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                                                                    Exhibit 10.7

                   SEPARATION AND GENERAL RELEASE AGREEMENT
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     The Parties to this Separation and General Release Agreement ("Agreement")
are Christopher M. McLain ("Executive") and Crown Vantage, Inc. ("the Company").

                                  AGREEMENTS


1.   Effective September 1, 1999, ("Effective Date") Executive's employment with
the Company will terminate as a result of the Company's executive office
relocation to Cincinnati, Ohio and Executive's decision not to relocate.  This
also acknowledges the Executive's resignation from any and all officerships and
directorships of Crown Vantage Inc. and any of its affiliates as of the date of
severance.  At the time of termination, Executive will receive all accrued
salary and all unused vacation pay.  Separate and apart from these payments, and
as consideration to support this Agreement, Executive shall receive the
following additional Separation Benefits following execution of this Agreement:

     (a)  Additional Separation Pay.  Fifty-two (52) weeks of base salary
          --------------------------
     continuation, excluding bonus eligibility or entitlement, at Executive's
     final base salary rate less required deductions and withholdings.

     (b)  Additional Health, Dental, and Life Insurance Coverage.  Company-paid
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     premiums for continued health, dental, employee life, and group life
     insurance coverage for Executive and Executive's covered dependents at the
     same rate and to the same extent Executive and his or her dependents are
     covered by such plans on the Effective Date for the fifty-two (52) weeks of
     Executive's salary continuation period, provided however that such coverage
     will cease if the Executive becomes reemployed with another employer and is
     eligible to receive health, dental of life insurance under an employer-
     provided plan, or if Executive and Executive's dependents cease being
     eligible for COBRA-continuation coverage under the Company's plans for any
     other reason.

     (c)  Company-Provided Automobile.  On the Effective Date, the Company will
          ----------------------------
     cease providing Executive with an automobile at Company expense.  However,
     at the Executive's option, Executive may either assume the lease obligation
     on the same terms and at the same rate as the Company was leasing the
     automobile on the Effective Date, or may purchase the automobile on the
     same terms and at the same rate as if the lease had expired.

     (d)  Restricted Stock.  All Restricted Stock in effect on the Effective
          -----------------
     Date shall become immediately vested.
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     (e)  Stock Options.    All Stock Options in effect on the Effective Date
          --------------
     shall become immediately vested in accordance with the terms of the Stock
     Option Plan provided that such options must be exercised within 3 months of
     the Effective Date during which time there shall be no further vesting.

2.   As partial consideration for the promises contained in this Agreement,
Executive hereby waives, releases, and discharges the Company and its
affiliates, parents and subsidiaries, and its or their current or former
officers, board members, employees, attorneys, and/or agents from any
complaints, claims, charges, claims for relief, demands, suits, actions and/or
causes of action which Executive asserts, has asserted or could assert arising
from or in any way connected with Executive's employment relationship with the
Company and/or the termination of that employment.  This includes, but is not
limited to, any "wrongful discharge" claims; all claims relating to any contract
of employment (express or implied); any covenant of good faith and fair dealing
(express or implied); any and all tort claims; any claims brought under any
federal, state, or municipal law, regulation or ordinance; any claims under
Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age
Discrimination in Employment Act, the Older Workers' Benefit Protection Act, the
Worker Adjustment and Retraining Notification Act, the Employee Retirement
Income Security Act, the Americans with Disabilities Act, the California Fair
Employment and Housing Act, any labor and civil codes of the State of California
or any other state, and any and all claims for attorney fees and costs.  This
waiver and release is intended to be full and complete, except for those
obligations that are created by this Agreement.

3.   As further consideration for this Agreement, Executive hereby waives and
releases any and all rights under section 1542 of the California Civil Code.
California Civil Code section 1542 reads as follows:

     A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
     NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
     RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
     SETTLEMENT WITH THE DEBTOR.

Executive agrees that this Agreement shall extend and apply to all unknown,
unsuspected and unanticipated injuries and damages as well as those of which
Executive is now aware, which arose before the signing of this Agreement.

4.   As further consideration for this Agreement, the Parties agree that the
"Change of Control" Agreement entered into between Executive and the Company on
December 5, 1995 will be, and hereby is, made null and void.

5.   If a Change of Control (as defined in Section 6 below) occurs during
Executive's fifty-two week salary continuation period, Executive, in addition to
the Separation Benefits defined in Section 1 of this Agreement, will receive the
following benefits:

     (a)  The sum of $553,120 and

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     (b)  For the Continuation Period (as defined below), Executive will again
     be eligible for Company-paid health, dental, employee life, and group life
     insurance benefits for Executive and Executive's dependents as and to the
     extent those coverages were in effect on the Effective Date, or, if more
     favorable to Executive, as are in effect generally immediately before the
     Change of Control Date with respect to other peer executives of the Company
     and their families, provided, however, that if Executive has become or
     becomes reemployed with another employer and is eligible to receive health,
     dental, or life insurance benefits under another employer-provided plan,
     the life insurance benefits shall cease and the health and dental insurance
     benefits shall be secondary to those provided under such other plan during
     such applicable period of eligibility, and provided further that Executive
     and Executive's dependents otherwise are and remain eligible for coverage
     under the federal law COBRA. The Continuation Period shall be three years.
     For purposes of determining eligibility (but not the time of commencement
     of benefits) of Executive for retiree benefits pursuant to such insurance
     plans, Executive shall be considered to have remained employed for three
     years after the Change of Control Date and to have retired on the last date
     of such period.

6.   For the purpose of this Agreement, a Change of Control shall mean:

     (a)  The acquisition by any individual, entity or group (within the meaning
     of Section 13(a)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
     amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
     the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or
     more of either (i) the then outstanding shares of common stock of the
     Company (the "Outstanding Company Common Stock") or (ii) the combined
     voting power of the then outstanding voting securities of the Company
     entitled to vote generally in the election of directors (the "Outstanding
     Company Voting Securities"); provided, however, that for purposes of this
     subsection (a), the following acquisitions shall not constitute a Change of
     Control:  (i) any acquisition by the Company, (ii) any acquisition by any
     employee benefit plan (or related trust) sponsored or maintained by the
     Company or any corporation controlled by the Company or (iii) any
     acquisition by any corporation pursuant to a transaction which complies
     with clauses (i), (ii), and (iii) of subsection (c) of this Section 6; or

     (b)  Individuals who, as of the Effective Date, constitute the Board (the
     "Incumbent Board") cease for any reason to constitute at least a majority
     of the Board; provided however, that any individual becoming a director
     subsequent to the date hereof whose election, or nomination for election by
     the Company's shareholders, was approved by a vote of at least a majority
     of the directors then comprising the Incumbent Board shall be considered as
     though such individual were a member of the Incumbent Board, but excluding
     for this purpose, any such individual whose initial assumption of office
     occurs as a result of an actual or threatened election contest with respect
     to the election or removal of directors of other actual or threatened
     solicitation of proxies or consents by or on behalf of a Person other than
     the Board; or

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     (c)  Consummation of a reorganization, merger or consolidation or sale or
     other disposition of all or substantially all of the assets of the Company
     and its subsidiaries (a "Business Combination"), in each case, unless
     following such Business Combination, (i) all or substantially all of the
     individuals and entities who were the beneficial owners, respectively, of
     the Outstanding Company Common Stock and Outstanding Company Voting
     Securities immediately prior to such Business Combination beneficially own,
     directly or indirectly, more than 50% of, respectively, the then
     outstanding shares of common stock and the combined voting power of the
     then outstanding voting securities entitled to vote generally in the
     election of directors, as the case may be, of the corporation resulting
     from such Business Combination (including, without limitation, a
     corporation which as a result of such transaction owns the Company or all
     or substantially all of the Company's assets either directly or through one
     or more subsidiaries) in substantially the same proportions as their
     ownership, immediately prior to such Business Combination of the
     Outstanding Company Common Stock and Outstanding Company Voting Securities,
     as the case may be, (ii) no Person (excluding any corporation resulting
     from such Business Combination or any employee benefit plan (or related
     trust) of the Company or such corporation resulting from such Business
     Combination) beneficially owns, directly or indirectly, 35% or more of,
     respectively, the then outstanding shares of common stock of the
     corporation resulting from such Business Combination or the combined voting
     power of the then outstanding voting securities of such corporation except
     to the extent that such ownership existed prior to the Business Combination
     and (iii) at least a majority of the members of the board of directors of
     the corporation resulting from such Business Combination were members of
     the Incumbent Board at the time of the execution of the initial agreement,
     or of the action of the Board, providing for such Business Combination; or

     (d)  Approval by the shareholders of the Company of a complete liquidation
     or dissolution of the Company and its subsidiaries.

7.   (a)  Anything in this Agreement to the contrary notwithstanding, in the
     event it shall be determined that any payment or distribution by the
     Company to or for the benefit of the Executive (whether paid or payable or
     distributed or distributable pursuant to the terms of this Agreement or
     otherwise, but determined without regard to any additional payments
     required under this Section 7 (a "Payment") would be subject to the excise
     tax imposed by Section 4999 of the Code or any interest or penalties are
     incurred by the Executive with respect to such excise tax (such excise tax,
     together with any such interest and penalties, are hereinafter collectively
     referred to as the "Excise Tax"), then the Executive shall be entitled to
     receive an additional payment (a "Gross-Up Payment") in an amount such that
     after payment by the Executive of all taxes (including any interest or
     penalties imposed with respect to such taxes) , including, without
     limitation, any income taxes (and any interest and penalties imposed with
     respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the
     Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
     imposed upon the Payments.  Notwithstanding the foregoing provisions of
     this Section 7(a), if it shall be

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     determined that the Executive is entitled to a Gross-Up Payment, but that
     the Executive, after taking into account the Payments and the Gross-Up
     Payment, would not receive a net after-tax benefit of at least $25,000
     (taking into account both income taxes and any Excise Tax) as compared to
     the net after-tax proceeds to the Executive resulting from an elimination
     of the Gross-Up Payment and a reduction of the Payments, in the aggregate,
     to an amount (the "Reduced Amount") such that the receipt of Payments would
     not give rise to any Excise Tax, then no Gross-Up Payment shall be made to
     the Executive and the Payments, in the aggregate, shall be reduced to the
     Reduced Amount.

     (b)  Subject to the provisions of Section 7(c), all determinations required
     to be made under this Section 7, including whether and when a Gross-Up
     Payment is required and the amount of such Gross-Up Payment and the
     assumptions to be utilized in arriving at such determination, shall be made
     by Ernst & Young, L.L.P., or such other certified public accounting firm as
     may be designated by the Executive (the "Accounting Firm"), which shall
     provide detailed supporting calculations both to the Company and the
     Executive within 15 business days of the receipt of notice from the
     Executive that there has been a Payment, or such earlier time as is
     requested by the Company.  In the event that the Accounting Firm is serving
     as accountant or auditor for the individual, entity or group effecting the
     Change of Control, the Executive shall appoint another nationally
     recognized accounting firm to make the determinations required hereunder
     (which accounting firm shall then be referred to as the Accounting Firm
     hereunder).  All fees and expenses of the Accounting Firm shall be borne
     solely by the Company.  Any Gross-Up Payment, as determined pursuant to
     this Section 7, shall be paid by the Company to the Executive within five
     days of the receipt of the Accounting Firm's determination.  Any
     determination by the Accounting Firm shall be binding upon the Company and
     the Executive.  As a result of the uncertainty in the application of
     Section 4999 of the Code at the time of the initial determination by the
     Accounting Firm hereunder, it is possible that Gross-Up Payments which will
     not have been made by the Company should have been made ("Underpayment"),
     consistent with the calculations required to be made hereunder.  In the
     event that the Company exhausts its remedies pursuant to Section 7(c) and
     the Executive thereafter is required to make a payment of any Excise Tax,
     the Accounting Firm shall determine the amount of the Underpayment that has
     occurred and any such Underpayment shall be promptly paid by the Company to
     or for the benefit of the Executive.

     (c)  The Executive shall notify the Company in writing of any claim by the
     Internal Revenue Service that, if successful, would require the payment by
     the Company of the Gross-Up Payment.  Such notification shall be given as
     soon as practicable but no later than ten business days after the Executive
     is informed in writing of such claim and shall apprise the Company of the
     nature of such claim and the date on which such claim is requested to be
     paid.  The Executive shall not pay such claim prior to the expiration of
     the 30-day period following the date on which it gives such notice to the
     Company (or such shorter period ending on the date that any payment of
     taxes with respect to such claim is due).  If the Company

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     notifies the Executive in writing prior to the expiration of such period
     that it desires to contest such claim, the Executive shall:

          (i)   give the Company any information reasonably requested by the
                Company relating to such claim;

          (ii)  take such action in connection with contesting such claim as the
                Company shall reasonably request in writing from time to time,
                including, without limitation, accepting legal representation
                with respect to such claim by an attorney reasonably selected by
                the Company;

          (iii) cooperate with the Company in good faith in order effectively to
                contest such claim; and

          (iv)  permit the Company to participate in any proceedings relating to
                such claim;

     provided, however, that the Company shall bear and pay directly all costs
     and expenses (including additional interest and penalties) incurred in
     connection with such contest and shall indemnify and hold the Executive
     harmless, on an after-tax basis, for any Excise Tax or income tax
     (including interest and penalties with respect thereto) imposed as a result
     of such representation and payment of costs and expenses.  Without
     limitation on the foregoing provisions of this Section 7(c), the Company
     shall control all proceedings taken in connection with such contest and, at
     its sole option, may pursue or forgo any and all administrative appeals,
     proceedings, hearings and conferences with the taxing authority in respect
     of such claim and may, at its sole option, either direct the Executive to
     pay the tax claimed and sue for a refund or contest the claim in any
     permissible manner, and the Executive agrees to prosecute such contest to a
     determination before any administrative tribunal, in a court of initial
     jurisdiction and in one or more appellate courts, as the Company shall
     determine; provided, however, that if the Company directs the Executive to
     pay such claim and sue for a refund, the Company shall advance the amount
     of such payment to the Executive, on an interest-free basis and shall
     indemnify and hold the Executive harmless, on an after-tax basis, from any
     Excise Tax or income tax (including interest or penalties with respect
     thereto) imposed with respect to such advance or with respect to any
     imputed income with respect to such advance; and further provided that any
     extension of the statute of limitations relating to payment of taxes for
     the taxable year of the Executive with respect to which such contested
     amount is claimed to be due is limited solely to such contested amount.
     Furthermore, the Company's control of the contest shall be limited to
     issues with respect to which a Gross-Up Payment would be payable hereunder
     and the Executive shall be entitled to settle or contest, as the case may
     be, any other issue raised by the Internal Revenue Service or any other
     taxing authority.

     (d)  If, after the receipt by the Executive of an amount advanced by the
     Company pursuant to Section 7(a) or 7(c), the Executive becomes entitled to

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     receive any refund with respect to such claim, the Executive shall (subject
     to the Company's complying with the requirements of Section 7(c)) promptly
     pay to the Company the amount of such refund (together with any interest
     paid or credited thereon after taxes applicable thereto).  If, after the
     receipt by the Executive of an amount advanced by the Company pursuant to
     Section 7(c), a determination is made that the Executive shall not be
     entitled to any refund with respect to such claim and the Company does not
     notify the Executive in writing of its intent to contest such denial of
     refund prior to the expiration of 30 days after such determination, then
     such advance shall be forgiven and shall not be required to be repaid and
     the amount of such advance shall offset, to the extent thereof, the amount
     of Gross-Up Payment required to be paid.

8.   Executive represents that Executive does not have any lawsuits, charges,
administrative proceedings or any other action currently on file, lodged or
pending against the Company or its affiliates, parents, or subsidiaries or any
of its or their current or former officers, board members, employees, attorneys,
and/or agents, and further agrees that Executive will not file any lawsuit or
administrative charge or complaint against the Company or its affiliates,
parents, or subsidiaries or any of its or their current or former officers,
employees, board members, attorneys, and/or agents for actions occurring before
the execution of this Agreement.  Executive shall cooperate with the Company in
the defense of any action brought against the Company or any agent of the
Company that relates in any way to Executive's acts or omissions or
responsibilities while employed by the Company.  Notwithstanding any contrary
provision in this Agreement, to the extent and in accordance with that which is
permitted by the By-laws of the Company, the Company shall indemnify and hold
Executive harmless for any and all costs, liabilities, or obligations, including
attorneys fees, which Executive may incur as a result of litigation brought by
any third party against the Company and/or Executive.

9.   The Parties understand and agree that this Agreement shall bind and benefit
their heirs, employees, officers, board members, agents, attorneys,
representatives, successors, predecessors and assigns.

10.  Executive affirms and acknowledges that Executive has read and understands
this Agreement, that Executive may have at least 45 days to consider this
Agreement (although Executive may voluntarily elect to waive any of this
consideration period), and that Executive is hereby advised to consult with an
attorney regarding the terms of this Agreement.  Executive accepts this
Agreement freely and voluntarily and with full knowledge of its effect.

11.  This Agreement shall not become effective until 7 days after Executive has
signed this Agreement.  This 7-day revocation period cannot be waived.  In order
to be effective, a notice of revocation must be received by the Company before
expiration of the 7-day revocation period.  Such notice shall be directed to:

               Mr. Robert A. Olah, President and CEO
               Crown Vantage, Inc.

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               4555 Lake Forest Drive, Suite 630
               Cincinnati, OH 45242

12.  Executive acknowledges that, as of the Effective Date, she hereby resigns
all officerships and directorships of Crown Vantage Inc. and/or any of its
affiliates.

13.  This Agreement constitutes the complete understanding between the Parties
and supersedes all prior or contemporaneous written or oral agreements between
the parties concerning its subject matter.  Any modification of this Agreement
will be effective only if it is in writing and signed by the Parties to this
Agreement.  If any provision of this Agreement is held invalid or unenforceable,
the remaining provisions shall nevertheless continue in full force and effect
without being impaired or invalidated in any way.

14.  Any and all disputes concerning this Agreement shall be resolved by binding
arbitration according to the Employment Dispute Resolution rules and procedures
of the American Arbitration Association.  California substantive law shall
apply, and the Agreement shall be interpreted as though it were mutually drafted
by both Parties.

15.  The Parties indicate their knowing and voluntary acceptance of this
Agreement by their signatures below.

Dated:  August 31, 1999       ____________________________________
                              Executive's Signature

                              Executive's Mailing Address:

                              ____________________________________
                              ____________________________________
                              ____________________________________

                              CROWN VANTAGE, INC.


Dated:  August 24, 1999       By _______________________________
                                 Robert A. Olah, President & CEO

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