exh10_41.htm


    Exhibit
10.41

    


    Amendment
of Tax Allocation Agreement

    Between

    MAXXAM
Inc.

    and

    The
Pacific Lumber Company

    


    


    WHEREAS, MAXXAM Inc. ("MAXXAM"), The
Pacific Lumber Company ("Pacific Lumber"), Scotia Pacific Holding Company
("Scotia"), and Salmon Creek Corporation ("Salmon Creek") executed a tax
allocation agreement as of March 23, 1993 covering all taxable years during
which Pacific Lumber, Scotia, and Salmon Creek were included in MAXXAM's Federal
consolidated income tax returns (the "Tax Allocation Agreement");
and

    


    WHEREAS, Pacific Lumber is currently a
member of the affiliated group within the meaning of Section 1504(a) of the
Internal Revenue Code of 1986, as amended ("the Code"), of which MAXXAM is the
common parent corporation (the "Group"); and

    


    WHEREAS, Scotia, a wholly owned
subsidiary of Pacific Lumber, is no longer a member of the Group as a result of
being merged into a newly formed wholly-owned subsidiary of Pacific Lumber,
Scotia Pacific Company LLC ("Scotia LLC"), on July 20, 1998; and

    


    WHEREAS, Scotia LLC is not a member of
the Group since it is a single member limited liability company which has not
elected to be treated as an association taxable as a corporation and, therefore,
is treated as a division of Pacific Lumber pursuant to Treasury Regulation
ss.301.7701-3(b)(1); and

    


    WHEREAS, Salmon Creek Corporation, a
wholly owned subsidiary of Pacific Lumber, is no longer a member of the Group as
a result of being converted into a single member limited liability company,
Salmon Creek LLC ("Salmon Creek LLC"), on December 7, 1999; and

    


    WHEREAS, Salmon Creek LLC is not a
member of the Group since it is a single member limited liability company which
has not elected to be treated as an association taxable as a corporation and,
therefore, is treated as a division of Pacific Lumber pursuant to Treasury
Regulation ss.301.7701-3(b)(1); and

    


    WHEREAS, MAXXAM and Pacific Lumber wish
to amend the Tax Allocation Agreement as contemplated herein.

    


    NOW, THEREFORE, MAXXAM and Pacific
Lumber hereby agree to the following amendments to the Tax Allocation Agreement
effective for periods beginning after February 28, 1999:

    


    
      	
              1.

            	
              Paragraph
      4.(a) of the Tax Allocation Agreement is replaced with, and superseded by,
      the following language:

            


    

    


    
      	
               
      

            	
              For
      purposes of making the computations described herein, Salmon Creek and any
      Restricted Subsidiary which becomes a member of the Group (each a "PL
      Subgroup Subsidiary") shall, together with Pacific Lumber, be treated as
      an affiliated group of corporations ("the PL Subgroup"), the common parent
      of which is Pacific Lumber,
      provided, however, that the PL Subgroup shall only include any subsidiary
      to the extent that such subsidiary meets the test of affiliation under
      Section 1504 of the Code as it would apply to the PL
      Subgroup.

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

     

    
      	
              2.

            	
              Paragraph
      4.(b) is amended by adding the following language after the first
      sentence:

            


    

    


    
      	
               
      

            	
              For
      the avoidance of doubt, Pacific Lumber's net operating losses are
      available to offset Salmon Creek's 1999 taxable income recognized on the
      sale of its Headwaters timberlands.

            


    

    


    
      	
              3.

            	
              Paragraphs
      5.(a), (b), (c), (d), and (e) of the Tax Allocation Agreement are deleted
      and shall not apply.

            


    

    


    IN WITNESS WHEREOF, MAXXAM and Pacific
Lumber have executed this Amendment of Tax Allocation Agreement by duly
authorized officers thereof as of December 31, 2001.

    


    


    
      	 
      	
              MAXXAM
      Inc.

            
	 
      	 
      
	 
      	
              By:

            	
              /s/
      Paul N. Schwartz

            
	 
      	
              Title:

            	
              President

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              The
      Pacific Lumber Company

            
	 
      	 
      	 
      
	 
      	
              By:

            	
              /s/
      Gary L. Clark

            
	 
      	
              Title:

            	
              Vice
      President - Finance

            
	 
      	 
      	
              And
      Administration