**EXHIBIT 10.1**

**SECOND AMENDMENT**

 

THIS SECOND AMENDMENT TO AMENDED AND RESTATED CREDITAGREEMENT (*"SecondAmendment"*), dated as of November 7, 2001, is enteredinto by and among CROWN PACIFIC LIMITED PARTNERSHIP, a Delaware limitedpartnership (the *"Company"*), BANK OF AMERICA, N.A., as agent forthe Banks (the *"Agent"*), and those financial institutions partiesto the Agreement (collectively, the *"Banks"*) signatory hereto.

 

**RECITALS**

 

A.            TheCompany, the Banks, and the Agent are parties to an Amended and Restated CreditAgreement dated as of December 1, 1999, pursuant to which the Agent and theBanks have extended certain credit facilities to the Company, as amended bythat certain First Amendment to Amended and Restated Credit Agreement dated asof April 20, 2001 and that certain Temporary Waiver to Amended and RestatedCredit Agreement (as so amended, the *"Agreement"*).

 

B.            TheCompany, the Banks, and the Agent now hereby wish to amend the Agreement incertain respects, all as set forth in greater detail below.

 

NOW, THEREFORE, for valuable consideration, thereceipt and adequacy of which are hereby acknowledged, the parties heretohereby agree as follows:

 

1.             *DefinedTerms. *Unless otherwisedefined herein, capitalized terms used herein shall have the meanings, if any,assigned to them in the Agreement.

 

2.             *Amendmentsto the Agreement.*

 

(a)           The definition of "ApplicableMargin" set forth in Section 1.1 of the Agreement is hereby deletedin its entirety, and a new definition of "Applicable Margin" in theform of the definition of "Applicable Margin" set forth on *Exhibit A*heretois substituted therefor.

 

(b)           The definition of "EBITDA"set forth in Section 1.1 of the Agreement is hereby deleted in itsentirety, and a new definition of "EBITDA" in the form of the definitionof "EBITDA" set forth on *Exhibit A*hereto is substituted therefor.

 

(c)           The definition of "Loan"set forth in Section 1.1 of the Agreement is hereby deleted in itsentirety, and a new definition of "Loan" in the form of thedefinition of "Loan" set forth on *Exhibit A*hereto is substituted therefor.

 

(d)           The definition of "MaturityDate" set forth in Section 1.1 of the Agreement is hereby deleted inits entirety, and a new definition of "Maturity Date" in the form ofthe definition of "Maturity Date" set forth on *Exhibit A*hereto issubstituted therefor.

 

(e)           The definition of "NetProceeds" set forth in Section 1.1 of the Agreement is hereby deletedin its entirety, and a new definition of "Net Proceeds" in the formof the definition of "Net Proceeds" set forth on *Exhibit A*hereto issubstituted therefor.

 

(f)            The definition of "Senior NoteAgreements" set forth in Section 1.1 of the Agreement is herebydeleted in its entirety, and a new definition of "Senior NoteAgreements" in the form of the definition of "Senior NoteAgreements" set forth on *Exhibit A*hereto is substituted therefor.

 

(g)           The definition of "SeniorNotes" set forth in Section 1.1 of the Agreement is hereby deleted inits entirety, and a new definition of "Senior Notes" in the form ofthe definition of "Senior Notes" set forth on *Exhibit A*hereto issubstituted therefor.

 

(h)           A new definition of "Actual CashFlow" in the form of the definition of "Actual Cash Flow" setforth on *ExhibitA*hereto is added to Section 1.1 of the Agreement inappropriate alphabetical order.

 

(i)            A new definition of "ForecastedCash Flow" in the form of the definition of "Forecasted CashFlow" set forth on *Exhibit A*hereto is added toSection 1.1 of the Agreement in appropriate alphabetical order.

 

(j)            A new definition of "1997Senior Note Agreement" in the form of the definition of "1997 SeniorNote Agreement" set forth on *Exhibit A*hereto is added toSection 1.1 of the Agreement in appropriate alphabetical order.

 

(k)           A new definition of "1997 SeniorNotes" in the form of the definition of "1997 Senior Notes" setforth on *ExhibitA*hereto is added to Section 1.1 of the Agreement inappropriate alphabetical order.

 

(l)            A new definition of "Qualifying Tree Farm Sale" in theform of the definition of "QualifyingTree Farm Sale" set forth on *Exhibit A*hereto is added toSection 1.1 of the Agreement in appropriate alphabetical order.

 

(m)          A new definition of "Restricted Subsidiary" in the form ofthe definition of "RestrictedSubsidiary" set forth on *Exhibit A*hereto is added toSection 1.1 of the Agreement in appropriate alphabetical order.

 

(n)           A new definition of "Second Amendment Effective Date" inthe form of the definition of "SecondAmendment Effective Date" set forth on *Exhibit A*hereto is added toSection 1.1 of the Agreement in appropriate alphabetical order.

 

(o)           A new definition of "Senior Funded Debt" in the form ofthe definition of "Senior Funded Debt"set forth on *Exhibit A*hereto is added to Section 1.1 of theAgreement in appropriate alphabetical order.

 

(p)           Section 2.7 of the Agreement ishereby deleted in its entirety, and a new Section 2.7 in the form of theSection 2.7 set forth on *Exhibit A*hereto is substituted therefor.

 

(q)           Section 2.8 of the Agreement ishereby deleted in its entirety, and a new Section 2.8 in the form of theSection 2.8 set forth on *Exhibit A*hereto is substituted therefor.

 

(r)            Section 7.2 of the Agreement ishereby deleted in its entirety, and a new Section 7.2 in the form of theSection 7.2 set forth on *Exhibit A*hereto is substituted therefor.

 

(s)           Section 7.4 of the Agreement ishereby deleted in its entirety, and a new Section 7.4 in the form of theSection 7.4 set forth on *Exhibit A*hereto is substituted therefor.

 

(t)            Section 7.15 of the Agreementis hereby deleted in its entirety, and a new Section 7.15 in the form ofthe Section 7.15 set forth on *Exhibit A*hereto is substituted therefor.

 

(u)           A new Section 7.17 in the formof Section 7.17 set forth on *Exhibit A*hereto is added to the Agreementimmediately succeeding existing Section 7.16 thereof.

 

(v)           A new Schedule 1.1A in theform of Schedule 1.1A hereto is added to the Agreement.

 

(w)          A new Schedule 2.7 in the formof Schedule 2.7 hereto is added to the Agreement.

 

3.             *Representationsand Warranties. *TheCompany hereby represents and warrants to the Agent and the Banks, as of theSecond Amendment Effective Date (as defined below), as follows:

 

(a)           Upon giving effect to this SecondAmendment as of the Second Amendment Effective Date, no Default or Event ofDefault has occurred and is continuing.

 

(b)           The execution, delivery andperformance by the Company of this Second Amendment have been duly authorizedby all necessary corporate and other action and do not and will not require anyregistration with, consent or approval of, notice to or action by, any person(including any Governmental Authority) in order to be effective andenforceable.  The Agreement as amendedby this Second Amendment constitutes the legal, valid and binding obligationsof the Company, enforceable against it in accordance with its terms, withoutdefense, counterclaim or offset except as such enforcement may be limited byapplicable bankruptcy, insolvency, reorganization or other similar lawsrelating to or limiting creditors' rights generally or by equitable principlesrelating to enforceability whether enforcement is sought in a proceeding at lawor in equity.

 

(c)           Upon giving effect to this SecondAmendment as of the Second Amendment Effective Date, all representations andwarranties of the Company contained in the Agreement are true and correct.

 

(d)           The Company is entering into thisSecond Amendment on the basis of its own investigation and for its own reasons,without reliance upon the Agent and the Banks or any other person.

 

4.             *Certain Waivers.*

 

The Banks hereby waive (i) compliance by theCompany with the Indebtedness Covenant for the fiscal quarter ended September30, 2001 and (ii) the requirements of Section 2.7 of the CreditAgreement with respect to any disposition of property prior to the SecondAmendment Effective Date other than in respect of the property described on Schedule 5(d)to the Second Amendment to the Amended and Restated Facility B Credit Agreementof even date herewith.  This is a one-time waiver and is grantedonly for the limited purposes set forth herein and shall be effective only inthe specific circumstances provided for above and only for the purposes forwhich given.

 

5.             *SecondAmendment Effective Date. *ThisAmendment will become effective on November 7, 2001 or the firstBusiness Day thereafter as of which each of the following conditions precedenthas been satisfied (the *"Second Amendment Effective Date"*):

 

(a)           The Agent has received from theCompany and the Required Banks a duly executed original or facsimile counterpartof this Amendment (any such facsimiles to be promptly followed by the originalsthereof).

 

(b)           The *"*Second AmendmentEffective Date*"* as defined in the Second Amendment to the Amended andRestated Facility B Credit Agreement of even date herewith has occurred or isoccurring contemporaneously as of the Second Amendment Effective Datehereunder.

 

(c)           The Agent has received an opinion ofAndrews & Kurth LLP, as counsel to the Company and the Partner Entitiesaddressed to the Agent and the Banks, in form and substance reasonablysatisfactory to the Required Banks.

 

(d)            The Company shall have paid to theAgent, for the account of each Bank that has executed a counterpart of thisAmendment and delivered (by hard copy or facsimile) the same to the Agent or itscounsel by 5:00 p.m. (Charlotte, North Carolina time) on the date hereof, anonrefundable amendment fee in an amount equal to such Bank's Commitmentmultiplied by 0.50%; which amounts the Company hereby covenants to pay to theAgent for the account of such Banks on demand.

 

(e)           TheCompany shall have paid all of the fees and other amounts due and payable toBanc of America Securities LLC ("BAS"), including, withoutlimitation, the fees set forth in that certain Engagement Letter dated as ofAugust 28, 2001, between the Company and BAS.

 

6.              *Reservation of Rights. *The Company acknowledges and agrees thatthe execution and delivery by the Agent and the Banks of this Second Amendmentshall not be deemed to create a course of dealing or otherwise obligate theAgent or the Banks to enter into similar amendments under the same or similarcircumstances in the future.

 

7.             *Miscellaneous.*

 

(a)            Except as herein expressly amendedor waived, all terms, covenants and provisions of the Agreement are and shallremain in full force and effect and all references therein to such Agreementshall henceforth refer to the Agreement as amended or waived by this SecondAmendment.  This Second Amendment shallbe deemed incorporated into, and a part of, the Agreement.

 

(b)            This Second Amendment shall bebinding upon and inure to the benefit of the parties hereto and thereto andtheir respective successors and assigns. No third party beneficiaries are intended in connection with this SecondAmendment.

 

(c)            This Second Amendment shall begoverned by and construed in accordance with the law of the State ofCalifornia.

 

(d)            This Second Amendment may beexecuted in any number of counterparts, each of which shall be deemed anoriginal, but all such counterparts together shall constitute but one and thesame instrument.

 

(e)           This Second Amendment, together withthe Agreement, contains the entire and exclusive agreement of the partieshereto with reference to the matters discussed herein and therein.  This Second Amendment supersedes all priordrafts and communications with respect thereto.  This Second Amendment may not be amended except in accordancewith the provisions of Section 10.1 of the Agreement.

 

(f)            If any term or provision of thisSecond Amendment shall be deemed prohibited by or invalid under any applicablelaw, such provision shall be invalidated without affecting the remainingprovisions of this Second Amendment or the Agreement, respectively.

 

(g)           Company confirms its obligationsunder Section 10.4(a) of the Agreement to reimburse the Agent for allcosts and expenses including reasonable attorneys' fees and expenses incurredby the Agent in connection with this Second Amendment.

 

IN WITNESS WHEREOF, the parties hereto have executedand delivered this Second Amendment as of the date first above written.

 
|   | **CROWN PACIFIC LIMITED PARTNERSHIP** |
|--------|---------------------------------------|
|   |                                  |
|   | By:                                   | **CROWN PACIFIC MANAGEMENT LIMITED PARTNERSHIP**, |
|   |                                  | its General Partner |
|   |                                  |   |
|   |                                  | By: |   |   |
|   |                                  | Name: |
|   |                                  | Title: |
|   |                                  |
|   | **BANK OF AMERICA, N.A.**,            |
|   | as Agent and as a Bank                |
|   |                                  |
|   | By:                                   |   |   |
|   | Name:                                 |   |
|   | Title:                                |   |
|   |                                  |
|   | **UNION BANK OF CALIFORNIA, N.A.**,   |
|   | as Syndication Agent and as a Bank    |
|   |                                  |   |   |
|   | By:                                   |   |   |
|   | Name:                                 |   |   |
|   | Title:                                |   |   |
|   |                                  |   |   |
|   | **BANK OF MONTREAL**,                 |
|   | as Co-Agent and as a Bank             |
|   |                                  |   |   |
|   | By:                                   |   |   |
|   | Name:                                 |   |   |
|   | Title:                                |   |   |
|   |                                  |   |   |
|   | **KEYBANK NATIONAL ASSOCIATION**,     |
|   | as Co-Agent and as a Bank             |
|   |                                  |   |   |
|   | By:                                   |   |   |
|   | Name:                                 |   |   |
|   | Title:                                |   |   |
|        |                                       |  |  |  |  |  |  |  |

** **

 
|   | **ABN AMRO BANK, N.V.** |
|--------|-------------------------|
|   |                    |
|   | By:                     |   |   |
|   | Name:                   |   |
|   | Title:                  |   |   |
|   |                    |
|   |                    |
|   | **SUNTRUST BANK**       |
|   |                    |
|   | By:                     |   |   |
|   | Name:                   |   |
|   | Title:                  |   |  
 

 

 

 

 

**WELLS FARGO BANK, N.A.**

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

**SUMITOMO MITSUI BANKING CORPORATION**

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

**BNP PARIBAS** (Successor in Interest to  Paribas)

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

**FIRST UNION NATIONAL BANK**

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

**BANK HAPOALIM, B.M.**

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

**Exhibit A**

 

"*ApplicableMargin*" means, in respect of all Loans outstanding on any date,a per annum rate equal to 3.50% for Offshore Rate Loans and 2.50% for Base RateLoans.

 

"*Actual**Cash Flow*" means, with respectto the Company and its Subsidiaries on a consolidated basis,(A) for the three quarter period ending on June 30, 2002 and (B) for the four quarter period ending onSeptember 30, 2002, an amount equal to the sum of (i) EBITDA, plus/minus (ii) changes inworking capital, plus (iii) cash from asset sales, minus (iv) capitalexpenditures, minus (v) Interest Expense, minus(vi) scheduled payments of principal (including payments undercapital leases) on all Indebtedness, minus(vii) mandatory prepayments of any term Indebtedness or, to the extent accompanied by a permanentcommitment reduction, any revolving Indebtedness, minus (viii) voluntary prepayments of Facility A Loans or, to the extent accompanied by apermanent commitment reduction, the Facility B Loans and (ix) without duplication, plus/minus any other changes in long-term assets and liabilities;*provided*,*however*,that Actual Cash Flow shall be computed for these purposes without givingeffect to extraordinary items.

 

"*EBITDA*"means, for any period, and determined in accordance with GAAP for the Companyand its Subsidiaries on a consolidated basis, an amount equal to the sum of(i) consolidated net income (or net loss) for such period,*plus*(ii) allamounts treated as expenses for depreciation, depletion and interest and theamortization of intangibles of any kind to the extent included in thedetermination of such consolidated net income (or loss) for such period, *plus*(iii) all accrued taxes on or measured by income to the extent included inthe determination of such consolidated net income (or loss) for such period;*provided*,*however*,that EBITDA shall be computed for these purposes without giving effect toextraordinary items.

 

"*ForecastedCash Flow*" means, with respect to the three fiscal quarters ofthe Company and its Subsidiaries ending on June 30, 2002 and the four fiscalquarters of the Company and its Subsidiaries ending on September 30, 2002, theamount set forth on Schedule 1.1A.

 

"*Loan*"has the meaning specified in subsection 2.1 and may be a Base Rate Loan oran Offshore Rate Loan (each a "Type" of Loan).  The term "Loan" and "FacilityA Loan" are used herein interchangeably.

 

*"Maturity*Date*"*means the Revolving Termination Date.

 

"*Net Proceeds*"means the gross proceeds of the disposition or sale of property, *less*(i) all reasonable expenses incurred in connection with such dispositionor sale of such property and (ii) with respect to the harvesting of excesstimber by the Company or any of its Subsidiaries pursuant to Section 8.4,all reasonable expenses properly allocable to such harvesting of excess timberand other costs incidental thereto.

 

"*1997 SeniorNote Agreement*" means the Note Agreement dated as ofDecember 15, 1997, providing for the issuance and sale by the Companyof the 1997 Senior Notes to the purchasers listed in the schedule of purchasersattached thereto as Schedule I.

 

"*1997 Senior Notes*" meansthose certain senior promissory notes in the aggregate principal amount of$91,000,000 issued and sold pursuant to the 1997 Senior Note Agreement.

 
**
*"QualifyingTree Farm Sale"*means the sale, in a single transaction or in a series of related or unrelatedtransactions, of all of the land, timber, improvements and other assets constituting (i) the Inland Tree Farm, (ii) theOregon Tree Farm or (iii) the Olympic and Hamilton Tree Farms located in Washington State.

 

"*Restricted Subsidiary*" shall have themeaning assigned to such term in the Senior Note Agreements as in effect on theSecond Amendment Effective Date.

 

"*Second AmendmentEffective Date*" shall have the meaning assigned to such term inSection 5 of the Second Amendment to the Agreement dated as ofNovember 7, 2001.

 

"*Senior Funded Debt*" shall have the meaningassigned to such term in the Senior Note Agreements as in effect on the SecondAmendment Effective Date.

 

"*Senior NoteAgreements*" means the 1994 Senior Note Agreement, the 1995Senior Note Agreement, the 1996 Senior Note Agreement and the 1997 Senior NoteAgreement.

 

"*Senior Notes*"means the 1994 Senior Notes, the 1995 Senior Notes, the 1996 Senior Notes andthe 1997 Senior Notes.

 

2.7           *MandatoryPrepayments of Loans; Mandatory Commitment Reductions*.

 

(a)           *Mandatory Prepayments*.

 

(i)            (A)          Promptlyfollowing the consummation of adisposition of property permitted by subsection 7.2(f), the Company shallprepay the Facility A Loans in an amount equal to the sum of (1) 100% ofthe Net Proceeds from such disposition minus (2) the sum, withoutduplication, of (x) the portion, if any, of such Net Proceeds that isrequired to be applied to the prepayment of the Facility B Loans in accordancewith the terms of Section 2.7(a)(i) of the Facility B Credit Agreement and(y) the portion, if any, of such Net Proceeds that is required to beapplied to the prepayment of Senior Notes, the Facility B Loans and otherSenior Funded Debt (other than the Facility A Loans) in accordance with theterms of Section 4.10(a)(2)(iii)(A)(y) of the Senior Note Agreements as ineffect on the Second Amendment Effective Date.

 

(B)           Promptly following the harvesting ofexcess timber by the Company or any of its Subsidiaries pursuant toSection 7.4, the Company shall prepay the Facility A Loans in an amountequal to the sum of (1) 100% of the Net Proceeds of such excess harvest, minus(2) the portion, if any, of such Net Proceeds that is required to beapplied to the prepayment of Senior Notes, the Facility B Loans and otherSenior Funded Debt (other than the Facility A Loans) in accordance with theterms of Section 4.12(ii)(A) of the Senior Note Agreements as in effect onthe Second Amendment Effective Date.

 

(C)           Unless a Qualifying Tree Farm Saleshall have been consummated, (1) within 30 days followingJune 30, 2002, the Company shall prepay the Facility A Loans by an amount equal to the amount in whichActual Cash Flow exceeds Forecasted Cash Flow for the three quarter periodending on June 30, 2002 and (2) within 30 days followingSeptember 30, 2002, the Company shall prepay the Facility A Loans by an amount equal to the amount in which Actual Cash Flow exceedsForecasted Cash Flow for the four quarter period ending on September 30, 2002.

 

(D)          Prepayments to be made pursuant tothis subsection 2.7(a)(i) shall be applied, *first*, to prepay any BaseRate Syndicated Loans and, *second*, at the Company's option, to CashCollateralize (which cash collateral shall be applied on the maturity date oftheir Interest Periods to prepay then outstanding Offshore Rate Loans in theorder of their maturities) or to prepay any Offshore Rate Loans thenoutstanding (in the order of the maturity of their Interest Periods).

 

(E)           Notwithstanding any provision to thecontrary contained in this Agreement, no prepayment of the FacilityA Loans shall be required if and tothe extent that a different application of the net proceeds of any suchdisposition of property is required under the terms of Section 4.10 orSection 4.12, as applicable, of the Senior Note Agreements as in effect onthe Second AmendmentEffective Date.

 

*****

 

(b)           *Mandatory Commitment Reductions*.  The Aggregate Commitment shall bepermanently reduced from time to time by the amount of any mandatory prepaymentof Facility A Loans required by subsection 2.7(a)(i).  Such permanent reduction shall take effectupon the date the corresponding mandatory prepayment is or would (if Facility ALoans were outstanding) be required by subsections 2.7(a)(i) or2.7(a)(iii) or, in the case of funds actually deposited as cash collateralunder those subsections, upon the application of such cash collateral to theFacility A Loans.  Upon any suchpermanent reduction in the Aggregate Commitment, the Commitment of each Bankshall automatically be reduced by an amount equal to such Bank's ratable shareof the reduction, effective as of the earlier of the date that anycorresponding prepayment is made or the date by which such prepayment is dueand payable hereunder.

 

(c)           *General*.  The Company shall pay, together with each prepayment under thisSection 2.7, accrued interest on the amount prepaid and any amountsrequired pursuant to Section 3.4.

 

2.8           *Repayment*.

 

(a)           *Repaymenton**Revolving Termination Date. * The Company shall repay to the Banks in full on the RevolvingTermination Date the aggregate principal amount of any Loans outstanding on theRevolving Termination Date.

 

7.2           *Asset Dispositions.*

 

The Company will not, andwill not permit any of its Subsidiaries to, sell, transfer, lease, contributeor otherwise convey, or grant options, warrants or other rights with respectto, all or any part of its assets (including accounts receivable and capitalstock of Subsidiaries) to any Person, other than:

 

(a)           sales of timber, logs, lumber andother inventory in the ordinary course of business for fair market value;

 

(b)           sales for fair market value ofequipment, which is surplus, worn-out or obsolete or no longer useful in theordinary course of business;

 

(c)           [Intentionally omitted];

 

(d)           [Intentionally omitted];

 

(e)           exchanges of timberland for othertimberland in the ordinary course of business with Persons who are notAffiliates of the Company, if:

 

(i)            thetimberland to be received in exchange is of at least an equivalent fair marketvalue to the timberland to be exchanged;

 

(ii)           the timberland to be received inexchange is located in the United States; and

 

(iii)          theaggregate fair market value of all such timberlands exchanged shall not exceed$50 million in the aggregate.

 

*provided**, however,*that any exchange permitted by this subsection 7.2(e) may be in the formof a tax deferred exchange so long as such tax deferred exchange is completedwithin 180 days;

 

(f)            dispositions for fair market valuethereof of assets not otherwise permitted hereunder to Persons who are notAffiliates of the Company if:

 

(i)            at the time of such disposition noDefault or Event of Default exists or shall result from such disposition;

 

(ii)           the Agent shall have received acertificate from a Responsible Officer in substantially the form of Schedule7.2(f)(ii); and

 

(iii)          the Company shall comply with therequirements of Section 2.7(a)(i) in respect of the Net Proceeds of suchdisposition;

 

*provided, however,*that no disposition of assets which would cause the aggregate amount of timberowned by the Company and its Restricted Subsidiaries to be less than 3.2billion board feet shall be permitted under this subsection 7.2(f) unlessthe aggregate amount of timber owned by the Company and its RestrictedSubsidiaries immediately prior to giving effect to such disposition is lessthan 3.3 billion board feet; and

 

(g)           [Intentionally omitted].

 

7.4           *Harvesting Restrictions*.

 

TheCompany shall not, and shall not suffer or permit any of its Subsidiaries to,in any calendar year, commencing with 2001, harvest timber or sell standingtimber on its or any Subsidiary's timberlands in excess of Planned Volume forthat year unless, within ten Business Days after the end of such period,(i) the Company shall comply with the requirements ofSection 2.7(a)(i)(B) in respect of the Net Proceeds from such excess harvest (which shall bedetermined based upon the average prices received on the sale of all timberharvested during such period and a reasonable allocation of direct cashexpenses incurred in connection with the harvesting and sale of timber duringsuch period) and (ii) the Agent shall have received a certificatefrom a Responsible Officer in substantially the form of Schedule 7.4.  "*PlannedVolume*" shall mean for each calendar year 340,000,000 boardfeet of timber, as decreased for any year in which there is an Annual TimberDecrease effective upon the Effective Date for such Annual Timber Decrease bythe same percentage that such Annual Timber Decrease represents as a percentageof the inventory of standing timber owned by the Company and its Subsidiariesat the end of the prior calendar year. For purposes of the foregoing:

 

"*Annual Timber Decrease*"shall mean, for any calendar year, the amount, in board feet, by which thenumber of board feet of timber sold by the Company and its Subsidiaries duringsuch calendar year shall exceed the number of board feet of timber acquired bythe Company and its Subsidiaries during such calendar year.

 

"*Effective Date*" for anyAnnual Timber Decrease shall be July 1 of the calendar year for which suchAnnual Timber Decrease occurs.

 

7.15         *MinimumCash Flow.*

 

The Company shall notpermit Cash Flow on the last day of any fiscal quarter specified below to beless than the corresponding amount set forth below:

 

**Fiscal  Quarter End**

 

**Amount**

December 31, 2001

 

$

45,000,000

March 31, 2002

 

$

47,500,000

June 30, 2002

 

$

47,500,000

September 30, 2002

 

$

55,000,000

 

7.17         *Additional Restrictions.*

 

Notwithstandingany provision to the contrary contained in the Agreement (including, withoutlimitation, the definition of "Operating Capacity Acquisitions","Capital Additions and Improvements", "Interim CapitalTransactions" and "PermittedLiens" appearing in Section 1.1 of the Agreement andSections 7.1, 7.3, 7.5, 7.6 and 7.16 of the Agreement), the Company shallnot and shall not permit any of its Subsidiaries to:

 

(a)           consummate any Operating CapacityAcquisitions or Acquisition otherwise permitted by Section 7.1(f) or (g);

 

(b)           directly or indirectly,make, create, incur, assume or suffer to exist any Lien upon or with respect toany part of itsproperty, whether now owned or hereafter acquired, other than (i) Liensexisting on property of such Person on the Second Amendment Effective Date and(ii) Liens permitted by Section 7.1(b), (c), (d), (e), (f), (g), (h) and(k);

 

(c)           merge, consolidate withor into, or convey, transfer, lease or otherwise dispose of (whether in onetransaction or in a series of transactions) all or substantially all of itsassets (whether now owned or hereafter acquired) to or in favor of any Person;

 

(d)           purchase or acquire, or suffer, ormake any commitment therefor, any capital stock, equity interest, or any obligations or othersecurities of, or any interest in, any Person, or make or commit to make anyAcquisitions, or make or commit to make any advance, loan, extension of creditor capital contribution to or any other investment in, any Person including anyAffiliate of the Company, other than (i) loans and investments existing onthe Second Amendment Effective Date and (ii) loans and investmentspermitted by Section 7.5(a), (c) and (d);

 

(e)           create, incur assume, suffer to existor otherwise become or remain directly or indirectly liable with respect to any Indebtednessother than (i) Indebtedness existing on the Second Amendment Effective Date and(ii) obligations consistingof trade payables entered into in the ordinary course of business on ordinaryterms;

 

(f)            make any voluntary or optionalpayment or prepayment on or redemption or acquisition for value of (including,without limitation, by way of depositing with respect thereto money orsecurities before due for the purpose of paying when due) the Senior Notesother than pro rata prepayments thereof with the Loans and the Facility B Loansas permitted bysubsection 2.7(a); or

 

(g)           amend, modify, supplement, waive orotherwise modify any of the terms or provisions contained in the SeniorNote Agreements. |