Exhibit 10.1


AMENDMENT NO. 1


TO
EQUIPMENT SCHEDULE NO. 1


This Amendment No. 1 (the “Amendment”) is entered into
this 18th day of December, 2006, and amends Equipment Schedule No. 1 (Equipment
Schedule No. 1 and all Annexes, Exhibits and Riders thereto being hereinafter
referred to collectively as the “Equipment Schedule”) to that certain Master
Lease, dated as of September 1, 1994 (the “Lease”) between General Electric
Capital Corporation (“Lessor”) and Blue Ridge Paper Products, Inc.
successor-in-interest to Champion International Corporation (“Lessee”).  Capitalized terms not otherwise defined
herein shall have the meaning ascribed to them in the Lease or Schedule.


RECITALS


WHEREAS, at the
expiration of the Initial Lease Term, Lessee exercised its option, pursuant to
Section (b)(ii) of Rider 3 of the Equipment Schedule, to renew the Equipment
Schedule, with respect to all of the Leased Items subject to the Equipment
Schedule, for the Initial Renewal Term.


WHEREAS, the Lessee and
Lessor wish to amend the end of Initial Renewal Term options available to
Lessee, and make various other changes to the Schedule, on the terms and
subject to the conditions set forth herein.


NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency is
hereby acknowledged, the parties hereto agree as follows:


1.             Tax Treatment.  This Amendment shall be treated for income
tax purposes as effectuating a sale of each Leased Item of Equipment subject to
Equipment Schedule No. 1 by the Lessor to the Lessee on the Effective Date of
the Amendment, such that the Lease is treated for such purposes as a financing
agreement pursuant to which the Lessee is paying to the Lessor the purchase
price for the Equipment of $2,527,377.56 by issuing a note, payments for which
will be comprised of the remaining rent payments plus the end of Initial Lease
Term purchase price. Such payments shall be treated as payments of principal
and interest in the amounts indicated on Exhibit A hereto.  Lessor and Lessee each agree to treat the
Amendment for all income tax purposes (including the filing of all income tax
returns) in a manner consistent with the intended income tax treatment as set
forth herein.


2.             Amendments to Equipment Schedule.


(a)  Subsection (b)(iii) of Rider No. 3 to the
Equipment Schedule is hereby deleted and replaced with the following:









 



If Lessee has elected to
renew this Equipment Schedule as provided in subsection (a)(ii) above, then
Lessee shall, upon expiration of
the Initial Renewal Term, purchase all of Lessor’s rights and interest in all,
but not less than all, of the Leased Items subject to this Scheduled for a
purchase price equal to 20% of Capitalized Lessor’s Cost plus all applicable
sale taxes.  Upon payment by Lessee of
the specified purchase price, and any and all other amounts then due and owing,
if any, by Lessee to Lessor pursuant to the Equipment Schedule, Lessor shall
(i) deliver to Lessee a bill of sale conveying to Lessee, on an AS-IS basis,
without any representations or warranties of any kind, express or implied,
including but not limited to any warranty of merchantability or fitness for a
particular purpose, all of Lessor’s right, title and interest in such Leased
Items, including such title as Lessor acquired as the inception of this
Equipment Schedule, (the “Conveyed Interest”), except that Lessor shall warrant
that the Conveyed Interest is free of all liens and encumbrances created or
claimed by Lessor; and (ii) provide to Lessee all appropriate UCC-3 statements
and other documentation necessary to release Lessor’s interest in the Leased
Items.


(b)           Subsections
(c) through (e) of Rider 3 are hereby deleted.


(c)           The Stipulated Loss and
Termination Value Table attached to the Equipment Schedule as Annex D is
deleted and replaced with the attached Annex D.


(d)                                 The
following is added as Section 10 to the Equipment Schedule:


10.  Grant of Security Interest:  To secure all obligations of Lessee to Lessor
pursuant to this Equipment Schedule, as the same may be amended from time to
time, Lessee grants to Lessor a first priority security interest in all Leased
Items of Equipment together with all additions, attachments, accessions and
accessories thereto and any and all substitutions, replacements or exchanges
therefore, and any and all insurance and/or other proceeds of the property in
and against which a security interest is granted hereunder (the “Collateral”).  Lessee authorizes Lessor to file against
Lessee with respect to such Collateral such UCC financing statements, as Lessor
deems necessary in order to evidence and perfect such security interest.  Lessee represents and warrants that (i) as of
the Effective Date of Amendment No. 1 to this Equipment Schedule, the
Collateral is free and clear of all liens, claims and encumbrances (except for
the security interest granted to Lessor hereunder) , and (ii)  Lessee shall maintain such Collateral free
and clear of all such liens, claims and encumbrances, other than any lien,
claim or encumbrance granted or created by Lessor.


(e)           The following is added
as Section 11 to the Equipment Schedule:


11.  Master
Lease Amendment:  For purposes of this
Equipment Schedule 



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only, the Master Lease is amended by adding the
following as subsection (h) to Section 9:


(h)
With respect to Equipment Schedule No. 1, subsections (c) through (g) above
shall continue to apply solely with respect to the period prior to the
Effective Date of Amendment No. 1 to Equipment Schedule 1 (the “Effective Date”)
and, for the avoidance of doubt, any Lessee obligations hereunder (including,
without limitation, Lessee’s obligation to indemnify Lessor for any loss of
Assumed Tax Benefits occurring or relating to the period prior to the Effective
Date) shall survive the expiration or other termination of Equipment Schedule
No. 1 and this Master  Lease.


(f)                                    The following
is added as Section 12 to the Equipment Schedule:


12.  Early Purchase Option:  On 10/1/07 (the “Early Purchase Date”),
Lessee may, upon not less than 90 days prior written notice to Lessor, purchase
all of Lessor’s rights and interest in all, but not less than all, of the
Leased Items subject to this Scheduled upon payment of all rent and other sums
due and payable as of the Early Purchase Date (including the Rent Payment
payable on such date), plus a purchase price equal to $2,005,430.01, plus all applicable
sale taxes and the Make Whole Amount (as defined below).  Upon payment by Lessee of the specified
purchase price, the Make Whole Amount and any and all other amounts then due
and owing, if any, by Lessee to Lessor pursuant to the Equipment Schedule,
Lessor shall (i) deliver to Lessee a bill of sale conveying to Lessee, on an
AS-IS basis, without any representations or warranties of any kind, express or
implied, including but not limited to any warranty of merchantability or
fitness for a particular purpose, all of Lessor’s right, title and interest in
such Leased Items, including such title as Lessor acquired as the inception of
this Equipment Schedule, (the “Conveyed Interest”), except that Lessor shall
warrant that the Conveyed Interest is free of all liens and encumbrances
created or claimed by Lessor; and (ii) provide to Lessee all appropriate UCC-3
statements and other documentation necessary to release Lessor’s interest in
the Leased Items.  Make-Whole Amount” shall mean the
amount which the Lessor determines as of the third Business Day prior to
such Early Purchase Date to equal the excess, if any, of (i) the aggregate
present value of all the remaining scheduled payments of principal and
interest (including the amount payable pursuant to Section (b) of Rider C
to the Equipment Schedule) from the Early Purchase Date to expiration 



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of
the Initial Renewal Term of the Equipment Schedule,
discounted monthly at a rate equal to the 1-Year Treasury Rate (as per the
Federal Reserve Statistical Release H.15), based on a 360-day year of twelve
30-day months, over (ii) the Investment Balance on such Early Purchase Date as
indicated on Annex A.  The payment of the
specified purchase price shall constitute, for federal income tax purposes, a
repayment of the loan contemplated by this instrument and each party agrees to
treat the payment for all income tax purposes (including the filing of all tax
returns) in a manner consistent with the intended income tax treatment as set
forth herein..


3.             Sales Tax.  Lessee shall be liable (and agrees to hold
harmless and indemnify the Lessor) for any sales, use, transfer or similar
taxes arising or resulting from the execution of this Amendment or the
transactions contemplated by this Amendment. 
For the avoidance of doubt, the obligations of Lessee set out in this
Section shall survive the expiration or other termination of the Equipment
Schedule and Master Lease.


4.             Personal Property Tax.


(a)           Notwithstanding
anything to the contrary contained in the Master Lease or Equipment Schedule,
with respect to the payment of personal property taxes or any equivalent tax (“Property
Tax”) on any Leased Items subject to Equipment Schedule No. 1, Lessee hereby
agrees that, contrary
to the practice of the parties prior to this Amendment,
Lessee shall (i) report such Leased Items for Property Tax purposes to the
appropriate taxing authorities in those jurisdictions where any such Leased
Items are located, and (ii) pay on a timely basis to the appropriate taxing
jurisdiction any such Property Tax.  All
personal property tax returns and reports shall show Lessee as the owner of the
Leased Items.


(b)           If any Property Tax is
charged to or assessed against Lessor, Lessee agrees to immediately reimburse
Lessor upon receipt of a written request for reimbursement for any Property Tax
charged to or assessed against Lessor with respect to any Leased Items subject
to Equipment Schedule No. 1.  Without
limiting the generality of the foregoing and/or any indemnity provision
contained in the Lease, Lessee hereby agrees to indemnify and hold harmless
Lessor from (i) any Property Tax imposed, charged or assessed in connection
with such  Leased Items, (ii) all
penalties and/or interest imposed as a result of any incorrect or late
reporting of such Leased Items, failure to report the Leased Items, or any late
payment of, or failure to pay, any Property Tax, penalties, or interest, and
(iii) all losses, claims, damages, or suits (including legal expenses) which
arise out of Lessee’s failure to abide by any term or provision contained
herein.


(c)           Lessee agrees to submit
to Lessor, upon Lessor’s request, copies of Property Tax returns and reports
(together with any and all applicable work sheets, if 



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requested by
Lessor) which relate to the Equipment, and canceled checks indicating proof of
payment of any Property Taxes, penalties and/or interest.


5.             Conditions to Effective Date.             Lessee
and Lessor are entering into this Amendment as of the date set forth
above.  This Amendment shall become
effective on the date (the “Effective Date”) upon which all of the following
conditions are satisfied, in form and substance satisfactory to Lessor:


(a)           the execution and
delivery of this Amendment;


(b)           all such filings in
each jurisdiction necessary and appropriate in order to evidence and perfect
the first priority lien and security interest granted by the Lessee to the
Lessor (including the filing of UCC termination statements by any lien holders
asserting an interest in the Collateral) shall have been made to the
satisfaction of the Lessor;


(c)           all taxes, fees,
recording charges, Transaction Costs and other charges payable in connection
with the execution, delivery, recordation and filing of all documents shall
have been paid in full or provided for, and Lessor shall have received evidence
reasonably satisfactory to Lessor demonstrating the same (or exemption there
from, if applicable);


 (d)          all such other documents, instruments and
other actions as Lessor may reasonably request in connection with the
consummation of the transactions contemplated herein and consistent with the
terms hereof shall be complete and reasonably satisfactory to the Lessor.


6.             Expenses.  Lessee agrees to pay all of Lessor’s
reasonable costs and expenses, including any filing fees for perfection of
Lessor’s security interest in the Equipment and all fees and expenses of Lessor’s
legal counsel, in connection with the preparation, execution, implementation
and enforcement of this Amendment (collectively, “Transaction Costs”) promptly
upon demand.


7.             Successors.  This Amendment shall be binding upon, and
inure to the benefits of, the parties hereto and the beneficiaries hereof and
their respective successors and assigns.


8.             Ratification.  This Amendment is limited as written and
shall not constitute a modification, amendment, acceptance or waiver of any
other provision of the Master Lease or Equipment Schedule No. 1.  The Lease Agreement as modified and amended
by this Amendment is hereby ratified and confirmed in all respects.


9.             Counterparts.  This Amendment may be executed in multiple
counterparts and by different parties thereto on separate counterparts, each of
which counterpart when executed and delivered shall be an original, but all of
which together shall constitute one and the same instrument.



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10.           Governing Law.  This Amendment and the rights and obligations
of the parties hereunder shall be construed in accordance with and governed by
the laws of the State of New York.


11.           Lease Agreement.  From and after the date hereof, all
references in the Master Lease to Equipment Schedule No. 1 shall be deemed to
be refer to such Equipment Schedule after giving effect to this Amendment.


[signature
page follows]



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IN WITNESS WHEREOF, the parties hereto have caused
this Amendment No. 1 to Lease Agreement to be duly executed as of the day and
year first above set forth.


	
  

  	
  Blue Ridge Paper Products, Inc. 

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Richard A. Lozyniak 

  	
   

  
	
   

  	
  Its: 

  	
  President and Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  General Electric Capital Corporation 

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Meenoo Sameer

  	
   

  
	
   

  	
  Its: 

  	
  Duly Authorized Signatory