SECOND AMENDMENT

TO STANDBY PURCHASE

AND NOTE SUPPORT AGREEMENT

 

THIS SECOND AMENDMENT (this “Second Amendment”), dated as of November 15, 2001,
is entered into by and among LOUISIANA-PACIFIC CORPORATION, a Delaware
Corporation (“L-P”), BANK OF AMERICA, N.A., a national banking association
(“BofA”), and CANADIAN IMPERIAL BANK OF COMMERCE, a Canadian chartered bank
(“CIBC”).

 

RECITALS:

 

A.         L-P, BofA and CIBC are parties to a Standby Purchase and Note Support
Agreement, dated as of August 16, 1999, as amended by the Waiver and First
Amendment to Standby Purchase and Note Support Agreement, dated as of July 18,
2001 (collectively, the “Agreement”), pursuant to which L-P has agreed to
purchase certain Installment Notes (as such term is defined therein) from BofA
and CIBC under certain circumstances.

 

B.         L-P is concurrently herewith terminating the Credit Agreement as
defined in the Agreement prior to this Second Amendment and entering into a
senior revolving credit facility with BofA, as administrative agent, and a
syndicate of banks (the “New Credit Agreement”).  In connection with such
transactions, L-P, BofA and CIBC wish to amend the Agreement subject to the
terms and conditions hereto.

 

NOW, THEREFORE, the parties hereto hereby agree as follows:

 

1.          Defined Terms.

 

(a)       The Agreement is hereby amended to add the following defined terms:

 

“Average Inventory Coverage Ratio” shall mean the Inventory Coverage Ratio
averaged over any applicable month.

 

“BofA Canadian Credit Agreement” means those various credit agreements, each
dated September 24, 1999 between Bank of America Canada and certain borrowers.

 

“BofA Pledged Installment Notes” means, collectively, those Installment Notes
numbered 0573, 0575, 0577, 0578, 0579, 0580, 0600 and 0601 (with respect to any
such Installment Note for so long as pledged as collateral for the amounts
payable under the BofA Canadian Credit Agreements).

 

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“Canadian Credit Agreements” means the BofA Canadian Credit Agreements and the
CIBC Canadian Credit Agreements.

 

“Canadian Dollars” means lawful money of Canada.

 

“Canadian Dollar Equivalent” means, as of any date of determination, the
equivalent amount in Canadian Dollars as determined by reference to the rate
published in the Wall Street Journal on such date as the rate for purchase of
Canadian Dollars with U.S. Dollars.

 

“CIBC Canadian Credit Agreements” means those various credit agreements each
dated September 24, 1999 between CIBC and certain borrowers.

 

“CIBC Pledged Installment Notes” means, collectively, those Installment Notes
numbered 0586, 0587, 0588, 0589, 0590, 0591, 0592 and 0593 (with respect to any
such Installment Note, for so long as pledged as collateral for the amounts
payable under the CIBC Canadian Credit Agreements).

 

“Collateral Agent” shall have the meaning given such term in the Security
Agreement.

 

“Eligible Inventory” shall mean Inventory as defined in the California Uniform
Commercial Code in which the Collateral Agent has a perfected first priority
security interest except for Liens permitted under Sections 7.01(c) and 7.01(d)
of the Credit Agreement but excluding (a) Inventory which is not owned by L-P
free and clear of all security interests, liens, encumbrances except for Liens
permitted under the Security Agreement or the Credit Agreement or claims
asserted by any third party, and (b) Inventory which the Collateral Agent, in
its reasonable discretion, deems to be obsolete, slow-moving, unsalable,
damaged, defective or unfit for further processing.

 

“Inventory Coverage Ratio” shall mean the ratio of (y) the Inventory Value to
(x) the aggregate principal amount outstanding under the Pledged Installment
Notes as of the date such Inventory Value was measured.

 

“Inventory Value” shall mean, as of any measurement date under Paragraph
2(a)(ii), the Canadian Dollar Equivalent (calculated as of such date) of the
value of the Eligible Inventory, calculated based on generally accepted
accounting principles, excluding the Canadian Dollar Equivalent (calculated as
of such date) of the LIFO reserve amount recorded on the Company’s books and
records.

 

“Pledged Installment Notes” means, collectively, the BofA Pledged Installment
Notes and the CIBC Pledged Installment Notes.

 

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“Second Amendment” means the Second Amendment to Standby Purchase and Note
Support Agreement dated as of November 15, 2001 among L-P and the Standby
Lenders.

 

“Standby Lender” means either of CIBC or BofA, in their capacity as parties to
the Agreement, or any of their successors or permitted assigns under Paragraph
3(f) of the Agreement; and “Standby Lenders” shall mean all such parties
collectively.

 

“U.S. Dollars” means lawful money of the United States.

 

“U.S. Dollar Equivalent” means, as of any date of determination, the equivalent
amount in U.S.  Dollars as determined by reference to the rate published in the
Wall Street Journal on such date as the rate for purchase of U.S. Dollars with
Canadian Dollars.

 

(b)        Unless otherwise defined herein, capitalized terms used in this
Amendment shall have the meanings assigned to them in the Agreement.

 

2.         Other Amendments to Agreement.

 

(a)        The Agreement is hereby amended by adding the word “Pledged” before
the two instances of the term “Installment Notes” in the first sentence of
Paragraph 2 and before the two instances of such term in Paragraph 2(c).

 

(b)       The Agreement is hereby amended by deleting Paragraphs 2(a) and 2(b)
thereof in their entirety and replacing them with the following:

 

(a)       Covenants by L-P.

 

(i)     L-P shall comply with all of the covenants set forth under the headings
“Affirmative Covenants” and “Negative Covenants” in the credit agreement dated
as of November 15, 2001 among L-P, the several financial institutions from time
to time party thereto (collectively, the “Banks”) and BofA, as agent for the
Banks (without giving effect to any waiver or amendment thereto which has not
been consented to by the Standby Lenders, the “Credit Agreement”), subject in
each case to any applicable grace periods provided for in the Credit Agreement,
and except for the covenants in Sections 6.01(d) and (e), 6.06(d), and 6.13 of
the Credit Agreement.  The covenants described in the immediately preceding
sentence, as from time to time constituted pursuant to the immediately preceding
sentence, are incorporated herein by this reference with the same force and
effect as though they were set forth herein in their entirety, and shall be
effective for the purposes of this Agreement irrespective of any further waiver,
amendment, expiration, termination, invalidity or unenforceability of the Credit
Agreement.  Any waiver or amendment of such covenants as incorporated herein
shall require consent of the Standby Lenders to be effective as a waiver or
amendment of such covenants as

 

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 incorporated herein, notwithstanding that such amendment or waiver may have
been become effective with respect to the Credit Agreement.  L-P shall give
prompt written notice to each Standby Lender of any pending or proposed
modification to the Credit Agreement and with respect to the entering into of a
new agreement replacing all or any part of the financing provided under the
Credit Agreement, and shall also promptly send a copy to each Standby Lender of
any notice of default under the Credit Agreement which it may receive from
Administrative Agent.  Concurrently with L-P obtaining the approval, waiver or
consent, as applicable, with respect to an amendment of the Credit Agreement or
with respect to the entering into of a new agreement replacing all or any part
of the financing provided under the Credit Agreement, L-P shall offer the terms
of such amendment or new agreement, as the case may be, to the Standby Lenders.

 

(ii)     L-P shall maintain an Average Inventory Coverage Ratio, measured for
and as of the end of each month, equal to not less than (i) for each January,
February and March, 1:8:1:0, (ii) for each April, May and June, 1.9 to 1.0, and
(iii) for each other month, 2.0 to 1.0.  L-P shall deliver to Collateral Agent
and the Standby Lenders detailed calculations of compliance with the foregoing
covenant, certified by a Responsible Officer of L-P as presenting, in all
material respects, such calculations fairly and in a manner consistent with
other such calculations in all material respects, concurrently with delivery and
certification of the monthly financial statements delivered pursuant to Section
6.01(c) of the Credit Agreement.

 

(b)          Representations of L-P.

 

(i)      L-P represents and warrants to BofA and CIBC that, as of the Effective
Date under and as defined in the Second Amendment, the representations and
warranties made by L-P set forth under the heading “Representations and
Warranties” in the Credit Agreement are true and correct, except that L-P does
not herein make the representations and warranties set forth in Section 5.09 and
in the last two sentences of Section 5.08 of the Credit Agreement.

 

(c)     Paragraph 2(d) is hereby amended by adding the words “, in the Security
Agreement or in the Second Lien Deed of Trust”  after the words “Credit
Agreement.”

 

(d)     Paragraph 3(c) is hereby amended by adding the words “or by facsimile”
before the words “to the parties”; adding the words “or facsimile numbers” after
the word “addresses”; adding the words “or facsimile number” after the word
“address”; and deleting sections (i), (ii) and (iii) thereof in their entirety
and replacing them with the following:

 

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(i)         if to L-P, to

 

Louisiana-Pacific Corporation

805 SW Broadway, Suite 700

Portland, Oregon  97205

Attention:  Vice President and Chief Financial Officer

Facsimile:  (503) 821-5322

 

With a courtesy copy to:

 

Brobeck, Phleger & Harrison LLP

One Market, Spear Street Tower

San Francisco, California  94105

Attention:  Douglas M. Young

Facsimile:  (415) 442-1010

 

(ii)         if to BofA, to

 

Bank of America, N.A.

555 California Street, 41St. Floor

Mail Code  CA5-705-12-12

San Francisco, California  94104

Attention:  Mr. Michael J. Balok

Facsimile:  (415) 622-4585

 

With a courtesy copy to:

 

Morrison & Foerster LLP

425 Market Street

San Francisco, California  94105-2482

Attention:  Keith C. Wetmore

Facsimile:  (415) 268-7522

 

(iii)        if to CIBC, to

 

Canadian Imperial Bank of Commerce

BCE Place, P.O. Box 500

161 Bay Street, 8th Floor

Toronto, Ontario  M5J 258

Attention:  Managing Director, Credit Capital Markets

Facsimile:  (416) 956-6680

 

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(e)        The Agreement is hereby amended to add the following Paragraph 4
thereof:

 

4.          Security.  At all times after the Effective Date under and as
defined in the Second Amendment, all obligations of L-P to BofA and CIBC under
this Agreement shall be secured in accordance with the Collateral Agency and
Security Agreement (the “Security Agreement”) and with the Second Lien Deed of
Trust, Security Agreement, Timber Filing, and Assignment of Rental (the “Second
Lien Deed of Trust”), each by L-P in favor of BofA and CIBC and dated as of
November 15, 2001.

 

(f)         The Agreement is hereby amended to add the following Paragraph 5
thereof:

 

5.          Obligations Absolute; Waivers.  L-P agrees that BofA and CIBC may,
at any time and from time to time, and without notice to L-P, make any agreement
with L-P Acquisition or with any other person or entity that has any liability
with respect to any of the Pledged Installment Notes or providing collateral as
security for the Pledged Installment Notes, for the extension, renewal, payment
compromise, discharge or release of the obligations under the Pledged
Installment Notes or any collateral (in whole or in part), or for any
modification or amendment of the terms thereof or of any instrument or agreement
evidencing or relating to the obligations under the Pledged Installment Notes or
the provision of collateral, all without in any way impairing, releasing,
discharging or otherwise affecting the obligations of L-P under this Agreement. 
L-P waives any defense arising by reason of any disability or other defense of
L-P Acquisition or any other person or entity that has any liability with
respect to any of the Pledged Installment Notes, or the cessation from any cause
whatsoever of the liability of any such party, or any claim that L-P’s
obligations exceed or are more burdensome than those of L-P Acquisition, and L-P
waives the benefit of any statute of limitations affecting the liability of L-P
hereunder.  L-P waives any right to enforce any remedy that BofA or CIBC now has
or may hereafter have against L-P Acquisition and waives any benefit of any
right to participate in any security now or hereafter held by BofA or CIBC. 
Further, L-P consents to the taking of, or failure to take, any action that
might in any manner or to any extent vary the risks of L-P under this Agreement
or that, but for this provision, might operate as a discharge of L-P.

 

(g)        The Agreement is hereby amended to add the following Paragraph 6
thereof:

 

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6.          Fees for Services.

 

(a)        L-P covenants and agrees to pay to BofA administrative and collateral
agent fees with respect to this Agreement and the security provided for
hereunder.  Such fees shall become due and payable on the first Interest Payment
Date as such term is defined in the Installment Notes after the date of the
Second Amendment under the Installment Notes and on each such Installment
Payment Date thereafter and shall be payable in U.S. Dollars in an amount equal
to 3.000% per annum on the U.S. Dollar Equivalent (calculated as of the
applicable Interest Payment Date) of the principal amount outstanding during the
Interest Period then ended of the BofA Pledged Installment Notes less the U.S.
Dollar Equivalent (calculated as of the applicable Interest Payment Date) of the
amount payable under BofA Pledged Installment Notes on each such Interest
Payment Date on account of the “Margin” as such term is defined in the BofA
Pledged Installment Notes; provided that, if L-P’s long-term unsecured debt
rating falls to a level equal to or below BB- by S&P and Ba3 by Moody’s, then
the foregoing reference to 3.000% per annum shall thereupon become 3.750% per
annum.

 

(b)        L-P covenants and agrees to pay to CIBC administrative and
documentation fees with respect to the Canadian Credit Agreements and the
security therefor, including the Installment Notes.  Such fees shall become due
and payable on the first Interest Payment Date after the date of the Second
Amendment hereof under the Installment Notes and on each such Interest Payment
Date thereafter and shall be an amount equal to 3.000% per annum on the
principal amount outstanding during the Interest Period then ended of the CIBC
Pledged Installment Notes less the amount payable under the CIBC Pledged
Installment Notes on each such Interest Payment Date on account of the “Margin”
as such term is defined in the CIBC Pledged Installment Notes; provided that, if
L-P’s long-term unsecured debt rating falls to a level equal to or below BB- by
S&P and Ba3 by Moody’s, then the foregoing reference to 3.000% per annum shall
thereupon become 3.750% per annum.

 

(c)        Interest shall by payable by L-P with respect to any fee hereunder
which is not timely paid  at a rate equal to the Default Rate applicable to Base
Rate Loans (each as defined under the Credit Agreement) and shall be payable
upon demand to the Standby Lender or Standby Lenders for whose account such fee
is payable.

 

(d)        If L-P shall be required by law or any authority or agency charged
with the administration thereof to withhold or deduct any taxes or other amounts
(“Withholding Taxes”) imposed or levied by or on behalf of the United States or
any state thereof or any authority or agency thereof from or in respect of the
fees payable under clause (b) of this Paragraph 6, then L-P shall pay to CIBC
such additional amounts as may be necessary

 

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so that after making all required withholdings or deductions of Withholding
Taxes CIBC receives from L-P the amount of fees which would otherwise have been
receivable by CIBC absent any such Withholding Taxes; provided however that no
such additional amounts shall be payable if the liability for such Withholding
Taxes arises as a result of CIBC performing any of the services for which such
fee is payable in the United States.

 

(h)        The Agreement is hereby amended to add the following Paragraph 7
thereof:

 

7.        Confidentiality.  The Collateral Agent and each Standby Lender agrees
to maintain the confidentiality of the Information (as defined below), except
that Information may be disclosed (a) to its and its Affiliates’ (as defined in
the Credit Agreement) directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons (as defined in the Credit Agreement) to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed
to keep such Information confidential); (b) to the extent requested by any
regulatory authority; (c) to the extent  required by applicable laws or
regulations or by any subpoena or similar legal process; (d) to any other party
to this Agreement or to any Lender (as defined in the Credit Agreement); (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or the enforcement of rights hereunder;
(f) subject to an agreement containing provisions substantially the same as
those of this Paragraph 7, to any successor or assign or potential successor or
assign of Collateral Agent or Standby Lender or potential participant in any
Standby Lender’s rights or obligations under this Agreement; (g) with the prior
written consent of L-P; (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Paragraph 7 or (ii) becomes
available to it on a nonconfidential basis from a source other than L-P or any
of its Subsidiaries (as defined in the Credit Agreement), provided that such
source is not bound by a confidentiality agreement with L-P or any of its
Subsidiaries known to such Collateral Agent or Standby Lender; or (i) to the
National Association of Insurance Commissioners or any other similar
organization or any nationally recognized rating agency that requires access to
information about a Standby Lender’s or its Affiliates’ investment portfolio in
connection with ratings issued with respect to such Standby Lender or its
Affiliates.  In addition, the Collateral Agent and the Standby Lenders may
disclose the existence of this Agreement and information about this Agreement to
market data collectors, similar service providers to the lending industry, and
service providers to the Collateral Agent and the Standby Lenders in connection
with the administration and management of this Agreement, the Security
Agreement, and the Second Lien Deed of Trust.  For the purposes of this

 

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Paragraph 7, “Information” means all information received from L-P or any of its
Subsidiaries relating to L-P or any of its Subsidiaries or their respective
businesses, other than any such information that is available to the Collateral
Agent or any Standby Lender on a nonconfidential basis prior to disclosure by
L-P; provided that, in the case of information received from L-P after the date
hereof, such information is clearly identified in writing at the time of
delivery as confidential.  Any Person required to maintain the confidentiality
of Information as provided in this Paragraph 7 shall be considered to have
complied with its obligation to do so if such Person has taken normal and
reasonable precautions and exercised reasonably due care to maintain the
confidentiality of such Information.

 

3.          Representations and Warranties.  L-P hereby represents and warrants
as follows:

 

(a)       No breach or default has occurred and is continuing under the
Agreement, as amended by this Second Amendment.

 

(b)      The execution, delivery and performance of this Second Amendment by L-P
have been duly authorized by all necessary corporate and other action and do not
and will not require any registration with, consent or approval of, notice to or
action by, any person (including any governmental agency) in order to be
effective and enforceable.  The Agreement, as amended by this Second Amendment,
constitutes the legal, valid and binding obligation of L-P, enforceable against
L-P in accordance with its respective terms, without defense, counterclaim or
offset, except as enforceability may be limited by Debtor Relief Laws (as
defined in the New Credit Agreement) or by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).

 

(c)      All its representations and warranties contained in the Agreement as
amended by this Second Amendment are true and correct as though made on and as
of the Effective Date (except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true and correct
as of such earlier date).

 

(d)      It is entering into this Second Amendment on the basis of its own
investigation and for its own reasons, without reliance upon BofA or CIBC or any
other person.

 

4.            Effective Date.  This Second Amendment will become effective as of
the date (the “Effective Date”) on which BofA and CIBC have, with respect to
each of the following items, either received such item in form and substance
acceptable to BofA and CIBC, or waived delivery of such item:

 

(a)      an original or facsimile of this Second Amendment, duly executed by
BofA, CIBC and L-P;

 

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(b)      evidence that all conditions precedent to the effectiveness of the New
Credit Agreement other than the effectiveness of this Second Amendment have
occurred or been waived pursuant to the terms of the New Credit Agreement;

 

(c)      an original or facsimile of the Second Lien Deed of Trust, Security
Agreement, Timber Filing and Assignment of Rental dated as of the date hereof,
duly executed by L-P and duly notarized, in favor of BofA and CIBC (the “Second
Lien Deed of Trust”);

 

(d)      an original or facsimile of the Security Agreement dated as of the date
hereof, duly executed by L-P in favor of BofA and CIBC (the “Security
Agreement”);

 

(e)      UCC financing statements, duly executed by L-P if required, and
otherwise in suitable form to be filed, registered or recorded as necessary or
advisable to perfect the security interests created by the Security Agreement;

 

(f)       written advice relating to the security interests created by the
Security Agreement and judgment searches as BofA and CIBC may reasonably request
with respect to any of the collateral under the Security Agreement, and evidence
that all actions necessary or, in the reasonable opinion of BofA or CIBC,
desirable to perfect and protect the first priority security interest created by
the Security Agreement have been taken; and

 

(g)      an opinion of counsel to L-P substantially in the form of Exhibit A
hereto.

 

5.           Miscellaneous.

 

(a)      Except as expressly amended, all terms, covenants and provisions of the
Agreement are and shall remain in full force and effect and all references
therein to such Agreement shall henceforth refer to the Agreement as amended by
this Second Amendment.  This Second Amendment shall be deemed incorporated into,
and a part of, the Agreement.

 

(b)     L-P hereby agrees that its obligations under the Agreement remain in
effect and are not impaired, released, discharged or otherwise affected by the
amendments to the Canadian Credit Agreements being made concurrently herewith,
and acknowledges and agrees that any future amendments made to the Canadian
Credit Agreements also shall not so affect its obligations under the Agreement.

 

(c)     This Second Amendment shall be binding upon and inure to the benefit of
the parties hereto and thereto and their respective successors and assigns.  No
third party beneficiaries are intended in connection with this Second Amendment
(including, without limitation, any holder of Installment Notes other than BofA
or CIBC and any trustee under the indenture under which the Installment Notes
were issued).

 

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(d)     This Second Amendment shall be governed by and construed in accordance
with the law of the State of California (without regard to principles of
conflicts of laws).

 

(e)      The parties hereto acknowledge and agree that, notwithstanding anything
to the contrary herein, in the Agreement (as amended hereby and as may be
amended, supplemented, or modified from time to time), or in any other document,
L-P is not, and shall not be deemed, a guarantor, surety or indemnitor with
respect to any obligation arising under or in connection with any of the
Canadian Credit Agreements (as they may be amended, supplemented, or modified
from time to time).

 

(f)      This Second Amendment may be executed in any number of counterparts,
each of which shall be deemed an original, but all such counterparts together
shall constitute but one and the same instrument.

 

(g)     This Second Amendment, together with the Agreement, contains the entire
and exclusive agreement of the parties hereto with reference to the matters
discussed herein and therein.  This Second Amendment supersedes all prior drafts
and communications with respect thereto.  This Second Amendment may not be
amended except in accordance with the provisions of Paragraph 3(b) of the
Agreement.

 

(h)     If any term or provision of this Second Amendment shall be deemed
prohibited by or invalid under any applicable law, such provision shall be
invalidated without affecting the remaining provisions of this Second Amendment
or the Agreement, respectively.

 

(i)       L-P hereby covenants to pay or to reimburse BofA and CIBC, upon
demand, for all reasonable costs and expenses (including reasonable attorney
fees and expenses) incurred in connection with (i) the development, preparation,
negotiation, execution and delivery of this Second Amendment, the Security
Agreement, the Second Lien Deed of Trust, any UCC financing statements
reasonably required by the Collateral Agent with respect to the personal
property collateral under the Second Lien Deed of Trust, and any other
amendments or other documents relating to any of the foregoing, and (ii) the
recording or filing of the Second Lien Deed of Trust with the respective
thirteen counties in Texas and the filing of, and of-record searches with
respect to, such UCC financing statements.

 

(j)       L-P and each Standby Lender shall use their respective reasonable
efforts to cause a fully executed Amendment No. 2 to each of the Canadian Credit
Agreements to be executed and delivered not later than December 1, 2001.  L-P
shall use its best efforts to assist the Collateral Agent in completing the
recording and filing referenced in Section 5(i) hereof as soon as practicable
after the Effective Date.

 

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Second
Amendment to Standby Purchase and Note Support Agreement as of the date first
above written.

 

 

LOUISIANA-PACIFIC CORPORATION

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

BANK OF AMERICA, N.A.

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

CANADIAN IMPERIAL BANK OF COMMERCE

 

By:

 

 

Name:

 

 

Title:

 

 

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EXHIBIT A

 

FORM OF OPINION OF COUNSEL TO L-P

 

[See attached.]

 

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