

OR

Secretary ofState

9/30/02600426


One Owens WayBradford, PA 16701

Lease Corporation of America340 E. Big Beaver Rd., Ste 560

Troy, MI 48083

Radios Portables

PA

Secretary ofState

1/27/9929841399

Georgia Pacific

P.O. Box 280Prosperity, SC 29127

Interstate Equipment Company122 Gardners Terrace RoadWest Columbia, SC 29172


SC

Secretary ofState

9/15/00000915-091424A


511 Winchester RdMemphis, TN 38116

Tennant Financial Services10 Riverview Dr.

Danbury, CT 06810

1 Tennant Model 6500Sweeper in connection

with certain LeaseAgreement

TN

Secretary ofState

1/18/02102-004380


4200 Old Tasso RdCleveland, TN 37312

Icemakers, Inc.909 Creekside Rd

Chattanooga, TN 37406

2 Scotsman(equipment)

TN

Secretary ofState

10/17/01301-104952


611 Winchester Rd.Memphis, TN 38116

Hyster Credit CompanyP.O. Box 4366

Portland, OR 97208

One Rico 8000 RollHandler

TN

Secretary ofState

12/10/99992-056404


Loop 285Quanah, TX 79252

Tennant Financial Services4333 Edgewood Rd. N.E.Cedar Rapids, IA 52441

1 Tennant Model 7400LP Scrubber in

connection with certainLease

Agreement

TX

Secretary ofSecretary

3/1/0101-037238


634 Davis St. Emporia, VA 23847

Pugh Oil Co. Inc. 701 McDovell Rd.

Asbeboro, SC

Specific oil industryequipment

VA

Secretary ofSecretary

3/30/01 010330 7015


1203 Fones Rd. Olympia, WA 98501

Tennant Financial Services 4333 Edgewood Rd. NE Cedar Rapids, IA 52411


Lease Agreement

WA

Secretary ofState

9/27/99 99270082


P.O. Box 1058 Bellingham, WA 98227

Tricon Metals & Services, Inc. P.O. Box 101447 2700 5th Ave. S


Specific Equipment

WA

Secretary ofState

12/5/00 2003400162

Georgia-Pacific Corp

520 Pike Street Seattle, WA 98101

Citicorp Vendor Finance, Inc. P.O. Box 728

Park Ridge, NJ 07656

Sharp Copier & FaxMachine

WA

Secretary ofState

12/29/032003-363-7807-5

Georgia Pacific

100 Wisconsin River Port Edwards, WI 54469

Pitney Bowes Credit Corp. 27 Waterview Dr. Shelton, CT 06484

Specific equipment inconnection with certain

Lease Agreement

WI

Secretary ofState

12/9/99 01906288

Georgia Pacific

100 Main Street Menasha, WI 54952

Hyster Credit Co. P.O. Box 4366

Portland, OR 97208

One new Hyster LiftTruck

WI

Secretary ofState

12/29/99 01912123


1927 Erie Ave. Sheboygan, WI 53082

Wisconsin Power & Light P.O. Box 192

Madison, WI 53701

Specific Equipment

WI

Secretary ofState

11/29/01 010009313117

Georgia-Pacific

113 Peachtree St. N.E. Atlanta, GA 30303

Sterling Water, Inc. Culligan Water Conditioning

2465 Trailwood Lane Mosinee, WI 54455

Specific Equipment

WI

Secretary ofState

9/17/02 020016719024

SCHEDULE 8.8

Environmental Disclosures

(a) Compliance with Environmental Laws

Information Relating to Underground Storage Tanks:

1. Akron, OH — Underground Storage Tank Closure Report — 9/30/99 — Ohio Action levels not exceeded.

2. Albuquerque, NM — Underground Storage Tank Removal Report — 5/3/94 — no further action required.

3. Allentown, PA — Underground Storage Tank Closure Report — 6/3/97

4. Beaverton (Portland), OR — Underground Storage Tank Removal Closure Report — 6/10/98

• No further action letter from Oregon Department of Environmental Quality

5. Burlington, VT Underground Storage Tank Permit — 9/17/97

• Correspondence from Vermont Agency of Natural Resources approving permit for installation ofreplacement UST.

• Permit for UST installation expired 9/1/02

6. Burlington, VT Underground Storage Tank Removal Report — 10/1/97

• Report prepared by Aqua-Terra, Inc. No additional action recommended.

7. Charleston, SC Underground Storage Tank Closure Report — 11/21/91

8. Charleston, SC — Standard Limited Assessment Report — 9/94

9. Charlotte, NC — Permit Rescission of Permit #SR 0300073

• Permit rescinded on 8/23/93 after remediation of contaminated soils completed.

10. City of Industry (Los Angeles), CA Underground Storage Tank Removal — 2/21/92

11. Denver, CO — Underground Storage Tank Removal Closure Report — 2/98

• No further action letter from Colorado Department of Labor and Employment, Oil Inspection Section dated4/30/98 re: UST removal

12. Denville, NJ — Underground Storage Tank Systems — Registration Certificate

• Expires 9/30/05

13. Denville, NJ — Underground Storage Tank Site Assessment Summary — 8/94

• New Jersey Dept of Environmental Protection and Energy form. GP discovered contamination from dieseland unleaded gasoline was found. Decommissioning was approved (closure approval #C93-5093). Soilcontamination was found, but no ground water contamination found.

14. Denville, NJ — Underground Storage Tank Closure & Corrective Action Report — 8/11/94

• Report prepared by TTI Environmental, Inc. Removal of 2 old USTs and installation of 1 new UST.Remediation activities required.

15. Denville, NJ — Underground Storage Tank No Further Action Letter — 12/2/94

• No further action letter from NJ Department of Environmental Protection and Energy.

16. Des Moines, IA — Underground Storage Tank Closure Report — 7/22/98

• Report prepared by Burns & McDonnell. No further action recommended.

17. Elkhart, IN — No Further Action Letter for Underground Storage Tank — 3/5/02

• No further action letter from Indiana Department of Environmental Management

18. Elkhart, IN — Response to Underground Storage Tank Closure Checklist — 11/12/01

• Report prepared by DLZ Michigan, Inc. in response to IDEM closure review checklist. Relates to 1998removal of UST and installation of new UST.

19. Elkhart, IN — Notification for Underground Storage Tanks

• Notification provided to Indiana Department of Environmental Management. Relates to new UST installed5/98.

20. Elkhart, IN — Underground Storage Tank Removal Closure Report — 12/98

• Report prepared by Burns & McDonnell re: removal of UST. Remediation performed — site downgradientfrom an ACCRA-PAC plant which is an aerosol company with history of environmental issues, it is aCERCLA site. Monitoring well installed. No further action recommended.

21. Erwin, TN — Underground Storage Tank Registration Certificate

• Expires 9/30/04

22. Fargo, ND — Notification for Underground Storage Tanks — 12/90

• Appears that new UST installed per site assessment below

23. Fargo, ND — Underground Storage Tank Site Assessment — 10/89

• Report prepared by Special Resource Management. Recommend reporting contamination to North DakotaState Department of Health.

24. Fort Worth, TX Underground Storage Tank Removal Report -

• No further action letter from Texas Water Commission dated 12/10/92

25. Grand Rapids, MI Underground Storage Tank Closure Report

• Correspondence from Michigan Department of Environmental Quality dated 3/18/03. Due to leaking USTrestrictive covenant recorded prohibiting installation of water well on the land. Any conveyance of the landmust provision for compliance with corrective action plan and notice must be given to purchasers.Monitoring wells installed. Monitoring well abandonment may occur after MDEQ provides a letterindicating that the closure report has been audited or after the 6 month time frame for the department toconduct a closure audit expires. The monitoring wells have been abandoned.

• Closure report prepared by DLZ Michigan, Inc. 2/03. Tank was an open Leaking UST based on confirmed

release discovered during tank removal 3/23/92. Initial closure report submitted in August 1997 after5 years of remediation and monitoring, but the MDEQ indicated that additional corrective action wasnecessary. Additional remediation activity performed beginning in 2000 by DLZ. DLZ recommends nofurther action.

26. Harlingen, TX Underground Storage Tank Closure Report — 9/20/94

• No further action letter from Texas Natural Resource Conservation Commission dated 10/4/94 re: USTclosure.

27. Houston, TX — Underground Storage Tank Closure/Removal — 9/19/91

• No further action letter from Texas Natural Resource Conservation Commission dated 11/22/93 re: USTclosure 4/92 (at the time the TNRCC did not issue no further action letter).

28. Jackson (Pearl), MS — Underground Storage Tank Closure — No Further Action Letter

• No further action letter from Mississippi Department of Environmental Quality dated 8/8/91.

29. Little Rock, AR — Underground Storage Tank Removal Closure Report — 4/98

• No further action letter from Arkansas Department of Pollution Control and Ecology dated 1/31/91 re:closure of UST on 11/6/90

30. Lubbock, TX Underground Storage Tank Closure/Removal — 3/1/94

• Report prepared by CURA. No further action recommended. File is missing a no further action letter fromTNRCC, but references the fact that a representative of the TNRCC informed CURA that no further actionwould be required.

31. Lubbock, TX Underground Storage Tank Registration — 3/31/94

32. Maple Grove (Minneapolis), MN Petroleum Tank Release Site File Closure — 1/26/94

• No further action / site closure letter from Minnesota Pollution Control Agency dated 10/27/95. • Underground Storage Tank Closure Report 2/17/94

33. Memphis, TN Underground Storage Tank Closure

• No further action / site closure letter from Tennessee Department of Environment and Conservation dated5/29/96.

• Permanent Closure Report 4/17/96

34. Missouri Dept. of Natural Resources Underground Storage Tank Certificate

35. Missouri Dept. of Natural Resources Underground Storage Tank Certificate

36. Nashville, TN — Underground Storage Tank Amended Notification — 11/8/99

37. Nashville, TN — Underground Storage Tank Closure Report

• Report prepared by Key Environmental 6/23/90 re: removal of UST. No further action recommended.

38. National City (San Diego), CA Underground Storage Tank Removal Report — 4/28/94

• Prepared by TRC Environmental Corporation. Elevated levels of contaminants found at site. TRCrecommends work plan for ongoing monitoring to evaluate the extent of potential impact of petroleumhydrocarbons at site.

• Supplemental Groundwater Monitoring and Sampling Report 7/97 • County of San Diego letter confirming completion of site investigation and remedial action dated 6/11/98

39. New Orleans, LA Underground Storage Tank Removal — Notification of closure of UST

• Letter to LADEQ with Removal Information form and other pertinent documents dated 2/25/93

40. New Stanton, PA Addendum to Underground Storage Tank Closure Report

41. New Stanton, PA Underground Storage Tank Closure Report — 4/5/93

• Report prepared by Environmental Resources Management, Inc. Documented contamination — furtherassessment required.

42. Newark, CA — Underground Storage Tank Permit application

• Application for permit and letter from City of Newark dated 8/6/97 indicating that permit will be issuedwhen fees paid. Actual permit not in file.

• Semi-Annual Groundwater Monitoring Report dated 7/21/03 — performed in accordance with Clean-up

Requirements Order 97-114, issued to PACCAR Inc. (former owner), and the Containment ManagementPlan

• GP is actively remediating the site.

43. Newtown, CT Underground Storage Tank Removal — 9/9/97

• Report prepared by Aqua-Terra, Inc. No further action recommended.

44. North Highlands (Sacramento), CA Underground Storage Tank Removal Report — 7/18/94

• Report prepared by TRC Environmental. No further action recommended.

45. North Kansas City, MO — No Further Action Letter re: Underground Storage Tank Closure

• No further action letter from Missouri Department of Natural Resources dated 7/21/99 after remediation wascompleted.

46. North Kansas City, MO — Permit Termination — Closure Approval — 8/20/99

• From Missouri Department of Natural Resources re: Termination of Permit MO-R401212. Remediationcomplete and permit is terminated.

47. North Kansas City, MO — Underground Storage Tank Closure Report — 8/25/98

48. North Kansas City, MO — Correspondence re: Permit Termination Request — 6/28/99

• From SECOR to Missouri Department of Natural Resources. Request for Termination of General Permit forlandfarming of impacted soil at GP site. Requests final closure of site.

49. Lake City, FL — Storage Tank Registration 2003-2004

• Expires 6/30/04

50. Portland, ME Underground Storage Tank Removal Site Assessment 10/26/93

• Report by JB Plunkett and Associates. No further action required per Maine Department of EnvironmentalProtection.

51. Riverside, CA Underground Storage Tank Removal

• No further action letter from Riverside Department of Environmental Health dated 5/15/95.

52. San Antonio, TX Underground Storage Tank Closure Report — 11/16/92

• Report by LGL-ECT Environmental Services. No further action recommended. • Letter from Texas Water Commission dated 10/23/92 requesting corrective action be stopped and reports

submitted to TWC for further evaluation. • Letter from TWC dated 11/3/92 reassigning case to central office in Austin • TNRCC LPST Data Base Query Results — case closed

53. Sioux Falls, SD Underground Storage Tank Closure Report — 10/97

• Report prepared by Burns & McDonnell. No further action recommended. • South Dakota DENR letter Closure of DENR Resources File #97.360 — DENR has determined that work at

this site can end and that the file can be closed.

54. Springfield, MO Underground Storage Tank Closure Report — 5/24/94

55. Tennessee — Underground Storage Tank Registration Certificate

• Expires 12/31/03

56. Virginia Beach (Norfolk), VA Underground Storage Tank Notification of Permanent Closure

• Report of Site Assessment for Tank Closure — 5/30/90 • No further action letter from Virginia State Water Control Board dated 10/9/90.

57. Yaphank, NY — Underground Storage Tank Removal / Installation

• Intracompany memo re: removal of UST.

58. Ypsilanti, MI — Underground Storage Tank Registration Certificate

• Expires 9/30/03; renewal by 1/13/04

(b) Reports:

1. Phase I Environmental Site Assessment and Limited Compliance Audit for sixty-three (63) locations by ATCAssociates, Inc., dated April 2004. The April 2004 Phase I Environmental Site Assessments for fifty-eight(58) locations were updated June 2006 by ATC Associates, Inc.

2. Phase I Environmental Site Assessment and Limited Compliance Audit for six (6) leased locations acquired inJuly 2005, performed by ATC Associates, Inc.

(c) Consent Orders or Decrees

Fremont Distribution Center, Newark, CA - Seller purchased the Fremont Distribution Center (Newark, CA) from PACCARInc. in November 1995. PACCAR paid Seller $171,800 as compensation for future monitoring and remediation of groundwatercontamination caused by leaking USTs during the ownership of PACCAR. The current liability loss reserve for Seller isunknown. The site concern is dissolved volatile organic compounds. The Regional Water Quality Control Board approved aContainment Zone Management Plan (CZMP) for PACCAR in 1997 under Cleanup Requirement Order 97-114. Seller took overthe semi-annual self (groundwater) monitoring requirements stipulated in the CZMP as required under the terms of the G-P/PACCAR sale agreement. Recent (December 2005) groundwater monitoring results indicate that dissolved diesel contaminationis the only constituent exceeding the RBSLs (risk based screening levels) in site groundwater.

(d) Material Environmental Audits, Reports, etc. Pertaining to Acquired Assets

Various Environmental Reports:

1. Wausau, WI Piping Closure Assessment Report

2. Newark, CA — Semi-Annual Ground Water Monitoring Report — First Half 2003

3. Newark, CA — Memo dated 6/13/1996

4. Charlotte, NC — Letter Report — Closure of Bioremediation Area

5. Charlotte, NC — Memo — Test Results from Stockpile

6. Charlotte, NC — Closure of Bioremediation Area

7. Charlotte, NC — Test Report #A83972

8. Charlotte, NC — Test Report #A83668

9. Charlotte, NC — Certificate of Approval for Disposal of Soils containing Petroleum Products

10. North Kansas City, MO — Land Farm Sampling Results

11. North Kansas City, MO — Correspondence — 6/30/99

• From SECOR regarding land farm decommissioning.

12. Lake City, FL — Petroleum Dispenser Closure

13. Woodinville, WA — Letter Report for Compliance Groundwater Monitoring

14. Woodinville, WA — Independent Remedial Action Report

15. Elkhart, IN — Exempt Construction & Operation Status — Cut-to-Size Saw Shop Baghouse

16. New Stanton, PA — Draft Site Characterization Report

17. El Paso, TX — Delivery Certificate

18. Ypsilanti, MI — Emissions Calculations

19. Notice of Storage

20. Missouri Treated Timber Dealer License

SCHEDULE 8.13

Labor Relations

Collective Bargaining Agreements:

1. Agreement between Georgia-Pacific Corporation Building Materials Distribution Center, Akron, Ohio andInternational Brotherhood of Teamsters Local 348 effective June 24, 2000 through June 23, 2012.

2. Agreement between Georgia-Pacific Corporation Triad Logistics Center, Bellingham, Massachusetts and TeamstersLocal Union No. 653 effective April 1, 2003 through March 31, 2008.

3. Agreement between Georgia-Pacific Corporation Trial Logistics Center, Buffalo, New York and Truck Drivers LocalUnion No. 449 effective April 10, 2003 through April 9, 2009.

4. Agreement between Georgia-Pacific Building Materials Distribution Center, Charleston, South Carolina and GeneralDrivers, Warehousemen and Helpers Local Union No. 509 effective May 20, 1998 through May 19, 2009.

5. Agreement between Georgia-Pacific Building Materials Distribution Center, Charlotte, North Carolina and TeamstersLocal Union No. 71 affiliated with the International Brotherhood of Teamsters effective August 1, 2001 throughJuly 31, 2007.

6. Agreement between Georgia-Pacific Corporation, University Park, Chicago, Illinois and Sand, Gravel & CrushedStone Workers’ Local 681 effective June 1, 1998 through May 31, 2009.

7. Agreement between Georgia-Pacific Corporation, University Park, Chicago, Illinois and Building Material, Lumber,Box, Shaving, Roofing and Insulating Chauffeurs, Teamsters, Warehousemen and Helpers, and Related IndustryEmployees, Watchmen, Security Guards, Chicago and Vicinity, Illinois; as well as Notions, Candies Cigar, Tobaccoand Cigarette Salesmen, Drivers, Helpers, and Inside Workers, and Vending Machine Drivers, Servicemen, and InsideWorkers Union Local 786 affiliated with the International Brotherhood of Teamsters and Teamsters Joint CouncilNo. 25 effective October 1, 2002 through September 30, 2010.

8. Agreement between Georgia-Pacific Building Materials Distribution Center, Denver, Colorado and Teamsters LocalUnion No. 435 affiliated with the International Brotherhood of Teamsters effective February 15, 2002 throughFebruary 14, 2008.

9. Agreement between Georgia-Pacific Building Materials Distribution Center, Denville, New Jersey and TeamstersLocal Union No. 408 effective February 1, 2000 through January 31, 2010.

10. Agreement between Georgia-Pacific Corporation Building Materials Distribution Center, Des Moines, Iowa and LocalUnion No. 147 an affiliate of the International Brotherhood of Teamsters effective July 1, 2001 through June 30,2007.

11. Agreement between Georgia-Pacific Corporation Distribution Division, Detroit, Michigan and InternationalBrotherhood of Teamsters Local Union Number 247 effective April 1, 2003 through March 31, 2008.

12. Agreement between Georgia-Pacific Corporation Distribution Center, El Paso, Texas and Truck Drivers, Chauffeurs,Warehousemen and Helpers Local Union No. 745 effective January 1, 2003 through December 31, 2009.

13. Agreement between Georgia-Pacific Corporation, Elkhart, Indiana and Teamsters Local Union No. 364 effectiveMay 15, 2003 through May 14, 2009.

14. Agreement between Georgia-Pacific Corporation Distribution Center, Erwin, Tennessee and Teamsters Local UnionNo. 549 effective April 11, 2004 through April 10, 2008.

15. Agreement between Georgia-Pacific Corporation Building Materials Distribution Center, Fargo, North Dakota andTeamsters Local Union No. 116 effective September 1, 2001 to August 31, 2007.

16. Labor Agreement between Georgia-Pacific Corporation, Ft. Worth, Texas and United Brotherhood of Carpenters andJoiners of America, ALF-CIO, Southern Council of Industrial Workers and its affiliate Shop, Mill and Industrial LocalUnion 2848 Ft. Worth, Texas effective October 1, 2003 through September 30, 2009.

17. Agreement between Georgia-Pacific Corporation Full Mix Distribution Center, Fremont, California and Teamsters,Warehouse, Wholesale Liquor Salespersons, Milk Drivers and Dairy Employees, Construction and Building Materialsand Miscellaneous Union Local 853 effective June 22, 2002 through June 21, 2008.

18. Agreement between Georgia-Pacific Corporation Building Products and Distribution Center, Grand Rapids, Michiganand General Teamsters Union Local No. 406 affiliated with the International Brotherhood of Teamsters effectiveJune 1, 1997 through May 31, 2007.

19. Agreement between Georgia-Pacific Corporation Building Materials Distribution Center, Houston, Texas and TexasState District Council of Carpenters, United Brotherhood of Carpenters & Joiners of America, Local Union 724affiliate effective March 10, 2004 through March 9, 2010.

20. Agreement between Georgia-Pacific Corporation, Independence, Kentucky FMDC and Teamsters Local UnionNo. 100 Cincinnati, Ohio effective January 1, 2000 through December 31, 2009.

21. Agreement between Georgia-Pacific Corporation Building Materials Distribution Center, Pearl, Mississippi and Local891 affiliated with International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of Americaeffective February 14, 2004 through February 13, 2010.

22. Agreement between Georgia-Pacific Corporation Kansas City Distribution Center and Teamsters Local Union No. 541effective December 1, 2000 through November 30, 2006.

23. Agreement between Georgia-Pacific Corporation Triad Logistics Center, Lawrenceville, Georgia and the InternationalBrotherhood of Teamsters Local Union No. 528 effective January 1, 2001 through December 31, 2006.

24. Agreement between Georgia-Pacific Corporation Building Material and Distribution Center, Los Angeles, Californiaand Teamsters Local No. 986 Construction Division effective April 1, 2000 through March 31, 2012.

25. Agreement between Georgia-Pacific Corporation Building Materials Distribution Center, Lubbock, Texas and GeneralDrivers, Warehousemen and Helpers Local Union No. 577 effective August 20, 2003 through September 8, 2009.

26. Agreement between Georgia-Pacific Corporation, Memphis, Tennessee and Highway and Local Motor FreightEmployees, Teamsters Local Union No. 667. Contract expires 10/31/07.

27. Agreement between Georgia-Pacific Corporation Building Materials Distribution Center, Miami, Florida andTeamsters, Chauffeurs, Warehousemen and Helpers of America Local Union No. 390 effective October 1, 2003through October 30, 2007.

28. Agreement between Georgia-Pacific Corporation, Midfield, Alabama and Teamsters Local Union No. 612 effectiveNovember 26, 2003 through November 25, 2008.

29. Agreement between Georgia-Pacific Corporation, Minneapolis Minnesota FMDC and International Brotherhood ofTeamsters Local 221 effective July 15, 2003 through July 14, 2008.

30. Agreement between Georgia-Pacific Corporation Distribution Center, New Orleans, Louisiana and General TruckDrivers, Chauffeurs, Warehousemen and Helpers Local Union No. 270 effective January 30, 1999 through January 29,2011.

31. Agreement between Georgia-Pacific Corporation Building Materials Distribution Center, Newtown, Connecticut andTeamsters, Chauffeurs, Warehousemen and Helpers Local Union No. 191 effective October 1, 2003 throughSeptember 30, 2009.

32. Agreement between Georgia-Pacific Building Materials Distribution Center, Virginia Beach, Virginia and Drivers,Chauffeurs, Warehousemen and Helpers Local Union No. 822 effective September 1, 2001 through August 31, 2007.

33. Agreement between Georgia-Pacific Corporation Bulk Distribution Center, Pensacola, Florida and Teamsters LocalUnion No. 991 affiliated with International Brotherhood of Teamsters effective August 1, 2002 through July 31, 2008.

34. Agreement between Georgia-Pacific Building Materials Distribution center, New Stanton, Pennsylvania andTeamsters, Chauffeurs, Warehousemen and Helpers Local Union No. 30 effective May 1, 2002 through April 30, 2007.

35. Agreement between Georgia-Pacific Building Materials Distribution Center, New Stanton, Pennsylvania and TheLaborers District Council of Western Pennsylvania Local Union No. 1058 effective January 1, 2002 throughDecember 31, 2006.

36. Agreement between Georgia-Pacific Corporation, Portland, Oregon and General Teamsters Local Union No. 162Drivers effective May 1, 1999 through April 30, 2011.

37. Agreement between Georgia-Pacific Corporation, Portland, Oregon and Teamsters Local Union No. 206 effectiveMay 1, 1999 through May 1, 2011.

38. Agreement between Georgia-Pacific Corporation Building Materials Distribution Center, Richmond, Virginia andTeamsters Local Union No. 592 affiliated with the International Brotherhood of Teamsters, Chauffeurs,Warehousemen and Helpers of America effective August 1, 2002 through July 31, 2007.

39. Agreement between Georgia-Pacific Corporation and Wholesale and Retail Food Distribution Teamster Local UnionNo. 63 effective April 1, 2003 through March 31, 2009, Riverside, California.

40. Agreement between Georgia-Pacific Corporation Full Mix Distribution Center, San Diego, California and BuildingMaterial, Construction, Industrial, Professional and Technical Teamsters Local Union No. 36 effective August 1, 2002through July 31, 2008.

41. Agreement between Georgia-Pacific Corporation, Seattle, Washington Reload Operation and General Teamsters LocalUnion No. 174, Seattle, Washington effective April 1, 2000 through March 31, 2010.

42. Agreement between Georgia-Pacific Corporation, Shreveport, Louisiana and UBC-Southern Council of IndustrialWorkers Local Union 2345 effective October 17, 2002 through October 16, 2008.

43. Agreement between Georgia-Pacific Building Materials Distribution Center, Sioux Falls, South Dakota and GeneralDrivers and Helpers Union No. 749 affiliated with the International Brotherhood of Teamsters effective March 2, 2002through March 1, 2008.

44. Agreement between Georgia-Pacific Corporation Bulk Distribution Center, Springfield, Missouri and Teamsters LocalUnion No. 245 affiliated with the IBT effective December 6, 1997 through December 5, 2009.

45. Agreement between Georgia-Pacific Full Mix Distribution Center, St. Louis, Missouri (Bridgeton, Missouri) andConstruction, Building Material, Ice and Coal, Laundry, Dry Cleaning and Industrial Laundry and Dry Cleaning,Drivers, Helpers, Warehousemen, Yardmen and Allied Workers Local Union No. 682 effective January 15, 2002through January 14, 2008.

46. Agreement between Georgia-Pacific Corporation, St. Paul, Minnesota and Warehouse Employees Union LocalNo. 503 affiliated with the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers ofAmerica effective July 15, 2000 through July 14, 2012.

47. Agreement between Georgia-Pacific Building Materials Distribution Center, Tulsa, Oklahoma and Tulsa GeneralDrivers Warehousemen and Helpers Local Union No. 523 effective October 15, 2003 through October 30, 2007.

48. Agreement between Georgia-Pacific Corporation Building Materials Distribution Center, Wausau, Wisconsin andGeneral Teamsters Union Local No. 662 affiliated with the International Brotherhood of Teamsters effective May 1,1999 through April 30, 2005.

49. Agreement between Georgia-Pacific Corporation Building Materials Distribution Center, Yaphank, New York andInternational Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America Local Union No. 1205effective May 1, 2003 through August 31, 2006.

SCHEDULE 8.15

Material Contracts

1. Master Supply & Purchase Agreement — Georgia — Pacific Corporation

2. Master Lease Agreement — ABP Alabama (Midfield) LLC and other Affiliates

SCHEDULE 9.9

Indebtedness

1. [All Capital Leases referenced on Schedule 8.4.]

2. Letters of Credit

Standby Letters of Credit (as of 7/20/06) LC Number Beneficiary Bank AmountSM208829W Zurich American Insurance Company Wachovia Bank 9,400,000.00SM211584W International Brotherhood of Teamsters Local 1205 Pension Fund Wachovia Bank 46,218.74SM211570W Central States Southeast and Southwest Areas Pension Fund Wachovia Bank 682,144.00SM211579W Western Conference of Teamsters Pension Fund Wachovia Bank 431,716.83SM211583W Southern Council of Industrial Workers Pension Fund Wachovia Bank 14,913.91SM219419W Wachovia Securities Wachovia Bank 322,443.00 10,897,436.48

Documentary Letters of Credit (as of 7/20/06) LC Number Beneficiary Bank AmountIC583838H Mindanao Timber Co, Inc. Wachovia Bank 46,244.10

SCHEDULE 9.10

Loans and Advances

None

SCHEDULE 9.14

Fiscal Year, Quarter and Month Ending DatesSee Attached Chart

EXHIBIT 31.1

CERTIFICATION REQUIRED BY RULE 13a-14(a) OR RULE 15d-14(a) OF THE SECURITIESEXCHANGE ACT OF 1934

I, GEORGE R. JUDD, CERTIFY THAT:

(1) I have reviewed this quarterly report on Form 10-Q of BlueLinx Holdings Inc;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internalcontrol over financial reporting.

November 6, 2009 /s/ George R. Judd George R. Judd

BlueLinx Holdings Inc.Chief Executive Officer

EXHIBIT 31.2

CERTIFICATION REQUIRED BY RULE 13a-14(a) OR RULE 15d-14(a) OF THE SECURITIESEXCHANGE ACT OF 1934

I, H. DOUGLAS GOFORTH, CERTIFY THAT:

(1) I have reviewed this quarterly report on Form 10-Q of BlueLinx Holdings Inc;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internalcontrol over financial reporting.

November 6, 2009 /s/ H. Douglas Goforth H. Douglas Goforth

BlueLinx Holdings Inc.Chief Financial Officer and Treasurer

EXHIBIT 32.1

BLUELINX HOLDINGS INC.CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of BlueLinx Holdings Inc. (the “Company”) on Form 10-Q for the period ending October 3, 2009, as filed with theUnited States Securities and Exchange Commission on the date hereof (the “Report”), I, George R. Judd, Chief Executive Officer of the Company, do herebycertify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. November 6, 2009 By: /s/ George R. Judd George R. Judd Chief Executive Officer

EXHIBIT 32.2

BLUELINX HOLDINGS INC.CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of BlueLinx Holdings Inc. (the “Company”) on Form 10-Q for the period ending October 3, 2009, as filed with theUnited States Securities and Exchange Commission on the date hereof (the “Report”), I, H. Douglas Goforth, Chief Financial Officer and Treasurer of theCompany, do hereby certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. November 6, 2009 By: /s/ H. Douglas Goforth H. Douglas Goforth Chief Financial Officer and Treasurer