<PAGE>
                                                              CONFIRMED COPY



                          CROWN PACIFIC LIMITED PARTNERSHIP
                                           



                                           


                            ______________________________


                               NOTE PURCHASE AGREEMENT


                              Dated as of August 1, 1996


                            ______________________________
                                           


                 RE:  $91,000,000 SENIOR NOTES, SERIES A, B, C AND D
                                   Due 2006 - 2013



               This Volume contains the confirmed Note Purchase Agreement
                                and Exhibits A-1 through H


<PAGE>
                                                              [CONFIRMED COPY]

______________________________________________________________________________
______________________________________________________________________________



                          CROWN PACIFIC LIMITED PARTNERSHIP
                                           

                                           


                            ______________________________


                               NOTE PURCHASE AGREEMENT


                              Dated as of August 1, 1996


                            ______________________________
                                           


                 RE:  $91,000,000 SENIOR NOTES, SERIES A, B, C AND D
                                   Due 2006 - 2013



______________________________________________________________________________
______________________________________________________________________________


<PAGE>


                                           

                                  TABLE OF CONTENTS
                                           


SECTION                  HEADING                                        PAGE


SECTION 1.     DESCRIPTION OF NOTES AND COMMITMENT....................    1
  Section 1.1.   Description of the Transaction; Notes................    1
  Section 1.2.   Commitment, Closing Date.............................    2
  Section 1.3.   Failure to Deliver...................................    2
  Section 1.4.   Expenses.............................................    2
  Section 1.5.   Several Commitments..................................    3
  Section 1.6.   Pre-funding of Commitment............................    3


SECTION 2.     REPRESENTATIONS........................................    4
  Section 2.1.   Representations of the Company.......................    4
  Section 2.2.   Representations of the Managing General Partner......    4
  Section 2.3.   Representations of the Purchasers....................    4


SECTION 3.     CLOSING CONDITIONS.....................................    6
  Section 3.1.   Execution of Agreement and Notes.....................    6
  Section 3.2.   Closing Certificates.................................    6
  Section 3.3.   Opinions of Counsel..................................    6
  Section 3.4.   Legal Existence and Authority........................    6
  Section 3.5.   Insurance............................................    6
  Section 3.6.   Environmental Audit..................................    7
 
  Section 3.7.   Appraisals...........................................    7
  Section 3.8.   Related Transactions.................................    7
  Section 3.9.   Acquisition Facility Working Capital Facility;            
                 Initial Draw Under Acquisition Facility..............    7
  Section 3.10.  Legality.............................................    7
  Section 3.11.  Payment of Special Counsel Fees......................    8
  Section 3.12.  Private Placement Number.............................    8
  Section 3.13.  [Intentionally Reserved].............................    8
  Section 3.14.  Satisfactory Proceedings.............................    8


SECTION 4.     COMPANY COVENANTS......................................    8
  Section 4.1.   Legal Existence, etc.................................    8
  Section 4.2.   Insurance............................................    8
  Section 4.3.   Taxes, Claims for Labor and Materials, 
                 Compliance with Laws; Environmental and 
                 Natural Resource Matters.............................    9
  Section 4.4.   Maintenance, Etc ....................................   11
  Section 4.5.   Nature of Business...................................   12
  Section 4.6.   Limitations on Current Debt and Funded Debt..........   12



                                       -i-
<PAGE>

  Section 4.7.   Distributions.......................................    13
  Section 4.8.   Investments.........................................    13
  Section 4.9.   Mergers and Consolidations..........................    15
  Section 4.10.  Sales of Assets.....................................    16
 
  Section 4.11.  Sale of Equity Interests in Restricted 
                 Subsidiaries........................................    18
  Section 4.12.  Limitation on Harvesting............................    18
  Section 4.13.  Payment of Dividends by Restricted Subsidiaries.....    20
  Section 4.14.  Guaranties..........................................    20
  Section 4.15.  Transactions with Affiliates........................    20
  Section 4.16.  Multiemployer Plan Liability and Termination of 
                 Pension Plans.......................................    20
  Section 4.17.  Reports and Rights of Inspection....................    20
  Section 4.18.  Changes in Status of Subsidiaries...................    23
  Section 4.19.  Repurchase of Notes.................................    24
  Section 4.20.  Liens...............................................    24
  Section 4.21.  Ratings.............................................    26


SECTION 5.     PREPAYMENT OF NOTES...................................    26
  Section 5.1.   Required Prepayments................................    26
  Section 5.2.   Optional Prepayment With Premium....................    28
  Section 5.3.   Notice of Optional Prepayments......................    28
  Section 5.4.   Application of Prepayments..........................    28
  Section 5.5.   Direct Payment......................................    28


SECTION 6.     EVENTS OF DEFAULT AND REMEDIES THEREFOR...............    29
  Section 6.1.   Events of Default...................................    29
  Section 6.2.   Notice to Holders...................................    31
  Section 6.3.   Acceleration of Maturities..........................    31
  Section 6.4.   Rescission of Acceleration..........................    31
  

SECTION 7.     AMENDMENTS, WAIVERS AND CONSENTS......................    32
  Section 7.1.   Consent Required....................................    32
  Section 7.2.   Solicitation of Holders.............................    32
  Section 7.3.   Effect of Amendment or Waiver.......................    33
                                                                     
                                                                     
SECTION 8.     INTERPRETATION OF AGREEMENT; DEFINITIONS..............    33
  Section 8.1.   Definitions.........................................    33
  Section 8.2.   Accounting Principles...............................    50
  Section 8.3.   Directly or Indirectly..............................    50


SECTION 9.     MISCELLANEOUS.........................................    51
  Section 9.1.   Registered Notes....................................    51
  Section 9.2.   Exchange of Notes...................................    51
  Section 9.3.   Loss, Theft, Etc. of Notes..........................    52



                                       -ii-
<PAGE>

  Section 9.4.   Powers and Rights Not Waived; Remedies Cumulative...    52
  Section 9.5.   Notices.............................................    52
  Section 9.6.   Reproduction of Documents...........................    52
  Section 9.7.   Survival............................................    53
  Section 9.8.   Successors and Assigns..............................    53
 
  Section 9.9.   Governing Law.......................................    53
  Section 9.10.  Submission to Jurisdiction..........................    53
  Section 9.11.  Limitations of Liability............................    54
  Section 9.12.  Severability........................................    54
  Section 9.13.  Captions............................................    54
  Section 9.14.  Duplicate Originals.................................    54


Signatures...........................................................    55

ATTACHMENTS TO NOTE PURCHASE AGREEMENT:

    SCHEDULE I    --   Names and Commitments of Purchasers
    SCHEDULE II   --   Investments

    EXHIBIT A-1   --   Form of 8.01% Senior Notes, Series A
    EXHIBIT A-2   --   Form of 8.16% Senior Notes, Series B
    EXHIBIT A-3   --   Form of 8.21% Senior Notes, Series C
    EXHIBIT A-4   --   Form of 8.25% Senior Notes, Series D
    EXHIBIT B-1   --   Closing Certificate of the Company
    EXHIBIT B-2   --   Closing Certificate of the Managing General Partner
    EXHIBIT C     --   Description of Closing Opinion of Counsel to the Company
    EXHIBIT D     --   Description of Closing Opinion of Special Counsel to the
                         Company
    EXHIBIT E     --   [Intentionally Reserved]
    EXHIBIT F     --   Description of Closing Opinion of Special Counsel to the
                         Purchasers
    EXHIBIT G     --   Subordination Provisions
    EXHIBIT H     --   Pre-Funding Agreement


                                       -iii-
<PAGE>

                          CROWN PACIFIC LIMITED PARTNERSHIP
                               121 S.W. Morrison Street
                               Portland, Oregon  97204


                                           

                               NOTE PURCHASE AGREEMENT




                Re:    $91,000,000 Senior Notes, Series A, B, C and D
                                   Due 2006 - 2013
                                             
                _____________________________________________________



                                                                  Dated as of
                                                                August 1, 1996

To the Purchasers named in Schedule I
  to this Agreement


Gentlemen:


    CROWN PACIFIC LIMITED PARTNERSHIP, a Delaware limited partnership 
(together with any Person who succeeds to all or substantially all Crown 
Pacific Limited Partnership's assets and business, the "COMPANY"), agrees 
with the Purchasers named on Schedule I to this Agreement (the "PURCHASERS") 
as follows:

SECTION 1.  DESCRIPTION OF NOTES AND COMMITMENT.

    SECTION 1.1.  DESCRIPTION OF THE TRANSACTION; NOTES.  The Company has duly
authorized the issuance and sale of its Senior Notes due 2006 - 2013 in an
aggregate principal amount not to exceed $91,000,000, to be comprised of Series
A Notes in an aggregate principal amount of $6,490,000, Series B Notes in an
aggregate principal amount of $50,000,000, Series C Notes in an aggregate
principal amount of $19,510,000 and Series D Notes in an aggregate principal
amount of $15,000,000.  The Notes (such term and all other capitalized terms not
otherwise defined herein shall have the respective meanings assigned thereto in
SECTION 8) are to be dated the date of issue, to bear interest at the rate of
8.01%, in the case of the Series A Notes, 8.16%, in the case of the Series B
Notes, 8.21%, in the case of the Series C Notes, and 8.25%, in the case of the
Series D Notes, per annum prior to maturity payable semiannually in arrears on
February 1 and August 1 in each year (commencing February 1, 1997) until the
principal amount thereof shall be due and payable, to bear interest on overdue
principal (including any overdue prepayment of principal) and premium, if any,
and (to the extent permitted by law) on any overdue installment of interest at
the Overdue Rate, to be expressed to mature on  August 1, 2006, in the case of
the Series A Notes, August 1, 2011, in the case of the Series B Notes, August 1,
2011, in the case of the Series C Notes, and August 1, 2013, in the case of the
Series D Notes, and to be substantially in the respective forms attached hereto
as Exhibits A-1, A-2, A-3 and A-4.


<PAGE>

Interest on the Notes will be computed on the basis of a 360-day year of 
twelve 30-day months.  The Notes are not subject to prepayment or redemption 
at the option of the Company prior to their expressed maturity dates except 
on the terms and conditions and in the amounts and with the premium, if any, 
set forth in SECTION 5.

    SECTION 1.2. COMMITMENT, CLOSING DATE.  Subject to the terms and
conditions hereof and on the basis of the representations and warranties
hereinafter set forth, the Company agrees to issue and sell to each Purchaser,
and such Purchaser agrees to purchase from the Company, on August 13, 1996, or
in the event that the Company cannot perform all of the conditions set forth in
SECTION 3 by such date, then such other Business Day not later than September
30, 1996 as such conditions can be satisfied or such other Business Day as the
Company and the Purchasers shall specifically agree upon (the "CLOSING DATE"),
the Notes specified opposite such Purchaser's name in Schedule I at a price of
100% of the principal amount thereof.

    Delivery of the Notes to be purchased will be made at the offices of 
Chapman and Cutler, 111 W. Monroe Street, Chicago, Illinois 60603 at or about 
12:00, noon, Chicago, Illinois time, on the Closing Date against payment 
therefor in Federal funds or other immediately available funds at the 
principal office of Bank of America National Trust and Savings Association in 
the amount of the purchase price.  The Note to be delivered to each Purchaser 
on the Closing Date will be delivered to such Purchaser in the form of a 
single registered Note of each series to be purchased by such Purchaser in 
the form attached hereto as Exhibit A-1, A-2, A-3 and/or A-4, as the case may 
be, for the full amount of such Purchaser's purchase of such series (unless 
different denominations are specified by such Purchaser), registered in such 
Purchaser's name or in the name of such Purchaser's nominee specified in 
Schedule I.

    SECTION 1.3.  FAILURE TO DELIVER.  If, on the Closing Date, the Company
fails to tender to any Purchaser the Notes to be issued to such Purchaser or if
the conditions specified in SECTION 3 hereof have not been fulfilled, such 
Purchaser may thereupon elect to be relieved of all further obligations under
this Agreement; PROVIDED that such election shall not relieve the Company from
any of its obligations hereunder or waive any of such Purchaser's rights against
the Company.  Without limiting the foregoing, if the conditions specified in
SECTION 3 hereof have not been fulfilled, each Purchaser may waive compliance by
the Company with any such condition to such extent as such Purchaser in its sole
discretion may determine.

    SECTION 1.4.  EXPENSES.  Whether or not the transactions herein
contemplated shall be consummated, the Company agrees to pay all expenses
relating to the transactions contemplated by this Agreement, including but not
limited to:


       (a)  the cost of reproducing this Agreement, the Notes and all 
    other documents required or contemplated hereunder;


       (b)  the reasonable fees and expenses of Chapman and Cutler, special
    counsel to the Purchasers;


                                      -2-
<PAGE>

       (c)  reasonable out-of-pocket expenses of the Purchasers;


       (d)  the cost of delivering to each Purchaser at its home office, 
    insured to its satisfaction, the Notes purchased thereby on the 
Closing Date;


       (e)  all reasonable fees and expenses (including, without limitation,
    reasonable attorney's fees) incurred by any Holder in connection with the
    enforcement of the obligations of the Company under this Agreement or the 
    Notes; and


       (f)  all expenses (including reasonable attorney's fees) in connection 
    with any amendments, waivers or consents requested or agreed to by the 
    Company in connection with this Agreement or the Notes (whether or not the 
    same are actually executed and delivered), including, without limitation, 
    any amendments, waivers, or consents resulting from any work-out, 
    renegotiation or restructuring relating to the performance by the Company of
    its obligations under this Agreement and the Notes;

PROVIDED that each Person that has incurred or incurs expenses related to the 
subject matter of this Agreement shall use its best efforts to submit 
promptly to the Company invoices with respect to such expenses.  The Company 
also agrees that it will pay and save the Purchasers  harmless against any 
and all liability with respect to stamp and other  taxes (except for taxes on 
any Purchaser's gross or net income), if any, which may be payable or which 
may be determined to be payable in connection with the execution and delivery 
of this Agreement or the Notes, whether or not any Notes are then 
outstanding.  The Company agrees to protect and indemnify the Purchasers 
against any liability for any and all brokerage fees and commissions payable 
or claimed to be payable to any Person in connection with the transactions 
contemplated by this Agreement.  Each Purchaser hereby represents and 
warrants that it has not engaged any investment banker or broker in 
connection with its purchase of the Notes, it being understood that BA 
Securities, Inc. has acted as placement agent of the Company.

    The obligations of the Company under this SECTION 1.4 shall survive the 
payment or prepayment of the Notes and the termination of this Agreement.

    SECTION 1.5.  SEVERAL COMMITMENTS.  The obligations of each Purchaser 
shall be several and not joint and no Purchaser shall be liable or 
responsible for the acts or defaults of any other Purchaser.  The obligation 
of the Company to consummate the sale of the Notes is contingent upon the 
purchase by the Purchasers of 100% of the aggregate principal amount of the 
Notes scheduled to be purchased on the Closing Date pursuant to this 
Agreement.

    SECTION 1.6.  PRE-FUNDING OF COMMITMENT.  In order to facilitate an 
orderly closing on the Closing Date, each Purchaser agrees that upon the 
request of the Company made at least 5 days prior to the Closing Date, such 
Purchaser shall make its funds required to purchase the Notes to be purchased 
by it available to Bank of America National Trust and Savings Association, as 
funding agent (the "FUNDING AGENT"), at or prior to 12:00, noon, Chicago, 
Illinois time, on the Business Day prior to the Closing Date, in Federal 
funds or 


                                      -3-
<PAGE>


other immediately available funds.  The foregoing obligation of each 
Purchaser to so make its funds available shall be subject to the condition 
precedent that it shall have received a Pre-Funding Agreement executed by the 
Company and the Funding Agent in substantially the form attached hereto as 
Exhibit H.  Each Purchaser agrees by its execution hereof that funds so made 
available by it may be invested by the Funding Agent as provided in said 
Pre-Funding Agreement.

SECTION 2.  REPRESENTATIONS.


     SECTION 2.1.  REPRESENTATIONS OF THE COMPANY.  The Company represents 
and warrants that all representations  set forth in the form of Closing 
Certificate attached hereto as Exhibit B-1 are true and correct as of the 
date hereof and are incorporated herein by reference with the same force and 
effect as though herein set forth in full.

     SECTION 2.2.  REPRESENTATIONS OF THE MANAGING GENERAL PARTNER.  Crown 
Pacific Management Limited Partnership, a Delaware limited partnership 
(together with any Person who succeeds to all or substantially all of Crown 
Pacific Management Limited Partnership's assets and business, the "MANAGING 
GENERAL PARTNER"), represents and warrants that all representations set forth 
in the form of Closing Certificate attached hereto as Exhibit B-2 are true 
and correct as of the date hereof and are incorporated herein by reference 
with the same force and effect as though herein set forth in full.

     SECTION 2.3.  REPRESENTATIONS OF THE PURCHASERS.  Each Purchaser 
represents and warrants to the Company that such Purchaser is acquiring the 
Notes for the purpose of investment and not with a view to the distribution 
thereof, and that such Purchaser has no present intention of selling, 
negotiating or otherwise disposing of the Notes it being understood, however, 
that the disposition of such Purchaser's Property shall at all times be and 
remain within its control.  Each Purchaser further represents and warrants to 
the Company that such Purchaser has such knowledge and experience in 
financial and business matters that it is capable of evaluating the merits 
and risks of investing in the Notes and is aware that the Notes have not been 
registered under the Securities Act or the securities laws of any state, and 
that the sale of each Note is predicated upon such sale being exempt from 
registration as an exempt transaction under applicable federal and state 
securities laws, and that no state or federal governmental authorities have 
made any finding or determination relating to the Notes, and that no state or 
federal governmental authority has or will recommend or endorse the Notes.  
Each Purchaser further represents and warrants to the Company that at least 
one of the following statements is an accurate representation as to the 
source of funds to be used by such Purchaser to pay the purchase price of the 
Notes purchased by it hereunder (respectively, the "SOURCE"):

       (a) The Source is an "insurance company general account" within 
    the meaning of Department of Labor Prohibited Transaction Exemption 
    ("PTE") 95-60 (issued July 12, 1995), and there is no employee benefit  
    plan (treating as a single plan, all employee benefit plans maintained 
    by the same employer or employee organization) with respect to which the 
    amount of the general account reserves and liabilities for all contracts 
    held by or on behalf of such employee benefit plan exceed

                                      -4-
<PAGE>

    ten percent (10%) of the total reserves and liabilities of such general 
    account (exclusive of separate account liabilities) plus surplus, as set 
    forth in the NAIC Annual Statement filed with such Purchaser's state of 
    domicile;

        (b) The Source is one or more separate accounts, trusts or a 
    commingled pension trust maintained by the Purchaser within the meaning 
    of PTE 90-1 (issued January 29, 1990) and the Purchaser has disclosed to 
    the Company the names of such employee benefit plans whose assets in 
    such separate account or accounts or pension trusts exceed 10% of the 
    total assets or are expected to exceed 10% of the total assets of such 
    account or accounts or trusts as of the date of such purchase (for the 
    purpose of this clause (b), all employee benefit plans maintained by the 
    same employer or employee organization are deemed to be a single plan);
    

        (c) The Source is a bank collective investment fund maintained by 
    the Purchaser within the meaning of PTE 91-38 (issued July 12, 1991) and 
    the Purchaser has disclosed to the Company the names of such employee 
    benefit plans whose assets in such collective investment fund exceed 10% 
    of the total assets or are expected to exceed 10% of the total assets of 
    such fund as of the date of such purchase (for the purpose of this 
    clause (c), all employee benefit plans maintained by the same employer 
    or employee organization are deemed to be a single plan);

        (d) The Source is one or more employee benefit plans, each of which 
    has been identified to the Company in writing;

        (e) The Source is one or more pension funds, trust funds or agency 
    accounts, each of which is a "governmental plan" as defined in Section 
    3(32) of ERISA;

        (f) The Source is an "investment fund" managed by a "qualified 
    professional asset manager" or "QPAM" (as defined in Part V of PTE 
    84-14, issued March 13, 1984), provided that no other party to the 
    transactions described in this Agreement and no "affiliate" of such  
    other party (as defined in Section V(c) of PTE 84-14) has at this time, 
    and during the immediately preceding one year has exercised the 
    authority to appoint or terminate said QPAM as manager of the assets of 
    any plan identified in writing pursuant to this clause (f) or to 
    negotiate the terms of said QPAM's management agreement on behalf of any 
    such identified plans; or

       (g) The Source consists of funds which do not constitute "plan assets".

    The Company shall deliver a certificate on the Closing Date which 
certificate shall either state that (i) it is neither a "party in interest" 
(as defined in Title I, Section 3(14) of ERISA) nor a "disqualified person" 
(as defined in Section 4975(e)(2) of the Internal Revenue Code of 1986, as 
amended), with respect to any plan identified pursuant to paragraphs (b), (c) 
or (d) above, or (ii) with respect to any plan identified pursuant to 
paragraph (f) above, neither it nor any "affiliate" (as defined in Section 
V(c) of PTE 84-14) is described in the proviso to said paragraph (f).  As 
used in this SECTION 2.3, the term "SEPARATE ACCOUNT" shall have the meaning 
assigned thereto in ERISA, the term "PLAN ASSETS" shall have

                                      -5-
<PAGE>

the meaning assigned thereto in Department of Labor Regulation 29 C.F.R. 
Section 2510.3-101 and the term "EMPLOYEE BENEFIT PLAN" shall have the 
meaning assigned thereto in ERISA and shall also include a plan as defined in 
Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended.  The 
representations contained in such certificate shall be made in reliance upon 
and subject to the accuracy of the representation of the Purchasers in this 
SECTION 2.3 as to the source of funds to be used by the Purchasers to pay the 
purchase price of the Notes to be purchased by the Purchasers.

SECTION 3.  CLOSING CONDITIONS.

    The obligation of each Purchaser to purchase the Notes to be purchased by 
such Purchaser on the Closing Date shall be subject to the performance by the 
Company of its agreements hereunder which, by the terms hereof, are to be 
performed at or prior to the time of delivery of the Notes and of the 
following further conditions precedent:

    SECTION 3.1.  EXECUTION OF AGREEMENT AND NOTES.  On or prior to the
Closing Date this Agreement and the Notes shall have been duly authorized,
executed and delivered by the Company and shall be in full force and effect and
no Default or Event of Default shall exist in the  performance by the Company of
any of its obligations thereunder.

    SECTION 3.2.  CLOSING CERTIFICATES.  On the Closing Date, each Purchaser
shall have received (i) from the Company a certificate dated the Closing Date,
substantially in the form attached hereto as Exhibit B-1, and (ii) from the
Managing General Partner a certificate dated the Closing Date, substantially in
the form attached hereto as Exhibit B-2, the truth and accuracy of each of which
shall be a condition to such Purchaser's obligation to purchase the Notes
proposed to be sold to such Purchaser.

    SECTION 3.3.  OPINIONS OF COUNSEL.  On the Closing Date, each Purchaser
shall have received the written opinions, dated in each case as of the Closing
Date, from Ball Janik LLP, counsel to the Company and the Managing General
Partner, from Andrews & Kurth L.L.P., special counsel to the Company, and from
Chapman and Cutler, special counsel to the Purchasers, their respective opinions
substantially described in Exhibits C, D and F hereto, reasonably satisfactory
in form and substance to such Purchaser.

    SECTION 3.4.  LEGAL EXISTENCE AND AUTHORITY.  On the Closing Date, each
Purchaser shall have received, in form and substance reasonably satisfactory to
such Purchaser and such Purchaser's special counsel, such documents and evidence
with respect to the Company and the Managing General Partner as such Purchaser
or such Purchaser's special counsel may reasonably request in order to establish
the existence and good standing of the Company and the Managing General Partner,
the authorization of the transactions contemplated by this Agreement, the taking
of all appropriate proceedings in connection therewith and compliance with the
conditions set forth in this SECTION 3.

    SECTION 3.5.  INSURANCE.  Prior to the Closing Date, each Purchaser shall
have received from the Company a certificate of the Company evidencing
compliance with the provisions of SECTION 4.2.


                                      -6-
<PAGE>

    SECTION 3.6.  ENVIRONMENTAL AUDIT.  Prior to the Closing Date, each
Purchaser shall have received from the Company reasonably requested
environmental information with respect to the Properties owned by the Company or
to be owned by the Company after giving effect to the issuance of the Notes and
the consummation of the transactions described in SECTION 3.8 (including
environmental information with respect to the conversion facilities and
endangered species).

    SECTION 3.7.  APPRAISALS.  Prior to the Closing Date, each Purchaser shall
have received existing appraisal reports reasonably requested by the Purchasers
with respect to the timberlands owned by the Company or to be owned by the
Company after giving effect to the issuance of the Notes.

    SECTION 3.8.  RELATED TRANSACTIONS.  Concurrently with the issuance and
sale of the Notes to the Purchasers on the Closing Date:

       (i) the Company shall consummate the sale of the entire aggregate 
    principal amount of the Notes scheduled to be sold on the Closing Date 
    pursuant to this Agreement and

       (ii) the net proceeds of the sale of the Notes pursuant to this 
    Agreement shall be applied by the Company to retire a portion of the 
    Acquisition Facility and to the payment, or provision for payment, of 
    expenses in consummating the transactions contemplated by this Agreement.

    SECTION 3.9.  ACQUISITION FACILITY; WORKING CAPITAL FACILITY; INITIAL DRAW
UNDER ACQUISITION FACILITY.  On or prior to the Closing Date, the Company shall
have executed and delivered and there shall be in full force and effect an
Amended and Restated Credit Agreement dated as of July 31, 1996 (the
"ACQUISITION CREDIT AGREEMENT") with Bank of America National Trust and Savings
Association and the other banks named therein, pursuant to which there shall
from time to time be available to the Company (subject to certain conditions
precedent set forth therein) not less than $109,000,000 to fund future
acquisitions by the Company of timberlands and related assets (the "ACQUISITION
FACILITY"), and the Company shall have executed and delivered and there shall be
in full force and effect an Amended and Restated Facility B Credit Agreement
dated as of July 31, 1996 (the "WORKING CAPITAL CREDIT AGREEMENT") with Bank of
America National Trust and Savings Association and the other banks named
therein, pursuant to which there shall from time to time be available to the
Company (subject to certain conditions precedent set forth therein) not less
than $40,000,000 for working capital and general partnership purposes of the
Company.

    SECTION 3.10.  LEGALITY.  On the Closing Date, the purchase by each
Purchaser of the Notes proposed to be sold to such Purchaser shall not be
prohibited by any applicable law or governmental regulation, shall not be
subject to any penalty  or other onerous condition under or pursuant to any
applicable law or governmental regulation, and such Purchaser shall have
received from the Company such certificates or other evidence as to matters of
fact as such Purchaser may reasonably request to establish compliance with this
condition.


                                      -7-
<PAGE>

    SECTION 3.11.  PAYMENT OF SPECIAL COUNSEL FEES.  On the Closing Date, the
Company shall have paid the reasonable fees and expenses of Chapman and Cutler,
special counsel to the Purchasers, in connection with the purchase of the Notes
by the Purchasers.

    SECTION 3.12.  PRIVATE PLACEMENT NUMBER.  Prior to the Closing Date, the
appropriate filings shall have been duly made with Standard & Poor's CUSIP
Service Bureau, as agent for the National Association of Insurance
Commissioners, in order to obtain a private placement number for each series of
the Notes.

    SECTION 3.13.  [INTENTIONALLY RESERVED]. 

    SECTION 3.14.  SATISFACTORY PROCEEDINGS.  All proceedings taken in
connection with the transactions contemplated by this Agreement and all
documents necessary to the consummation thereof, shall have been taken or
delivered, as the case may be, shall be satisfactory in form and substance to
special counsel to the Purchasers, and each Purchaser shall have received a copy
(executed or certified as may be appropriate) of all legal documents or
proceedings taken in connection with the consummation of said transactions.


    SECTION 4.  COMPANY COVENANTS.

    From and after the Closing Date and continuing so long as any amount remains
unpaid on any Note:


    SECTION 4.1.  LEGAL EXISTENCE, ETC.  The Company will preserve and keep in
force and effect its legal existence as a limited partnership not taxable as a
corporation, and will cause each Restricted Subsidiary to preserve and keep in
force and effect, its legal existence as a limited partnership, general
partnership or corporation, as the case may be, and all material licenses,
franchises and permits necessary to the proper conduct of its business, PROVIDED
that the foregoing shall not prevent any transaction permitted by SECTION 4.9;
and PROVIDED FURTHER that the Company shall not be obligated to preserve its
status as a partnership not taxable as a corporation if (i) the Company's
failure to preserve such status shall be the result of an amendment to the tax
laws enacted by the Congress of the  United States and (ii) after giving effect
to the loss of such status the ratio of Consolidated Cash Flow for the
immediately preceding Four Quarter Period to Pro Forma Maximum Debt Service,
determined as of the date of the loss of such status, would be greater than 1.1
to 1.0, assuming, for the purposes of the computation of Consolidated Cash Flow,
that Consolidated Cash Flow would be reduced by taxes at the applicable tax rate
of the Company for such period had the Company been taxable as a corporation.

    SECTION 4.2.  INSURANCE.  The Company will maintain, and will cause each
Restricted Subsidiary to maintain, insurance coverage by financially sound and
reputable insurers in such forms and amounts (including such deductibles and
self insurance) and against such risks as are customary for companies of
established reputation engaged in the same or similar business activities and
owning and operating similar Properties.


                                      -8-
<PAGE>

    SECTION 4.3.  TAXES, CLAIMS FOR LABOR AND MATERIALS, COMPLIANCE WITH LAWS;
ENVIRONMENTAL AND NATURAL RESOURCE MATTERS.  (a) The Company will promptly pay
and discharge, and will cause each Restricted Subsidiary promptly to pay and
discharge, all lawful taxes, assessments and governmental charges or levies
imposed upon the Company or such Restricted Subsidiary, respectively, or upon or
in respect of all or any part of the Property or business of the Company or such
Restricted Subsidiary, all trade accounts payable in accordance with usual and
customary business terms, and all claims for work, labor or materials, which if
unpaid would become a Lien or charge upon any Property of the Company or such
Restricted Subsidiary, PROVIDED that the Company or such Restricted Subsidiary
shall not be required to pay any such tax, assessment, charge, levy, account
payable or claim if (i) the validity, applicability or amount thereof is being
contested in good faith by appropriate actions or proceedings which will prevent
the forfeiture or sale of any Property of the Company or such Restricted
Subsidiary or any material interference with the use thereof by the Company or
such Restricted Subsidiary, and (ii) the Company or such Restricted Subsidiary
shall set aside on its books, reserves deemed by it to be adequate with respect
thereto.  The Company will promptly comply, and will cause each Subsidiary to
comply, with all laws, ordinances or governmental rules and regulations to which
it is subject, including without limitation, ERISA, the violation of which would
materially  and adversely affect the Properties, business, profits or condition
of the Company and its Restricted Subsidiaries, taken as a whole, or would
result in any Lien not permitted under SECTION 4.20.


       (b) (1)  The Company and its Subsidiaries and their Properties shall 
    comply in all material respects with any applicable Environmental and 
    Natural Resource Law;

       (2) The Company and its Subsidiaries shall obtain and maintain in good 
    standing all material Governmental Approvals required for their 
    operations and their Properties by any applicable Environmental and 
    Natural Resource Law;

       (3) The Company and its Subsidiaries shall not, and shall not permit any
    Person to, own or operate on any of its Properties any (i) landfill or 
    dump or (ii) hazardous waste treatment, storage or disposal facility as 
    defined pursuant to RCRA or any comparable state law; the Company and 
    its Subsidiaries shall not use, generate, treat, store, release or 
    dispose of Hazardous Materials at or on any of its Properties in 
    quantities materially greater than that which is customary for 
    operations similar to those of the Company and its Subsidiaries;

       (4) The Company and its Subsidiaries shall within ten Business Days 
    notify the Holders in writing of, and specify the action the Company is 
    taking and proposes to take with respect thereto and provide any 
    reasonably requested documents upon learning of, any of the following:

             (A) any material liability for response or corrective action, 
       natural resource damage or other harm pursuant to CERCLA, RCRA or any 
       comparable state law;

                                      -9-
<PAGE>

             (B) any material Environmental and Natural Resource Claim arising 
       from the Company and its Subsidiaries, their operations, their 
       Properties or any other Property previously owned or operated by 
       the Company or its Subsidiaries or their predecessors;

             (C) any conditions or occurrences at the Properties of the Company 
       and its Subsidiaries which could reasonably form the basis for a 
       material Environmental and Natural Resource Claim  against the 
       Company or its Subsidiaries or their Properties;

             (D) any material and actual or imminent restriction on the 
       ownership, occupancy, use, productivity or transferability of the 
       Properties of the Company or its Subsidiaries (i) arising in 
       connection with any Release, threatened Release or disposal of a 
       Hazardous Material, or any Environmental and Natural Resource Law 
       or (ii) as a consequence of any Harvest/Yield Restriction; or

             (E) any other environmental, natural resource, health or safety 
       condition, which could materially and adversely affect the ability 
       of the Company to perform its obligations under this Agreement or 
       the Notes;

       (5) At its sole expense (but without thereby waiving any claims it may 
    have against third parties), the Company and its Subsidiaries will 
    conduct any investigation, study, sampling and testing, and undertake 
    any cleanup, removal, remedial or other response action necessary to 
    remove, clean up or abate any material quantity of Hazardous Material 
    which is Released or disposed of at or on the Properties in accordance 
    with any applicable Environmental and Natural Resource Law and any order 
    or directive from a Governmental Authority having jurisdiction, except 
    to the extent the Company or its Subsidiaries are diligently contesting 
    any applicable Environmental and Natural Resource Law or any order or 
    directive from a Governmental Authority, so long as such contest is in 
    good faith and by appropriate proceedings and as to which reserves 
    deemed by the Company to be adequate are maintained and no forfeiture or 
    material interference with the use of the Properties of the Company and 
    its Restricted Subsidiaries will result from a failure to comply with 
    the contested requirement;

       (6) (A) The Company agrees, at its sole cost and expense, to defend 
    (with attorneys reasonably satisfactory to the Holders holding at least 
    a majority in aggregate principal amount of outstanding Notes), protect, 
    indemnify and hold harmless the Purchasers, and any Holder, and their 
    respective officers, directors, trustees, employees and agents (the 
    "INDEMNITEES") from and against any and all liabilities, obligations  
    (including removal and remedial actions), losses, damages (including 
    foreseeable and unforeseeable consequential damages and punitive 
    damages, which consequential or punitive damages do not result from an 
    Indemnitee's gross negligence or willful misconduct), penalties, 
    actions, judgments, suits, orders (whether administrative or judicial), 
    consent decrees, claims, costs, expenses and disbursements (including 
    reasonable consultants' fees and disbursements and including all 
    reasonable

                                      -10-
<PAGE>


    attorneys' fees whether incurred in a suit or action or any appeals from 
    a judgment or decree therein or in connection with non-judicial action) 
    of any kind or nature whatsoever that may at any time be incurred by, 
    imposed on or asserted against the Indemnitees, the Company or its 
    Subsidiaries directly or indirectly based on, or arising or resulting 
    from (i) the actual or alleged presence or Release of any Hazardous 
    Material on the Properties of the Company or its Subsidiaries or the 
    removal, handling, transportation, disposal or storage of such Hazardous 
    Material, (ii) any Environmental and Natural Resource Claim with respect 
    to the Properties of the Company or its Subsidiaries, or (iii) any 
    failure to comply, and the resulting cost to come into compliance, with 
    any applicable Environmental and Natural Resource Laws with respect to 
    the Properties of the Company or its Subsidiaries and the requirements 
    of any permits issued under such Environmental and Natural Resource Laws 
    (collectively, the "INDEMNIFIED MATTERS"), regardless of when such 
    Indemnified Matters arise, but excluding as to any Indemnitee any 
    Indemnified Matter resulting directly from gross negligence or willful 
    misconduct by such Indemnitee or its representative.  To the extent that 
    this indemnity is unenforceable because it violates any law or public 
    policy, the Company agrees to contribute the maximum portion that it is 
    permitted to contribute under applicable law to the payment and 
    satisfaction of all Indemnified Matters;

       (B) The Company hereby waives, releases and covenants not to bring 
    any demand, claim, cost recovery action or lawsuit it may now or 
    hereafter have or accrue against any Indemnitee arising from the 
    subject matter of an Indemnified Matter, except as a direct result 
    of the gross negligence or willful misconduct of such Indemnitee;

       (C) The Company agrees to reimburse each Indemnitee for all sums 
    paid and costs incurred by each Indemnitee with respect to any 
    Indemnified Matter, within ten (10) Business Days following written 
    demand therefor, with interest thereon at the Overdue Rate from the 
    initial date of such written demand, if not paid within such ten 
    (10) Business Day period; and

       (D) Should any Indemnitee institute any action or proceeding at law 
    or in equity, or in arbitration, to enforce any provision of the 
    above indemnification (including an action for declaratory relief 
    or for damages by reason of an alleged breach of any provision of 
    the above indemnification) or otherwise in connection with the 
    above indemnification, it shall be entitled to recover from the 
    Company its reasonable fees and disbursements incurred in 
    connection therewith if it is the prevailing party in such action 
    or proceeding.

    SECTION 4.4. MAINTENANCE, ETC.  The Company will maintain, preserve and
keep, and will cause each Restricted Subsidiary to maintain, preserve and keep,
its Properties (other than timber) which are used or useful in the conduct of
its business (whether owned in fee or a leasehold interest) in good repair and
working order and from time to time will make all necessary repairs,
replacements, renewals and additions so that at all times such Properties shall
remain usable in the Company's business.  The Company will follow, and will
cause


                                      -11-
<PAGE>

each Restricted Subsidiary to follow, prudent industry management
standards with respect to its timber and timber Properties, including the
growing and harvesting of its timber.  Nothing in this SECTION 4.4 shall be
construed to (i) limit the Company's ability to sell or otherwise dispose of
assets in accordance with SECTION 4.10, or (ii) prevent the Company from ceasing
to operate any sawmill or other conversion facility if the Board of Control
determines in good faith that such cessation is in the best interest of the
Company.  The Company shall engage in prudent management practices with respect
to any acquisition of assets, including conducting any environmental
investigation as is prudent under the circumstances.  The Company shall deliver
to each Holder a copy of any environmental report obtained by the Company in
connection with any such acquisition.

    SECTION 4.5.  NATURE OF BUSINESS.  Neither the Company nor  any Restricted
Subsidiary will engage in any business if, as a result, the general nature of
the business, taken on a consolidated basis, which would then be engaged in by
the Company and its Restricted Subsidiaries would be substantially changed from
the growing and harvesting of timber and manufacture and sale of lumber, plywood
and wood products and related businesses engaged in by the Company and its
Restricted Subsidiaries on the date of this Agreement and described in the
Private Placement Memorandum and other businesses incidental or reasonably
related thereto.

    SECTION 4.6.  LIMITATIONS ON CURRENT DEBT AND FUNDED DEBT.  (a) The
Company will not, and will not permit any Restricted Subsidiary to, create,
assume, incur, guarantee or in any manner be or become liable in respect of any
Current Debt or Funded Debt, except:


       (1) Funded Debt evidenced by the Notes;

       (2) Funded Debt of the Company outstanding on the Closing Date and 
    described in Part II of Annex C to Exhibit B-1;

       (3) Current Debt and Funded Debt of the Company incurred under the 
    Working Capital Facility, PROVIDED that the aggregate principal amount 
    of such Current Debt and Funded Debt outstanding at any one time shall 
    not exceed $40,000,000;

       (4) Additional Current Debt and Funded Debt of the Company and Funded 
    Debt of a Restricted Subsidiary secured by Liens permitted by SECTION 
    4.20(g), PROVIDED that on the date that any such Current Debt or Funded 
    Debt is incurred and after giving effect to the application of the 
    proceeds thereof:

             (i) the ratio of Consolidated Cash Flow for the immediately 
       preceding Four Quarter Period to Pro Forma Interest Expense for 
       such period is greater than 2.5 to 1.0; and

             (ii) the ratio of Consolidated Cash Flow for the immediately 
       preceding Four Quarter Period to Pro Forma Maximum Debt Service is 
       greater than 1.25 to 1.0;

                                      -12-
<PAGE>

       (5) unsecured Subordinated Funded Debt of the Company to the 
    Managing General Partner or any Affiliate of the Managing General 
    Partner, PROVIDED that the aggregate principal amount of such 
    Subordinated Funded Debt outstanding at any one time shall not 
    exceed $10,000,000; and

       (6) Current Debt or Funded Debt of a Restricted Subsidiary to the 
    Company or to a Wholly-owned Restricted Subsidiary.

    (b) The renewal, extension or refunding of any Current Debt or Funded 
Debt issued, incurred or outstanding pursuant to SECTION 4.6(a) shall 
constitute the issuance of additional Current Debt or Funded Debt which 
is, in turn, subject to the limitations of the applicable provisions of 
this SECTION 4.6, PROVIDED that, except to the extent of any increase in 
the outstanding principal amount thereof, the commencement of a new 
interest period for any Current Debt or Funded Debt as to which interest 
is computed with reference to the London Interbank Offered Rate or any 
other base rate or the conversion of the base rate used for any such 
interest computation shall not be considered a renewal, extension, or 
refunding of such Current Debt or Funded Debt for purposes of this 
SECTION 4.6.

    (c) Any business entity which becomes a Restricted Subsidiary after the 
date hereof shall for all purposes of this SECTION 4.6 be deemed to have 
created, assumed or incurred at the time it becomes a Restricted 
Subsidiary all Current Debt and Funded Debt of such business entity 
existing immediately after it becomes a Restricted Subsidiary.

    SECTION 4.7.  DISTRIBUTIONS.  The Company will not make any Distribution
if at the time of such Distribution and after giving effect thereto a Default or
Event of Default shall have occurred and be continuing.  In addition, the
Company will not authorize or make any Distribution (i) on any date other than a
Business Day, (ii) in Property other than cash, (iii) which is payable more than
60 days after the date of authorization or declaration, or (iv) in an amount
which, together with all previous Distributions made by the Company for the
quarterly fiscal period most recently ended prior to the date of such
Distribution, exceeds the amount of Available Cash for such quarterly fiscal
period.

    SECTION 4.8.  INVESTMENTS.  The Company will not, and will not permit any
Restricted Subsidiary to, make any Investments in any Person, except:


       (a) Investments by the Company and its Restricted Subsidiaries in 
    and to Restricted Subsidiaries, including any Investment in a 
    business entity which, after giving effect to such Investment, 
    becomes a Restricted Subsidiary;

       (b) Investments in commercial paper maturing in 270 days or less 
    from the date of issuance which, at the time of acquisition by the 
    Company or any Restricted Subsidiary, is rated at least A-1 by 
    Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc., 
    or P-1 by Moody's Investors Service, Inc. or, if such commercial 
    paper is not rated by either Standard & Poor's Ratings Group, a 
    division of McGraw-Hill, Inc., or Moody's Investors Service, Inc., 
    the highest rating of another nationally recognized credit rating 
    agency of similar standing approved in writing by

                                      -13-
<PAGE>

    the Holders holding at least 66-2/3% in aggregate principal amount of 
    outstanding Notes;

       (c) Investments in direct obligations of the United States of America or
    any agency or instrumentality of the United States of America, the 
    payment or guarantee of which constitutes a full faith and credit 
    obligation of the United States of America, in either case, maturing in 
    twelve months or less from the date of acquisition thereof;

       (d) Investments in certificates of deposit maturing within one year from
    the date of origin, issued by a bank or trust company organized under 
    the laws of the United States or any state thereof, having capital, 
    surplus and undivided profits aggregating at least $250,000,000 and 
    having unsecured Funded Debt outstanding and rated at least AA by 
    Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc., or Aa 
    by Moody's Investors Service, Inc. or, if such unsecured Funded Debt is 
    not rated by either Standard & Poor's Ratings Group, a division of 
    McGraw-Hill, Inc., or Moody's Investors Service, Inc., a comparable 
    rating by another nationally recognized credit rating agency of similar 
    standing approved in writing by the Holders holding at least 66-2/3% in 
    aggregate principal amount of outstanding Notes;

       (e) receivables arising from the sale of goods and services in the 
    ordinary course of business of the Company and its Restricted 
    Subsidiaries, and prepayments, advances or deposits made by the Company 
    or any Restricted Subsidiary to any Person in the ordinary course of 
    business in connection with contracts for timber harvesting or the 
    acquisition of stumpage entered into in the ordinary course of business;

       (f) loans or advances in the usual and ordinary course of business to 
    officers, directors and employees of the Managing General Partner or the 
    Company for expenses (including moving expenses related to a transfer) 
    incidental to carrying on the business of the Company or any Restricted 
    Subsidiary;

       (g) Investments in bankers acceptances maturing within 180 days from the
    issuance thereof, accepted by a bank or trust company organized under 
    the laws of the United States or any state thereof, having capital, 
    surplus and undivided profits aggregating at least $500,000,000 and 
    having unsecured Funded Debt outstanding and rated at least AA by 
    Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc., or Aa 
    by Moody's Investors Service, Inc. or, if such unsecured Funded Debt is 
    not rated by either Standard & Poor's Ratings Group, a division of 
    McGraw-Hill, Inc., or Moody's Investors Service, Inc., a comparable 
    rating by another nationally recognized credit rating agency of similar 
    standing approved in writing by the Holders holding at least 66-2/3% in 
    aggregate principal amount of outstanding Notes;

       (h) Investments by the Company and its Restricted Subsidiaries existing
    on the date of this Agreement and described in Schedule II hereto;

       (i) Investments in any Subsidiary or any other Person organized under 
    the laws of the United States or Canada or any state or province thereof 
    which conducts

                                      -14-
<PAGE>

    substantially all of its business and has substantially all of its 
    assets within the United States or Canada and which is engaged in 
    substantially the same business as the Company, PROVIDED that the 
    aggregate amount of all such Investments made pursuant to this clause 
    (i) shall not exceed $10,000,000 in any twelve-month period ending on 
    the date of such Investment or $51,500,000 from and after the Closing 
    Date (adjusting each such amount annually for the percentage increase or 
    decrease from the prior calendar year in the Consumer Price Index); and

       (j) Guaranties issued in compliance with SECTION 4.14 constituting an 
    obligation, warranty or indemnity of the Company, not guaranteeing 
    Indebtedness of any Person, which is undertaken or made in the  ordinary 
    course of business.

    SECTION 4.9. MERGERS AND CONSOLIDATIONS.  The Company will not, and will
not permit any Restricted Subsidiary to, consolidate with, or be a party to a
merger with, or sell, lease or otherwise dispose of all or substantially all of
its assets to, any other Person; PROVIDED, HOWEVER, that:


       (1) any Restricted Subsidiary may merge or consolidate with or 
    into, or sell, lease or otherwise dispose of all or substantially 
    all of its assets to, the Company or any Wholly-owned Restricted 
    Subsidiary so long as in any merger or consolidation involving the 
    Company, the Company shall be the surviving or continuing entity; and

       (2) the Company may consolidate or merge with, or sell all or 
    substantially all of its assets to, any business entity if:

             (i) the surviving or continuing entity or the entity to which all
       or substantially all of the Company's assets are sold (the 
       "SURVIVING ENTITY") shall be either the Company or an entity 
       organized under the laws of the United States or any state thereof 
       which conducts substantially all of its business and has 
       substantially all of its assets within the United States, and in 
       the case of any such consolidation or merger in which the Company 
       is not the Surviving Entity or in the case of any such sale, the 
       Surviving Entity shall (x) expressly assume in writing the due and 
       punctual payment of the principal of, premium, if any, and the 
       interest on all of the Notes outstanding according to their tenor 
       and the due and punctual performance and observance of all of the 
       covenants in the Notes and this Agreement to be performed or 
       observed by the Company, and (y) furnish to the Holders an opinion 
       of independent counsel to the effect that the instrument of 
       assumption has been duly authorized, executed and delivered and 
       constitutes the legal, valid and binding contract and agreement of 
       the Surviving Entity enforceable in accordance with its terms, 
       which counsel and opinion shall be satisfactory to Holders holding 
       at least 66-2/3% in aggregate principal amount of the then 
       outstanding Notes;


             (ii) at the time of such consolidation or merger or such sale and
       after giving effect thereto (a) no Default or Event of Default 
       shall have occurred and be continuing and (b) the Consolidated Net 
       Worth of the Surviving Entity shall

                                      -15-
<PAGE>

       not be less than the Consolidated Net Worth of the Company 
       immediately prior to such consolidation or merger or such sale; and

             (iii) after giving effect to such consolidation or merger or such 
       sale, the Surviving Entity would be permitted to incur at least 
       $1.00 of additional Funded Debt under the provisions of SECTION 
       4.6(a)(4).

    SECTION 4.10. Sales of Assets.  (a) The Company will not, and will not
permit any Restricted Subsidiary to sell, lease or otherwise dispose of all or
any substantial part (as defined in paragraph (b) of this SECTION 4.10) of the
assets of the Company and its Restricted Subsidiaries, except as permitted by
SECTION 4.9; PROVIDED, HOWEVER, that:

       (1) any Restricted Subsidiary may sell, lease or otherwise dispose 
    of any substantial part of its assets to the Company or any 
    Wholly-owned Restricted Subsidiary;

       (2) the Company or any Restricted Subsidiary may sell Properties 
    constituting a substantial part of the assets of the Company and 
    its Restricted Subsidiaries if (i) such sale shall be for an amount 
    not less than the fair market value (as determined in good faith by 
    the Board of Control) of such Properties; (ii) after giving effect 
    to such sale, no Default or Event of Default shall have occurred 
    and be continuing; (iii) the Net Proceeds of the sale of such 
    Properties (to the extent that the Net Proceeds of such sale exceed 
    the minimum amount required to define a substantial part pursuant 
    to SECTION 4.10(b)) are either:

             (A) applied within the Application Period to pay Senior Funded Debt
       of the Company or any Restricted Subsidiary (other than Senior 
       Funded Debt of a Restricted Subsidiary to the Company or another 
       Restricted Subsidiary) selected by the Company, which in the case 
       of the Notes shall be applied if and to the extent a prepayment 
       pursuant to SECTION 5.1 is required to be made within such 
       Application Period then in accordance with SECTION 5.1 and 
       otherwise pursuant to SECTION 5.2; PROVIDED, HOWEVER, in the event 
       that a Lien encumbering the Property that is the subject of the 
       sale was given to secure Indebtedness incurred in connection with 
       the acquisition thereof, the Net Proceeds of such sale may be 
       applied first to the payment of such Indebtedness and any remaining 
       Net Proceeds shall be applied as set forth above, or

             (B) deposited and held in a separate trust account with a bank or 
       trust company satisfactory to the Holders holding at least a 
       majority in aggregate principal amount of the outstanding Notes 
       (which account may be invested in Investments of the type described 
       in SECTION 4.8(b), (c), or (d)) and such Net Proceeds shall be 
       either (x) applied within such Application Period to the 
       acquisition of productive assets useful in the Company's business, 
       or (y) committed, pursuant to a binding written contract entered 
       into by the Company during such Application Period, to be applied 
       to the acquisition of productive assets useful in the Company's 
       business (in either case, having a fair market

                                      -16-
<PAGE>

       value, determined in good faith by the Board of Control, but excluding 
       in the case of any timberlands any value based on a higher or better use 
       thereof) not less than the amount of such Net Proceeds so applied, 
       PROVIDED that the acquisition contemplated by such binding contract 
       shall be consummated substantially in accordance with the terms thereof 
       within 90 days after the end of such Application Period, and PROVIDED, 
       FURTHER, that the Net Proceeds of the sale of any Property shall be 
       considered to have been applied to an acquisition of Property although 
       the acquisition occurred prior to the sale of Property giving rise to 
       such Net Proceeds so long as such acquisition and sale were a series of 
       related transactions occurring within a 180-day period; and

    (iv) within ten Business Days after any sale pursuant to this clause 
    (2), the Company shall have delivered to the Holders a certificate of 
    the Board of Control certifying that such sale was for fair market value 
    received by the Company and that after giving effect to such sale no  
    Default or Event of Default has occurred and is continuing, and within 
    ten Business Days after the earlier to occur of (a) the application 
    pursuant to this clause (2) of the Net Proceeds of any sale or (b) the 
    last day of any Application Period with respect to any sale, the Company 
    shall have delivered to the Holders a certificate of the Board of 
    Control certifying as to the application of the Net Proceeds of such 
    sale and establishing compliance with the requirements of this clause (2);

       (3) the Company may sell timberlands in a like-kind exchange for 
    a like interest in other timberlands having a fair market value 
    (determined in good faith by the Board of Control, but excluding any 
    value based on a higher and better use thereof) of at least the fair 
    market value of the timberlands so sold, PROVIDED that 30 days prior to 
    any like-kind exchange, the Company shall have delivered to the Holders 
    a description of such exchange in sufficient detail to establish 
    compliance with the foregoing requirements; and

       (4) the Company may sell not more than 25,000 acres in the 
    aggregate of timberlands owned by the Company designated in good faith 
    by a Responsible Officer for a higher and better use, PROVIDED that ten 
    Business Days after any such sale, the Company shall have delivered to 
    the Holders a certificate of a Responsible Officer notifying the Holders 
    of such sale and certifying as to the number of acres sold pursuant to 
    this clause (4) and the amount of gross proceeds from such sale and 
    establishing compliance herewith.

    (b) As used in this SECTION 4.10, a sale, lease or other 
disposition of assets (other than timber harvested and sold and 
inventory sold, in each case, in the ordinary course of business) shall 
be deemed to be a "SUBSTANTIAL PART" of the assets of the Company and 
its Restricted Subsidiaries if the book value of such assets, when added 
to the book value of all other assets sold, leased or otherwise disposed 
of by the Company and its Restricted Subsidiaries (other than pursuant 
to clauses (1) through (4) above) (x) during the 12-month period ending 
with the date of such sale, lease or other disposition, exceeds 
$10,000,000 or (y) since December 22, 1994, exceeds $51,500,000, 
PROVIDED that each such amount shall be

                                      -17-
<PAGE>

adjusted annually from the Closing Date for the percentage increase or
decrease from the prior calendar year  in the Consumer Price Index.


    SECTION 4.11.  SALE OF EQUITY INTERESTS IN RESTRICTED SUBSIDIARIES.  (a)
The Company will not permit any Restricted Subsidiary to issue or sell any
Equity Interest (including as "Equity Interest" for the purposes of this SECTION
4.11, any warrants, rights or options to purchase or otherwise acquire an Equity
Interest or other Securities exchangeable for or convertible into an Equity
Interest) of such Restricted Subsidiary to any Person other than the Company or
a Wholly-owned Restricted Subsidiary, except for the purpose of qualifying
directors, or except in satisfaction of the validly pre-existing preemptive
rights of minority shareholders in connection with the simultaneous issuance of
stock to the Company and/or a Restricted Subsidiary whereby the Company and/or
such Restricted Subsidiary maintain their same proportionate interest in such
Restricted Subsidiary.


    (b) The Company will not sell, transfer or otherwise dispose of 
any Equity Interest in any Restricted Subsidiary (except to qualify 
directors) or any Indebtedness of any Restricted Subsidiary, and will 
not permit any Restricted Subsidiary to sell, transfer or otherwise 
dispose of (except to the Company or a Wholly-owned Restricted 
Subsidiary) any Equity Interest in or any Indebtedness of any other 
Restricted Subsidiary, unless:

       (1) simultaneously with such sale, transfer, or disposition, all 
    the Equity Interests and all Indebtedness of such Restricted Subsidiary 
    at the time owned by the Company and by every other Restricted 
    Subsidiary shall be sold, transferred or disposed of as an entirety;

       (2) the Board of Control shall have determined, as evidenced by 
    a resolution thereof, that the proposed sale, transfer or disposition of 
    said Equity Interest and Indebtedness is in the best interests of the 
    Company;

       (3) said Equity Interest and Indebtedness are sold, transferred 
    or otherwise disposed of to a Person, for a cash consideration and on 
    terms reasonably deemed by the Board of Control to be adequate and 
    satisfactory;

       (4) the Restricted Subsidiary being disposed of shall not have 
    any continuing Investment in the Company or any other Restricted 
    Subsidiary not being simultaneously disposed of; and
 

       (5) such sale or other disposition is not prohibited by SECTION 4.10.


    SECTION 4.12. Limitation on Harvesting.  The Company will not, and will
not permit any Restricted Subsidiary to, harvest timber on its or such
Restricted Subsidiary's timberlands in excess in the aggregate of the following
limitations:


    150% of the Planned Volume during any fiscal year of the Company,


                                      -18-
<PAGE>

    140% of the Planned Volume during any period of two consecutive fiscal 
    years of the Company,

    130% of the Planned Volume during any period of three consecutive fiscal 
    years of the Company, and

    120% of the Planned Volume during any period of four consecutive fiscal 
    years of the Company;

PROVIDED, HOWEVER, that the Company and its Restricted Subsidiaries may harvest
timber from their timberlands exceeding the limitations set forth above (the
"EXCESS HARVEST") if (i) after giving effect to such Excess Harvest, no Default
or Event of Default shall have occurred and be continuing, (ii) the Net Proceeds
of the sale of such Excess Harvest (based upon the average price received by the
Company and its Restricted Subsidiaries for timber sold during such period) are
either:


       (A) applied within the Application Period to pay Senior Funded 
    Debt of the Company or any Restricted Subsidiary (other than Senior 
    Funded Debt of a Restricted Subsidiary to the Company or another 
    Restricted Subsidiary) selected by the Company, which in the case of the 
    Notes shall be applied if and to the extent a prepayment pursuant to 
    SECTION 5.1 is required to be made within such Application Period then 
    in accordance with SECTION 5.1 and otherwise pursuant to SECTION 5.2, or

       (B) deposited and held in a separate trust account with the bank 
    or trust company satisfactory to the Holders holding at least a majority 
    in aggregate principal amount of the outstanding Notes (which account 
    may be invested in Investments of the type described in SECTION 4.8(b), 
    (c), or (d)) and such Net Proceeds shall be either (x) applied by the 
    Company within the Application Period to the acquisition of timber or 
    timberland or (y) committed, pursuant to a binding written contract 
    entered into by the Company during such  Application Period, to be 
    applied to the acquisition of timber or timberland (in either case, 
    having a fair market value, determined in good faith by the Board of 
    Control, but excluding any value based on a higher or better use 
    thereof) not less than the amount of such Net Proceeds so applied, 
    PROVIDED that the acquisition contemplated by such binding contract 
    shall be consummated substantially in accordance with the terms thereof 
    within 90 days after the end of such Application Period, and

(iii) within ten Business Days after any Excess Harvest, the Company shall have
delivered to the Holders a certificate of the Board of Control certifying that
after giving effect to such Excess Harvest no Default or Event of Default has
occurred and is continuing, and within ten Business Days after the earlier to
occur of (a) the application of the Net Proceeds as set forth clause (ii) of
this SECTION 4.12 or (b) the last day of any Application Period with respect to
any Excess Harvest, the Company shall have delivered to the Holders a
certificate of the Board of Control certifying as to the application of the Net
Proceeds of such Excess Harvest and establishing compliance with the
requirements of clause (ii) of this SECTION 4.12.


                                      -19-
<PAGE>

    SECTION 4.13. PAYMENT OF DIVIDENDS BY RESTRICTED SUBSIDIARIES.  The
Company will not and will not permit any Restricted Subsidiary to enter into any
agreement which restricts the ability of any Restricted Subsidiary to declare
any dividend or to make any distribution on any Equity Interest of such
Restricted Subsidiary, PROVIDED that the  limited partnership agreement of any
Restricted Subsidiary which is a limited partnership may limit the amount of any
distribution by such Restricted Subsidiary to the amount of available cash for
such Restricted Subsidiary (calculated on the same basis as Available Cash
hereunder) for the period in respect of which such distribution is being made.

    SECTION 4.14. GUARANTIES.  The Company will not and will not permit any
Restricted Subsidiary to become or be liable in respect of any Guaranty except
(i) Guaranties by the Company which are limited in amount to a stated maximum
dollar exposure, (ii) Guaranties of obligations incurred by any Restricted
Subsidiary in compliance with the provisions of this Agreement and (iii) bonds
posted by the Company or a Restricted Subsidiary in the ordinary course of
business in  connection with timber harvest contracts, permits for road
construction or work in respect of environmental remediation.

    SECTION 4.15. TRANSACTIONS WITH AFFILIATES.  The Company will not, and
will not permit any Restricted Subsidiary to, enter into or be a party to any
transaction or arrangement with any Affiliate (including without limitation, the
purchase from, sale to or exchange of Property with, or the rendering of any
service by or for, any Affiliate), except in the ordinary course of, and
pursuant to the reasonable requirements of, the Company's or such Restricted
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Company or such Restricted Subsidiary than would be obtained in a comparable
arm's-length transaction with a Person other than an Affiliate; PROVIDED,
HOWEVER, the Company shall be entitled to reimburse the Managing General Partner
for Specified Expenses.  The Managing General Partner shall determine the
Specified Expenses that are allocable to the Company in any reasonable manner
determined by the Managing General Partner.

    SECTION 4.16. MULTIEMPLOYER PLAN LIABILITY AND TERMINATION OF PENSION
PLANS.  The Company will not and will not permit any ERISA Affiliate to withdraw
from any Multiemployer Plan if such withdrawal would result in withdrawal
liability (as described in Part 1 of Subtitle E of Title IV of ERISA) that could
reasonably be expected to have a material adverse effect on the business,
profits or financial condition of the Company and its Restricted Subsidiaries,
taken as a whole.  The Company will not and will not permit any ERISA Affiliate
to permit any employee benefit plan maintained by it to be terminated in a
manner which could result in the imposition of a Lien on any Property of the
Company or any Subsidiary pursuant to Section 4068 of ERISA.

    SECTION 4.17. REPORTS AND RIGHTS OF INSPECTION.  The Company will keep,
and will cause each Subsidiary to keep, proper books of record and account in
which full and correct entries will be made of all dealings or transactions of
or in relation to the business and affairs of the Company or such Subsidiary, in
accordance with GAAP consistently applied (except for changes disclosed in the
financial statements furnished to the Holders pursuant to this SECTION 4.17 and
concurred in by the independent public accountants referred to in SECTION
4.17(b) hereof), and will furnish to each Holder of any Note (in duplicate if so
specified below or 


                                      -20-
<PAGE>

otherwise requested), and in the case of the financial statements delivered 
pursuant to SECTION 4.17(b), to the Securities Valuation Office, National 
Association of Insurance Commissioners, 195 Broadway, Suite 1903, New York, 
New York 10007:

       (a) QUARTERLY STATEMENTS.  As soon as available and in any event 
    within 60 days after the end of each quarterly fiscal period 
    (except the last) of each fiscal year, duplicate copies of:

             (1) consolidated balance sheets of the Company and its Restricted
       Subsidiaries as of the close of such quarter setting forth in 
       comparative form the amount as of the close of the corresponding 
       period of the preceding fiscal year and the amount as of the close 
       of said preceding fiscal year, and

             (2) consolidated statements of income and cash flows of the Company
       and its Restricted Subsidiaries for such quarterly period and the 
       year to date period setting forth in comparative form the amount 
       for the corresponding periods of the preceding fiscal year,

    all in reasonable detail and certified as complete and correct, by 
    an authorized financial officer of the Company;

       (b) ANNUAL STATEMENTS.  As soon as available and in any event 
    within 120 days after the close of each fiscal year of the Company, 
    duplicate copies of:

             (1) consolidated balance sheets of the Company and its 
       Restricted Subsidiaries as of the close of such fiscal year, and

             (2) consolidated statements of income and cash flows of the 
       Company and its Restricted Subsidiaries for such fiscal year,

    in each case setting forth in comparative form the consolidated 
    figures for the preceding fiscal year, all in reasonable detail and 
    accompanied by an opinion thereon of a firm of independent public 
    accountants of recognized national standing selected by the Company 
    to the effect that the consolidated financial statements have been 
    prepared in accordance with GAAP consistently applied (except for 
    changes in application in which such accountants concur) and 
    present fairly the financial condition and results of operations of 
    the Company and its Restricted Subsidiaries and that the 
    examination of  such accountants in connection with such financial 
    statements has been made in accordance with generally accepted 
    auditing standards and accordingly, includes such tests of the 
    accounting records and such other auditing procedures as were 
    considered necessary in connection therewith;

       (c) SEC AND OTHER REPORTS.  Promptly upon their becoming available, 
    one copy of each financial statement, report, notice or proxy 
    statement sent by the Company to all holders of Equity Interests in 
    the Company generally and of each regular or periodic report, and 
    any registration statement or prospectus filed by the 

                                      -21-
<PAGE>

    Company, any Subsidiary or the Partnership with any securities 
    exchange or the Securities and Exchange Commission or any successor 
    agency, and copies of any orders in any proceedings to which the 
    Company or any of its Subsidiaries is a party, issued by any 
    governmental agency, Federal or state, having jurisdiction over the 
    Company or any of its Subsidiaries, other than reports or licenses 
    granted by any such governmental agency with respect to the timber;

       (d) REQUESTED INFORMATION.  With reasonable promptness, 
    such other data and information as any Holder may reasonably 
    request including, without limitation, any information required to 
    be provided to such Holder or a prospective purchaser of the Notes 
    by Rule 144A(d)(4) under the Securities Act;

       (e) OFFICER'S CERTIFICATES.  Within the periods provided in 
    paragraphs (a) and (b) above, a certificate signed by the chief 
    financial officer of the Company stating that such officer has 
    reviewed the provisions of this Agreement and setting forth:  (i) 
    the information and computations (in sufficient detail) required in 
    order to establish whether the Company was in compliance with the 
    requirements of SECTION 4.6 through SECTION 4.12, inclusive, and 
    SECTION 4.20 at the end of the period covered by the financial 
    statements then being furnished (including with respect to SECTION 
    4.10(a)(2) and SECTION 4.12, a certification as to the application 
    of any Net Proceeds during such period and the amount of Net 
    Proceeds remaining to be applied in accordance with each such 
    Section as of such date) and (ii) whether there existed as of the 
    date of such financial statements and whether, to the best of his  
    knowledge, there exists on the date of the certificate or existed 
    at any time during the period covered by such financial statements 
    any Default or Event of Default and, if any such condition or event 
    exists on the date of the certificate, specifying the nature and 
    period of existence thereof and the action the Company is taking 
    and proposes to take with respect thereto;

        (f) ACCOUNTANT'S CERTIFICATES.  Within the period provided 
    in paragraph (b) above, a letter, addressed to the Holders, of the 
    accountants who render an opinion with respect to such financial 
    statements, stating that they have reviewed this Agreement and 
    stating further that nothing came to their attention that caused 
    them to believe that the Company was not in compliance with any of 
    the provisions of SECTION 4.6 through SECTION 4.12, both inclusive, 
    or SECTION 4.20 insofar as said provisions relate to accounting 
    matters, and if any non-compliance has come to their attention 
    specifying the nature and period of existence thereof, PROVIDED 
    that such accountants may state that their audit was not directed 
    primarily toward obtaining knowledge of any noncompliance by the 
    Company with any of the terms or provisions of this Agreement;

       (g) ERISA REPORTING.  Prompt written notice, and in any 
    event within five Business Days upon learning of its occurrence, of 
    the following and the action the Company has taken, is taking or 
    proposes to take with respect thereto and, when known, any action 
    taken or threatened by the Internal Revenue Service, Department of 
    Labor or the Pension Benefit Guaranty Corporation ("PBGC") with 
    respect thereto:  (i) a Reportable Event with respect to any 
    employee benefit plan; (ii) the institution

                                      -22-
<PAGE>

    of any steps by the Company, any ERISA Affiliate, the PBGC or any other 
    Person to terminate any employee benefit plan pursuant to Sections 
    4041(c) or 4042 of ERISA; (iii) the institution of any steps by the 
    Company or any ERISA Affiliate to withdraw from any Multiemployer Plan, 
    within the meaning of ERISA which would result in a material adverse 
    effect on the business, profits or financial condition of the Company 
    and its Restricted Subsidiaries taken as a whole; (iv) a "prohibited 
    transaction" within the meaning of Section 406 of ERISA in connection 
    with any employee benefit plan which would result in a material adverse 
    effect on  the business, profits or financial condition of the Company 
    and its Restricted Subsidiaries, taken as a whole; or (v) any increase in 
    the liability of the Company or any Subsidiary with respect to any 
    post-retirement welfare benefits which would result in a material 
    adverse effect on the business, profits or financial condition of the 
    Company and its Restricted Subsidiaries, taken as a whole; and

       (h) NOTICE OF LITIGATION.  Prompt written notice, and in any 
    event within five Business Days after the Company first obtains 
    knowledge thereof, with respect to the institution of any suit or 
    proceeding against the Company or any Restricted Subsidiary which if 
    determined adversely could, individually or in the aggregate with other 
    suits and proceedings, reasonably be expected to have a material adverse 
    effect on the business, profits, Properties or financial condition of 
    the Company or any Restricted Subsidiary.

Without limiting the foregoing, the Company will permit each Holder (or such
Persons as such Holder may designate) to visit and inspect any of the Properties
of the Managing General Partner, the Company or any Subsidiary, to examine all
their books of account, records, reports and other papers, to make copies and
extracts therefrom, and to discuss their respective affairs, finances and
accounts with their respective officers, employees, and independent public
accountants (and by this provision the Company authorizes said accountants to
discuss with such Holder or Person so designated the finances and affairs of the
Company and its Subsidiaries with or without an officer or employee of the
Company or any of its Subsidiaries being present) all at such reasonable times
and as often as may be reasonably requested; PROVIDED that unless a Default or
Event of Default shall have occurred and shall be continuing, such Holders shall
give the Company at least 10 days' prior written notice of any such visit.  The
Company shall not be required to pay or reimburse any Holder for expenses which
it may incur in connection with any such visitation or inspection except in the
case of any such visitation or inspection which shall occur while a Default or
Event of Default shall have occurred and shall be continuing.


    SECTION 4.18. CHANGES IN STATUS OF SUBSIDIARIES.  So long as no Default or
Event of Default shall have occurred and be continuing, the Board of Control 
may at any time and from time to time, upon not less than 30 days' prior written
notice given to each Holder, designate a previously Unrestricted Subsidiary as a
Restricted Subsidiary, PROVIDED that immediately after such designation and
after giving effect thereto (i) no Default or Event of Default shall have
occurred and be continuing and (ii) the Company could incur at least $1.00 of
additional Funded Debt under the provisions of SECTION 4.6(a)(4).




                                      -23-
<PAGE>

    Any notice of designation pursuant to this SECTION 4.18 shall be 
accompanied by certificate signed by the chief financial officer of the 
Company stating that the provisions of this SECTION 4.18 have been complied 
with in connection with such designation and setting forth the name of each 
other Subsidiary (if any) which has or will become a Restricted Subsidiary, 
as the case may be, as a result of such designation.

    SECTION 4.19. REPURCHASE OF NOTES.  Neither the Company nor any Restricted
Subsidiary, directly or indirectly or through any Affiliate, may repurchase or
make any offer to repurchase any Notes unless an offer has been made to
repurchase Notes, PRO RATA, from all Holders at the same time and upon the same
terms (without regard to the different maturities but taking into account the
interest rates applicable to each series of Notes). In case the Company
repurchases or otherwise acquires any Notes, such Notes shall immediately
thereafter be cancelled and no Notes shall be issued in substitution therefor. 
Without limiting the foregoing, upon the repurchase or other acquisition of any
Notes by the Company, any Restricted Subsidiary or any Affiliate, such Notes
shall no longer be outstanding for purposes of any section of this Agreement
relating to the taking by the Holders of any actions with respect hereto,
including, without limitation, SECTIONS 6.3, 6.4 and 7.1.

    SECTION 4.20. LIENS.  The Company will not, and will not permit any
Restricted Subsidiary to, create or incur, or suffer to be incurred or to exist,
any Lien on its or their Property, whether now owned or hereafter acquired, or
upon any income or profits therefrom, or transfer any Property for the purpose
of subjecting the same to the payment of obligations in priority to the payment
of its or their general creditors, or acquire or agree to acquire, or permit any
Restricted Subsidiary to acquire, any Property upon conditional sales agreements
or other title retention devices, except:


       (a) Liens for property taxes and assessments or governmental 
    charges or levies and Liens securing claims or demands of carriers, 
    loggers, mechanics and materialmen incurred in the ordinary course of 
    business, PROVIDED that payment thereof is not at the time required by 
    SECTION 4.3(a);

       (b) Liens of or resulting from any judgment or award, the time 
    for the appeal or petition for rehearing of which shall not have 
    expired, or in respect of which the Company or a Restricted Subsidiary 
    shall at any time in good faith be prosecuting an appeal or proceeding 
    for a review, and in respect of which a stay of execution pending such 
    appeal or proceeding for review shall have been secured;

       (c) Liens incidental to the conduct of business or the ownership 
    of Properties (including Liens in connection with worker's compensation, 
    unemployment insurance and other like laws, warehousemen's and 
    attorneys' liens and statutory landlords' liens) and Liens to secure the 
    performance of bids, tenders or trade contracts, or to secure statutory 
    obligations, surety or appeal bonds or other Liens of like general 
    nature incurred in the ordinary course of business and not in connection 
    with the borrowing of money; PROVIDED in each case, the obligation 
    secured is not overdue or, if overdue, is being contested in good faith 
    by appropriate actions or proceedings

                                      -24-
<PAGE>

    which will prevent the forfeiture or sale of any Property of the Company 
    or such Restricted Subsidiary or any material interference with the use 
    thereof by the Company or such Restricted Subsidiary;

        (d) minor survey exceptions or minor encumbrances, easements or 
    reservations, rights of others for rights-of-way, utilities and other 
    similar purposes, zoning or other restrictions as to the use of real 
    properties, and leases and subleases thereof, in each case, which (i) 
    are necessary or appropriate for the conduct of the activities of the 
    Company and its Restricted Subsidiaries or customarily exist on 
    Properties of business entities engaged in similar activities and 
    similarly situated and (ii) do not in any event materially impair the 
    use of such real property in the operation of the business of the 
    Company and its Restricted Subsidiaries;


       (e) Liens securing Indebtedness of a Restricted Subsidiary to 
    the Company or to a Wholly-owned Restricted Subsidiary;

       (f) Liens on inventory and receivables securing Indebtedness 
    incurred pursuant to the Working Capital Facility, PROVIDED that the 
    aggregate outstanding principal amount so secured shall not exceed 
    $40,000,000 at any time;

       (g) Liens incurred in connection with the acquisition of any 
    fixed asset useful and intended to be used in carrying on the business 
    of the Company or a Restricted Subsidiary, including Liens existing on 
    such fixed asset at the time of acquisition by the Company or a 
    Restricted Subsidiary of any business entity then owning such fixed 
    asset, whether or not such existing Liens were given to secure the 
    payment of the purchase price of the fixed asset to which they attach so 
    long as they were not incurred, extended or renewed in contemplation of 
    such acquisition, PROVIDED in any case that (i) the Lien shall attach 
    solely to the fixed asset acquired or purchased, (ii) at the time of 
    acquisition of such fixed asset, the amount remaining unpaid on all 
    Indebtedness secured by Liens on such fixed asset whether or not assumed 
    by the Company or a Restricted Subsidiary shall not exceed an amount 
    equal to 85% (or 100% in the case of Capitalized Leases) of the total 
    purchase price of such fixed asset, and the aggregate amount remaining 
    unpaid on all Indebtedness secured by Liens on fixed assets acquired or 
    purchased subsequent to the Closing Date (including such fixed asset) 
    shall not exceed the following amounts:

            On or before November 30, 1999                   $25,000,000

            December 1, 1999 to November 30, 2004            $50,000,000

            December 1, 2004 and thereafter                 $100,000,000,


    (iii) all such Indebtedness shall have been incurred within the 
    applicable limitations provided in SECTION 4.6, and (iv) after 
    giving effect to such acquisition no Default or Event of Default 
    shall have occurred and be continuing; and

                                      -25-


<PAGE>

       (h)  Liens existing on the Closing Date and described in Part II of 
    Annex C to Exhibit B-1.
 
    In the event that any Property of the Company or its Restricted 
Subsidiaries is subjected to a Lien in violation of this SECTION 4.20 (an 
"EXCESS LIEN"), (1) the Company or such Restricted Subsidiary shall make or 
cause to be made provision whereby the obligations of the Company under the 
Notes and this Agreement will be secured equally and ratably with all other 
obligations secured by such Excess Lien pursuant to security arrangements 
reasonably satisfactory in form, scope and substance to the Holders holding 
not less than 66-2/3% in aggregate principal amount of the outstanding Notes 
and (2) the Company or such Restricted Subsidiary shall deliver an opinion of 
counsel satisfactory to the Holders holding not less than 66-2/3% in 
aggregate principal amount of the outstanding Notes regarding the validity of 
such security interest and to the effect that the Notes are secured equally 
and ratably with such other obligations; PROVIDED, HOWEVER, that satisfaction 
of the conditions set forth in clauses (1) and (2) above does not remedy the 
Event of Default resulting from such Excess Lien.  In the case of any Excess 
Lien, said obligations of the Company under the Notes and this Agreement 
shall have the benefit, to the full extent that the Holders may be entitled 
thereto under applicable law, of an equitable lien on such Property subject 
to the Excess Lien.

    SECTION 4.21.  RATINGS.  Upon receipt of a request from any Holder, the 
Company will, and will cause its Subsidiaries to, provide such information as 
shall be reasonably requested for the purpose of maintaining any rating 
applicable to the Notes, whether by a governmental authority or private 
association and, if requested, the Company shall make a presentation relevant 
to the maintenance of any such rating to such authority or association, 
PROVIDED that the Company shall not be obligated to maintain any specific 
rating with respect to the Notes with any such authority or association.

SECTION 5.  PREPAYMENT OF NOTES.


    SECTION 5.1.  REQUIRED PREPAYMENTS.  The Company agrees that it will 
prepay and apply and there shall become due and payable on the principal 
indebtedness evidenced by the Series A Notes on each of the following dates 
an amount equal to the lesser of (i) the amount set forth opposite such date 
or (ii) the principal amount of the Series A Notes then outstanding:

            August 1, 2003                      $  770,000
            August 1, 2004                      $1,320,000
            August 1, 2005                      $2,200,000

The entire remaining principal amount of the Series A Notes shall become due 
and payable on August 1, 2006.

    The Company agrees that it will prepay and apply and there shall become 
due and payable on the principal indebtedness evidenced by the Series B Notes 
on each of the 


                                     -26-

<PAGE>

following dates an amount equal to the lesser of (i) the amount set forth 
opposite such date or (ii) the principal amount of the Series B Notes then 
outstanding:

            August 1, 2003                      $ 1,750,000
            August 1, 2004                      $ 3,000,000
            August 1, 2005                      $ 5,000,000
            August 1, 2006                      $ 5,000,000
            August 1, 2007                      $ 5,000,000
            August 1, 2008                      $ 5,000,000
            August 1, 2009                      $ 5,000,000
            August 1, 2010                      $10,125,000

The entire remaining principal amount of the Series B Notes shall become due 
and payable on August 1, 2011.

    The Company agrees that it will prepay and apply and there shall become 
due and payable on the principal indebtedness evidenced by the Series C Notes 
on each of the following dates an amount equal to the lesser of (i) the 
amount set forth opposite such date or (ii) the principal amount of the 
Series C Notes then outstanding:

            August 1, 2007                      $2,767,375.89
            August 1, 2008                      $2,767,375.89
            August 1, 2009                      $2,767,375.89
            August 1, 2010                      $5,603,936.17

The entire remaining principal amount of the Series C Notes shall become due and
payable on August 1, 2011.

    The Company agrees that it will prepay and apply and there shall become 
due and payable on the principal indebtedness evidenced by the Series D Notes 
on each of the following dates an amount equal to the lesser of (i) the 
amount set forth opposite such date or (ii) the principal amount of the 
Series D Notes then outstanding:

            August 1, 2009                      $3,000,000
            August 1, 2010                      $3,000,000
            August 1, 2011                      $3,000,000
            August 1, 2012                      $3,000,000

The entire remaining principal amount of the Series D Notes shall become due 
and payable on August 1, 2013.

    No premium shall be payable in connection with a required prepayment made 
pursuant to this SECTION 5.1.  For purposes of this SECTION 5.1, any 
prepayment of less than all of the outstanding Notes of a series pursuant to 
SECTION 5.2 shall reduce the principal amount of the Notes of such series 
required to be prepaid on August 1 in each subsequent year to and including 
the stated maturity of the Notes of such series in the same proportion as the 
aggregate 


                                     -27-

<PAGE>

principal amount of the Notes of such series outstanding immediately prior to 
such prepayment has been reduced by such prepayment.

    SECTION 5.2.  OPTIONAL PREPAYMENT WITH PREMIUM.  In addition to the 
payments required by SECTION 5.1, upon compliance with SECTION 5.3 the 
Company shall have the privilege, at any time and from time to time, of 
prepaying the outstanding Notes of all series, either in whole or in part 
(but if in part then in an aggregate minimum principal amount of $1,000,000 
or such lesser amount as permitted in connection with a sale of assets under 
SECTION 4.10 or an Excess Harvest under SECTION 4.12) by payment of the 
outstanding principal amount of the Notes or portion thereof to be prepaid, 
and accrued interest thereon to the date of such prepayment, together with a 
premium equal to the Make-Whole Amount, determined as of three Business Days 
prior to the date of such prepayment pursuant to this SECTION 5.2.

    SECTION 5.3.  NOTICE OF OPTIONAL PREPAYMENTS.  The Company will give 
notice of any prepayment of the Notes pursuant to SECTION 5.2 to each Holder 
thereof not less than 10 days nor more than 30 days before the date fixed for 
such optional prepayment specifying (i) such date (which shall be a Business 
Day), (ii) the outstanding principal amount of the Holder's Notes to be 
prepaid on such date, (iii) that a premium may be payable, (iv) the date when 
such premium will be calculated, (v) the estimated premium, and (vi) the 
accrued interest applicable to the prepayment.  Such notice of prepayment 
shall also certify all facts, if any, which are conditions precedent to any 
such prepayment.  Notice of prepayment having been so given, the aggregate 
principal amount of the Notes to be prepaid specified in such notice, 
together with accrued interest thereon and the premium, if any, payable with 
respect thereto shall become due and payable on the prepayment date specified 
in said notice. Not  later than two Business Days prior to the prepayment 
date specified in such notice, the Company shall provide written notice by 
facsimile communication followed by delivery on the next succeeding Business 
Day by overnight air courier to each Holder of Notes to be prepaid of the 
amount of premium, if any, payable in connection with such prepayment and, 
whether or not any premium is payable, a reasonably detailed computation of 
the Make-Whole Amount.  In the event the Company shall incorrectly compute 
the Make-Whole Amount payable in connection with any Note to be prepaid 
pursuant to SECTION 5.2, or declared to be immediately due and payable 
pursuant to SECTION 6.3, the Holder shall not be bound by such incorrect 
computation, but instead shall be entitled to receive an amount equal to the 
correct Make-Whole Amount, if any, computed in compliance with the terms of 
this Agreement.

    SECTION 5.4.  APPLICATION OF PREPAYMENTS.  All partial prepayments of the 
Notes of a series pursuant to SECTION 5.1 shall be applied on all outstanding 
Notes of such series ratably in accordance with the unpaid principal amounts 
thereof.  All partial prepayments of the Notes pursuant to SECTION 5.2 shall 
be applied on all outstanding Notes ratably in accordance with the unpaid 
principal amounts thereof.

    SECTION 5.5.  DIRECT PAYMENT.  Notwithstanding anything to the contrary 
contained in this Agreement or the Notes, in the case of any Note owned by a 
Purchaser or any Purchaser's nominee or owned by any subsequent Holder which 
has given written notice to the Company requesting that the provisions of 
this SECTION 5.5 shall apply, the Company will punctually pay when due the 
principal thereof, interest thereon and premium, if any, due 


                                     -28-

<PAGE>

with respect to said principal, without any presentment thereof, directly to 
such Purchaser, to its nominee or to such subsequent Holder at its address or 
such nominee's address set forth herein or such other address as such 
Purchaser, its nominee or such subsequent Holder may from time to time 
designate in writing to the Company or, if a bank account with a United 
States bank is so designated for such Holder, the Company will make such 
payments in immediately available funds to such bank account no later than 
10:00 A.M. Portland, Oregon time on the date due, marked for attention as 
indicated, or in such other manner or to such other account in any United 
States bank as such Purchaser, its nominee or any such subsequent Holder may 
from time to time direct in writing.  Such payments will be made without 
notations being made on such Note, except that (a)  any such Note so paid or 
prepaid in full (including the payment of all interest accrued to the date of 
such payment or prepayment and premium, if any) shall be surrendered to the 
Company within a reasonable time after such payment or prepayment in full, 
and (b) before any sale or other transfer by any Holder of any Note in 
respect of which any principal payments have been made in the manner provided 
in this Agreement, such Holder will make appropriate notation of such 
payments on such Note.

SECTION 6.  EVENTS OF DEFAULT AND REMEDIES THEREFOR.

    SECTION 6.1.  EVENTS OF DEFAULT.  Any one or more of the following shall 
constitute an "Event of Default" as such term is used herein:

       (a)   Default shall occur in the payment of interest on any Note 
    when the same shall have become due and such default shall continue for 
    more than five Business Days or

       (b)   Default shall occur in the making of any required prepayment 
    on any of the Notes as provided in SECTION 5.1 or

       (c)   Default shall occur in the making of any other payment of 
    the principal of any Note or premium, if any, thereon at the expressed 
    or any accelerated maturity date or at any date fixed for prepayment or

       (d)   Default continuing beyond the period of grace, if any, 
    allowed with respect thereto shall be made in the payment when due 
    (whether by lapse of time, by declaration, by call for redemption or 
    otherwise) of the principal of or interest on any Funded Debt (other 
    than the Notes) or Current Debt of the Company or any Restricted 
    Subsidiary, and, individually or in the aggregate, the principal amount 
    of such Funded Debt and Current Debt shall be in excess of $5,000,000 or

       (e)   Default or the happening of any event shall occur under any 
    indenture, agreement or other instrument under which any Funded Debt or 
    Current Debt of the Company or any Restricted Subsidiary may be or has 
    been issued and, individually or in the aggregate, the aggregate 
    principal amount of such Funded Debt and Current Debt which has been 
    issued or may be issued thereunder shall be in excess of 


                                     -29-

<PAGE>

    $5,000,000, and such default or event shall continue for a period of 
    time sufficient to permit the acceleration of the maturity of such 
    Funded Debt or Current Debt or
 
       (f)   Default shall occur in the observance or performance of any 
    covenant or agreement contained in SECTION 4.6 through SECTION 4.12, 
    both inclusive or

       (g)   Default shall occur in the observance or performance of the 
    covenant contained in SECTION 4.20 which is not remedied within ten days 
    after the earlier of (i) the day on which the Company first obtains 
    knowledge of such default, or (ii) the day on which written notice 
    thereof is given to the Company by any Holder or

       (h)   Default shall occur in the observance or performance of any 
    other provision of this Agreement which is not remedied within 30 days 
    after the earlier of (i) the day on which the Company first obtains 
    knowledge of such default, or (ii) the day on which written notice 
    thereof is given to the Company by any Holder or

       (i)   Any representation or warranty made by the Company or the 
    Managing General Partner herein, or by the Company or the Managing 
    General Partner in any statement or certificate furnished by the Company 
    or the Managing General Partner in connection with the consummation of 
    the issuance and delivery of the Notes or furnished by the Company or 
    the Managing General Partner pursuant hereto, is untrue in any material 
    respect as of the date of the issuance or making thereof or

       (j)   Final judgment or judgments for the payment of money 
    aggregating in excess of $5,000,000 is or are outstanding against the 
    Company or any Restricted Subsidiary or against any Property of either 
    and such judgment or judgments have remained unpaid, unvacated, unbonded 
    or unstayed by appeal or otherwise for a period of 60 consecutive days 
    from the date of its entry or

       (k)   The Company, or any Person on behalf of the Company, shall 
    contest or deny the validity or enforceability of this Agreement or the 
    Notes or its obligations hereunder and thereunder or

       (l)   An order or decree requiring a split-up or divestiture of 
    the Company is outstanding against the Company and such order or decree 
    remains unstayed and in effect for more than 30 consecutive days or

       (m)   A custodian, liquidator, trustee, receiver or similar 
    official is appointed for the  Company or any Restricted Subsidiary or 
    for the major part of the Property of either and is not discharged 
    within 60 days after such appointment or

       (n)   The Company, any Restricted Subsidiary or the Managing 
    General Partner becomes insolvent or bankrupt, is generally not paying 
    its debts as they become due or makes an assignment for the benefit of 
    creditors, or the Company or any Restricted Subsidiary or the Managing 
    General Partner applies for or consents to the appointment of a 
    custodian, liquidator, trustee, receiver or similar official for the 


                                     -30-

<PAGE>

    Company, such Restricted Subsidiary or the Managing General Partner or 
    for the major part of the Property of any of them or

       (o)   Bankruptcy, reorganization, arrangement or insolvency 
    proceedings, or other proceedings for relief under any bankruptcy or 
    similar law or laws for the relief of debtors, are instituted by or 
    against the Company, any Restricted Subsidiary or the Managing General 
    Partner and, if instituted against the Company, any Restricted 
    Subsidiary or the Managing General Partner, are consented to or are not 
    dismissed within 60 days after such institution.

    SECTION 6.2.  NOTICE TO HOLDERS.  When any Default or Event of Default 
described in the foregoing SECTION 6.1 has occurred, or if the holder of any 
Note or of any other evidence of Indebtedness of the Company or any 
Restricted Subsidiary gives any notice or takes any other action with respect 
to a claimed default, the Company agrees to give notice within three Business 
Days of such event to all Holders.

    SECTION 6.3.  ACCELERATION OF MATURITIES.  When any Event of Default 
described in paragraph (a), (b) or (c) of SECTION 6.1 has happened and is 
continuing, any Holder may, by notice to the Company, declare the entire 
principal, premium, if any, and all interest accrued on the Note or Notes 
held by such Holder to be, and such Note or Notes shall thereupon become 
forthwith due and payable, without any presentment, demand, protest or other 
notice of any kind, all of which are hereby expressly waived.  When any Event 
of Default described in paragraphs (a) through (l), inclusive, of SECTION 6.1 
has happened and is continuing, the Holders holding not less than 50% of the 
principal amount of the outstanding Notes may, by notice to the Company, 
declare the entire principal, premium, if any, and all interest accrued on 
all Notes to be, and all Notes shall thereupon become, forthwith due and 
payable, without any presentment, demand, protest or other notice of any 
kind, all of which are hereby expressly waived.  When any Event of Default 
described in paragraph (m), (n) or (o) of SECTION 6.1 has occurred, then all 
outstanding Notes shall immediately become due and payable without 
presentment, demand or notice of any kind, all of which are hereby expressly 
waived.  Upon any Notes becoming due and payable as a result of any Event of 
Default as aforesaid, the Company will forthwith pay to the Holders of such 
Notes the entire principal and interest accrued on the Notes so accelerated 
and, in the case of an Event of Default specified in paragraphs (a) through 
(l), inclusive of SECTION 6.1, to the extent not prohibited by applicable 
law, the Company will pay an amount as liquidated damages for the loss of the 
bargain evidenced hereby (and not as a penalty) equal to the Make-Whole 
Amount, determined as of the date on which such Notes shall so become due and 
payable.  No course of dealing on the part of the Holders nor any delay or 
failure on the part of any Holder to exercise any right shall operate as a 
waiver of such right or otherwise prejudice such Holder's rights, powers and 
remedies.  The Company further agrees, to the extent permitted by law, to pay 
to the Holders all costs and expenses incurred by them in the collection of 
any Notes upon any default hereunder or thereon, including reasonable 
compensation to such Holders' attorneys and financial advisors for all 
services rendered in connection therewith.

    SECTION 6.4.  RESCISSION OF ACCELERATION.  The provisions of SECTION 6.3 
are subject to the condition that if the principal of, premium, if any, and 
accrued interest on all or any 


                                     -31-

<PAGE>

outstanding Notes have been declared immediately due and payable by reason of 
the occurrence of any Event of Default described in paragraphs (a) through 
(l), inclusive, of SECTION 6.1, the Holders holding 66-2/3% in aggregate 
principal amount of the Notes then outstanding may, by written instrument 
filed with the Company, rescind and annul such declaration and the 
consequences thereof, PROVIDED that at the time such declaration is annulled 
and rescinded:

       (a)   no judgment or decree has been entered for the payment of 
    any monies due pursuant to the Notes or this Agreement

       (b)   all arrears of interest upon all the Notes and all other 
    sums payable under the Notes and under this Agreement (except any 
    principal, interest or premium on the Notes which has become due and 
    payable solely by reason of such declaration under SECTION 6.3) 
    shall have been duly paid and

       (c)   each and every other Default and Event of Default shall have 
    been made good, cured or waived pursuant to SECTION 7.1

and PROVIDED FURTHER, that no such rescission and annulment shall extend to 
or affect any subsequent Default or Event of Default or impair any right 
consequent thereto.

SECTION 7.  AMENDMENTS, WAIVERS AND CONSENTS.

    SECTION 7.1.  CONSENT REQUIRED.  Any term, covenant, agreement or 
condition of this Agreement may, with the consent of the Company, be amended 
or compliance therewith may be waived (either generally or in a particular 
instance and either retroactively or prospectively) if the Company shall have 
obtained the consent in writing of the Holders holding at least 55% in 
aggregate principal amount of outstanding Notes, PROVIDED that without the 
written consent of the Holders holding all of the Notes then outstanding, no 
such amendment or waiver shall be effective (i) which will change the time of 
payment (including any prepayment required by SECTION 5.1) of the principal 
of or the interest on any Note or change the principal amount thereof or 
change the rate of interest thereon, (ii) which will change any of the 
provisions with respect to optional prepayments, (iii) which will change the 
percentage of Holders required to consent to any such amendment or waiver of 
any of the provisions of SECTION 6 or this SECTION 7 or (iv) which will 
change any provision of SECTION 4.19 or SECTION 7.2.

    SECTION 7.2.  SOLICITATION OF HOLDERS.  So long as there are any Notes 
outstanding, the Company will not solicit, request or negotiate for or with 
respect to any proposed waiver or amendment of any of the provisions of this 
Agreement or the Notes unless each Holder (irrespective of the amount of 
Notes then owned by it) shall be informed thereof by the Company and shall be 
afforded the opportunity of considering the same and shall be supplied by the 
Company with sufficient information to enable it to make an informed decision 
with respect thereto.  The Company will not, directly or indirectly, pay or 
cause to be paid any remuneration, whether by way of supplemental or 
additional interest, fee or otherwise, to any Holder as consideration for or 
as an inducement to entering into by any Holder of any 


                                     -32-

<PAGE>

waiver or amendment of any of the terms and provisions of  this Agreement or 
the Notes unless such remuneration is concurrently paid, on the same terms, 
ratably to the Holders.

    SECTION 7.3.  EFFECT OF AMENDMENT OR WAIVER.  Any such amendment or 
waiver shall apply equally to all of the Holders and shall be binding upon 
them, upon each future Holder and upon the Company, whether or not such Note 
shall have been marked to indicate such amendment or waiver.  No such 
amendment or waiver shall extend to or affect any obligation not expressly 
amended or waived or impair any right consequent thereon.

SECTION 8.  INTERPRETATION OF AGREEMENT DEFINITIONS.

    SECTION 8.1.  DEFINITIONS.  Unless the context shall otherwise require, 
the terms hereinafter set forth when used herein shall have the following 
meanings and the following definitions shall be equally applicable to both 
the singular and plural forms of any of the terms herein defined:

    "ACQUISITION" means any transaction in which the Company or any 
Restricted Subsidiary acquires (through an asset acquisition, merger, stock 
acquisition or other form of investment) control over all or a portion of the 
Properties or business of another Person for the purpose of increasing the 
operating capacity of the Company and its Restricted Subsidiaries, taken as a 
whole, from the operating capacity of the Company and its Restricted 
Subsidiaries, taken as a whole, existing immediately prior to such 
transaction.

    "ACQUISITION CREDIT AGREEMENT" and "ACQUISITION FACILITY" are defined in 
SECTION 3.9.

    "AFFILIATE" shall mean any Person (other than a Wholly-owned Restricted 
Subsidiary) (i) which directly or indirectly through one or more 
intermediaries controls, or is controlled by, or is under common control 
with, the Company, (ii) which beneficially owns or holds 5% or more of the 
Voting Equity Interest of the Company or (iii) 5% or more of the Voting 
Equity Interest of which is beneficially owned or held by the Company or a 
Subsidiary.  The term "CONTROL" means the possession, directly or indirectly, 
of the power to direct or cause the direction of the management and policies 
of a Person, whether through the ownership of Voting Equity Interest, by 
contract or otherwise.

    "APPLICATION PERIOD" shall mean, with respect to any sale of assets 
pursuant to SECTION 4.10(a)(2), the 180-day period following the date of such 
sale and, with respect to any sale of harvested timber subject to SECTION 
4.12, the 180-day period following the last day of the fiscal year of the 
Company in which such Excess Harvest occurred.

    "AVAILABLE CASH" shall mean, with respect to any fiscal quarter of the 
Company and without duplication,

       (a)   the sum of:

             (i)   all cash receipts of the Company during such 
       quarter from all sources,


                                     -33-

<PAGE>

             (ii)  any reduction with respect to such quarter in a 
       cash reserve previously established pursuant to clause (b)(ii) 
       below (either by reversal or utilization) from the level of such 
       reserve at the end of the prior quarter, and

             (iii) any utilization with respect to such quarter of 
       the Working Capital Reserve; LESS

       (b)   the sum of:

             (i)   all cash disbursements of the Company during 
       such quarter and

             (ii)  any cash reserves established with respect to 
       such quarter, and any increase with respect to such quarter in a 
       cash reserve established pursuant to this clause (b)(ii) from the 
       level of such reserve at the end of the prior quarter, in such 
       amounts as the Managing General Partner determines in its 
       reasonable discretion to be necessary or appropriate (A) to provide 
       for the proper conduct of the business of the Company, (B) to 
       comply with the provisions of the Partnership Agreement, (C) to 
       provide funds for distributions to Partners in respect of any one 
       or more of the next four quarters or (D) because the distribution 
       of such amounts would be prohibited by applicable law or by any 
       loan agreement, security agreement, mortgage, debt instrument or 
       other agreement or obligation to which the Company is a party or by 
       which any of its assets are subject, PROVIDED that Available Cash 
       shall reflect (x) in each fiscal quarter a reserve equal to at 
       least 50% of the aggregate amount of all interest to be paid in 
       respect of the Notes, the 1994 Notes and the 1995 Notes on the next 
       interest payment date, and (y) in the third fiscal quarter 
       immediately preceding each fiscal quarter in which any scheduled 
       principal payment is due with respect to the Notes, the 1994 Notes 
       and/or the 1995 Notes (a "PRINCIPAL PAYMENT QUARTER"), a reserve 
       equal to at least 25% of the aggregate amount of all principal to 
       be paid in respect of such Notes, 1994 Notes and 1995 Notes in such 
       principal payment quarter in the second calendar quarter 
       immediately preceding a principal payment quarter, a reserve equal 
       to at least 50% of the aggregate amount of all principal to be paid 
       in respect of such Notes, 1994 Notes and 1995 Notes in such 
       principal payment quarter and in the calendar quarter immediately 
       preceding a principal payment quarter, a reserve equal to at least 
       75% of the aggregate amount of all principal to be paid in respect 
       of such Notes, 1994 Notes and 1995 Notes in such principal payment 
       quarter.

    So long as the Company is not a taxpaying entity, taxes paid by the 
Company on behalf of, or amounts withheld with respect to, all or less than 
all of the Partners shall not be considered cash disbursements of the Company 
that reduce Available Cash, but the payment or withholding thereof shall be 
deemed to be a distribution of Available Cash to such Partners.  
Alternatively, in the discretion of the Managing General Partner, so long as 
the Company is not a taxpaying entity, such taxes (if pertaining to all 
Partners) may be considered to be cash disbursements of the Company which 
reduce Available Cash, but the 


                                     -34-

<PAGE>

payment or withholding thereof shall not be deemed to be a distribution of 
Available Cash to such Partners.

    "BOARD OF CONTROL" shall mean the Board of Control of the Managing 
General Partner.

    "BUSINESS DAY" shall mean any day other than a Saturday, Sunday or a day 
on which banks in the States of New York, California or Oregon are authorized 
or permitted to be closed in the observance of a legal holiday.

    "CAPITAL ADDITIONS AND IMPROVEMENTS" means (i) additions or improvements 
to the capital assets owned by the Company or any Restricted Subsidiary or 
(ii) the acquisition of existing or the construction of new capital assets 
(including, without limitation, timberlands and timber processing and 
manufacturing facilities and related assets) made to increase the operating 
capacity of the Company and its Restricted Subsidiaries, taken as a whole, 
from the operating capacity of the Company and its Restricted Subsidiaries, 
taken as a whole, existing immediately prior to such addition, improvement, 
acquisition or construction.

    "CAPITALIZED LEASE" shall mean any lease the obligation for Rentals with 
respect to which is required to be capitalized on a balance sheet of the 
lessee in accordance with GAAP.

    "CAPITALIZED RENTALS" of any Person shall mean as of the date of any 
determination the amount at which the aggregate Rentals due and to become due 
under all Capitalized Leases under which such Person is a lessee would be 
reflected as a liability on a consolidated balance sheet of such Person in 
accordance with GAAP.

    "CERCLA" shall mean the Comprehensive Environmental Response, 
Compensation and Liability Act of 1980, as amended by the Superfund 
Amendments and Reauthorization Act of 1986, 42 U.S.C. SECTIONS 9601 ET SEQ., 
and any future amendments.

    "CLOSING DATE" is defined in SECTION 1.2.

    "COMPANY" is defined in the introductory paragraph of this Agreement.

    "CONSOLIDATED CASH FLOW" for any period shall mean Operations Cash for 
such period adjusted to include (a) in the case of any acquisition of timber 
or timberland by the Company or a Restricted Subsidiary during such period, 
an amount equal to the projected cash flow of the timber or timberland so 
acquired, based on the harvest plan for the first harvest year, PROVIDED that 
such harvest plan shall not include more than 15% of the total volume of 
merchantable timber so acquired, and PROVIDED, FURTHER, that in determining 
projected cash flow from acquired timber or timberlands, prices shall be 
assumed to equal the average price realized by the Company for comparable 
timber sold during such period, and (b) in the case of any acquisition of any 
other productive asset by the Company or a Restricted Subsidiary during such 
period, an amount equal to 80% of the average annual cash flow of the 
productive asset so acquired for the preceding two years, which amount will 
be increased if and to the extent a Responsible Officer of the Company shall 
certify in writing to the Holders (x) specified cost savings that can be 
effected by the Company in the operation of 


                                     -35-

<PAGE>

such productive asset or (y) the net additional resources to be allocated to 
increase productivity of such asset, PLUS (to the extent deducted in 
determining Operations Cash) (i) all cash debt service payments of the 
Company and its Restricted Subsidiaries during such period, (ii) all cash 
capital expenditures (except capital expenditures relating to Acquisitions 
and Capital Additions and Improvements) of the Company and its Restricted 
Subsidiaries during such period, and (iii) the amount deducted from 
Operations Cash as a result of the increase in any reserve for the future 
cash payment of items of the type referred to in the foregoing clauses (i) or 
(ii).

    "CONSOLIDATED NET WORTH" of any Person shall mean, as of the date of any 
determination, the amount by which the total assets of such Person and its 
subsidiaries appearing on a balance sheet of such Person and its subsidiaries 
prepared in accordance with GAAP on a consolidated basis exceeds the total 
liabilities of such Person and its subsidiaries appearing on a balance sheet 
of such Person and its subsidiaries prepared in accordance with GAAP on a 
consolidated basis, in each case after eliminating all intercompany 
transactions.

    "CONSUMER PRICE INDEX" shall mean the consumer price index for goods and 
services for the United States, as published by the U. S. Bureau of Labor 
Statistics, or if such index is no longer printed, its successor publications.

    "CONTROLLING GENERAL PARTNERSHIP INTEREST" shall mean a General 
Partnership Interest which permits the owner of such General Partnership 
Interest to direct the management of a general partnership or a limited 
partnership.

    "CP INLAND" shall mean Crown Pacific Inland Limited Partnership, an 
Oregon limited partnership, previously merged into the Company.

    "CP INLAND LUMBER" is defined in Exhibit C.

    "CPLP" shall mean Crown Pacific Limited Partnership, an Oregon limited 
partnership, previously merged into the Company.

    "CREDIT AGREEMENTS" means the Acquisition Credit Agreement and the 
Working Capital Credit Agreement.

    "CURRENT DEBT" of any Person shall mean, as of the date of any 
determination thereof, (i) all Indebtedness of such Person for borrowed money 
or for the acquisition of assets, other than Funded Debt of such Person and 
(ii) Guaranties by such Person of Current Debt of others.

    "DAW" is defined in Exhibit B.

    "DEFAULT" shall mean any event or condition the occurrence of which 
would, with the lapse of time or the giving of notice, or both, constitute an 
Event of Default.

    "DISTRIBUTION" in respect of the Company shall mean:


                                     -36

<PAGE>

       (a)   dividends, distributions or other payments of any kind 
    whatsoever on or in respect of the Partnership Interests (except 
    distributions payable  solely in Partnership Interests or in rights or 
    options to acquire Partnership Interests)

       (b)   the redemption or acquisition of Partnership Interests or 
    of rights or other options to purchase Partnership Interests and

       (c)   any payment of or on account of Subordinated Funded Debt 
    owed to the Managing General Partner or any payment on account of the 
    purchase, redemption or other retirement thereof.

    "ENVIRONMENTAL AND NATURAL RESOURCE CLAIM" shall mean any administrative, 
regulatory or judicial action, judgment, order, consent decree, suit, demand, 
demand letter, claim, Lien, notice of non-compliance or violation, 
investigation or other proceeding arising (a) pursuant to any Environmental 
and Natural Resource Law or Governmental Approval issued under any such 
Environmental and Natural Resource Law, (b) from the presence, use, 
generation, storage, treatment, Release, threatened Release, disposal, 
remediation or other existence of any Hazardous Material, (c) from any 
removal, remedial, corrective or other response action pursuant to an 
Environmental and Natural Resource Law or the order of a Governmental 
Authority, (d) from any third party seeking damages, contribution, 
indemnification, cost recovery, compensation, injunctive or other relief in 
connection with a Hazardous Material or arising from alleged injury or threat 
of injury to health, safety, natural resources or the environment, or (e) 
from any Lien against the Properties of the Company or any Subsidiary in 
favor of a Governmental Authority in connection with a Release, threatened 
Release or disposal of a Hazardous Material. 

    "ENVIRONMENTAL AND NATURAL RESOURCE LAW" shall mean any statute, law, 
regulation, ordinance, order, consent decree, judgment, permit, license, 
code, common law, treaty, convention or other requirement of a Governmental 
Authority, pertaining to protection of the environment, health or safety of 
persons, natural resources, forestry, conservation, wildlife, waste 
management, hazardous substances or wastes, and pollution (including, without 
limitation, regulation of releases and disposals to air, land, water and 
groundwater), now or hereafter enacted, and includes, without limitation, the 
Idaho Reforestation Law, Idaho Code SECTIONS 38-201, ET SEQ., Idaho Forest 
Practices Act, Idaho Code SECTIONS 38-1301 ET SEQ., Idaho Hazardous 
Substances Emergency Response Act, Idaho Code SECTIONS 39-7101 ET SEQ., 
Montana Timber Resources  Code, Mont. Code Ann. SECTIONS 76-13-101 ET SEQ., 
Montana Environmental Protection Code, Mont. Code Ann.  SECTIONS 75-1-101 ET 
SEQ., Oregon Forest Practices Act, Or. Rev. Stat. SECTIONS 527.610 ET SEQ., 
Oregon Hazardous Waste and Hazardous Materials Code, Or. Rev. Stat. SECTIONS 
465.003 ET SEQ., Washington Forest Practice Code, Wash. Rev. Code SECTIONS 
76.09.010 ET SEQ., Washington Model Toxic Control Act, Wash. Rev. Code 
SECTIONS 70.105D.010 ET SEQ., Endangered Species Act of 1973, 16 U.S.C. 
SECTIONS 1531 ET SEQ., Comprehensive Environmental Response, Compensation and 
Liability Act of 1980, as amended by the Superfund Amendments and 
Reauthorization Act of 1986, 42 U.S.C. SECTIONS 9601 ET SEQ., Solid Waste 
Disposal Act, as amended by the Resource Conservation and Recovery Act of 
1976 and Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. SECTIONS 
6901 ET SEQ., Federal Water Pollution Control Act, as amended by the Clean 
Water Act of 1977, 33 

                                     -37-

<PAGE>

U.S.C. SECTIONS 1251 ET SEQ., Clean Air Act of 1966, as amended, 42 U.S.C. 
SECTIONS 7401 ET SEQ., Toxic Substances Control Act of 1976, 15 U.S.C. 
SECTIONS 2601 ET SEQ., Occupational Safety and Health Act of 1970, as 
amended, 29 U.S.C SECTIONS 651 ET SEQ., Oil Pollution Act of 1990, 33 U.S.C 
SECTIONS 2701 ET SEQ., Emergency Planning and Community Right-to-Know Act of 
1986, 42 U.S.C. SECTIONS 11001 ET SEQ., National Environmental Policy Act of 
1975, 42 U.S.C. SECTIONS 4321 ET SEQ., Safe Drinking Water Act of 1974, as 
amended, 42 U.S.C. SECTIONS 300(f) ET SEQ., and all similar or implementing 
laws, rules, regulations, approvals, guidance documents and amendments 
promulgated thereunder. 

    "EQUITY INTEREST" shall mean, in the case of a corporation, stock of any 
class, and in the case of a partnership or a limited partnership, a General 
Partnership Interest or Limited Partnership Interest.

    "ERISA" means the Employee Retirement Income Security Act of 1974, as 
amended, and any successor statute of similar import, together with the 
regulations thereunder, in each case as in effect from time to time.  
References to sections of ERISA shall be construed to also refer to any 
successor sections.

    "ERISA AFFILIATE" shall mean any corporation, trade or business that is, 
along with the Company, a member of a controlled group of corporations or a 
controlled group of trades or businesses, as described in section 414(b) and 
414(c), respectively, of the Internal Revenue Code of 1986, as amended, or 
Section 4001 of ERISA.
 
    "EVENT OF DEFAULT" is defined in SECTION 6.1.

    "EXCESS HARVEST" is defined in SECTION 4.12.

    "EXCESS LIEN" is defined in SECTION 4.20.

    "FOUR QUARTER PERIOD" shall mean a period of four full consecutive 
quarterly fiscal periods of the Company, taken together as one accounting 
period.

    "FUNDED DEBT" of any Person shall mean (i) all Indebtedness of such 
Person for borrowed money or which has been incurred in connection with the 
acquisition of assets in each case having a final maturity of one or more 
than one year from the date of origin thereof (or which is renewable or 
extendible at the option of the obligor for a period or periods more than one 
year from the date of origin), including all payments in respect thereof that 
are required to be made within one year from the date of any determination of 
Funded Debt, (ii) all Capitalized Rentals of such Person, and (iii) all  
Guaranties by such Person of Funded Debt of others.

    "FUNDING AGENT" is defined in SECTION 1.6.

    "GAAP" shall mean generally accepted accounting principles at the time in 
the United States.


                                     -38-

<PAGE>

    "GENERAL PARTNERSHIP INTEREST" shall mean the interest of a general 
partner in a general partnership and the interest of a general partner in a 
limited partnership.

    "GOVERNMENTAL APPROVAL" shall mean any written permit, license, variance, 
certification, consent, no-action letter, clearance, exemption or other 
approval granted by a Governmental Authority.

    "GOVERNMENTAL AUTHORITY" shall mean any international, foreign, federal, 
state, regional, county, local or other body or authority of a governmental 
entity.

    "GUARANTIES" by any Person shall mean all obligations (other than 
endorsements in the ordinary course of business of negotiable instruments for 
deposit or collection) of such Person guaranteeing or in effect guaranteeing 
any Indebtedness, dividend or other obligation, of any other Person (the 
"PRIMARY OBLIGOR") in any manner, whether directly or indirectly, including, 
without limitation, all obligations incurred through an agreement, contingent 
or otherwise (including, without limitation, such obligations that arise as a 
matter of law including obligations of a joint venturer in connection with a 
joint venture and of a partner in connection with a partnership), by such 
Person:  (i) to purchase such Indebtedness or obligation or any Property 
constituting security therefor, (ii) to advance or  supply funds (x) for the 
purchase or payment of such Indebtedness or obligation or (y) to maintain 
working capital or other balance sheet condition or otherwise to advance or 
make available funds for the purchase or payment of such Indebtedness or 
obligation, (iii) to lease Property or to purchase Securities or other 
Property or services primarily for the purpose of assuring the owner of such 
Indebtedness or obligation of the ability of the primary obligor to make 
payment of the Indebtedness or obligation, or (iv) otherwise to assure the 
owner of the Indebtedness or obligation of the primary obligor against loss 
in respect thereof.  For the purposes of all computations made under this 
Agreement, a Guaranty in respect of any Indebtedness for borrowed money shall 
be deemed to be Indebtedness equal to the principal amount of such 
Indebtedness for borrowed money which has been guaranteed, and a Guaranty in 
respect of any other obligation or liability or any dividend shall be deemed 
to be Indebtedness equal to the maximum aggregate amount of such obligation, 
liability or dividend.

    "HARVEST/YIELD RESTRICTION" shall mean any restriction, limitation, 
prohibition, constraint, event, occurrence or condition which materially 
impairs the cultivation, harvest or yield of timber at a property, including 
but not limited to the following conditions or an Environmental and Natural 
Resource Law concerning such following conditions:

       (1)   natural phenomena, including fire, drought, disease or pests;

       (2)   threatened or endangered species of wildlife, fish or flora;

       (3)   protected or sensitive habitats (including brooding, 
    nesting, feeding and sheltering areas) of sensitive, threatened, 
    endangered or other species of wildlife or fish;


                                     -39-

<PAGE>

       (4)   critical natural resources (including soil, water, 
    wetlands, riparian areas, forestland and visually sensitive areas);

       (5)   cultural resource sites (including Properties of historic, 
    archaeological or tribal significance);

       (6)   condemnation or other regulation of forestland for public 
    uses (such as for recreation, wilderness or park purposes);

       (7)   timber export;

       (8)   agrichemicals (including fertilizers and  pesticides);

       (9)   environmental quality standards (including non-point source 
    best management practices);

      (10)   access and transportation factors (including road 
    construction and improvement and riparian logging crossings); and

      (11)   forest practices (including harvest rates, clear cuts and 
    reforestation).

    "HAZARDOUS MATERIAL" shall mean any hazardous or toxic chemical, waste, 
byproduct, pollutant, contaminant, compound, product or substance, including, 
without limitation, asbestos, polychlorinated biphenyls, petroleum (including 
crude oil or any fraction thereof), and any material the exposure to, or 
manufacture, possession, presence, use, generation, storage, transportation, 
treatment, release, disposal, abatement, cleanup, removal, remediation or 
handling of which, is prohibited, controlled or regulated by any 
Environmental and Natural Resource Law.

    "HOLDER "shall mean any Person which is, at the time of reference, the 
registered holder of any outstanding Note.

    "HS Corp." is defined in Exhibit C.

    "INDEBTEDNESS" of any Person shall mean and include all obligations of 
such Person which in accordance with GAAP shall be classified upon a balance 
sheet of such Person as liabilities of such Person and in any event shall 
include all (i) obligations of such Person for borrowed money, (ii) 
obligations secured by any Lien or other charge upon Property owned by such 
Person, even though such Person has not assumed or become liable for the 
payment of such obligations, (iii) obligations created or arising under any 
conditional sale or other title retention agreement with respect to Property 
acquired by such Person, notwithstanding the fact that the rights and 
remedies of the seller, lender or lessor under such agreement in the event of 
default are limited to repossession or sale of Property, PROVIDED that the 
preceding provisions of this clause (iii) shall not include obligations of 
such Person in respect of Operating Leases, (iv) Capitalized Rentals of such 
Person, and (v) Guaranties by such Person of Indebtedness of others.


                                     -40-

<PAGE>

    "INDEMNIFIED MATTERS" is defined in SECTION 4.3(b)(6)(A).

    "INDEMNITEES" is defined in SECTION 4.3(b)(6)(A).

    "INSTITUTIONAL HOLDER" shall mean any insurance company, bank, savings 
and loan association, trust company, investment company, charitable 
foundation, broker or dealer registered  under the Securities Exchange Act of 
1934, as amended, employee benefit plan (as defined in ERISA) or other 
institutional investor or financial institution, including, without 
limitation, each Purchaser.

    "INTEREST EXPENSE" for any period shall mean all interest (including the 
interest component of Rentals payable by the Company and its Restricted 
Subsidiaries on Capitalized Leases) and all amortization of debt discount and 
expense expensed during such period in accordance with GAAP on any 
Indebtedness of the Company and its Restricted Subsidiaries for which such 
calculations are being made.

    "INTERIM CAPITAL TRANSACTIONS" means (i) borrowings, refinancings or 
refundings of Current Debt and Funded Debt of the Company or any Restricted 
Subsidiary and sales of debt securities (other than for working capital 
purposes and other than for items purchased on open account in the ordinary 
course of business) by the Company or any Restricted Subsidiary, (ii) sales 
of Equity Interests by the Company and (iii) sales or other voluntary or 
involuntary dispositions of any assets of the Company or any Restricted 
Subsidiary (other than (x) sales or other dispositions of inventory, accounts 
receivable and other assets in the ordinary course of business, including the 
exchange of timber or real property for other timber or real property, to the 
extent that the timber or real property received in exchange is of equal or 
greater value, or the sale of timber or real property, to the extent the 
proceeds from which are invested within 180 days in other timber or real 
property, and (y) sales or other dispositions of assets as a part of normal 
retirements or replacements), other than in the context of the commencement 
of the dissolution and liquidation of the Company.

    "INVESTMENTS" shall mean all investments, in cash or by delivery of 
Property made, directly or indirectly in any Person, whether by acquisition 
of shares of capital stock, indebtedness or other obligations or Securities 
or by loan, advance, capital contribution or otherwise.

    "LIEN" shall mean any interest in Property securing an obligation owed 
to, or a claim by, a Person other than the owner of the Property, whether 
such interest is based on the common law, statute or contract, and including 
but not limited to the security interest lien arising from a mortgage, 
encumbrance, pledge, conditional sale or trust receipt or a lease, 
consignment or bailment for security purposes.  The term "Lien" shall include 
reservations,  exceptions, encroachments, easements, rights-of-way, 
covenants, conditions, restrictions, leases and other title exceptions and 
encumbrances (including, with respect to stock, stockholder agreements, 
voting trust agreements, buy-back agreements and all similar arrangements) 
affecting Property.  For the purposes of this Agreement, the Company or a 
Restricted Subsidiary shall be deemed to be the owner of any Property which 
it has acquired or holds subject to a conditional sale agreement, Capitalized 
Lease or other arrangement 


                                     -41-

<PAGE>

pursuant to which title to the Property has been retained by or vested in 
some other Person for security purposes, and such retention or vesting shall 
constitute a Lien.

    "LIMITED PARTNERSHIP INTEREST" shall mean the interest of a limited 
partner in a limited partnership.

    "MAKE-WHOLE AMOUNT" shall mean in connection with any prepayment or 
acceleration of the Notes of a series the excess, if any, of (i) the 
aggregate present value as of the date of such prepayment or acceleration of 
each dollar of principal being prepaid or accelerated of the Notes of such 
series (taking into account the application of such prepayment required by 
SECTION 5.1) and the amount of interest (exclusive of interest accrued to the 
date of prepayment or acceleration) that would have been payable in respect 
of such dollar if such prepayment or acceleration had not been made, 
determined by discounting on a semiannually compounded basis such amounts at 
the Reinvestment Rate from the respective dates on which they would have been 
payable, over (ii) 100% of the principal amount of the outstanding Notes of 
the series being prepaid.  The Make-Whole Amount shall not be less than zero. 
For purposes of any determination of the Make-Whole Amount:

       "REINVESTMENT RATE" shall mean (a) the sum of 0.50%, plus the 
    yield reported at 10:00 A.M. (New York time) on the date of 
    determination of the Make-Whole Amount by the Telerate Access Service on 
    the display designated "Page 5" for United States government Securities 
    having a maturity (rounded to the nearest month) corresponding to the 
    remaining Weighted Average Life to Maturity of the principal of such 
    series being prepaid or accelerated (taking into account the application 
    of such prepayment required by SECTION 5.1), or (b) in the event that 
    such Telerate Access Service is no longer available or such yield is not 
    reported as of such time,  "REINVESTMENT RATE" shall mean the sum of 
    0.50%, plus the arithmetic mean of the two yields under the heading 
    "WEEK ENDING" published in the Statistical Release under the caption 
    "TREASURY CONSTANT MATURITIES" for the maturity (rounded to the nearest 
    month) corresponding to the Weighted Average Life to Maturity of the 
    principal of such series being prepaid or accelerated (taking into 
    account the application of such prepayment required by SECTION 5.1).  If 
    no maturity exactly corresponds to such Weighted Average Life to 
    Maturity, yields for the maturity next longer than the Weighted Average 
    Life to Maturity and for the maturity next shorter than the Weighted 
    Average Life to Maturity shall be calculated and the Reinvestment Rate 
    shall be interpolated from such yields on a straight-line basis, 
    rounding in each of such relevant periods to the nearest month.  For the 
    purposes of calculating the Reinvestment Rate pursuant to clause (b), 
    the most recent Statistical Release published prior to the date of 
    determination of the Make-Whole Amount shall be used.

       "STATISTICAL RELEASE" shall mean the statistical release 
    designated "H.15(519)" or any successor publication which is published 
    weekly by the Federal Reserve System and which establishes yields on 
    actively traded United States government Securities adjusted to constant 
    maturities or, if such statistical release is not published at the time 
    of any determination hereunder, then such other reasonably comparable 
    index which 


                                     -42-

<PAGE>

    shall be designated by the Holders holding 66-2/3% in aggregate 
    principal amount of the outstanding Notes.

       "WEIGHTED AVERAGE LIFE TO MATURITY" of the principal amount of 
    the Notes of a series being prepaid or accelerated shall mean, as of the 
    time of any determination thereof, the number of years obtained by 
    dividing the then Remaining Dollar-Years of such principal by the 
    aggregate amount of such principal.  The term "REMAINING DOLLAR-YEARS" 
    of such principal shall mean the amount obtained by (i) multiplying (x) 
    the remainder of (1) the amount of principal of such series that would 
    have become due on each scheduled payment date if such prepayment or 
    acceleration and the application thereof in accordance with the 
    provisions of SECTION 5.1 had not been made, less (2) the amount of 
    principal on the Notes of such series being prepaid or  accelerated 
    scheduled to become due on such date after giving effect to such 
    prepayment or acceleration, by (y) the number of years (calculated to 
    the nearest one-twelfth) which will elapse between the date of 
    determination and such scheduled payment date, and (ii) totaling the 
    products obtained in (i).

    "MANAGING GENERAL PARTNER" is defined in SECTION 2.2.

    "MULTIEMPLOYER PLAN" shall have the same meaning as in ERISA.

    "NET PROCEEDS" shall mean the gross proceeds of the disposition or sale 
of Property, less (i) all reasonable expenses incurred in connection with 
such disposition or sale of such Property and (ii) with respect to any Excess 
Harvest, all reasonable expenses properly allocable to the harvesting of the 
timber constituting the Excess Harvest and other costs incidental thereto.

    "1994 NOTES" shall mean the $275,000,000 9.78% Senior Notes due December 
1, 2009 of the Company issued under and pursuant to the Note Purchase 
Agreement dated as of December 1, 1994 among the Company and the purchasers 
listed in Schedule I thereto.

    "1995 NOTES" shall mean the $25,000,000 9.60% Senior Notes due December 
1, 2009 of the Company issued under and pursuant to the Note Purchase 
Agreement dated as of March 15, 1995 among the Company and the purchasers 
listed in Schedule I thereto.

    "NOTE" shall mean each Series A Note, Series B Note, Series C Note and 
Series D Note.

    "OPERATING LEASE" shall mean, with respect to any Person, any lease which 
is not a Capitalized Lease pursuant to which such Person shall lease real or 
personal Property.

    "OPERATIONS CASH" for any period shall mean the sum of all cash receipts 
of the Company and its Restricted Subsidiaries during such period, on a 
cumulative basis and without duplication (including cash receipts from 
operations of Restricted Subsidiaries prior to the acquisition thereof by the 
Company but excluding (a) cash proceeds from Interim 


                                     -43-

<PAGE>

Capital Transactions, and (b) net cash receipts from operations in respect of 
assets sold during such period), LESS the sum of:

       (1)   all cash operating expenditures of the Company and its 
    Restricted Subsidiaries during such period (including, without 
    limitation, (x) cash operating expenditures of Restricted Subsidiaries 
    prior to the acquisition thereof by the Company, (y) taxes, if  any, 
    paid by the Company as an entity and by its Restricted Subsidiaries, and 
    (z) amounts owed to the Managing General Partner as reimbursement for 
    Specified Expenses)

       (2)   all cash debt service payments of the Company and its 
    Restricted Subsidiaries during such period (other than payments or 
    prepayments of principal and premium (x) required by reason of loan 
    agreements (including, without limitation, covenants and default 
    provisions therein) or by lenders, in each case, in connection with 
    sales or other dispositions of assets or (y) made in connection with 
    refinancings or refundings of Indebtedness with the proceeds from new 
    Indebtedness or from the sale of Equity Interests, PROVIDED, that any 
    payment or prepayment of principal and premium, whether or not then due, 
    shall be deemed, at the election and in the discretion of the Managing 
    General Partner, to be refunded or refinanced by any Indebtedness 
    incurred or to be incurred by the Company simultaneously with or within 
    180 days prior to or after such payment or prepayment to the extent of 
    the principal amount of such Indebtedness so incurred)

       (3)   all cash capital expenditures of the Company and its 
    Restricted Subsidiaries during such period, except capital expenditures 
    (including associated transaction costs) relating to (x) Acquisitions, 
    (y) Capital Additions and Improvements and (z) Interim Capital 
    Transactions

       (4)   the amount, if any, by which cash reserves outstanding as 
    of the end of such period that the Managing General Partner has 
    determined in its reasonable discretion to be necessary or appropriate 
    in order to provide funds for the future cash payment of items of the 
    type referred to in clauses (1) through (3) above exceeds such cash 
    reserves outstanding at the beginning of such period

       (5)   the amount, if any, by which any cash reserves outstanding 
    at the end of such period that the Managing General Partner has 
    determined in its reasonable discretion to be necessary or appropriate 
    in order to provide funds for Distributions in respect of any one or 
    more of the four consecutive fiscal quarters following the end of such 
    period exceeds such cash reserves outstanding at the beginning of the 
    such period  and

       (6)   any cash receipts of any Restricted Subsidiary which for 
    any reason (including pursuant to its organizational documents) is 
    unavailable for distribution to the Company or any other Restricted 
    Subsidiary,


                                     -44-

<PAGE>

all determined on a consolidated basis.  Where cash capital expenditures are 
made in part in respect of Acquisitions or Capital Additions and Improvements 
and in part for other purposes, the Managing General Partner's good faith 
allocation thereof between the portion made for Acquisitions or Capital 
Additions and Improvements and the portion made for other purposes shall be 
conclusive.

    So long as the Company is not a taxpaying entity, taxes paid by the 
Company on behalf of, or amounts withheld with respect to, all or less than 
all of the Partners shall not be considered cash operating expenditures of 
the Company that reduce Operations Cash, but the payment or withholding 
thereof shall be deemed to be a distribution of Available Cash to such 
Partners.  Alternatively, in the discretion of the Managing General Partner, 
so long as the Company is not a taxpaying entity, such taxes (if pertaining 
to all Partners) may be considered to be cash operating expenditures of the 
Company which reduce Operations Cash, but the payment or withholding thereof 
shall not be deemed to be a distribution of Available Cash to such Partners.

    "OVERDUE RATE" with respect to each series of Notes shall mean a rate per 
annum equal to the lesser of (i) the maximum rate of interest allowable by 
law and (ii) the rate of interest then borne by the Notes of such series plus 
2%.

    "PARTNERS" shall mean the Managing General Partner and each other Person 
owning a Partnership Interest in the Company.

    "PARTNERSHIP" shall mean Crown Pacific Partners, L.P., a Delaware limited 
partnership, together with any Person who succeeds to all, or substantially 
all Crown Pacific Partners, L.P.'s assets and business.

    "PARTNERSHIP AGREEMENT" shall mean the Amended and Restated Agreement of 
Limited Partnership of the Company dated as of December 22, 1994 between the 
Managing General Partner and the Partnership, as the same may from time to 
time be supplemented, amended, or restated as permitted thereby.

    "PARTNERSHIP INTEREST" shall mean Limited Partnership Interests and 
General Partnership Interests.

    "PBGC" is defined in SECTION 4.17(g).
 
    "PERSON" shall mean an individual, partnership, corporation, trust or 
limited liability company or other unincorporated organization, and a 
government or agency or political subdivision thereof.

    "PLAN" shall mean a "pension plan," as such term is defined in ERISA and 
which is covered by Title IV of ERISA, other than a Multiemployer Plan, 
established or maintained by the Company or any ERISA Affiliate or as to 
which the Company or any ERISA Affiliate contributed or is a member or 
otherwise may have any liability.


                                     -45-

<PAGE>

    "PLANNED VOLUME" shall mean as of the Closing Date 250,000,000 board feet 
per annum of timber, and shall be adjusted for any Annual Timber Increase, as 
of the Effective Date for such Annual Timber Increase, by increasing such per 
annum amount by an amount equal to 15% of such Annual Timber Increase per 
annum for a period of 6-2/3 years from such Effective Date.  In addition, 
such per annum amount shall, if there shall be an Annual Timber Decrease in 
any Determination Period, be permanently (with respect to such Annual Timber 
Decrease) adjusted, effective as of the Effective Date for such Annual Timber 
Decrease, by decreasing such per annum amount in the same proportion that the 
Predisposition Timber Amount in respect of such Annual Timber Decrease is 
reduced by such Annual Timber Decrease; PROVIDED that such adjustment shall 
not be made if the percentage decrease represented by such adjustment would 
be less than 5% and if the Asset Coverage Ratio as of the last day of such 
Determination Period is at least 2:1.  For purposes of the foregoing:

       "ANNUAL TIMBER INCREASE" shall mean, for any Determination 
    Period, the amount, in board feet, by which the number of board feet of 
    timber acquired by the Company and its Restricted Subsidiaries during 
    such Determination Period shall exceed the number of board feet of 
    timber sold or otherwise disposed of by the Company and its Restricted 
    Subsidiaries during such Determination Period; and "ANNUAL TIMBER 
    DECREASE" shall mean, for any Determination Period, the amount, in board 
    feet, by which the number of board feet of timber sold or otherwise 
    disposed of by the Company and its Restricted Subsidiaries during such 
    Determination Period shall exceed the number of board feet of timber 
    acquired by the Company and its Restricted Subsidiaries during such 
    Determination Period; PROVIDED that, neither such calculation shall 
    include timber acquired with the Net Proceeds of an Excess Harvest 
    pursuant to SECTION 4.12.

       "ASSET COVERAGE RATIO" shall mean, as of the date of 
    determination, the ratio of (a) the fair market value (determined in 
    good faith by a Responsible Officer, but excluding any value based on a 
    higher and better use thereof) of the timberlands owned by the Company 
    and its Restricted Subsidiaries on such determination date to (b) Funded 
    Debt of the Company and its Restricted Subsidiaries on a consolidated 
    basis on such determination date.

       "DETERMINATION PERIOD" shall mean the period from and including 
    the Closing Date to and including December 31, 1997 and each calendar 
    year thereafter.

       "EFFECTIVE DATE" for any Annual Timber Increase or Annual Timber 
    Decrease shall be July 1 of the Determination Period for which such 
    Annual Timber Increase or Annual Timber Decrease, as the case may be, 
    occurs.
    
       "PREDISPOSITION TIMBER AMOUNT" with respect to any Annual Timber 
    Decrease shall mean the amount of timber owned by the Company and its 
    Restricted Subsidiaries as of the first day of the Determination Period 
    for which such Annual Timber Decrease occurred.


                                     -46-

<PAGE>

    "PREDECESSOR PARTNERSHIPS" shall mean CPLP and CP Inland.

    "PRIVATE PLACEMENT MEMORANDUM" shall mean the Placement Memorandum, dated 
June, 1996, prepared by the Company with the assistance of BA Securities, Inc.

    "PRO FORMA INTEREST EXPENSE" for any Four Quarter Period shall mean the 
Interest Expense payable by the Company and its Restricted Subsidiaries 
during such Four Quarter Period on all Current Debt and Funded Debt of the 
Company and its Restricted Subsidiaries on a consolidated basis, PLUS the 
Interest Expense which would have been payable during such Four Quarter 
Period in respect of (i) any Current Debt and Funded Debt to be issued on the 
date of determination of Pro Forma Interest Expense and (ii) the Current Debt 
or Funded Debt issued after the end of such Four Quarter Period and prior to 
such date of determination, in each case, giving effect as of the beginning 
of such Four Quarter Period (y) to the incurrence of all such Current Debt 
and Funded Debt described in clauses (i) and (ii), and (z) to the application 
of any such Funded Debt or Current Debt to the substantially concurrent 
repayment of any other Current Debt or Funded Debt outstanding during such 
Four Quarter Period.  Computations of  Pro Forma Interest Expense for Current 
Debt and Funded Debt having a variable interest rate shall be calculated at 
the rate in effect on the date of such determination.

    "PRO FORMA MAXIMUM DEBT SERVICE" shall mean, as of any date of 
determination, the highest total amount payable by the Company and its 
Restricted Subsidiaries on a consolidated basis, during any Four Quarter 
Period, commencing with the fiscal quarter in which such date of 
determination occurs and ending on December 31, 2011, in respect of scheduled 
principal payments and all Interest Expense with respect to all Current Debt 
and Funded Debt of the Company and its Restricted Subsidiaries outstanding on 
such date of determination, after giving effect to any Current Debt and 
Funded Debt proposed to be incurred on such date and to the substantially 
concurrent repayment of any other Current Debt and Funded Debt (i) assuming, 
in the case of Current Debt or Funded Debt having a variable interest rate, 
that the rate in effect on the date of determination will remain in effect 
throughout such period, (ii) including only actual interest payments with 
respect to the Current Debt and Funded Debt incurred pursuant to the Working 
Capital Facility during the most recent Four Quarter Period and (iii) 
treating the principal amount of all Current Debt and Funded Debt outstanding 
as of such date of determination under a revolving credit or similar 
agreement (other than the Working Capital Facility) as maturing and becoming 
due and payable on the scheduled maturity date or dates thereof (including 
the maturity of any payment required by any commitment reduction or similar 
amortization provision), without regard to any provision permitting such 
maturity date to be extended; PROVIDED, HOWEVER, that for purposes of the 
foregoing clause (iii), the Company shall be deemed to have elected to have 
any amount outstanding under the Acquisition Facility to be amortized in the 
manner and over the period provided for therein commencing at the expiration 
of the period during which the Acquisition Facility is revolving in nature.

    "PROPERTY" shall mean any interest in any kind of property or asset, 
whether real, personal or mixed, or tangible or intangible.


                                     -47-

<PAGE>

    "PTE" is defined in SECTION 2.3(a).

    "PURCHASERS" is defined in the introductory paragraph to this Agreement.

    "RCRA" shall mean the Solid Waste Disposal Act, as amended by the 
Resource Conservation and Recovery Act of 1976 and  Hazardous and Solid Waste 
Amendments of 1984, 42 U.S.C. SECTIONS 6901 ET SEQ., and any future 
amendments.

    "RELEASE" shall mean any spilling, leaking, pumping, pouring, emitting, 
emptying, discharging, injecting, escaping, leaching, dumping, or disposing 
into the environment, including, without limitation, the abandonment or 
discarding of barrels, drums, containers, tanks and other receptacles 
containing or previously containing any Hazardous Material.

    "RENTALS" of any Person shall mean and include as of the date of 
determination thereof all fixed payments (including as such all payments 
which the lessee is obligated to make to the lessor on termination of the 
lease or surrender of the Property) payable by such Person, as lessee or 
sublessee under a lease of real or personal Property, but shall be exclusive 
of any amounts required to be paid by such Person (whether or not designated 
as rents or additional rents) on account of maintenance, repairs, insurance, 
taxes and similar charges.  Fixed rents under any so-called "percentage 
leases" shall be computed solely on the basis of the minimum rents, if any, 
required to be paid by the lessee regardless of sales volume or gross 
revenues.

    "REPORTABLE EVENT" shall mean a "reportable event" as described in 
Section 4043 of ERISA for which the notice requirement to the PBGC has not 
been waived, PROVIDED that the loss of qualification of a Plan and the 
failure to meet the minimum funding standard of Section 412 of the Internal 
Revenue Code of 1986, as amended, or Section 302 of ERISA shall be a 
Reportable Event regardless of the issuance of any waiver of the reporting 
requirement by the PBGC.

    "RESPONSIBLE OFFICER" shall mean any of the Chief Executive Officer, 
President, Chief Financial Officer, General Counsel and any Executive Vice 
President of the Managing General Partner.

    "RESTRICTED SUBSIDIARY" shall mean any Subsidiary (i) which is organized 
under the laws of the United States or Canada or any state or province 
thereof; (ii) which conducts substantially all of its business and has 
substantially all of its assets within the United States or Canada; (iii) of 
which (A) in the case of any corporation, more than 50% of the Voting Stock 
is beneficially owned, directly or indirectly by the Company, or (B) in the 
case of any partnership, more than 50% of each of the Limited Partnership 
Interest and the General Partnership Interest is beneficially owned, directly 
or indirectly by the Company; and (iv) which  is designated as a Restricted 
Subsidiary in the most recent written notice with respect to such Subsidiary 
given by the Company pursuant to SECTION 4.18.

    "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.


                                     -48-

<PAGE>

    "SECURITY" shall have the same meaning as in Section 2(1) of the 
Securities Act.

    "SENIOR FUNDED DEBT" shall mean all Funded Debt other than Subordinated 
Funded Debt.

    "SERIES A NOTE" shall mean each 8.01% Senior Note, Series A, due August 
1, 2006 issued under and pursuant to this Agreement, including any Note 
issued in substitution therefor or replacement thereof pursuant to SECTION 
9.1, SECTION 9.2, or SECTION 9.3.

    "SERIES B NOTE" shall mean each 8.16% Senior Note, Series B, due August 
1, 2011 issued under and pursuant to this Agreement, including any Note 
issued in substitution therefor or replacement thereof pursuant to SECTION 
9.1, SECTION 9.2, or SECTION 9.3.

    "SERIES C NOTE "shall mean each 8.21% Senior Note, Series C, due August 
1, 2011 issued under and pursuant to this Agreement, including any Note 
issued in substitution therefor or replacement thereof pursuant to SECTION 
9.1, SECTION 9.2, or SECTION 9.3.

    "SERIES D NOTE" shall mean each 8.25% Senior Note, Series D, due August 
1, 2013 issued under and pursuant to this Agreement, including any Note 
issued in substitution therefor or replacement thereof pursuant to SECTION 
9.1, SECTION 9.2, or SECTION 9.3.

    "SOURCE" is defined in SECTION 2.3.

    "SPECIFIED EXPENSES" shall mean (i) all reasonable direct and indirect 
expenses the Managing General Partner incurs or payments it makes on behalf 
of the Company (including, without limitation, salary, bonus, incentive 
compensation, and other amounts paid to any Person to perform services for 
the Company or for the Managing General Partner in the discharge of its 
duties to the Company), and (ii) all other necessary or appropriate 
reasonable expenses allocable to the Company or otherwise reasonably incurred 
by the Managing General Partner in connection with operating the Company's 
business (including without limitation reasonable expenses allocated to the 
Managing General Partner by its affiliates and, for so long as Fremont Group, 
Inc. owns an interest in the Managing General Partner, an annual fee of 
$100,000,  payable semi-annually in arrears in consideration of management 
services).

    "SUBORDINATED FUNDED DEBT" shall mean all unsecured Funded Debt of the 
Company which shall contain or have applicable thereto subordination 
provisions substantially in the form set forth in Exhibit G attached hereto 
providing for the subordination thereof to other Funded Debt of the Company, 
including, without limitation, the Notes.

    "SUBSIDIARY" shall mean, as to any particular parent business entity, any 
business entity of which such parent business entity and/or one or more 
business entities which are themselves subsidiaries of such parent business 
entity, (i) in the case of any corporation, own more than 50% of the Voting 
Stock, or (ii) in the case of any partnership, own more than 50% of the 
Limited Partnership Interest, or own a Controlling General Partnership 
Interest.


                                     -49-

<PAGE>

    "SUBSIDIARY" shall mean a subsidiary of the Company.

    "SURVIVING ENTITY" is defined in SECTION 4.9(2)(i).

    "UNRESTRICTED SUBSIDIARY" shall mean any Subsidiary other than a 
Restricted Subsidiary.

    "VOTING EQUITY INTEREST" shall mean Voting Stock and General Partnership 
Interests.

    "VOTING STOCK" of any Person shall mean Securities of any class or 
classes, the holders of which are entitled at such time to elect a majority 
of the corporate directors of such Person (or Persons performing similar 
functions).

    "W-I" is defined in Exhibit B.

    "WHOLLY-OWNED" when used in connection with any Subsidiary shall mean (i) 
in the case of a corporation, a Subsidiary of which all the issued and 
outstanding shares of stock (except shares required as directors' qualifying 
shares) and all Indebtedness shall be owned by the Company and/or one or more 
of its Wholly-owned Subsidiaries, and (ii) in the case of any partnership 
shall mean a Subsidiary of which all of the outstanding General Partnership 
Interests are owned by the Managing General Partner and all of the Limited 
Partnership Interests and all Indebtedness shall be owned by the Company 
and/or one or more of its Wholly-owned Subsidiaries.

    "WORKING CAPITAL CREDIT AGREEMENT" is defined in SECTION 3.9.

    "WORKING CAPITAL FACILITY" shall mean the facility made available to the 
Company for working capital and general partnership purposes pursuant to the 
Working Capital Credit Agreement, as from time to time renewed, extended, 
amended and supplemented and any other credit agreement from time to  time 
entered into by the Company for purposes of obtaining working capital 
financing, PROVIDED that such facility or facilities shall not be for an 
amount in excess of $40,000,000 in the aggregate.

    "WORKING CAPITAL RESERVE" shall mean the amount, if any, available to be 
borrowed at the time of determination under the Working Capital Facility, up 
to a maximum of $40,000,000.

    SECTION 8.2.  ACCOUNTING PRINCIPLES.  Where the character or amount of 
any asset or liability or item of income or expense is required to be 
determined or any consolidation or other accounting computation is required 
to be made for the purposes of this Agreement the same shall be done in 
accordance with GAAP, to the extent applicable, except (i) that audit 
adjustments shall be effective as of the related period and not as of the 
period made, and (ii) where such principles are inconsistent with the 
requirements of this Agreement.

    SECTION 8.3.  DIRECTLY OR INDIRECTLY.  Where any provision of this
Agreement refers to action to be taken by any Person, or which such Person is
prohibited from taking, such 


                                     -50-

<PAGE>

provision shall be applicable whether such action is taken directly or 
indirectly by such Person.

SECTION 9.  MISCELLANEOUS.

    SECTION 9.1.  REGISTERED NOTES.  The Company shall cause to be kept at 
its principal office a register for the registration and transfer of the 
Notes and the Company will register or transfer or cause to be registered or 
transferred as hereinafter provided any Note issued pursuant to this 
Agreement, PROVIDED that nothing in this SECTION 9.1 shall be construed to 
require the Company to register the Notes under the Securities Act or the 
United States Securities Exchange Act of 1934, as amended.

    At any time and from time to time the registered Holder holding any Note 
which has been duly registered as hereinabove provided may transfer such Note 
upon surrender thereof at the principal office of the Company duly endorsed 
or accompanied by a written instrument of transfer duly executed by the 
registered Holder or its attorney duly authorized in writing.  Any transferee 
of a Note shall, by its acceptance of such Note, be deemed to have made the 
same representations to the Company regarding the purchase of the Note as the 
original Purchaser made pursuant to SECTION 2.3; PROVIDED, HOWEVER, that with 
respect to the representation made in the third sentence of SECTION 2.3, such 
transferee  will not be deemed to have chosen the options set forth in 
SECTION 2.3(b), (c), (d) or (f) unless such transferee shall have made the 
disclosures referred to therein at least ten Business Days prior to its 
acceptance of such Note and shall have received prior to its acceptance of 
such Note written confirmation from the Company to the effect set forth in 
the first sentence of Paragraph 20 of Exhibit B-1 hereto.  The Company shall 
exercise such reasonable due diligence as is necessary to respond to any such 
disclosure, PROVIDED THAT, if the Company shall not respond within 10 
Business Days following receipt of any such disclosure, it shall be deemed to 
have made such confirmation.

    The Person in whose name any registered Note shall be registered shall be 
deemed and treated as the owner and Holder thereof for all purposes of this 
Agreement. Payment of or on account of the principal, premium, if any, and 
interest on any registered Note shall be made to or upon the written order of 
such registered Holder.

    SECTION 9.2.  EXCHANGE OF NOTES.  At any time and from time to time, upon 
not less than ten days' notice to that effect given by the Holder holding any 
Note initially delivered or of any Note substituted therefor pursuant to 
SECTION 9.1, this SECTION 9.2 or SECTION 9.3, and, upon surrender of such 
Note at its office, the Company will deliver in exchange therefor, without 
expense to such Holder, except as set forth below, a Note of the same series 
and for the same aggregate principal amount as the then unpaid principal 
amount of the Note so surrendered, or Notes of the same series in the 
denomination of $1,000,000 or any amount in excess thereof as such Holder 
shall specify, dated as of the date to which interest has been paid on the 
Note so surrendered or, if such surrender is prior to the payment of any 
interest thereon, then dated as of the date of issue, registered in the name 
of such Person or Persons as may be designated by such Holder, and otherwise 
of the same form and tenor as the Notes so 


                                     -51-

<PAGE>

surrendered for exchange.  The Company may require the payment of a sum 
sufficient to cover any stamp tax or governmental charge imposed upon such 
exchange or transfer.

    SECTION 9.3.  LOSS, THEFT, ETC. OF NOTES.  Upon receipt of evidence 
satisfactory to the Company of the loss, theft, mutilation or destruction of 
any Note, and in the case of any such loss, theft or destruction upon 
delivery of a bond of indemnity in such form and amount as shall be 
reasonably  satisfactory to the Company, or in the event of such mutilation 
upon surrender and cancellation of the Note, the Company will make and 
deliver without expense to the Holder thereof, a new Note, of the same series 
and of like tenor, in lieu of such lost, stolen, destroyed or mutilated Note. 
 If the Purchaser or any subsequent Institutional Holder is the owner of any 
such lost, stolen or destroyed Note, then the affidavit of an authorized 
officer of such owner, setting forth the fact of loss, theft or destruction 
and of its ownership of such Note at the time of such loss, theft or 
destruction shall be accepted as satisfactory evidence thereof and no further 
indemnity shall be required as a condition to the execution and delivery of a 
new Note other than the written agreement of such owner to indemnify the 
Company.

    SECTION 9.4.  POWERS AND RIGHTS NOT WAIVED; REMEDIES CUMULATIVE.  No 
delay or failure on the part of any Holder in the exercise of any power or 
right shall operate as a waiver thereof nor shall any single or partial 
exercise of the same preclude any other or further exercise thereof, or the 
exercise of any other power or right, and the rights and remedies of any 
Holder are cumulative to, and are not exclusive of, any rights or remedies 
any such Holder would otherwise have, and no waiver or consent shall extend 
to or affect any obligation or right not expressly waived or consented to.

    SECTION 9.5.  NOTICES.  (a) All communications under this Agreement shall 
be in writing and shall be mailed by registered or certified mail, postage 
prepaid or shall be sent by overnight courier:

       (1)   If to any Purchaser, at such Purchaser's address appearing 
    on Schedule I hereto, marked for attention as there indicated, or at 
    such other address as such Purchaser or any subsequent Holder may have 
    furnished to the Company in writing or

       (2)   If to the Company, at its address beneath its signature at 
    the foot of this Agreement, or at such other address as it may have 
    furnished in writing to each Holder.

    (b)   Any notice so addressed and mailed by registered or certified mail 
to any Holder shall be deemed to be given when delivered to such Holder and 
any notice so addressed and sent by overnight courier to any Holder shall be 
deemed to be given when delivered to such Holder.

    SECTION 9.6.  REPRODUCTION OF DOCUMENTS.  This Agreement and all 
documents relating thereto including, without limitation, (a) consents, 
waivers and modifications which may hereafter be executed, (b) documents 
received by each Purchaser at the closing of its 


                                     -52-

<PAGE>

purchase of the Notes (except the Notes themselves), and (c) financial 
statements, certificates and other information previously or hereafter 
furnished to such Purchaser, may be reproduced by such Purchaser by any 
photographic, photostatic, microfilm, micro-card, miniature photographic or 
other similar process and such Purchaser may destroy any original document so 
reproduced.  The Company agrees and stipulates that any such reproduction 
shall be admissible in evidence as the original itself in any judicial or 
administrative proceeding (whether or not the original is in existence and 
whether or not such reproduction was made by such Purchaser in the regular 
course of business) and that any enlargement, facsimile or further 
reproduction of such reproduction shall likewise be admissible in evidence.

    SECTION 9.7.  SURVIVAL.  All warranties, representations and covenants 
made by the Company herein or on any certificate or other instrument 
delivered by it or on its behalf under this Agreement shall be considered to 
have been relied upon by each Purchaser and shall survive the delivery to 
such Purchaser of the Notes regardless of any investigation made by such 
Purchaser or on its behalf.  All representations made by the Purchasers in 
SECTION 2.3 shall be considered to have been relied upon by the Company and 
shall survive the delivery to the Company of the purchase price of the Notes 
regardless of any investigation made by the Company or on its behalf.  All 
statements in any such certificate or other instrument shall constitute 
warranties and representations by the Company hereunder.

    SECTION 9.8.  SUCCESSORS AND ASSIGNS.  This Agreement shall inure to the 
benefit of and be binding upon the successors and assigns of each of the 
parties.  The provisions of this Agreement are intended to be for the benefit 
of all Holders, from time to time, and shall be enforceable by any such 
Holder, whether or not an express assignment to such Holder of rights under 
this Agreement has been made by any Purchaser or its successor or assign.

    SECTION 9.9.  GOVERNING LAW.  This Agreement and the Notes shall be 
governed by and construed in accordance with the laws of the State of New 
York.
 
    SECTION 9.10.  SUBMISSION TO JURISDICTION.  The Company hereby 
irrevocably submits to the jurisdiction of the courts of the State of New 
York and of the courts of the United States of America having jurisdiction in 
the State of New York for the purpose of any legal action or proceeding in 
any such court with respect to, or arising out of, this Agreement.  The 
Company designates and appoints Prentice Hall Legal & Financial Services, 15 
Columbus Circle, New York, New York  10023 and its successors as the 
Company's lawful agent in the United States of America upon which may be 
served and which may accept and acknowledge, for and on behalf of the Company 
all process in any action, suit or proceedings that may be brought against 
the Company in any of the courts referred to in this SECTION 9.10, and agrees 
that such service of process, or the acceptance or acknowledgment thereof by 
said agent, shall be valid, effective and binding in every respect PROVIDED, 
HOWEVER, that if said agency shall cease for any reason whatsoever, the 
Company hereby designates and appoints, without power or revocation, the 
Secretary of State of the State of New York to serve as its agent for service 
of process.  If any Holder shall cause process to be served upon the Company 
by being served upon such agent, a copy of such process shall also be mailed 
to the Company by registered mail, first class postage prepaid, at the 
Company's address set 


                                     -53-

<PAGE>

forth at the foot of this Agreement.  Nothing contained in this SECTION 9.10 
shall limit the right of any Holders to take proceedings against the Company 
in any other court of competent jurisdiction nor, by virtue of anything 
contained herein, shall the taking of proceedings in one or more 
jurisdictions preclude the taking of proceedings in any other jurisdiction 
whether concurrently or not.

    SECTION 9.11.  LIMITATIONS OF LIABILITY.  Anything in this Agreement to 
the contrary notwithstanding, neither the Holders nor the successors or 
assigns thereof shall have any claim, remedy or right to proceed against (i) 
the Managing General Partner or (ii) any past, present or future partner, 
employee, director, officer, stockholder or incorporator of the Managing 
General Partner, the Partnership or any subsidiary thereof (other than the 
Company) for the payment of any deficiency or any other sum owing on account 
of the Indebtedness evidenced by the Notes or for the payment of any 
liability resulting from the breach of any covenant, agreement, warranty or 
representation of any nature whatsoever in this Agreement or in any 
certificate delivered pursuant hereto. Nothing herein contained shall limit, 
restrict or impair the rights of the Holders to accelerate the maturity of 
the Notes upon an Event of Default, to bring suit and obtain a judgment 
against the Company on the Notes, to execute any such judgment on the 
Company's Properties or to exercise all other rights and remedies against the 
Company provided under this Agreement.

    SECTION 9.12.  SEVERABILITY.  Should any part of this Agreement for any 
reason be declared invalid, such decision shall not affect the validity of 
any remaining portion, which remaining portion shall remain in force and 
effect as if this Agreement had been executed with the invalid portion 
thereof eliminated.

    SECTION 9.13.  CAPTIONS.  The descriptive headings of the various 
Sections or parts of this Agreement are for convenience only and shall not 
affect the meaning or construction of any of the provisions hereof.

    SECTION 9.14.  DUPLICATE ORIGINALS. Two or more counterparts of this 
Agreement may be signed by the parties, each of which shall be an original 
but all of which together shall constitute one and the same instrument.


                                     -54-

<PAGE>

    The execution hereof by the Purchasers shall constitute a contract among 
the Company and the Purchasers for the uses and purposes hereinabove set 
forth. 

                                       CROWN PACIFIC LIMITED PARTNERSHIP, a 
                                         Delaware limited partnership

                                          By: CROWN PACIFIC MANAGEMENT
                                              LIMITED PARTNERSHIP, a Delaware
                                               limited partnership
                                                Its General Partner

                                          By: HS Corp. of Oregon, an Oregon
                                              corporation
                                                Its General Partner

                                          By: /s/ RICHARD D. SNYDER
                                                Its Treasurer

Crown Pacific Limited Partnership
121 S.W. Morrison Street
Portland, Oregon  97204
Attention:  Roger L. Krage
Telefacsimile number:  (503) 228-4875
Confirmation number:  (503) 274-2300
                                       Acknowledged (as to representations made 
                                         pursuant to SECTION 2.2) by:

                                          CROWN PACIFIC MANAGEMENT
                                           LIMITED PARTNERSHIP, a
                                            Delaware limited partnership
                                             As Managing General Partner

                                          By: HS Corp. of Oregon, an Oregon
                                              corporation
                                               Its General Partner

                                          By: /s/ RICHARD D. SNYDER
                                               Its Treasurer
Crown Pacific Management Limited
  Partnership
121 S.W. Morrison Street
Portland, Oregon  97204
Attention:  Roger L. Krage
Telefacsimile number:  (503) 228-4875
Confirmation number:  (503) 274-2300


                                     -55-

<PAGE>

Accepted as of August 1, 1996:
                                       JOHN HANCOCK MUTUAL LIFE INSURANCE 
                                          COMPANY



                                       By: /s/ KEN HINES, JR.
                                         Its Senior Investment Officer


                                     -56-

<PAGE>

Accepted as of August 1, 1996:
                                       COMMONWEALTH OF PENNSYLVANIA
                                       STATE EMPLOYEES' RETIREMENT SYSTEM

                                       By:  John Hancock Mutual Life Insurance
                                           Company, as Investment Adviser



                                         By /s/ STEPHEN A. MACLEAN
                                            [authorized John Hancock Officer]
                                                Senior Investment Officer


                                     -57-

<PAGE>

Accepted as of August 1, 1996:
                                       TEACHERS INSURANCE AND ANNUITY 
                                         ASSOCIATION OF AMERICA



                                        By /s/ ANGELA BROCK-KYLE
                                          Its Associate Director-Private 
                                            Placements


                                     -58-

<PAGE>

Accepted as of August 1, 1996:
                                       ALLSTATE LIFE INSURANCE COMPANY



                                       By /s/ PATRICIA W. WILSON
                                       Name:



                                       By /s/ STEVEN M. LAUDE
                                       Name:
                                                   Authorized Signatories


                                     -59-

<PAGE>

Accepted as of August 1, 1996:
                                       ALLSTATE INSURANCE COMPANY



                                       By /s/ PATRICIA W. WILSON
                                       Name:



                                       By /s/ STEVEN M. LAUDE
                                       Name:
                                                  Authorized Signatories


                                     -60-

<PAGE>

Accepted as of August 1, 1996:
                                       ALLSTATE LIFE INSURANCE COMPANY OF 
                                          NEW YORK



                                       By /s/ PATRICIA W. WILSON
                                       Name:



                                       By /s/ STEVEN M. LAUDE
                                       Name:
                                                   Authorized Signatories


                                     -61-

<PAGE>

Accepted as of August 1, 1996:
                                       PROVIDENT LIFE AND ACCIDENT INSURANCE 
                                          COMPANY



                                       By /s/ JAMES T. ROGERS
                                          Its Vice President


                                     -62-