CROWN PACIFIC PARTNERS L P
10-K405, 2000-03-30
SAWMILLS & PLANTING MILLS, GENERAL
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EXHIBIT 10.7


AMENDED AND RESTATED
CREDIT AGREEMENT

Dated as of December 1, 1999

among

CROWN PACIFIC LIMITED
PARTNERSHIP,

as the Company

BANK OF AMERICA N.A.,

as Agent,

UNION BANK OF CALIFORNIA, N.A.

as Syndication Agent

and

BANK OF MONTREAL

and

KEYBANK NATIONAL ASSOCIATION,

as Co-Agents

and

THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO

Arranged By

BANC OF AMERICA SECURITIES LLC


TABLE OF CONTENTS

 
    
   Page
ARTICLE I—DEFINITIONS   1
1.1   Certain Defined Terms   1
1.2   Other Interpretive Provisions   21
1.3   Accounting Principles   22
ARTICLE II THE CREDITS   22
2.1   Amounts and Terms of Commitments   22
2.2   Loan Accounts   23
2.3   Procedure for Borrowing on any Borrowing Date   23
2.4   Conversion and Continuation Elections   24
2.5   Voluntary Termination or Reduction of Commitments   25
2.6   Optional Prepayments   25
2.7   Mandatory Prepayments of Loans; Mandatory Commitment Reductions   25
2.8   Repayment   26
2.9   Interest   27
2.10   Fees   27
2.11   Computation of Fees and Interest   28
2.12   Payments by the Company   28
2.13   Payments by the Banks to the Agent   29
2.14   Sharing of Payments, Etc   29
2.15   Quarterly Adjustments   30
2.16   Increase of the Commitments   30
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY   31
3.1   Taxes   31
3.2   Illegality   32
3.3   Increased Costs and Reduction of Return   32
3.4   Funding Losses   33
3.5   Inability to Determine Rates   33
3.6   Certificates of Banks   33
3.7   Survival   34
ARTICLE IV CONDITIONS PRECEDENT   34
4.1   Conditions of Initial Credit Extension   34
4.2   Conditions to all Credit Extensions   35
ARTICLE V REPRESENTATIONS AND WARRANTIES   36
5.1   Existence and Power   36
5.2   Authorization; No Contravention   36
5.3   Governmental Authorization   37
5.4   Binding Effect   37
5.5   Litigation   37
5.6   No Default   37
5.7   Erisa Compliance   37

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5.8   Use of Proceeds; Margin Regulations   38
5.9   Title to Properties   38
5.10   Taxes   38
5.11   Financial Condition   38
5.12   Environmental Matters   39
5.13   Regulated Entities   39
5.14   No Burdensome Restrictions   40
5.15   Copyrights, Patents, Trademarks and Licenses, Etc   40
5.16   Subsidiaries   40
5.17   Insurance   40
5.18   Labor Relations   40
5.19   Partnership Interests   40
5.20   Full Disclosure   40
5.21   Solvency   41
5.22   Swap Obligations   41
5.23   Y2K   41
ARTICLE VI AFFIRMATIVE COVENANTS   41
6.1   Financial Statements   41
6.2   Certificates; Other Information   43
6.3   Notices   43
6.4   Preservation of Partnership Existence, Etc   44
6.5   Maintenance of Property   45
6.6   Insurance   45
6.7   Payment of Obligations   45
6.8   Compliance with Laws   45
6.9   Inspection of Property and Books and Records   45
6.10   Environmental Laws   46
6.11   Use of Proceeds   46
6.12   Further Assurances   46
ARTIVLE VII NEGATIVE COVENANTS   46
7.1   Limitation on Liens   46
7.2   Asset Dispositions   48
7.3   Consolidations and Mergers   49
7.4   Harvesting Restrictions   50
7.5   Loans and Investments   51
7.6   Limitation on Indebtedness   52
7.7   Transactions with Affiliates   53
7.8   Use of Proceeds   53
7.9   Contingent Obligations   53
7.10   Joint Ventures   54
7.11   Restricted Payments   54
7.12   Change in Business   54

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7.13   Fiscal Year Changes   54
7.14   Amendments to Agreements   54
7.15   Indebtedness Covenant   55
7.16   Limitation on Voluntary Payments of Senior Notes, Etc   55
ARTICLE VII EVENTS OF DEFAULT   55
8.1   Event of Default   55
8.2   Remedies   57
8.3   Rights Not Exclusive   57
ARTICLE IX THE AGENT   57
9.1   Appointment and Authorization   57
9.2   Delegation of Duties   58
9.3   Liability of Agent   58
9.4   Reliance by Agent   58
9.5   Notice of Default   58
9.6   Credit Decision   59
9.7   Indemnification   59
9.8   Agent in Individual Capacity   59
9.9   Successor Agent   60
9.10   Withholding Tax   60
9.11   Syndication Agent and the Co-Agents   61
9.12   CP Acquisition II Guaranty   61
ARTICLE X MISCELLANEOUS   61
10.1   Amendments and Waivers   61
10.2   Notices   62
10.3   No Waiver; Cumulative Remedies   63
10.4   Costs and Expenses   63
10.5   Indemnity   63
10.6   Payments Set Aside   64
10.7   Successors and Assigns   64
10.8   Assignments, Participations, Etc   64
10.9   Set-off   66
10.10   Automatic Debits of Fees   66
10.11   Notification of Addresses, Lending Offices, Etc   67
10.12   Counterparts   67
10.13   Severability   67
10.14   No Third Parties Benefited   67
10.15   Governing Law and Jurisdiction   67
10.16   Waiver of Jury Trial   68
10.17   Recourse   68
10.18   Entire Agreement   68

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SCHEDULES    
 
Schedule 1.1		  
 		  
Investment Policy
Schedule 2.1   Commitments
Schedule 5.5   Litigation
Schedule 5.7   ERISA
Schedule 5.12   Environmental Matters
Schedule 5.16   Subsidiaries and Minority Interests
Schedule 7.1   Permitted Liens
Schedule 7.5   Permitted Loans and Investments
Schedule 7.6   Permitted Indebtedness
Schedule 7.9   Contingent Obligations
Schedule 10.2   Lending Offices; Addresses for Notices
 
 EXHIBITS		  
 		  
 
 
Exhibit A		  
 		  
Form of Notice of Borrowing
Exhibit B   Form of Notice of Conversion/Continuation
Exhibit C   Form of Compliance Certificate
Exhibit D   Form of Legal Opinion of Company's Counsel
Exhibit E   Form of Assignment and Acceptance
Exhibit F   Form of Note
Exhibit G   Form of Installment Payment Election
Exhibit H   Form of Escrow Agreement

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AMENDED AND RESTATED
CREDIT AGREEMENT

    This AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of December 1, 1999, among Crown Pacific Limited Partnership, a Delaware limited partnership (the "Company"), the several financial institutions from time to time party to this Agreement (collectively, the "Banks"; individually, a "Bank"), Bank of America, N.A. (formerly known as Bank of America National Trust and Savings Association), as agent for the Banks, Union Bank of California, N.A. as Syndication Agent, and Bank of Montreal and KeyBank National Association, as co-agents for the Banks.

    WHEREAS, the Company, the banks signatory thereto and Bank of America, as agent for those banks, entered into a Credit Agreement dated as of December 13, 1994 (as amended by the Amendment to Credit Agreement dated as of February 21, 1995, the "Original Credit Agreement");

    WHEREAS, the Company, the banks signatory thereto and Bank of America, as agent for those banks, entered into an Amended and Restated Credit Agreement dated as of May 22, 1995 (the "1995 Amended and Restated Credit Agreement");

    WHEREAS, the Company, the banks signatory thereto and Bank of America, as agent for those banks, entered into an Amended and Restated Credit Agreement dated as of May 13, 1996 (the "Initial 1996 Amended and Restated Credit Agreement");

    WHEREAS, the Company, the Existing Banks and Bank of America, as agent for the Existing Banks, are parties to an Amended and Restated Credit Agreement dated as of July 31, 1996, as amended (the "1996 Amended and Restated Credit Agreement");

    WHEREAS, the Company, the Agent, the Syndication Agent, the Co-Agents and the Banks desire to enter into this Agreement to amend and restate the 1996 Amended and Restated Credit Agreement and to become parties to this Agreement upon the terms and conditions set forth herein;

    NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the Company, the Agent, the Syndication Agent, the Co-Agents and the Banks hereby amend and restate the 1996 Amended and Restated Credit Agreement in its entirety and hereby agree as follows:


ARTICLE I

DEFINITIONS

1.1
Certain Defined Terms.

    The following terms have the following meanings:

    "Acquisition" means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of any business or division of a Person, (b) the acquisition of in excess of 50% of the capital stock, partnership interests or equity of any Person or otherwise causing any Person, to become a Subsidiary, or (c) a merger or consolidation or any other combination with another Person (other than a Person that is a Subsidiary) provided that the Company or the Subsidiary is the surviving entity.

    "Affiliate" means, as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. A Person shall be deemed to control another Person if the controlling Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the other Person, whether through the ownership of voting securities, by contract, or otherwise.

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    "Agent" means Bank of America in its capacity as agent for the Banks hereunder, and any successor agent arising under Section 9.9.

    "Agent-Related Persons" means Bank of America, Bank of America as agent under Original Credit Agreement, the 1995 Amended and Restated Credit Agreement, the Initial 1996 Amended and Restated Credit Agreement, or the 1996 Amended and Restated Credit Agreement and any successor agent arising under Section 9.9, together with their respective Affiliates (including, in the case of Bank of America, the Arranger), and the officers, directors, employees, agents and attorneys-in-fact of such Persons and Affiliates.

    "Agent's Payment Office" means the address for payments set forth on Schedule 10.2 in relation to the Agent, or such other address as the Agent may from time to time specify.

    "Aggregate Commitment" means the combined Commitments of the Banks, as such amount may be increased or reduced from time to time pursuant to this Agreement.

    "Agreement" means this Amended and Restated Credit Agreement.

    "Annual Timber Increase" and "Annual Timber Decrease" have the meanings specified in Section 7.4.

    "Applicable Margin" means, in respect of all Loans outstanding on any date (A) for the period from the Closing Date through the date which is three Business Days after the delivery of the financial reports and certificate delivered to the Agent pursuant to subsections 6.1(a) and (b) and 6.2(b), respectively, for the fiscal quarter ending December 31, 1999 1.3750% for Offshore Rate Loans and 0.3750% for Base Rate Loans, and (B) thereafter the percentage specified below opposite the Total Debt to Cash Flow Ratio (which ratio shall be calculated for the relevant four fiscal quarter period) calculated for the periods described below.

 
   Applicable Margin
  
Total Debt to Cash Flow Ratio at
End of Fiscal Quarter
   Offshore
Rate Loans
   Base
Rate Loans
  
Less than or equal to 2.50 to 1.00   0.7500 % 0.0000 %
Greater than 2.50 to 1.00 but less than or equal to 3.00 to 1.00   0.8750 % 0.0000 %
Greater than 3.00 to 1.00, but less than or equal to 3.50 to 1.00   1.1250 % 0.1250 %
Greater than 3.50 to 1.00, but less than or equal to 4.00 to 1.00   1.3750 % 0.3750 %
Greater than 4.00 to 1.00   1.8750 % 0.8750 %

The Applicable Margin shall be adjusted automatically as to all Loans then outstanding (without regard to the timing of Interest Periods) three Business Days after the delivery to the Agent of the financial reports and certificate delivered pursuant to subsections 6.1(a) and (b) and 6.2(b), respectively, for the fiscal quarter ending on December 31, 1999, and three Business Days after delivery to the Agent of such financial reports and certificate for each fiscal quarter thereafter. If the Company fails to deliver such financial reports and certificate to the Agent for any such fiscal quarter by the date required hereunder, then the Applicable Margin for all Loans beginning three Business Days after such date shall, until three Business Days after delivery of such financial reports and certificate, be the next highest Applicable Margin as set forth in the chart above immediately below the previously effective Applicable Margin; thus, if the Applicable Margin had previously been 0.1250% for Base Rate Loans and 1.1250% for Offshore Rate Loans, a failure to deliver quarterly financials on a timely basis would cause the Applicable Margin to be 0.3750% and 1.3750%, respectively, until three Business Days after such delivery.

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    "Arranger" means Banc of America Securities LLC.

    "Asset Coverage Ratio" has the meaning specified in Section 7.4.

    "Assignee" has the meaning specified in subsection 10.8(a).

    "Assuming Bank" means an Eligible Assignee not previously a Bank that becomes a Bank hereunder pursuant to Section 2.16.

    "Attorney Costs" means and includes all reasonable fees and disbursements of any law firm or other external counsel, the reasonable allocated cost of internal legal services and all disbursements of internal counsel.

    "Available Cash" means, with respect to any fiscal quarter and without duplication:

3

    Taxes paid by the Company on behalf of, or amounts withheld with respect to, all or less than all of the Partners (as defined in the Company Partnership Agreement) 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, such taxes (if pertaining to all Partners) may be considered to be cash disbursements of the Company which reduce Available Cash, but the payment or withholding thereof shall not be deemed to be a distribution of Available Cash to such Partners.

    "Bank" has the meaning specified in the introductory clause hereto.

    "Bank of America" means Bank of America, N.A.

    "Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11 U.S.C. § 101, et seq.).

    "Base Rate" means, for any day, the higher of: (a) 0.50% per annum above the latest Federal Funds Rate; and (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its "reference rate." (The "reference rate" is a rate set by Bank of America based upon various factors including Bank of America's costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.) Any change in the reference rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

    "Base Rate Loan" means a Loan that bears interest based on the Base Rate.

    "Borrowing" means a borrowing hereunder consisting of Loans of the same Type made to the Company on the same day by the Banks pursuant to Article II, and, other than in the case of Base Rate Loans, having the same Interest Period.

    "Borrowing Date" means any date on which a Borrowing occurs under Section 2.3.

    "Business Day" means any day other than a Saturday, Sunday or other day on which commercial banks in Portland, Oregon, New York City or San Francisco are authorized or required by law to close and, if the applicable Business Day relates to any Offshore Rate Loan, means such a day on which dealings are carried on in the applicable offshore dollar interbank market.

    "Capital Additions and Improvements" means (a) additions or improvements to the capital assets owned by the Company or any of its Subsidiaries or (b) 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 Subsidiaries, taken as a whole, from the Operating Capacity of the Company and its Subsidiaries, taken as a whole, existing immediately prior to such addition, improvement, acquisition or construction.

    "Capital Adequacy Regulation" means any guideline, request or directive of any central bank or other Governmental Authority, or any other law, rule or regulation, whether or not having the force of law, in each case, regarding capital adequacy of any bank or of any corporation controlling a bank.

    "Capital Expenditure Loans" means Loans intended for the purposes set forth in subsection 6.11(iii).

    "Cash Collateralize" means to pledge and deposit with or deliver to the Agent, for the benefit of the Agent and the Banks, as collateral for the Offshore Rate Loans, cash or deposit account balances

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pursuant to documentation in form and substance reasonably satisfactory to the Agent (which documents are hereby consented to by the Banks). The Company hereby grants to the Agent, for the benefit of the Agent and the Banks, a security interest in all such cash and deposit account balances. Derivatives of such term shall have corresponding meaning. Cash collateral shall be maintained in blocked, non-interest bearing deposit accounts at Bank of America.

    "Cash Flow" means, at any date of determination, the sum of the following calculated for the Company and its Subsidiaries on a consolidated basis for the four fiscal quarter period ending on the last day of the most recent quarter for which financial reports pursuant to subsections 6.1(a) and (b) and a certificate pursuant to subsection 6.2(b) have been delivered: (i) EBITDA for such period; (ii) plus the Net Proceeds from the sale or other disposition of assets permitted under subsections 7.2(a), (b), (c), (d) or (f)(ii)(C) during such period, to the extent not otherwise included in determining EBITDA, plus Permitted Inclusions; (iii) plus or minus, as applicable, in connection with any businesses (other than timberland covered by clause (iv) below) acquired by the Company within such period, an amount equal to a good faith estimate of such additional amounts that would be included in determining EBITDA had such businesses been owned by the Company for the entirety of such period, as certified with reasonable accompanying detail by the Chief Financial Officer of the Company based upon such Chief Financial Officer's good faith estimates of applicable revenues and expenses arising from such businesses, and (iv) plus or minus, as applicable, in connection with any timberland acquired by the Company within such period, an amount equal to a good faith estimate of such additional amounts that would be included in determining EBITDA had such timberlands been owned by the Company for the entirety of such period, as certified with reasonable accompanying detail by the Chief Financial Officer of the Company based upon such Chief Financial Officer's good faith estimates of applicable revenues and expenses arising from such timberlands and assuming aggregate timber harvests in an amount that does not require proceeds to be placed in an escrow account pursuant to Section 7.4.

    "Cash Provided by Operating Activity" means, at any date of determination, the sum of the following calculated for the Company and its Subsidiaries on a consolidated basis for the four fiscal quarter period ending as of the last day of the most recent fiscal quarter for which financial reports pursuant to subsections 6.1(a) and (b) and a certificate pursuant to subsection 6.2(b) have been delivered:

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all as determined on a consolidated basis with respect to the Company and its Subsidiaries and after taking into account the Managing General Partner's interest therein attributable to its general partner interest in the Company. Where cash capital expenditures are made in part in respect of Operating Capacity 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 Operating Capacity Acquisitions or Capital Additions and Improvements and the portion made for other purposes shall be conclusive. 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 Cash Provided by Operating Activity, 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, such taxes (if pertaining to all Partners) may be considered to be cash operating expenditures of the Company which reduce Cash Provided by Operating Activity, but the payment or withholding thereof shall not be deemed to be a distribution of Available Cash to such Partners.

    "CERCLA" has the meaning specified in the definition of "Environmental Laws."

    "Closing Date" means the date on which all conditions precedent set forth in Section 4.1 are satisfied or waived by all Banks (or, in the case of subsection 4.1(e), waived by the Person entitled to receive such payment).

    "Co-Agents" means Bank of Montreal and KeyBank National Association, in their capacity as co-agents for the Banks.

    "Code" means the Internal Revenue Code of 1986, and regulations promulgated thereunder.

    "Commitment", as to each Bank, has the meaning specified in subsection 2.1.

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    "Commitment Fee Percentage" means (A) for the period from the Closing Date through the date which is three Business Days after the delivery of the financial reports and certificate delivered to the Agent pursuant to subsections 6.1(a) and (b) and 6.2(b), respectively, for the fiscal quarter ending December 31, 1999 0.350%, and (B) thereafter, a rate per annum equal to the percentage specified below opposite the Total Debt to Cash Flow Ratio (which ratio shall be calculated for the relevant four fiscal quarter period) calculated for the periods described below.

Total Debt to Cash Flow Ratio
at End of Fiscal Quarter
   Commitment Fee
  
Less than or equal to 2.50 to 1.00   0.225 %
Greater than 2.50 to 1.00 but less than or equal to 3.00 to 1.00   0.250 %
Greater than 3.00 to 1.00, but less than or equal to 3.50 to 1.00   0.300 %
Greater than 3.50 to 1.00, but less than or equal to 4.00 to 1.00   0.350 %
Greater than 4.00 to 1.00   0.450 %

    The Commitment Fee Percentage shall be adjusted automatically three Business Days after the delivery to the Agent of the financial reports and certificate delivered pursuant to subsections 6.1(a) and (b) and subsection 6.2(b), respectively, for the fiscal quarter ending December 31, 1999, and three days after delivery to the Agent of such financial reports and certificate for each fiscal quarter thereafter. If the Company fails to deliver such financial reports and certificate to the Agent for any such fiscal quarter by the date required hereunder, then the Commitment Fee Percentage beginning three Business Days after such date shall, until three Business Days after delivery of such financial reports and certificate, be the next highest Commitment Fee Percentage as set forth in the chart above immediately below the previously effective Commitment Fee Percentage; thus, if the Commitment Fee Percentage had previously been 0.350%, a failure to deliver quarterly financials on a timely basis would cause the Commitment Fee Percentage to be 0.450% until three Business Days after such delivery.

    "Company" has the meaning specified in the introductory clause hereto.

    "Company's Knowledge" shall mean the actual knowledge of any Person holding an office of divisional manager of the Company or any Person holding an office senior to a divisional manager including, without limitation, any senior executive or officer of the Company.

    "Company Partnership Agreement" means the Amended and Restated Agreement of Limited Partnership of the Company dated as of December 22, 1994, between the Managing General Partner and the Master Partnership.

    "Compliance Certificate" means a certificate substantially in the form of Exhibit C.

    "Contingent Obligation" means, as to any Person, any direct or indirect liability of that Person, whether or not contingent, with or without recourse, (a) with respect to any Indebtedness, lease, dividend, letter of credit or other obligation (the "primary obligations") of another Person (the "primary obligor"), including any obligation of that Person (i) to purchase, repurchase or otherwise acquire such primary obligations or any security therefor, (ii) to advance or provide funds for the payment or discharge of any such primary obligation, or to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency or any balance sheet item, level of income or financial condition of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation, or (iv) otherwise to assure or hold harmless the holder of any such primary obligation against loss in respect thereof (each, a "Guaranty Obligation"); (b) with respect to any Surety Instrument issued for the account of that Person or as to which that Person is otherwise liable for reimbursement of drawings or payments; (c) to purchase any materials, supplies or other property from, or to obtain the services of, another Person if the relevant contract or other related document or obligation requires that payment for such materials, supplies or

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other property, or for such services, shall be made regardless of whether delivery of such materials, supplies or other property is ever made or tendered, or such services are ever performed or tendered, or (d) in respect of any Swap Contract. The amount of any Contingent Obligation shall, in the case of Guaranty Obligations, be deemed equal to the stated or determinable amount of the primary obligation in respect of which such Guaranty Obligation is made or, if not stated or if indeterminable, the maximum reasonably anticipated liability in respect thereof, and in the case of other Contingent Obligations, shall be equal to the maximum reasonably anticipated liability in respect thereof.

    "Contractual Obligation" means, as to any Person, any provision of any security issued by such Person or of any agreement, undertaking, contract, indenture, mortgage, deed of trust or other instrument, document or agreement to which such Person is a party or by which it or any of its property is bound.

    "Conversion/Continuation Date" means any date on which, under Section 2.4, the Company (a) converts Loans of one Type to another Type, or (b) continues as Loans of the same Type, but with a new Interest Period, Loans having Interest Periods expiring on such date.

    "CP Acquisition II Guaranty" means the Guaranty made and entered into as of March 1, 1999 by CP Acquisition II in favor of the "Agent" under the 1996 Credit Agreement, as amended on the date hereof, with respect to the Nevada Acquisition Tranche.

    "CPI" means the Consumer Price Index For All Urban Consumers (CPI-U), All Cities, (1982-84 equals 100), as published by the U.S. Department of Labor, Bureau of Labor Statistics, or any successor publication. If the CPI should hereafter be changed, then the new base shall be converted to the 1982-84 base and the base so converted shall be used.

    "Credit Extension" means the making of any Loans hereunder, including any conversion or continuation thereof.

    "Debt Service" means, as of the last day of any fiscal quarter, the sum of (a) Interest Expense for the four fiscal quarter period then ending plus (b) the amount that will be payable by the Company and its Subsidiaries on a consolidated basis during the next four fiscal quarters in respect of scheduled principal (including payments under capital leases) with respect to all Indebtedness of the Company and its Subsidiaries outstanding on the date of determination other than under Facility B Loans, after giving effect to any such Indebtedness proposed to be incurred on such date and to the substantially concurrent repayment of any other Indebtedness, (i) assuming in the case of Loans, that the Company will elect to repay the Loans outstanding on the Revolving Termination Date in installments pursuant to subsection 2.8(b), and (ii) treating the principal amount of such Indebtedness outstanding as of such date under a revolving credit or similar agreement (other than loans incurred under 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.

    "Default" means any event or circumstance which, with the giving of notice, the lapse of time, or both, would (if not cured or otherwise remedied during such time) constitute an Event of Default.

    "Designated Acres" means up to an aggregate during the term of this Agreement of 50,000 acres owned by the Company which (based on the good faith determination of, and as certified to the Agent and the Banks in writing by, a Responsible Officer that such acres have at the time such determination is made a higher value as recreational, commercial, residential, grazing or agricultural property than for timber production) may reasonably be designated by the Managing General Partner at the time of the sale thereof as constituting Designated Acres.

    "Dollars", "dollars" and "$" each mean lawful money of the United States.

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    "EBITDA" means, as measured quarterly on the last day of each fiscal quarter for the four fiscal quarter period then ending, and determined in accordance with GAAP for the Company and its Subsidiaries on a consolidated basis, an amount equal to the sum of (i) consolidated net income (or net loss) for such period, plus (ii) all amounts treated as expenses for depreciation, depletion and interest and the amortization of intangibles of any kind to the extent included in the determination of such consolidated net income (or loss), plus (iii) all accrued taxes on or measured by income to the extent included in the determination of such consolidated net income (or loss); provided, however, that consolidated net income (or loss) shall be computed for these purposes without giving effect to extraordinary losses or extraordinary gains.

    "Effective Amount" means with respect to any Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any Borrowing and prepayments or repayments thereof occurring on such date.

    "Effective Date" has the meaning specified in Section 7.4.

    "Eligible Assignee" means (i) a commercial bank organized under the laws of the United States, or any state thereof, and having a combined capital and surplus of at least $250,000,000; (ii) a commercial bank organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development (the "OECD"), or a political subdivision of any such country, and having a combined capital and surplus of at least $250,000,000, provided that such bank is acting through a branch or agency located in the United States; and (iii) a Person that is primarily engaged in the business of commercial banking and that is (A) a Subsidiary of a Bank, (B) a Subsidiary of a Person of which a Bank is a Subsidiary, or (C) a Person of which a Bank is a Subsidiary.

    "Environmental Claims" means all claims, however asserted, by any Governmental Authority or other Person alleging potential liability or responsibility for (i) violation of any Environmental Law, or (ii) release or injury to the environment or threat to public health, personal injury (including sickness, disease or death), property damage, natural resources damage, or (iii) damages (punitive or otherwise), cleanup, removal, remedial or response costs, restitution, civil or criminal penalties, injunctive relief, or other type of relief resulting from or based upon the presence, placement, discharge, emission or release (including intentional and unintentional, negligent and non-negligent, sudden or non-sudden, accidental or non-accidental placement, spills, leaks, discharges, emissions or releases of any Hazardous Material at, in, or from property, whether or not owned by the Company.

    "Environmental Laws" means all federal, state or local laws, statutes, common law duties, rules, regulations, ordinances and codes, together with all administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authorities, in each case relating to environmental, health, safety, natural resource and land use matters; including the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), the Clean Air Act, the Federal Water Pollution Control Act of 1972, the Solid Waste Disposal Act, the Federal Resource Conservation and Recovery Act, the Toxic Substances Control Act, the Emergency Planning and Community Right-to-Know Act, the Endangered Species Act and similar state laws.

    "ERISA" means the Employee Retirement Income Security Act of 1974, and regulations promulgated thereunder.

    "ERISA Affiliate" means any trade or business (whether or not incorporated) under common control with the Company within the meaning of Section 414(b) or 414(c) of the Code.

    "ERISA Event" means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Company or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations which is treated as such a withdrawal under Section 4062(e) of ERISA; (c) the filing of a notice of intent to terminate the treatment of a plan amendment as a termination under

9

Section 4041 or 4041A of ERISA or the commencement of proceedings by the PBGC to terminate a Pension Plan subject to Title IV of ERISA; (d) a failure by the Company or any ERISA Affiliate to make required contributions to a Pension Plan or other Plan subject to Section 412 of the Code; (e) an event or condition which might reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (f) the imposition of any liability under Title IV of ERISA, other than PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Company; or (g) an application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code with respect to any Pension Plan.

    "Escrow Agreement" means an agreement or agreements entered into by the Company pursuant to subsections 7.2(f) or 7.4, substantially in the form of Exhibit H.

    "Estimated Percentage" has the meaning specified in Section 7.4.

    "Eurodollar Reserve Percentage" has the meaning specified in the definition of "Offshore Rate".

    "Event of Default" means any of the events or circumstances specified in Section 8.1.

    "Exchange Act" means the Securities and Exchange Act of 1934, and regulations promulgated thereunder.

    "Existing Banks" means The Nova Scotia Bank, Societe Generale, and the Banks that are initial signatories hereto except SunTrust Bank, Atlanta and First Union National Bank.

    "Existing Timberlands" has the meaning specified in Section 7.4.

    "Facility B Credit Agreement" means the Amended and Restated Facility B Credit Agreement dated as of the date hereof between the Company, the Banks, the Syndication Agent, the Co-Agents and the Agent.

    "Facility B Loan" means a "Loan" as defined in the Facility B Credit Agreement.

    "FDIC" means the Federal Deposit Insurance Corporation, and any Governmental Authority succeeding to any of its principal functions.

    "Federal Funds Rate" means, for any day, the rate set forth in the weekly statistical release designated as H.15(519), or any successor publication, published by the Federal Reserve Bank of New York (including any such successor, "H.15(519)") on the preceding Business Day opposite the caption "Federal Funds (Effective)"; or, if for any relevant day such rate is not so published on any such preceding Business Day, the rate for such day will be the arithmetic mean as determined by the Agent of the rates for the last transaction in overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on that day by each of three leading brokers of Federal funds transactions in New York City selected by the Agent.

    "Fee Letter" means the fee letter between the Company, the Arranger and the Agent dated October 4, 1999.

    "FRB" means the Board of Governors of the Federal Reserve System, and any Governmental Authority succeeding to any of its principal functions.

    "Fremont" means Fremont Timber, Inc., a Delaware corporation.

    "GAAP" means generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession), which are applicable to the circumstances as of the date of determination.

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    "Governmental Authority" means any nation or government, any state or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

    "Guaranty Obligation" has the meaning specified in the definition of "Contingent Obligation."

    "Hazardous Materials" means all those substances that are regulated by, or which may form the basis of liability under, any Environmental Law, including all substances identified under any Environmental Law as a pollutant, contaminant, hazardous waste, hazardous constituent, special waste, hazardous substance, hazardous material, or toxic substance, or petroleum or petroleum derived substance or waste.

    "HS Corp." means HS Corp. of Oregon, an Oregon corporation.

    "Indebtedness" of any Person means, without duplication, (a) all indebtedness for borrowed money; (b) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (other than trade payables entered into in the ordinary course of business on ordinary terms); (c) all non-contingent reimbursement or payment obligations with respect to Surety Instruments; (d) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses; (e) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to property acquired by the Person (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property); (f) all obligations with respect to capital leases; (g) all indebtedness referred to in clauses (a) through (f) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property (including accounts and contracts rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness; and (h) all Guaranty Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (a) through (f) above.

    "Indemnified Liabilities" has the meaning specified in Section 10.5.

    "Indemnified Person" has the meaning specified in Section 10.5.

    "Independent Auditor" has the meaning specified in subsection 6.1(a).

    "Initial 1996 Amended and Restated Credit Agreement" has the meaning specified in the recitals.

    "Insolvency Proceeding" means (a) any case, action or proceeding before any court or other Governmental Authority relating to bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors, or (b) any general assignment for the benefit of creditors, composition, marshalling of assets for creditors, or other, similar arrangement in respect of its creditors generally or any substantial portion of its creditors; undertaken under U.S. Federal, state or foreign law, including the Bankruptcy Code.

    "Interest Expense" means, at any date of determination, the sum of the following calculated for the Company and its Subsidiaries on a consolidated basis for the four fiscal quarter period ending on the last day of the most recent quarter for which financial reports pursuant to subsection 6.1(a) and a certificate pursuant to subsection 6.2(b) have been delivered: (a) the interest expense of the Company and its Subsidiaries, plus (b) the additional interest expense that would have accrued on the Indebtedness incurred to acquire businesses or timberland described in clauses (iii) or (iv) of the definition of "Cash Flow" had such Indebtedness been outstanding for the full four fiscal quarter period, based upon the interest rate applicable on such date of determination to such Indebtedness

11

(unless ahigher interest rate is scheduled to apply during the next four fiscal quarters, in which case such higher interest rate shall be employed for such portion of the prior four fiscal quarters as is scheduled to apply during the next four fiscal quarters).

    "Interest Payment Date" means, (a) with respect to any Offshore Rate Loan, the last day of each Interest Period applicable to such Loan, and (b) with respect to any Base Rate Loan, the last Business Day of each calendar quarter and each date such Loan is converted into another Type of Loan; provided, however, that if any Interest Period for an Offshore Rate Loan exceeds three months, the date that falls three months after the beginning of such Interest Period and after each Interest Payment Date thereafter is also an Interest Payment Date.

    "Interest Period" means, as to any Offshore Rate Loan, the period commencing on the Borrowing Date of such Loan or on the Conversion/Continuation Date on which the Loan is converted into or continued as an Offshore Rate Loan, and ending on the date one, two, three or six months thereafter as selected by the Company in the Notice of Borrowing or Notice of Conversion/Continuation; provided that:

    "Interim Capital Transactions" means (a) borrowings, refinancings or refundings of indebtedness 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, (b) sales of equity interests by the Company, and (c) sales or other voluntary or involuntary dispositions of any assets of the Company (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 (including such investments not consummated during such 180 days if a binding agreement for such investment is completed within 90 days after the expiry of such 180 day period), (y) sales or other dispositions of assets to the extent the proceeds from which do not exceed cash expenditures by the Company for the purchase of timber or real property during the preceding 90 days (excluding any purchase to the extent financed by a Loan), and (z) sales or other dispositions of assets as a part of normal retirements or replacements).

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    "Investment Policy" means the Investment Policy of the Company as attached hereto as Schedule 1.1 (without giving effect to any later amendments thereto unless such amendments are approved in writing by the Required Banks).

    "IRS" means the Internal Revenue Service, and any Governmental Authority succeeding to any of its principal functions.

    "Joint Venture" means a single-purpose corporation, partnership, joint venture or other similar legal arrangement (whether created by contract or conducted through a separate legal entity) now or hereafter formed by the Company or any of its Subsidiaries with another Person in order to conduct a common venture or enterprise with such Person.

    "Lending Office" means, as to any Bank, the office or offices of such Bank specified as its "Lending Office" or "Domestic Lending Office" or "Offshore Lending Office", as the case may be, on Schedule 10.2, or such other office or offices as such Bank may from time to time notify the Company and the Agent.

    "Lien" means any security interest, mortgage, deed of trust, pledge, hypothecation, assignment, charge or deposit arrangement, encumbrance, lien (statutory or other) or preferential arrangement of any kind or nature whatsoever in respect of any property (including those created by, arising under or evidenced by any conditional sale or other title retention agreement, the interest of a lessor under a capital lease, any financing lease having substantially the same economic effect as any of the foregoing, or the filing of any financing statement naming the owner of the asset to which such lien relates as debtor, under the Uniform Commercial Code or any comparable law) and any contingent or other agreement to provide any of the foregoing, but not including the interest of a lessor under an operating lease.

    "Loan" has the meaning specified in subsection 2.1 and may be a Base Rate Loan or an Offshore Rate Loan (each a "Type" of Loan).

    "Loan Documents" means this Agreement, any Notes, the Fee Letter, and all other documents delivered to the Agent or any Bank in connection herewith or therewith; provided that, Loan Documents shall not include the Facility B Credit Agreement and any exhibits thereto that are not also exhibits to this Agreement.

    "Maintenance Capital Expenditures" means cash capital expenditures made to maintain, up to the level thereof that existed at the time of such expenditure, the Operating Capacity of the capital assets of the Company and its Subsidiaries, taken as a whole, as such assets existed at the time of such expenditure and shall, therefore, not include cash capital expenditures made in respect of Operating Capacity Acquisitions, and Capital Additions and Improvements. Where cash capital expenditures are made in part to maintain the Operating Capacity level referred to in the immediately preceding sentence and in part for other purposes, the Managing General Partner's good faith allocation thereof between the portion used to maintain such Operating Capacity level and the portion used for other purposes shall be conclusive.

    "Managing General Partner" means Crown Pacific Management Limited Partnership, a Delaware limited partnership and (i) the sole general partner of the Company and (ii) the sole managing general partner of the Master Partnership, and any successor general partner of the Company or managing general partner of the Master Partnership, as applicable.

    "Margin Stock" means "margin stock" as such term is defined in Regulation T, U or X of the FRB.

    "Master Partnership" means Crown Pacific Partners, L.P., a Delaware limited partnership.

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    "Master Partnership Agreement" means the Second Amended Restated Agreement of Limited Partnership of the Master Partnership dated as of the Closing Date, between the Managing General Partner, the Special General Partner and the limited partners party thereto.

    "Material Adverse Effect" means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties, condition (financial or otherwise) or prospects of the Company or the Company and its Subsidiaries taken as a whole or the Master Partnership; (b) a material impairment of the ability of the Company to perform under any Loan Document and to avoid any Event of Default; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against the Company of any Loan Document.

    "Maturity Date" means, if the Company properly exercises its election to repay the Loans in installments as provided in subsection 2.8(b), December 31, 2006, otherwise, the Revolving Termination Date.

    "MGP General Partners" means, collectively, Fremont and HS Corp., the sole general partners of the Managing General Partner, and any successor general partner of the Managing General Partner.

    "MGP Partnership Agreement" means the Amended and Restated Agreement of Limited Partnership of the Managing General Partner dated as of December 1, 1994, between the MGP General Partners and the limited partners party thereto.

    "Net Proceeds" means, as to any disposition of assets by a Person, proceeds in cash, checks or other cash equivalent financial instruments as and when received by such Person, net of: (a) the direct costs relating to such disposition excluding amounts payable to such Person or any Affiliate of such person, (b) sale, use or other transaction taxes paid or payable by such Person as a direct result thereof, and (c) amounts required to be applied to repay principal, interest and prepayment premiums and penalties on Indebtedness secured by a Permitted Lien on the asset which is the subject of such disposition.

    "Nevada Acquisition Tranche" has the meaning specified in Section 9.12.

    "1995 Amended and Restated Credit Agreement" has the meaning specified in the recitals.

    "1996 Amended and Restated Credit Agreement" has the meaning specified in the recitals.

    "1994 Senior Notes" means those certain senior promissory notes in the aggregate principal amount of $275,000,000 issued and sold pursuant to the 1994 Senior Note Agreement.

    "1995 Senior Notes" means those certain senior promissory notes in the aggregate principal amount of $25,000,000 issued and sold pursuant to the 1995 Senior Note Agreement.

    "1996 Senior Notes" means those certain senior promissory notes in the aggregate principal amount of $91,000,000 issued and sold pursuant to the 1996 Senior Note Agreement.

    "1994 Senior Note Agreement" means the Note Agreement dated as of December 1, 1994, providing for the issuance and sale by the Company of the 1994 Senior Notes to the purchasers listed in the schedule of purchasers attached thereto as Schedule I.

    "1995 Senior Note Agreement" means the Note Agreement dated as of March 15, 1995, providing for the issuance and sale by the Company of the 1995 Senior Notes to the purchasers listed in the schedule of purchasers attached thereto as Schedule I.

    "1996 Senior Note Agreement" means the Note Agreement dated as of August 1, 1996, providing for the issuance and sale by the Company of the 1994 Senior Notes to the purchasers listed in the schedule of purchasers attached thereto as Schedule I.

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    "Note" means the promissory note executed by the Company in favor of a Bank pursuant to subsection 2.2(b), in substantially the form of Exhibit F.

    "Notice of Borrowing" means a notice in substantially the form of Exhibit A.

    "Notice of Conversion/Continuation" means a notice in substantially the form of Exhibit B.

    "Obligations" means all advances, debts, liabilities, obligations, covenants and duties arising under any Loan Document, owing by the Company to any Bank, the Co-Agents, the Syndication Agent, the Agent or any Indemnified Person, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising.

    "Offshore Rate" means, for any Interest Period with respect to Offshore Rate Loans constituting part of the same Borrowing, the rate of interest per annum (rounded upward to the next 1/16th of 1%) determined by the Agent as follows:

 
    
Offshore Rate =   LIBO Rate
1.00 - Eurodollar Reserve Percentage

    Where,

The Offshore Rate shall be adjusted automatically as to all Offshore Rate Loans then outstanding as of the effective date of any change in the Eurodollar Reserve Percentage.

    "Offshore Rate Loan" means a Loan that bears interest based on the Offshore Rate.

    "Operating Capacity" means the operating capacity and resources (including, without limitation, the capacity to grow timber or process logs) of the Company and its Subsidiaries, taken as a whole.

    "Operating Capacity Acquisition" means any transaction in which the Company or any Subsidiary acquires (through an asset acquisition, merger, stock acquisition or other form of investment) control

15

over all or a portion of the assets, properties or business of another Person for the purpose of increasing the Operating Capacity of the Company and its Subsidiaries, taken as a whole, from the Operating Capacity of the Company and its Subsidiaries, taken as a whole, existing immediately prior to such transaction.

    "Organization Documents" means, (i) for any corporation, the certificate or articles of incorporation, the bylaws, any certificate of determination or instrument relating to the rights of preferred shareholders of such corporation, any shareholder rights agreement, and all applicable resolutions of the board of directors (or any committee thereof) of such corporation; and, (ii) for any limited partnership, the certificate of limited partnership, the limited partnership agreement, all applicable partnership resolutions, and all other agreements among the general or limited partners (or any of them) of such partnership relating thereto (but not including agreements solely between the limited partners of the Master Partnership).

    "Original Credit Agreement" has the meaning specified in the Recitals hereto.

    "Other Taxes" means any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies which arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement or any other Loan Documents.

    "Participant" has the meaning specified in subsection 10.8(d).

    "Partner Entities" means the Managing General Partner, the MGP General Partners and the Master Partnership.

    "PBGC" means the Pension Benefit Guaranty Corporation, or any Governmental Authority succeeding to any of its principal functions under ERISA.

    "Pension Plan" means a pension plan (as defined in Section 3(2) of ERISA) subject to Title IV of ERISA which the Company or any ERISA Affiliate sponsors, maintains, or to which it makes, is making, or is obligated to make contributions, or in the case of a multiple employer plan (as described in Section 4064(a) of ERISA) has made contributions at any time during the immediately preceding five (5) plan years.

    "Permitted Business" means (i) any business engaged in by the Company on the Closing Date; (ii) any business substantially similar or related to any such business, which shall include any business in the forest products industry, provided that any activity shall cease to be a Permitted Business if it causes or would cause more than 25% of the Company's assets on a consolidated basis valued at book value to be devoted to pulp or paper manufacturing; and (iii) any non-forest products business that is incidental or reasonably related to the forest products industry.

    "Permitted Inclusions" means the aggregate Net Proceeds from the sale or other disposition of assets permitted under subsection 7.2(f)(ii)(A) or (B) to the extent that such Net Proceeds (a) in any four fiscal quarters do not exceed (i) 2.5% of the wholesale value of the inventory of standing timber owned by the Company and its Subsidiaries as determined for purposes of calculating the Asset Coverage Ratio under Section 7.4 at the end of the most recent calendar year for which a Compliance Certificate has been delivered calculating such Asset Coverage Ratio or (ii) $25,000,000 before the delivery of the first such Compliance Certificate, and (b) are not otherwise included in determining EBITDA.

    "Permitted Liens" has the meaning specified in Section 7.1.

    "Permitted Swap Obligations" means all obligations (contingent or otherwise) of the Company or any Subsidiary existing or arising under Swap Contracts, provided that each of the following criteria is satisfied: (a) such obligations are (or were) entered into by such Person in the ordinary course of

16

business for the purpose of directly mitigating risks associated with liabilities, commitments or assets held by such Person, or changes in the value of securities issues by such Person in conjunction with a securities repurchase program not otherwise prohibited hereunder, and not for purposes of speculation or taking a "market view;" (b) such Swap Contracts do not contain any provision ("walk-away" provision) exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party.

    "Person" means an individual, partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture or Governmental Authority.

    "Plan" means an employee benefit plan (as defined in Section 3(3) of ERISA) which the Company or any ERISA Affiliate sponsors or maintains or to which the Company makes, is making, or is obligated to make contributions and includes any Pension Plan.

    "Planned Volume" has the meaning specified in Section 7.4.

    "Pro Forma Consolidated Cash Flow" means, at any date of determination, the sum of the following calculated on a pro forma basis for the Company and its Subsidiaries on a consolidated basis for the four fiscal quarter period ending on the last day of the most recent quarter for which financial reports pursuant to subsections 6.1(a) and (b) and a certificate pursuant to subsection 6.2(b) have been delivered:

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    "Pro Forma Interest Expense" means, at any date of determination, the sum of the following calculated for the Company and its Subsidiaries on a consolidated basis for the four fiscal quarter period ending on the last day of the most recent quarter for which financial reports pursuant to subsections 6.1(a) and (b) and a certificate pursuant to subsection 6.2(b) have been delivered:

    (a) interest expense payable during such four fiscal quarter period on all Indebtedness of the Company and its Subsidiaries; plus

    (b) interest expense that would have been payable during such four fiscal quarter period in respect of (i) any Indebtedness proposed to be incurred on such date of determination, including any Loan requested hereunder or other Senior Debt, and (ii) Indebtedness incurred after the end of such four fiscal quarter period and before such date of determination, in each case based upon the interest rate applicable on such date of determination to such Indebtedness and giving effect as of the beginning of such four fiscal quarter period (y) to the incurrence of all such Indebtedness described in clauses (i) and (ii), and (z) to the application of any such Indebtedness to the substantially concurrent repayment of any other Indebtedness outstanding during such four fiscal quarter period.

    "Pro Forma Maximum Debt Service" means, as of any date of determination, the sum of (a) the highest amount that will be payable by the Company and its Subsidiaries on a consolidated basis, during any consecutive four fiscal quarters, commencing with the fiscal quarter during which such determination occurs and ending on December 31, 2009, in respect of scheduled principal and interest (including payments under capital leases) with respect to all Indebtedness of the Company and its Subsidiaries outstanding on the date of determination other than Loans, after giving effect to any such Indebtedness proposed to be incurred on such date and to the substantially concurrent repayment of any other Indebtedness, (i) assuming, in the case of such Indebtedness having a variable interest rate, that the rate in effect on the date of determination will remain in effect throughout such period, (ii) assuming, in the case of Loans, that the Company will elect to repay the Loans outstanding on the Revolving Termination Date in installments pursuant to subsection 2.8(b), (iii) treating the principal amount of such Indebtedness outstanding as of such date under a revolving credit or similar agreement (other than Facility B Loans and Loans) 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, and (iv) treating the principal amount of any Indebtedness that is payable on demand as maturing and becoming due and payable at the end of any such four fiscal quarters for which such determination may be made and treating the principal amount of any Indebtedness that is otherwise callable during any four fiscal quarters as maturing and becoming due and payable on the last date for such call during those four fiscal quarters; plus (b) interest expense accrued on the Working Capital Facility during the most recent four fiscal quarters with respect to which financial

18

reports pursuant to subsections 6.1(a) and (b) and the certificates pursuant to subsection 6.2(b) have been delivered.

    "Pro Rata Share" means, as to any Bank (a) at any time prior to the Revolving Termination Date, or after the Revolving Termination Date if no Loans are then outstanding, the percentage equivalent (expressed as a decimal, rounded to the ninth decimal place) at such time of such Bank's Commitment divided by the Aggregate Commitment (or, if the Commitments have been terminated, such Bank's Commitment divided by the Aggregate Commitment as each existed immediately before such termination), and (b) otherwise, the percentage equivalent (expressed as a decimal, rounded to the ninth decimal place) at such time of the then aggregate unpaid principal amount of such Bank's Loans divided by the then aggregate unpaid principal amount of all Loans.

    "Reportable Event" means any of the events set forth in Section 4043(b) of ERISA or the regulations thereunder, other than any such event for which the 30-day notice requirement under ERISA has been waived in regulations issued by the PBGC.

    "Required Banks" means (a) at any time before the Revolving Termination Date, or after the Revolving Termination Date if no Loans are then outstanding, one or more Banks then having at least 662/3% of the Aggregate Commitment (or, if the Commitments have been terminated, the Aggregate Commitment as it existed immediately before such termination), and (b) otherwise, one or more Banks then holding at least 662/3% of the then aggregate unpaid principal amount of the Loans.

    "Requirement of Law" means, as to any Person, any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or of a Governmental Authority, in each case applicable to or binding upon the Person or any of its property or to which the Person or any of its property is subject.

    "Responsible Officer" means, as to the Company, the chief executive officer, the president, the chief financial officer or the Person serving as the secretary and general counsel of the Company, or any other officer having substantially the same authority and responsibility; or, with respect to compliance with financial covenants, the chief financial officer or the treasurer of the Company, or any other officer having substantially the same authority and responsibility. With respect to a partnership, a Responsible Officer of a general partner shall constitute a Responsible Officer of such Partnership.

    "Restricted Payment" has the meaning specified in Section 7.11.

    "Revolving Termination Date" means the earlier to occur of:

    (a) December 1, 2002; and

    (b) the date on which the Aggregate Commitment terminates in accordance with the provisions of this Agreement.

    "SEC" means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

    "Senior Debt" means, as to the Company, as of any date of determination, without duplication, all outstanding unsecured Indebtedness of the Company of the type described in clauses (a), (b), or (d) of the definition of Indebtedness herein and all Indebtedness represented by the Senior Notes, this Agreement and the Facility B Credit Agreement (including "L/C Obligations" as defined therein), but not including any Indebtedness subordinated to the Obligations upon terms and conditions satisfactory to the Agent and the Banks.

    "Senior Notes" means the 1994 Senior Notes, the 1995 Senior Notes and the 1996 Senior Notes.

    "Senior Note Agreements" means the 1994 Senior Note Agreement, the 1995 Senior Note Agreement and the 1996 Senior Note Agreement.

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    "Solvent" means, as to any Person at any time, that (a) (i) in the case of a Person that is not a partnership, the fair value of the property of such Person is greater than the amount of such Person's liabilities (including disputed, contingent and unliquidated liabilities), and (ii) in the case of a Person that is a partnership, the sum of (A) the fair value of the property of such Person plus (B) the sum of the excess of the fair value of each general partner's non-partnership property over such partner's non-partnership debts (together the "Applicable Property") is greater than the amount of such Person's liabilities (including disputed, contingent and unliquidated liabilities), as such value for purposes of both (i) and (ii) is established and liabilities evaluated for purposes of Section 101(31) of the Bankruptcy Code and, in the alternative, for purposes of the California Uniform Fraudulent Transfer Act; (b) the present fair saleable value of the property of such Person (or, in the case of a partnership, the Applicable Property of such Person) is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured; (c) such Person is able to realize upon its property and pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business; (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and liabilities mature; and (e) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person's property would constitute unreasonably small capital.

    "Special General Partner" means Crown Pacific, Ltd., an Oregon corporation and a special general partner of the Master Partnership, and any successor special general partner.

    "Subsidiary" of a Person means any corporation, association, partnership, joint venture or other business entity of which such Person or any Subsidiary of such Person either (i) in respect of a corporation, more than 50% of the voting stock is owned or controlled directly or indirectly by the Person, or one or more of the Subsidiaries of the Person, or a combination thereof or (ii) in respect of an association, partnership, joint venture or other business entity, is the general partner or is entitled to share in more than 50% of the profit, however determined.

    "Surety Instruments" means all letters of credit (including standby and commercial), banker's acceptances, bank guaranties, shipside bonds, surety bonds and similar instruments.

    "Swap Contract" means any agreement, whether or not in writing, relating to any transaction that is a rate swap, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap or option, bond, note or bill option, interest rate option, forward foreign exchange transaction, cap, collar or floor transaction, currency swap, cross-currency rate swap, swaption, currency option or any other, similar transaction (including any option to enter into any of the foregoing) or any combination of the foregoing, and, unless the context otherwise clearly requires, any master agreement relating to or governing any or all of the foregoing.

    "Swap Termination Value" means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a) the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as reasonably determined by the Required Banks based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include any Bank).

    "Syndication Agent" means Union Bank of California, N.A., in its capacity as Syndication Agent.

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    "Taxes" means any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Bank and the Agent, such taxes (including income taxes or franchise taxes) as are imposed on or measured by each Bank's net income by the jurisdiction (or any political subdivision thereof) under the laws of which such Bank or the Agent, as the case may be, is organized or maintains a lending office.

    "Total Debt" means, as of any date of determination, the sum of the interest-bearing Indebtedness of the Company and its Subsidiaries on a consolidated basis, including all obligations with respect to capitalized leases and all "L/C Obligations" as defined in the Facility B Credit Agreement and the entire undrawn face amount of letters of credit other than "Letters of Credit" as defined in the Facility B Credit Agreement with respect to which the Company or any of its Subsidiaries are liable for reimbursement obligations, except that Total Debt shall not include obligations that are entirely Contingent Obligations (other than "L/C Obligations" as defined in the Facility B Credit Agreement and such obligations with respect to letters of credit other than "L/C Obligations").

    "Total Debt to Cash Flow Ratio" means, for any fiscal quarter, the ratio of (i) Total Debt outstanding at the end of such quarter to (ii) Cash Flow for the four fiscal quarter period ending on the last day of such quarter.

    "Type" has the meaning specified in the definition of "Loan."

    "Unfunded Pension Liability" means the excess of a Pension Plan's benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan's assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the Code for the applicable plan year.

    "United States" and "U.S." each means the United States of America.

    "Working Capital Facility" means (a) for historical purposes, the "Original Facility B Credit Agreement," the "Initial 1996 Facility B Credit Agreement" or the "1996 Facility B Credit Agreement," each as defined in the Facility B Credit Agreement, (b) until the "Revolving Termination Date" as defined therein, the Facility B Credit Agreement, and (c) thereafter, any facility pursuant to which the Company may obtain revolving credit for working capital and general partnership purposes, take-down credit for working capital and general partnership purposes, the issuance of standby and payment letters of credit and back-up for the issuance of commercial paper.

    "Year 2000 problem" has the meaning specified in Section 5.23.

    1.2  Other Interpretive Provisions.  

    (a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

    (b) The words "hereof", "herein", "hereunder" and similar words refer to this Agreement as a whole and not to any particular provision of this Agreement; and subsection, Section, Schedule and Exhibit references are to this Agreement unless otherwise specified.

    (c) (i) The term "documents" includes any and all instruments, documents, agreements, certificates, indentures, notices and other writings, however evidenced.

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    (d) Unless otherwise expressly provided herein, (i) references to agreements (including this Agreement) and other contractual instruments shall be deemed to include all subsequent amendments and other modifications thereto, but only to the extent such amendments and other modifications are not prohibited by the terms of any Loan Document, (ii) references to defined terms and cross-references to particular sections of the Company Partnership Agreement or the Master Partnership Agreement shall be deemed references to such terms and such sections in their current form without giving effect to any future amendments or modifications thereto unless such amendments or modifications shall have been approved in writing by the Required Banks, and (iii) references to any statute or regulation are to be construed as including all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting the statute or regulation.

    (e) The captions and headings of this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement.

    (f)  This Agreement and the other Loan Documents may use several different limitations, tests or measurements to regulate the same or similar matters. All such limitations, tests and measurements are cumulative and shall each be performed in accordance with their terms.

    (g) This Agreement and the other Loan Documents are the result of negotiations among and have been reviewed by counsel to the Agent, the Company and the other parties, and are the products of all parties. Accordingly, they shall not be construed against the Banks, the Co-Agents, the Syndication Agent or the Agent merely because of the Agent's, the Syndication Agent's, the Co-Agents' or the Banks' involvement in their preparation.

    1.3  Accounting Principles.  

    (a) Unless the context otherwise clearly requires, all accounting terms not expressly defined herein shall be construed, and all financial computations required under this Agreement shall be made, in accordance with GAAP.

    (b) References herein to "fiscal year" and "fiscal quarter" refer to such fiscal periods of the Company.


ARTICLE II

THE CREDITS

    2.1  Amounts and Terms of Commitments.  

    Each Bank severally agrees, on the terms and conditions set forth herein, to make loans to the Company (each such loan, a "Loan") from time to time on any Business Day during the period from the Closing Date to the Revolving Termination Date, in an aggregate amount not to exceed the amount set forth in Schedule 2.1 under the heading "Commitment" (such amount, as the same may be reduced under Sections 2.5 or 2.7 or as a result of one or more assignments under Section 10.8, the Bank's "Commitment"); provided, however, that, after giving effect to any Borrowing, the Effective Amount of all outstanding Loans shall not at any time exceed the Aggregate Commitment; and provided further, that the Effective Amount of the Loans of any Bank shall not at any time exceed such Bank's Commitment. Within the limits of each Bank's Commitment, and subject to the other terms and conditions hereof, until the Revolving Termination Date, the Company may borrow under this Section 2.1, prepay under Section 2.6 and reborrow under this Section 2.1. This amendment and restatement of the 1996 Amended and Restated Credit Agreement shall not be deemed a repayment, satisfaction, cancellation, or novation of the loans outstanding thereunder or any other obligations of the Company under the 1996 Amended and Restated Credit Agreement or any of the "Loan Documents" (as defined therein), which shall instead continue and constitute Obligations hereunder and under the other Loan Documents; provided, however, that upon the Closing Date, all outstanding

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"Loans" under and as defined in the 1996 Amended and Restated Credit Agreement, subject to Section 3.4 thereof, shall be prepaid in full with the proceeds of Loans hereunder or from other funds.

    2.2  Loan Accounts.  

    (a) The Loans made by each Bank shall be evidenced by one or more accounts or records maintained by such Bank in the ordinary course of business. The accounts or records maintained by the Agent and each Bank shall be conclusive absent manifest error of the amount of the Loans made by the Banks to the Company, and the interest and payments thereon. Any failure so to record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Company hereunder to pay any amount owing with respect to the Loans.

    (b) Upon the request of any Bank made through the Agent, the Loans made by such Bank may be evidenced by one or more Notes, instead of loan accounts. Each such Bank shall endorse on the schedules annexed to its Note(s) the date, amount and maturity of each Loan made by it and the amount of each payment of principal made by the Company with respect thereto. Each such Bank is irrevocably authorized by the Company to endorse its Note(s) and each Bank's record shall be conclusive absent manifest error; provided, however, that the failure of a Bank to make, or an error in making, a notation thereon with respect to any Loan shall not limit or otherwise affect the obligations of the Company hereunder or under any such Note to such Bank.

    2.3  Procedure for Borrowing on any Borrowing Date.  

    (a) Each Borrowing shall be made upon the Company's irrevocable written notice (which notice may be delivered telephonically and confirmed in writing on the same day) delivered to the Agent in the form of a Notice of Borrowing which notice must be received by the Agent (i) prior to 10:00 a.m. (San Francisco time) at least three Business Days prior to the requested Borrowing Date, in the case of Offshore Rate Loans; and (ii) prior to 8:00 a.m. (San Francisco time) on the requested Borrowing Date, in the case of Base Rate Loans, specifying:

provided that the Borrowing to be made on the Closing Date may comprise Offshore Rate Loans only if this Agreement has been fully executed before the giving of such notice or the Notice of Borrowing is accompanied by an indemnity letter signed by the Company and acceptable to the Agent and the Banks.

    (b) The Agent will promptly notify each Bank of its receipt of any Notice of Borrowing and of the amount of such Bank's Pro Rata Share of that Borrowing.

    (c) Each Bank will make the amount of its Pro Rata Share of each Borrowing available to the Agent for the account of the Company at the Agent's Payment Office by 11:00 a.m. (San Francisco time) on the Borrowing Date requested by the Company in funds immediately available to the Agent. The proceeds of all such Loans will then be made available to the Company by the Agent at such office by crediting the account of the Company on the books of Bank of America with the aggregate of the amounts made available to the Agent by the Banks in like funds as received by the Agent.

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    (d) Unless the Required Banks shall otherwise agree, during the existence of a Default or Event of Default, the Company may not elect to have a Loan be made as, or converted into or continued as, an Offshore Rate Loan.

    (e) After giving effect to any Borrowing, there may not be more than five different Interest Periods in effect with respect to all Loans together then outstanding.

    2.4  Conversion and Continuation Elections.  

    (a) The Company may, upon irrevocable written notice to the Agent in accordance with subsection 2.4(b):

provided, that if at any time the aggregate amount of Offshore Rate Loans in respect of any Borrowing is reduced, by payment, prepayment, or conversion of part thereof to be less than $500,000, such Offshore Rate Loans shall automatically convert into Base Rate Loans, and on and after such date the right of the Company to continue such Loans as, and convert such Loans into, Offshore Rate Loans shall terminate.

    (b) The Company shall deliver a Notice of Conversion/Continuation (which notice may be delivered telephonically and confirmed in writing on the same day) to be received by the Agent (i) not later than 10:00 a.m. (San Francisco time) at least three Business Days in advance of the Conversion/ Continuation Date, if the Loans are to be converted into or continued as Offshore Rate Loans; and (ii) not later than 8:00 a.m. (San Francisco time) on the Conversion/ Continuation Date, if the Loans are to be converted into Base Rate Loans, specifying:

    (c) If upon the expiration of any Interest Period applicable to Offshore Rate Loans, the Company has failed to select timely a new Interest Period to be applicable to such Offshore Rate Loans, or if any Default or Event of Default then exists or if the Company has not delivered to the Agent a notice of prepayment with respect thereto, the Company shall be deemed to have elected to convert such Offshore Rate Loans into Base Rate Loans effective as of the expiration date of such Interest Period.

    (d) The Agent will promptly notify each Bank of its receipt of a Notice of Conversion/Continuation, or, if no timely notice is provided by the Company, the Agent will promptly notify each Bank of the details of any automatic conversion. All conversions and continuations shall be made ratably according to the respective outstanding principal amounts of the Loans with respect to which the notice was given held by each Bank.

    (e) Unless the Required Banks otherwise agree, during the existence of a Default or Event of Default, the Company may not elect to have a Loan converted into or continued as an Offshore Rate Loan.

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    (f)  After giving effect to any conversion or continuation of Loans, there may not be more than five different Interest Periods in effect in respect of all Loans together then outstanding.

    2.5  Voluntary Termination or Reduction of Commitments.  

    The Company may, upon not less than five Business Days' prior notice to the Agent, terminate the Commitments, or permanently reduce the Commitments by an aggregate minimum amount of $5,000,000 or any integral multiple of $5,000,000 in excess thereof; unless, after giving effect thereto and to any prepayments of Loans made on the effective date thereof, the Effective Amount of all Loans would exceed the amount of the Aggregate Commitment then in effect. Once reduced in accordance with this Section, the Commitments may not be increased. Any reduction of the Aggregate Commitment shall be applied to each Bank according to its Pro Rata Share. All accrued commitment fees to, but not including, the effective date of any reduction or termination of the Aggregate Commitment, shall be paid on the effective date of such reduction or termination.

    2.6  Optional Prepayments.  

    Subject to Section 3.4, the Company may, at any time or from time to time, upon irrevocable notice (which notice may be delivered telephonically and confirmed in writing on the same day) delivered to the Agent not later than 10:00 a.m. (San Francisco time) at least three Business Days prior to such prepayment in the case of Offshore Rate Loans and not later than 8:00 a.m. (San Francisco) time on the date of such prepayment in the case of Base Rate Loans, ratably prepay Loans, in whole or in part, in minimum amounts of $3,000,000 or any integral multiple of $500,000 in excess thereof. Such notice of prepayment shall specify (i) the date and amount of such prepayment, and (ii) whether such prepayment is of Offshore Rate Loans or Base Rate Loans, or any combination thereof. The Agent will promptly notify each Bank of its receipt of any such notice, and of such Bank's Pro Rata Share of such prepayment. If such notice is given by the Company, the Company shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein, together with accrued interest to each such date on the amount prepaid and any amounts required pursuant to Section 3.4.

    2.7  Mandatory Prepayments of Loans; Mandatory Commitment Reductions.  

    (a)  Mandatory Prepayments.  

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    (b) Mandatory Commitment Reductions.  The Aggregate Commitment shall be permanently reduced from time to time by the amount of any mandatory prepayment of Loans required by subsection 2.7(a)(i) and by the amount of any Senior Debt incurred by the Company pursuant to subsection 7.6(i) other than Loans; provided that to the extent a sale of assets or harvest of excess timber shall not result in any prepayment pursuant to subsection 2.7(a)(i) because no Loans are outstanding, the Aggregate Commitment shall be permanently reduced in an amount equal to the amount that would otherwise be applied to a prepayment of the Loans by operation of subsection 2.7(a)(i). Such permanent reduction shall take effect upon the date the corresponding mandatory prepayment is or would (if Senior Debt were outstanding) be required by subsections 2.7(a)(i) or 2.7(a)(iii) or, in the case of funds actually deposited as cash collateral under those subsections, upon the application of such cash collateral to the Loans. Upon any such permanent reduction in the Aggregate Commitment, the Commitment of each Bank shall automatically be reduced by an amount equal to such Bank's ratable share of the reduction, effective as of the earlier of the date that any corresponding prepayment is made or the date by which such prepayment is due and payable hereunder. All accrued commitment fees to, but not including the effective date of any reduction or termination of the Commitments shall be paid on the effective date of such reduction or termination.

    (c) General.  After the Revolving Termination Date, all prepayments shall be applied in the inverse order of maturity to the principal payments required under subsection 2.8(b). The Company shall pay, together with each prepayment under this Section 2.7, accrued interest on the amount prepaid and any amounts required pursuant to Section 3.4.

    2.8  Repayment.  

    (a) Repayment on Revolving Termination Date.  Unless the Company shall have exercised its election to repay the Loans outstanding on the Revolving Termination Date in installments pursuant to and in strict compliance with subsection 2.8(b), the Company shall repay to the Banks in full on the Revolving Termination Date the aggregate principal amount of any Loans outstanding on the Revolving Termination Date.

    (b) Installment Election.  So long as (A) no Default or Event of Default then exists, and (B) the representations and warranties in Article V are true and correct with the same effect as if made on and as of such date (except to the extent such representations and warranties expressly refer to an earlier date, in which case they are true and correct as of such earlier date), in each case of clauses (A) and (B) above on the date of such election and on the Revolving Termination Date, at least 60 days before

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the Revolving Termination Date the Company may, in lieu of repaying Loans on the Revolving Termination Date under subsection 2.8(b), elect to repay the aggregate principal amount of Loans outstanding on the Revolving Termination Date in sixteen (16) consecutive quarterly equal installments, each in an amount equal to one-sixteenth of the Effective Amount of the Loans on the Revolving Termination Date and payable on the last Business Day of each June, September, December and March through the Maturity Date, commencing on March 31, 2003. The Company shall request such repayment election by delivering to the Agent an irrevocable written request in substantially the form of Exhibit G. The Agent shall promptly deliver a copy of such notice to the Banks.

    2.9  Interest.  

    (a) Subject to subsection 2.9(c), (1) each Loan shall bear interest on the outstanding principal amount thereof from the applicable Borrowing Date at a rate per annum equal to the Offshore Rate or the Base Rate, as the case may be (and subject to the Company's right to convert to other Types of Loans under Section 2.4), plus the Applicable Margin, and (2)  if the Company elects its repayment option under subsection 2.8(b), each Loan shall bear interest on the outstanding principal amount thereof from the Revolving Termination Date at a rate per annum equal to the Offshore Rate or the Base Rate, as the case may be (and subject to the Company's right to convert to other Types of Loans under Section 2.4), plus the Applicable Margin plus 0.2500%.

    (b) The Company shall pay interest on each Loan in arrears on each Interest Payment Date. Interest shall also be paid on the date of any prepayment of Offshore Rate Loans under Section 2.6 or 2.7 for the portion of the Loans so prepaid and upon payment (including prepayment) in full thereof and, during the existence of any Event of Default, interest shall be paid on demand of the Agent at the request or with the consent of the Required Banks.

    (c) Notwithstanding subsection (a) of this Section, while any Event of Default exists or after acceleration, the Company shall pay interest (after as well as before entry of judgment thereon to the extent permitted by law) on the principal amount of all outstanding Obligations, at a rate per annum which is determined by adding 2% per annum to the Applicable Margin then in effect for such Loans and, in the case of Obligations not subject to an Applicable Margin, at a rate per annum equal to the Base Rate plus 2%; provided, however, that, on and after the expiration of any Interest Period applicable to any Offshore Rate Loan outstanding on the date of occurrence of such Event of Default or acceleration, the principal amount of such Loan shall, during the continuance of such Event of Default or after acceleration, bear interest at a rate per annum equal to the Base Rate, plus the Applicable Margin for Base Rate Loans, plus 2%.

    (d) Anything herein to the contrary notwithstanding, the obligations of the Company to any Bank hereunder shall be subject to the limitation that payments of interest shall not be required for any period for which interest is computed hereunder, to the extent (but only to the extent) that contracting for or receiving such payment by such Bank would be contrary to the provisions of any law applicable to such Bank limiting the highest rate of interest that may be lawfully contracted for, charged or received by such Bank, and in such event the Company shall pay such Bank interest at the highest rate permitted by applicable law.

    2.10  Fees.  

    (a)  Agency Fees.  The Company shall pay the Agent administrative agency fees in the amounts and at the times set forth in the Fee Letter.

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    (b)  Commitment Fees.  The Company shall pay to the Agent for the account of each Bank a commitment fee on the average daily unused portion of such Bank's Commitment, computed on a quarterly basis in arrears on the last Business Day of each calendar quarter based upon the daily utilization for that quarter as calculated by the Agent, equal to the Commitment Fee Percentage. For purposes of calculating utilization under this subsection, the Aggregate Commitment shall be deemed used to the extent of the Effective Amount of Loans then outstanding. Such commitment fee shall accrue from the Closing Date to the Revolving Termination Date and shall be due and payable quarterly in arrears on the last Business Day of each calendar quarter commencing on the first such day after this Agreement is executed by the Company through the Revolving Termination Date, with the final payment to be made on the Revolving Termination Date; provided that, in connection with any reduction or termination of Commitments under Section 2.5 or Section 2.7, the accrued commitment fee calculated for the period ending on such date shall also be paid on the date of such reduction or termination, with the following quarterly payment being calculated on the basis of the period from such reduction or termination date to such quarterly payment date. The commitment fees provided in this subsection shall accrue at all times after the above-mentioned commencement date, including at any time during which one or more conditions in Article IV are not met.

    2.11  Computation of Fees and Interest.  

    (a) All computations of interest for Base Rate Loans when the Base Rate is determined by Bank of America's "reference rate" shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more interest being paid than if computed on the basis of a 365-day year). Interest and fees shall accrue during each period during which interest or such fees are computed from the first day thereof to the last day thereof.

    (b) Each determination of an interest rate or commitment fee by the Agent shall be conclusive and binding on the Company and the Banks in the absence of manifest error. The Agent will, at the request of the Company or any Bank, deliver to the Company or such Bank, as the case may be, a statement showing the quotations used by the Agent in determining any interest rate and the resulting interest rate.

    2.12  Payments by the Company.  

    (a) All payments to be made by the Company shall be made without set-off, recoupment or counterclaim. Except as otherwise expressly provided herein, all payments by the Company shall be made to the Agent for the account of the Banks at the Agent's Payment Office, and shall be made in dollars and in immediately available funds, no later than 11:00 a.m. (San Francisco time) on the date specified herein. The Agent will promptly distribute to each Bank its Pro Rata Share (or other applicable share as expressly provided herein) of such payment in like funds as received. Any payment received by the Agent later than 11:00 a.m. (San Francisco time) shall be deemed to have been received on the following Business Day and any applicable interest or fee shall continue to accrue.

    (b) Subject to the provisions set forth in the definition of "Interest Period" herein, whenever any payment is due on a day other than a Business Day, such payment shall be made on the following Business Day, and such extension of time shall in such case be included in the computation of interest or fees, as the case may be.

    (c) Unless the Agent receives notice from the Company prior to the date on which any payment is due to the Banks that the Company will not make such payment in full as and when required, the Agent may assume that the Company has made such payment in full to the Agent on such date in immediately available funds and the Agent may (but shall not be so required), in reliance upon such assumption, distribute to each Bank on such due date an amount equal to the amount then due such Bank. If and to the extent the Company has not made such payment in full to the Agent, each Bank

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shall repay to the Agent on demand such amount distributed to such Bank, together with interest thereon at the Federal Funds Rate for each day from the date such amount is distributed to such Bank until the date repaid.

    2.13  Payments by the Banks to the Agent.  

    (a) Unless the Agent receives notice from a Bank with respect to any Borrowing on or before the Business Day preceding the Borrowing Date for such Borrowing that such Bank will not make available as and when required hereunder to the Agent for the account of the Company the amount of that Bank's Pro Rata Share of such Borrowing, the Agent may assume that each Bank has made such amount available to the Agent in immediately available funds on such Borrowing Date and the Agent may (but shall not be so required), in reliance upon such assumption, make available to the Company on such date a corresponding amount. If and to the extent any Bank shall not have made its full amount available to the Agent in immediately available funds and the Agent in such circumstances has made available to the Company such amount, that Bank shall on the Business Day following such Borrowing Date make such amount available to the Agent, together with interest at the Federal Funds Rate for each day during such period. A notice of the Agent submitted to any Bank with respect to amounts owing under this subsection (a) shall constitute prima facie evidence of the accuracy of the information contained therein. If such amount is so made available, such payment to the Agent shall constitute such Bank's Loan on the date of Borrowing for all purposes of this Agreement. If such amount is not made available to the Agent on the Business Day following the Borrowing Date, the Agent will notify the Company of such failure to fund and, upon demand by the Agent, the Company shall pay such amount to the Agent for the Agent's account, together with interest thereon for each day elapsed since the Borrowing Date, at a rate per annum equal to the interest rate applicable at the time to the Loans constituting such Borrowing.

    (b) The failure of any Bank to make any Loan on any Borrowing Date shall not relieve any other Bank of any obligation hereunder to make a Loan on such Borrowing Date, but no Bank shall be responsible for the failure of any other Bank to make the Loan to be made by such other Bank on any Borrowing Date.

    2.14  Sharing of Payments, Etc.  

    If, other than as expressly provided elsewhere herein, any Bank shall obtain on account of the Loans made by it any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) in excess of its Pro Rata Share, such Bank shall immediately (a) notify the Agent of such fact, and (b) purchase from the other Banks such participations in the Loans made by them as shall be necessary to cause such purchasing Bank to share the excess payment pro rata with each of them; provided,however, that if all or any portion of such excess payment is thereafter recovered from the purchasing Bank, such purchase shall to that extent be rescinded and each other Bank shall repay to the purchasing Bank the purchase price paid therefor, together with an amount equal to such paying Bank's ratable share (according to the proportion of (i) the amount of such paying Bank's required repayment to (ii) the total amount so recovered from the purchasing Bank) of any interest or other amount paid or payable by the purchasing Bank in respect of the total amount so recovered. The Company agrees that any Bank so purchasing a participation from another Bank may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off, but subject to Section 10.9) with respect to such participation as fully as if such Bank were the direct creditor of the Company in the amount of such participation. The Agent will keep records (which shall be conclusive and binding in the absence of manifest error) of participations purchased under this Section and will in each case notify the Banks following any such purchases or repayments.

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    2.15  Quarterly Adjustments.  

    If the Company shall have failed to deliver the financial reports pursuant to subsections 6.1(a) and (b) and the certificate pursuant to subsection 6.2(b) when required by said subsections and if, when delivered with respect to any fiscal quarter, such financial reports and certificate indicate that the Applicable Margin and the Commitment Fee Percentage for any period after such failure should have been higher than the Applicable Margin and the Commitment Fee Percentage assumed after such period pursuant to the definitions of such terms by virtue of such failure, and the interest or fee that would have been collected hereunder based upon the actual Applicable Margin and the Commitment Fee Percentage had such failure not occurred exceeds the interest or fee actually collected hereunder, then the Company shall pay, on or before the third Business Day after delivery of such financial reports and certificate, an amount equal to such excess.

    2.16  Increase of the Commitments.  

    (a) The Company, with the consent of the Agent, may at any time arrange an increase in the aggregate amount of the Aggregate Commitment and the "Aggregate Commitment" as defined in the Facility B Credit Agreement (a "Commitment Increase"), effective on a Business Day (an "Increase Date") as separately agreed between the Company and each Increasing Bank (as defined below) and each Assuming Bank by an earlier date at least three days before the intended Increase Date (a "Commitment Date"); provided,however, that (A) in no event shall the Aggregate Commitment at any time exceed $240,000,000, (B) each such increase shall be simultaneous with an equal percentage increase in the "Aggregate Commitment" as defined in the Facility B Credit Agreement, and (C) no Default shall exist on such Increase Date. Such Commitment Increase may be achieved through the increase of the Commitments of one or more of the Banks (each such Bank that is willing to increase its Commitment hereunder being an "Increasing Bank") or the addition of one or more other Eligible Assignees as Assuming Banks and as parties to this Agreement; provided,however, that (1) the Commitment of each Assuming Bank, when combined with such Assuming Bank's "Commitment" under the Facility B Credit Agreement, shall be an integral multiple of $10,000,000, (2) the increase in the existing Commitment of each Increasing Bank, when combined with the increase in such Increasing Bank's "Commitment" under the Facility B Credit Agreement, shall be an integral multiple of $10,000,000, and (3) after giving effect to the Commitment Increase, each Bank (including the Assuming Banks and the Increasing Banks) shall have the same percentage of the Aggregate Commitment as it holds in the "Aggregate Commitment" as defined in the Facility B Credit Agreement.

    (b) If, on or before the Commitment Date, (i) each Assuming Bank has delivered to the Agent an Assumption Agreement in form and substance reasonably satisfactory to the Agent, duly executed by such Assuming Bank and the Company, and effective upon the Increase Date; and (ii) each Increasing Bank shall have delivered to the Agent (A) its existing Note and (B) confirmation in writing satisfactory to the Agent as to its increased Commitment effective upon the Increase Date, then the Agent shall notify the Banks (including any Assuming Banks) and the Company of such Commitment Increase and the applicable Increase Date. Each Increasing Bank and each Assuming Bank shall, before 11:00 a.m. (San Francisco time) on the applicable Increase Date, make available to the Agent in immediately available funds, in the case of such Assuming Bank, an amount equal to such Assuming Bank's Pro Rata Share of the Loans then outstanding (calculated based on its Commitment as a percentage of the Aggregate Commitment after giving effect to the relevant Commitment Increase) and, in the case of such Increasing Bank, an amount equal to the excess of (i) such Increasing Bank's Pro Rata Share of the Loans then outstanding (calculated based on its Commitment as a percentage of the Aggregate Commitment after giving effect to the relevant Commitment Increase) over (ii) such Increasing Bank's Pro Rata Share of the Loans then outstanding (calculated based on its Commitment without giving effect to the relevant Commitment Increase) as a percentage of the aggregate Commitments (without giving effect to the relevant Commitment Increase). After the Agent's receipt of

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such funds from each Increasing Bank and each Assuming Bank, the Agent will promptly thereafter cause to be distributed like funds to the other Banks an amount such that the aggregate amount of the outstanding Loans owing to each Bank after giving effect to such distribution equals such Bank's Pro Rata Share of the Loans then outstanding (calculated based on its Commitment as a percentage of the Aggregate Commitments after giving effect to the Commitment Increase). To the extent there are outstanding Offshore Rate Loans with Interest Periods ending after the Increase Date, such Offshore Rate Loans shall be converted in full to Base Rate Loans or new Offshore Rate Loans on the Increase Date. The Company shall be liable for any amounts owing under Section 3.4 on account of the prepayment or conversion of Offshore Rate Loans required by the two immediately preceding sentences. Promptly after the Company receives a request from the Agent, the Company shall execute and deliver to the Agent Notes payable to the order of each Assuming Bank, if any, and each Increasing Bank, dated as of the applicable Increase Date, in a principal amount equal to such Bank's Commitment after giving effect to the relevant Commitment Increase. The Agent, upon receipt of such Notes, shall promptly deliver such Notes to the respective Assuming Banks and Increasing Banks.


ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY

    3.1  Taxes.  

    (a) Any and all payments by the Company to each Bank or the Agent under this Agreement and any other Loan Document shall be made free and clear of, and without deduction or withholding for any Taxes. In addition, the Company shall pay all Other Taxes.

    (b) The Company agrees to indemnify and hold harmless each Bank and the Agent for the full amount of Taxes or Other Taxes (including any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section) paid by the Bank or the Agent and any liability (including penalties, interest, additions to tax and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. Payment under this indemnification shall be made within 30 days after the date the Bank or the Agent makes written demand therefor.

    (c) If the Company shall be required by law to deduct or withhold any Taxes or Other Taxes from or in respect of any sum payable hereunder to any Bank or the Agent, then:

    (d) Within 30 days after the date of any payment by the Company of Taxes or Other Taxes, the Company shall furnish the Agent the original or a certified copy of a receipt evidencing payment thereof, or other evidence of payment satisfactory to the Agent.

    (e) If the Company is required to pay additional amounts to any Bank or the Agent pursuant to subsection (c) of this Section, then such Bank shall use reasonable efforts (consistent with legal and

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regulatory restrictions) to change the jurisdiction of its Lending Office so as to eliminate any such additional payment by the Company which may thereafter accrue, if such change in the judgment of such Bank is not otherwise disadvantageous to such Bank.

    3.2  Illegality.  

    (a) If any Bank determines that the introduction of any Requirement of Law, or any change in any Requirement of Law, or in the interpretation or administration of any Requirement of Law, has made it unlawful, or that any central bank or other Governmental Authority has asserted that it is unlawful, for any Bank or its applicable Lending Office to make Offshore Rate Loans, then, on notice thereof by the Bank to the Company through the Agent, any obligation of that Bank to make Offshore Rate Loans shall be suspended until the Bank notifies the Agent and the Company that the circumstances giving rise to such determination no longer exist.

    (b) If a Bank determines that it is unlawful to maintain any Offshore Rate Loan, the Company shall, upon receipt of notice of such fact and demand from such Bank (with a copy to the Agent), prepay in full such Offshore Rate Loans of that Bank then outstanding, together with interest accrued thereon and amounts required under Section 3.4, either on the last day of the Interest Period thereof, if the Bank may lawfully continue to maintain such Offshore Rate Loans to such day, or immediately, if the Bank may not lawfully continue to maintain such Offshore Rate Loan. If the Company is required to so prepay any Offshore Rate Loan, then concurrently with such prepayment, the Company shall borrow from the affected Bank, in the amount of such repayment, a Base Rate Loan.

    (c) If the obligation of any Bank to make or maintain Offshore Rate Loans has been so terminated or suspended, the Company may elect, by giving notice to the Bank through the Agent that all Loans which would otherwise be made by the Bank as Offshore Rate Loans shall be instead Base Rate Loans.

    (d) Before giving any notice to the Agent under this Section, the affected Bank shall designate a different Lending Office with respect to its Offshore Rate Loans if such designation will avoid the need for giving such notice or making such demand and will not, in the judgment of the Bank, be illegal or otherwise disadvantageous to the Bank.

    3.3  Increased Costs and Reduction of Return.  

    (a) If any Bank determines that, due to either (i) the introduction of or any change (other than any change by way of imposition of or increase in reserve requirements included in the calculation of the Offshore Rate) in or in the interpretation of any law or regulation or (ii) the compliance by that Bank with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), there shall be any increase in the cost to such Bank of agreeing to make or making, funding or maintaining any Offshore Rate Loans, then the Company shall be liable for, and shall from time to time, upon demand (with a copy of such demand to be sent to the Agent), pay to the Agent for the account of such Bank, additional amounts as are sufficient to compensate such Bank for such increased costs.

    (b) If any Bank shall have determined that (i) the introduction of any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy Regulation, (iii) any change in the interpretation or administration of any Capital Adequacy Regulation by any central bank or other Governmental Authority charged with the interpretation or administration thereof, or (iv) compliance by the Bank (or its Lending Office) or any corporation controlling the Bank with any Capital Adequacy Regulation, affects or would affect the amount of capital required or expected to be maintained by the Bank or any corporation controlling the Bank and (taking into consideration such Bank's or such corporation's policies with respect to capital adequacy and such Bank's desired return on capital) determines that the amount of such capital is increased as a consequence of its Commitment, loans, credits or obligations under this Agreement, then, upon demand of such Bank to the Company through the Agent, the

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Company shall pay to the Bank, from time to time as specified by the Bank, additional amounts sufficient to compensate the Bank for such increase.

    3.4  Funding Losses.  

    The Company shall reimburse each Bank and hold each Bank harmless from any loss or expense which the Bank may sustain or incur as a consequence of:

including any such loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain its Offshore Rate Loans or from fees payable to terminate the deposits from which such funds were obtained. For purposes of calculating amounts payable by the Company to the Banks under this Section and under subsection 3.3(a), (i) each Offshore Rate Loan made by a Bank (and each related reserve, special deposit or similar requirement) shall be conclusively deemed to have been funded at the LIBO Rate used in determining the Offshore Rate for such Offshore Rate Loan by a matching deposit or other borrowing in the interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Offshore Rate Loan is in fact so funded.

    3.5  Inability to Determine Rates.  

    If the Required Banks determine that for any reason adequate and reasonable means do not exist for determining the Offshore Rate for any requested Interest Period with respect to a proposed Offshore Rate Loan, or that the Offshore Rate applicable pursuant to subsection 2.9(a) for any requested Interest Period with respect to a proposed Offshore Rate Loan does not adequately and fairly reflect the cost to such Banks of funding such Loan, the Agent will promptly so notify the Company and each Bank. Thereafter, the obligation of the Banks to make or maintain Offshore Rate Loans, as the case may be, hereunder shall be suspended until the Agent upon the instruction of the Required Banks revokes such notice in writing. Upon receipt of such notice, the Company may revoke any Notice of Borrowing or Notice of Conversion/Continuation then submitted by it. If the Company does not revoke such Notice, the Banks shall make, convert or continue the Loans, as proposed by the Company, in the amount specified in the applicable notice submitted by the Company, but such Loans shall be made, converted or continued as Base Rate Loans instead of Offshore Rate Loans.

    3.6  Certificates of Banks.  

    Any Bank claiming reimbursement or compensation under this Article III shall deliver to the Company (with a copy to the Agent) a certificate setting forth in reasonable detail the amount payable to the Bank hereunder and such certificate shall be conclusive and binding on the Company in the absence of manifest error.

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    3.7  Survival.  

    The agreements and obligations of the Company in Sections 3.1, 3.2, 3.3, 3.4 and 3.5 shall survive the payment of all other Obligations and any assignment and delegation by a Bank.


ARTICLE IV

CONDITIONS PRECEDENT

    4.1  Conditions of Initial Credit Extension.  

    The obligation of each Bank to make its initial Credit Extension hereunder is subject to the condition that the Agent have received on or before the Closing Date all of the following, in form and substance satisfactory to the Agent and each Bank, and in sufficient copies for each Bank:

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    4.2  Conditions to All Credit Extensions.  

    The obligation of each Bank to make any Loan to be made by it (including its initial Loan) or, except as provided in subsection 4.2(d), to continue or convert any Loan under Section 2.4 is subject to the satisfaction of the following conditions precedent on the relevant Borrowing Date or Conversion/ Continuation Date:

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Each Notice of Borrowing and Notice of Conversion/ Continuation submitted by the Company hereunder shall constitute a representation and warranty by the Company hereunder, as of the date of each such notice and as of each Borrowing Date or Conversion/Continuation Date as applicable, that the conditions in Section 4.2 are satisfied.


ARTICLE V

REPRESENTATIONS AND WARRANTIES

    The Company represents and warrants to the Agent and each Bank that:

    5.1  Existence and Power.  

    5.2  Authorization; No Contravention.  

    The execution, delivery and performance by the Company of this Agreement and each other Loan Document to which the Company is a party, have been duly authorized by all necessary partnership and corporate action, and do not and will not:

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    5.3  Governmental Authorization.  

    No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority is necessary or required in connection with the execution, delivery or performance by, or enforcement against, the Company or any Partner Entity of this Agreement or any other Loan Document.

    5.4  Binding Effect.  

    This Agreement and each other Loan Document to which the Company is a party constitute the legal, valid and binding obligations of the Company (to the extent it is a party thereto), enforceable against the Company in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors' rights generally or by equitable principles relating to enforceability.

    5.5  Litigation.  

    Except as specifically disclosed in Schedule 5.5, there are no actions, suits, proceedings, claims or disputes pending, or to the Company's Knowledge, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, against the Company or any of the Partner Entities, or any of their respective Subsidiaries or any of their respective properties which:

    5.6  No Default.  

    No Default or Event of Default exists or would result from the incurring of any Obligations by the Company. As of the Closing Date, none of the Company, the Partner Entities, or any of their respective Subsidiaries is in default under or with respect to any Contractual Obligation in any respect which, individually or together with all such defaults, could reasonably be expected to have a Material Adverse Effect, or that would, if such default had occurred after the Closing Date, create an Event of Default under subsection 8.1(f).

    5.7  ERISA Compliance.  

    (a) Schedule 5.7 lists all Plans. All written descriptions thereof provided to the Agent are true and complete in all material respects.

    (b) Except as specifically disclosed in Schedule 5.7, each Plan is in compliance with the applicable provisions of ERISA, the Code and other federal or state law, except for such non-compliance which would not reasonably be expected to have a Material Adverse Effect. Each Plan which is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS or an application for such a determination letter will be submitted no later than the expiration of the remedial amendment period for effecting amendments required by reason of Section 1140 of the Tax Reform Act of 1986, as amended, and to the Company's Knowledge, nothing has occurred which would cause the loss of such qualification.

    (c) There are no pending, or to the Company's Knowledge, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan which has resulted or could

37

reasonably be expected to result in a Material Adverse Effect. There has been no prohibited transaction or other violation of the fiduciary responsibility rule with respect to any Plan which could reasonably result in a Material Adverse Effect.

    (d) Except as specifically disclosed in Schedule 5.7, no ERISA Event has occurred or is reasonably expected to occur with respect to any Pension Plan.

    (e) Except as specifically disclosed in Schedule 5.7, no Pension Plan (other than multiemployer plans within the meaning of Section 3(38) of ERISA) has any Unfunded Pension Liability.

    (f)  Except as specifically disclosed in Schedule 5.7, neither the Company nor any ERISA Affiliate has incurred, nor does it reasonably expect to incur, any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA).

    (g) Except as specifically disclosed in Schedule 5.7, neither the Company nor any ERISA Affiliate has transferred any Unfunded Pension Liability to any Person or otherwise engaged in a transaction that could be subject to Section 4069 of ERISA.

    5.8  Use of Proceeds; Margin Regulations.  

    The proceeds of the Loans are to be used solely for the purposes set forth in and permitted by Section 6.11 and Section 7.8. None of the Company, the Partner Entities nor any of their respective Subsidiaries is generally engaged in the business of purchasing or selling Margin Stock or extending credit for the purpose of purchasing or carrying Margin Stock.

    5.9  Title to Properties.  

    The Company and each of its Subsidiaries have good record and marketable title in fee simple to, or valid leasehold interests in, all real property necessary or used in the ordinary conduct of their respective businesses, except for such defects in title as could not, individually or in the aggregate, have a Material Adverse Effect. As of the Closing Date, the property of the Company and its Subsidiaries is subject to no Liens, other than Permitted Liens.

    5.10  Taxes.  

    The Company, each Partner Entity, and their respective Subsidiaries have filed all Federal and other material tax returns and reports required to be filed, and have paid all Federal and other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with GAAP. There is no proposed tax assessment against the Company, the Partner Entities or any of their Subsidiaries that would, if made, have a Material Adverse Effect.

    5.11  Financial Condition.  

    (a) The audited consolidated financial statements of the Company and its Subsidiaries dated December 31, 1998, and the unaudited financial statements of the Company and its Subsidiaries for the fiscal quarter ending June 30, 1999, and the related consolidated statements of income or operations, partners' capital and cash flows for the fiscal periods ended on those dates:

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    (b) Since December 31, 1998, there has been no Material Adverse Effect.

    5.12  Environmental Matters.  

    (a) Except as specifically disclosed in Schedule 5.12, the on-going operations of the Company and each of its Subsidiaries comply in all respects with all Environmental Laws, except such non-compliance which would not (if enforced in accordance with applicable law) reasonably be expected to result in liability in excess of $10,000,000 in the aggregate.

    (b) Except as specifically disclosed in Schedule 5.12, the Company and each of its Subsidiaries have obtained all material licenses, permits, authorizations and registrations required under any Environmental Law ("Environmental Permits") and necessary for their respective ordinary course operations, all such Environmental Permits are in good standing, and the Company and each of its Subsidiaries are in compliance with all material terms and conditions of such Environmental Permits.

    (c) Except as specifically disclosed in Schedule 5.12, none of the Company or its Subsidiaries, any Partner Entity or any of its Subsidiaries, or any of their respective present property or operations, is subject to any outstanding written order from or agreement with any Governmental Authority, nor subject to any judicial or docketed administrative proceeding, respecting any Environmental Law, Environmental Claim or Hazardous Material.

    (d) To the Company's Knowledge, except as specifically disclosed in Schedule 5.12, there are no Hazardous Materials or other conditions or circumstances existing with respect to any property of the Company or any of its Subsidiaries, that would reasonably be expected to give rise to Environmental Claims with a potential liability of the Company and its Subsidiaries in excess of $10,000,000 in the aggregate for any such condition, circumstance or property. In addition, (i) to the Company's Knowledge, neither the Company nor any of its Subsidiaries has any underground storage tanks (x) that are not properly registered or permitted under applicable Environmental Laws, or (y) that are leaking or disposing of Hazardous Materials, and (ii) to the extent required under any Requirement of Law, the Company and its Subsidiaries have notified all of their employees of the existence, if any, of any health hazard arising from the conditions of their employment and have met all notification requirements under the Emergency Planning and Community Right-to-Know Act, and all other Environmental Laws.

    (e) Except as specifically disclosed in Schedule 5.12, there are no disputes, litigation, investigations, or proceedings to which the Company, the Partner Entities, or any of their respective Subsidiaries are a party relating to any Environmental Law or environmental condition that could reasonably be expected to have a Material Adverse Effect, and, to the Company's Knowledge, there are no other disputes, litigation, investigations, or proceedings and no rulemaking or legislation pending relating to any Environmental Law or environmental condition that could reasonably be expected to have a Material Adverse Effect.

    5.13  Regulated Entities.  

    None of the Company, the Partner Entities, any Person controlling such Person, or any Subsidiary, is (a) an "Investment Company" within the meaning of the Investment Company Act of 1940; or (b) subject to regulation under the Public Utility Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, any state public utilities code, or any other Federal or state statute or regulation limiting its ability to incur Indebtedness.

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    5.14  No Burdensome Restrictions.  

    Neither the Company nor any of its Subsidiaries is a party to or bound by any Contractual Obligation, or subject to any restriction in any Organization Document, or any Requirement of Law, which could reasonably be expected to have a Material Adverse Effect.

    5.15  Copyrights, Patents, Trademarks and Licenses, Etc.  

    The Company or its Subsidiaries own or are licensed or otherwise have the right to use all of the patents, trademarks, service marks, trade names, copyrights, contractual franchises, authorizations and other rights that are reasonably necessary for the operation of their respective businesses, without conflict with the rights of any other Person. To the Company's Knowledge, no slogan or other advertising device, product, process, method, substance, part or other material now employed, or now contemplated to be employed, by the Company or any of its Subsidiaries infringes upon any rights held by any other Person. Except as specifically disclosed in Schedule 5.5, no claim or litigation regarding any of the foregoing is pending or threatened, and no patent, invention, device, application, principle or any statute, law, rule, regulation, standard or code is pending or, to the Company's Knowledge, proposed, which, in either case, could reasonably be expected to have a Material Adverse Effect.

    5.16  Subsidiaries.  

    As of the Closing Date, the Company has no Subsidiaries other than those specifically disclosed in part (a) of Schedule 5.16 hereto and has no equity investments in any other corporation or entity other than those specifically disclosed in part (b) of Schedule 5.16.

    5.17  Insurance.  

    The properties of the Company and its Subsidiaries are insured with financially sound and reputable insurance companies not Affiliates of the Company, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Company or such Subsidiary operates.

    5.18  Labor Relations.  

    There are no material strikes, lockouts or other labor disputes against the Company or any of its Subsidiaries or, to the Company's Knowledge, threatened against or affecting the Company or any of its Subsidiaries, and no significant unfair labor practice complaint is pending against the Company or any of its Subsidiaries or, to the Company's Knowledge, threatened against any of them before any Government Authority.

    5.19  Partnership Interests.  

    As of the Closing Date, the only general partner of the Company is the Managing General Partner. As of the Closing Date, the only general partners of the Managing General Partner are Fremont and HS Corp.

    5.20  Full Disclosure.  

    None of the representations or warranties made by the Company, any Partner Entity or any of their Subsidiaries in the Loan Documents as of the date such representations and warranties are made or deemed made, and none of the statements contained in any exhibit, report, statement or certificate furnished by or on behalf of the Company or any of its Subsidiaries in connection with the Loan Documents (including the offering and disclosure materials delivered by or on behalf of the Company to the Banks prior to the Closing Date), contains any untrue statement of a material fact or omits any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they are made, not misleading as of the time when made or delivered.

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    5.21  Solvency.  

    The Company and each of the Partner Entities is Solvent.

    5.22  Swap Obligations.  

    Neither the Company nor any of its Subsidiaries has incurred any outstanding obligations under any Swap Contracts, other than Permitted Swap Obligations. The Company has undertaken its own independent assessment of its consolidated assets, liabilities and commitments and has considered appropriate means of mitigating and managing risks associated with such matters and has not relied on any swap counterparty or any Affiliate of any swap counterparty in determining whether to enter into any Swap Contract.

    5.23  Y2K.  

    The Company and its Subsidiaries have developed and budgeted for a comprehensive program to address the "Year 2000 Problem" (that is, the inability of computers, as well as embedded microchips in non-computing devices, to perform properly date-sensitive functions with respect to certain dates prior to and after December 31, 1999). The Company and its Subsidiaries have implemented that program substantially in accordance with their timetable and budget and they will substantially avoid the Year 2000 problem as to all computers, as well as embedded microchips in non-computing devices, that are material to the Company's and its Subsidiaries' business, properties or operations. The Company and its Subsidiaries have developed feasible contingency plans to adequately ensure uninterrupted and unimpaired business operation in the event of failure of their own or a third party's systems or equipment due to the Year 2000 problem, including those of vendors, customers, and suppliers, as well as a general failure of or interruption in its communications and delivery infrastructure, but not including failure of third-party systems or equipment that affect the economy generally and as to which contingency planning is not reasonably feasible.


ARTICLE VI

AFFIRMATIVE COVENANTS

    So long as any Bank shall have any Commitment hereunder, or any Loan or other Obligation shall remain unpaid or unsatisfied, unless the Required Banks waive compliance in writing:

    6.1  Financial Statements.  

    The Company shall deliver to the Agent, in form and detail satisfactory to the Agent and the Required Banks, with sufficient copies for each Bank:

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    6.2  Certificates; Other Information.  

    The Company shall furnish to the Agent, with sufficient copies for each Bank:

    6.3  Notices.  

    The Company shall promptly notify the Agent and each Bank:

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    Each notice under this Section shall be accompanied by a written statement by a Responsible Officer setting forth details of the occurrence referred to therein, and stating what action the Company or any affected Subsidiary proposes to take with respect thereto and at what time. Each notice under subsection 6.3(a) shall describe with particularity any and all clauses or provisions of this Agreement or other Loan Document that have been (or foreseeably will be) breached or violated.

    6.4  Preservation of Partnership Existence, Etc.  

    The Company shall, except as permitted by Section 7.3, and shall cause each of its Subsidiaries and each of the Partner Entities to:

provided 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 Pro Forma Consolidated Cash Flow to Pro Forma Maximum Debt Service, determined as of the end of the fiscal quarter immediately preceding the loss of such status, would be greater than 1.1 to 1.0, assuming for the purposes of the computation of Pro Forma Consolidated Cash Flow, that Pro Forma 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.

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    6.5  Maintenance of Property.  

    The Company shall maintain, and shall cause each Subsidiary to maintain, and preserve all its property which is used or useful in its business in good working order and condition, ordinary wear and tear excepted and make all necessary repairs thereto and renewals and replacements thereof except where the failure to do so could not reasonably be expected to have a Material Adverse Effect or except as permitted by Section 7.2.

    6.6  Insurance.  

    The Company shall maintain, and shall cause each Subsidiary to maintain, with financially sound and reputable independent insurers, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts as are customarily carried under similar circumstances by such other Persons; including public liability and property and casualty insurance.

    6.7  Payment of Obligations.  

    The Company shall, and shall cause each Subsidiary to, pay and discharge as the same shall become due and payable, all their respective obligations and liabilities, including:

    6.8  Compliance with Laws.  

    The Company shall comply, and shall cause each of its Subsidiaries to comply, in all material respects with all Requirements of Law of any Governmental Authority having jurisdiction over it or its business (including the Federal Fair Labor Standards Act), except such as may be contested in good faith or as to which a bona fide dispute may exist.

    6.9  Inspection of Property and Books and Records.  

    The Company shall maintain and shall cause each of its Subsidiaries to maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of the Company and such Subsidiary. The Company shall permit, and shall cause each Subsidiary to permit, representatives and independent contractors of the Agent or any Bank to visit and inspect any of their respective properties, to examine their respective corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss their respective affairs, finances and accounts with their respective directors, officers, and independent public accountants, all at the expense of the Company and at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Company; provided, however, when an Event of Default exists the Agent or any Bank may do any of the foregoing at the expense of the Company at any time during normal business hours and without advance notice.

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    6.10  Environmental Laws.  

    (a) The Company shall, and shall cause each Subsidiary to, conduct its operations and keep and maintain its property in material compliance with all Environmental Laws, the non-compliance with which would reasonably be expected to have a Material Adverse Effect.

    (b) Upon the written request of the Agent or any Bank, the Company shall submit and cause each of its Subsidiaries to submit, to the Agent with sufficient copies for each Bank, at the Company's sole cost and expense, at reasonable intervals, a report providing an update of the status of any environmental, health or safety compliance, hazard or liability issue identified in any notice or report required pursuant to subsection 6.3(b), that could, individually or in the aggregate, reasonably be expected to result in liability in excess of $10,000,000.

    6.11  Use of Proceeds.  

    The Company shall use the proceeds of the Loans (i) to repay on the Closing Date "Facility A Loans" under and as defined in the 1996 Amended and Restated Credit Agreement, and (ii) for the cost (including related fees, commissions and expenses) of the acquisition of any Permitted Business or assets to be used in any Permitted Business, in all cases not in contravention of any Requirement of Law or of any Loan Document, and (iii) for the cost of any capital expenditures in Permitted Businesses as long as the cumulative principal amount of Loans made for the purposes described in this clause (iii) shall not exceed $50,000,000.

    6.12  Further Assurances.  

    The Company shall ensure that all written information, exhibits and reports furnished to the Agent or the Banks do not and will not contain any untrue statement of a material fact and do not and will not omit to state any material fact or any fact necessary to make the statements contained therein not misleading in light of the circumstances in which made, and will promptly disclose to the Agent and the Banks and correct any defect or error that may be discovered therein or in any Loan Document or in the execution, acknowledgment or recordation thereof.


ARTICLE VII

NEGATIVE COVENANTS

    So long as any Bank shall have any Commitment hereunder, or any Loan or other Obligation shall remain unpaid or unsatisfied, unless the Required Banks waive compliance in writing:

    7.1  Limitation on Liens.  

    The Company shall not, and shall not suffer or permit any of its Subsidiaries to, directly or indirectly, make, create, incur, assume or suffer to exist any Lien upon or with respect to any part of its property, whether now owned or hereafter acquired, other than the following ("Permitted Liens"):

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    7.2  Asset Dispositions.  

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

provided, however, that any exchange permitted by this subsection 7.2(e) may be in the form of a tax deferred exchange so long as such tax deferred exchange is completed within 180 days; and

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    7.3  Consolidations and Mergers.  

    The Company shall not, and shall not suffer or permit any Subsidiary to, merge, consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except:

provided, however, in each case (i) no Default or Event of Default exists or shall result from such merger or sale and (ii) immediately after such merger or sale, the ratio of (A) Pro Forma Consolidated

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Cash Flow to Pro Forma Interest Expense is greater than 2.50 to 1.00, and (B) Pro Forma Consolidated Cash Flow to Pro Forma Maximum Debt Service is greater than 1.25 to 1.00.

    7.4  Harvesting Restrictions.  

    The Company shall not, and shall not suffer or permit any of its Subsidiaries to, in any calendar year commencing with 1998, harvest timber or sell standing timber on its or any Subsidiary's timberlands in excess of:

unless the net proceeds from such excess harvest (which shall be determined based upon the average prices received on the sale of all timber harvested during such period and a reasonable allocation of direct cash expenses incurred in connection with the harvesting and sale of timber during such period), are, within ten Business Days after the end of such period, placed in an escrow account, pursuant to an Escrow Agreement, to be applied within 180 days after the end of such period (y) to the repayment of such Senior Debt as the Company may elect to so prepay provided that at any time the Company shall elect to repay Senior Debt other than the Loans and the Facility B Loans, the Company shall also repay Loans and Facility B Loans by at least a pro rata amount (based on the outstanding principal of all Senior Debt), or (z) to purchase or commit to purchase timber or timberlands located in the United States, Canada, Mexico or New Zealand (including purchases not consummated during such 180 days if a binding agreement for such purchase is entered into during such period and such purchase is completed within 90 days after the expiry of such 180 day period) for not more than fair market value (in the good faith judgment of the Responsible Officer as certified in writing to the Agent and the Banks), provided that the aggregate of such net proceeds used to purchase timber or timberlands located in Mexico shall not exceed, together with the fair market value of assets in Mexico obtained in an exchange pursuant to subsection 7.2(e) and the Net Proceeds invested in productive assets in Mexico pursuant to subsection 7.2(f)(ii), $50,000,000 during the term of this Agreement, and provided further that the Company shall have notified the Agent promptly after its determination to so apply the net proceeds. The Company shall apply any such net proceeds withdrawn from the escrow account pursuant to an Escrow Agreement to the applications required by clauses (y) or (z) above within three Business Days after such withdrawal.

    "Planned Volume" shall mean for each calendar year 325,000,000 board feet of timber, and shall be increased for any Annual Timber Increase, from the Effective Date for such Annual Timber Increase, by increasing such per annum amount by an amount equal to the Estimated Percentage of such Annual Timber Increase. In addition, such amount for any year after 1999 with respect to which there is an Annual Timber Decrease shall be decreased (calculated after giving effect to any Annual Timber Increases) effective upon the Effective Date for such Annual Timber Decrease by the same percentage that such Annual Timber Decrease represents as a percentage of the inventory of standing timber owned by the Company and its Subsidiaries at the end of the prior calendar year; provided, however, that such decrease shall not be made for any calendar year if the percentage decrease for that year would be less than 5% and if the Asset Coverage Ratio at the end of the prior calendar year is at least 2.0:1.0. For purposes of the foregoing:

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    7.5  Loans and Investments.  

    The Company shall not purchase or acquire, or suffer or permit any of its Subsidiaries to purchase or acquire, or make any commitment therefor, any capital stock, equity interest, or any obligations or other securities of, or any interest in, any Person, or make or commit to make any Acquisitions, or make or commit to make any advance, loan, extension of credit or capital contribution to or any other investment in, any Person including any Affiliate of the Company, except for:

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    7.6  Limitation on Indebtedness.  

    The Company shall not, and shall not suffer or permit any of its Subsidiaries to, create, incur, assume, suffer to exist, or otherwise become or remain directly or indirectly liable with respect to, any Indebtedness, except:

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    7.7  Transactions with Affiliates.  

    The Company shall not, and shall not suffer or permit any of its Subsidiaries to, enter into any transaction with any Affiliate of the Company, except upon fair and reasonable terms no less favorable to the Company or such Subsidiary than would obtain in a comparable arm's-length transaction with a Person not an Affiliate of the Company or such Subsidiary. The Company shall be entitled to reimburse the Managing General Partner for (i) all direct and indirect expenses it 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 expenses reasonably allocable to the Company or otherwise reasonably incurred by the Managing General Partner in connection with operating the Company's business (including 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).

    7.8  Use of Proceeds.  

    7.9  Contingent Obligations.  

    The Company shall not, and shall not suffer or permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Contingent Obligations except:

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    7.10  Joint Ventures.  

    The Company shall not, and shall not suffer or permit any of its Subsidiaries to enter into any Joint Venture, other than Joint Ventures in Permitted Businesses and so long as any such Joint Ventures are not entered into for the purpose of evading any covenant or restriction in any Loan Document.

    7.11  Restricted Payments.  

    The Company shall not, and shall not suffer or permit any Subsidiary to, declare or make any limited partner or general partner distribution or dividend payment or other distribution of assets, properties, cash, rights, obligations or securities on account of any, limited or general partnership interest or shares of any class of capital stock, or purchase, redeem or otherwise acquire for value any partnership interest or shares of capital stock or any warrants, rights or options to acquire such partnership interest or shares, now or hereafter outstanding (each a "Restricted Payment"); except that: (a) the Company may declare and make distributions payable solely in general or limited partnership interests or units; (b) if no Default or Event of Default exists or would result from such action, the Company may make during each fiscal quarter one or more Restricted Payments if such Restricted Payments in an aggregate amount do not exceed Available Cash for the immediately preceding fiscal quarter; and (c) Subsidiaries of the Company may declare and make dividends or distributions to the Company.

    7.12  Change in Business.  

    The Company shall not, and shall not suffer or permit any of its Subsidiaries to, engage in any material line of business other than a Permitted Business. The Company shall not suffer or permit the Managing General Partner to engage in any business other than being the general partner of the Company, the managing general partner of the Master Partnership or the general partner in any other Subsidiary of the Master Partnership.

    7.13  Fiscal Year Changes.  

    The Company shall not, and shall not suffer or permit any of its Subsidiaries to change the fiscal year of the Company or of any of its Subsidiaries.

    7.14  Amendments to Agreements.  

    The Company shall not, and shall not suffer or permit any of its Subsidiaries to amend, modify, supplement, waive or otherwise modify any of the terms and provisions contained in the Company Partnership Agreement, the Master Partnership Agreement (or any document executed or delivered in connection with such Partnership Agreements), or the partnership certificate of the Company or the Master Partnership, if such amendment, supplement or other modification shall impair the Company's ability to perform its obligations under the Loan Documents or increase any of its financial obligations to any of its general or limited partners or to any Affiliate.

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    7.15  Indebtedness Covenant.  

    The Company shall not permit, as of the last day of any fiscal quarter, (i) the ratio of Cash Flow to Interest Expense to be less than 2.50 to 1.00, or (ii) the ratio of Cash Flow to Debt Service to be less than 1.25 to 1.00.

    7.16  Limitation on Voluntary Payments of Senior Notes, Etc.  

    The Company shall not, and shall not permit any of its Subsidiaries to make any voluntary or optional payment or prepayment on or redemption or acquisition for value of (including, without limitation, by way of depositing with respect thereto money or securities before due for the purpose of paying when due) the Senior Notes other than (i) the refunding or refinancing in full of the Senior Notes permitted by subsection 7.6(a) and (ii) pro rata prepayments thereof with the Loans and the Facility B Loans as permitted by subsection 2.7(a).


ARTICLE VIII

EVENTS OF DEFAULT

    8.1  Event of Default.  

    Any of the following shall constitute an "Event of Default":

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    8.2  Remedies.  

    If any Event of Default occurs, the Agent shall, at the request of, or may, with the consent of, the Required Banks,

    (a) declare the Commitment of each Bank to be terminated, whereupon such Commitment shall be terminated;

    (b) declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Company; and

    (c) exercise on behalf of itself and the Banks all rights and remedies available to it and the Banks under the Loan Documents or applicable law;

provided, however, that upon the occurrence of any event specified in subsection (g) or (h) of Section 8.1 (in the case of clause (i) of subsection (h) upon the expiration of the 60-day period mentioned therein), the obligation of each Bank to make Loans shall automatically terminate and the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable without further act of the Agent or any Bank.

    8.3  Rights Not Exclusive.  

    The rights provided for in this Agreement and the other Loan Documents are cumulative and are not exclusive of any other rights, powers, privileges or remedies provided by law or in equity, or under any other instrument, document or agreement now existing or hereafter arising.


ARTICLE IX

THE AGENT

    9.1  Appointment and Authorization.  

    Each Bank hereby irrevocably appoints, designates and authorizes the Agent to take such action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary contained elsewhere in this Agreement or in any other Loan Document, the Agent shall not have any duties or responsibilities, except those expressly set forth herein, nor shall the Agent have or be deemed to have any fiduciary relationship with any Bank, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Agent. The Company acknowledges that the Agent has made no assertions of implied authority to act for the Banks and that the Agent has only the authority expressly granted herein. Without limiting the generality of the foregoing sentence, the use of the term "agent" in this Agreement with reference to the Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency

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doctrine of any applicable law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.

    9.2  Delegation of Duties.  

    The Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects with reasonable care.

    9.3  Liability of Agent.  

    None of the Agent-Related Persons shall (i) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct), or (ii) be responsible in any manner to any of the Banks for any recital, statement, representation or warranty made by the Company or any of its Subsidiaries or Affiliate of the Company, or any officer thereof, contained in this Agreement or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure of the Company or any other party to any Loan Document to perform its obligations hereunder or thereunder. No Agent-Related Person shall be under any obligation to any Bank to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of the Company or any of its Subsidiaries or Affiliates.

    9.4  Reliance by Agent.  

    (a) The Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to the Company), independent accountants and other experts selected by the Agent. The Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless it shall first receive such advice or concurrence of the Required Banks as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Banks against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Required Banks and such request and any action taken or failure to act pursuant thereto shall be binding upon all of the Banks.

    (b) For purposes of determining compliance with the conditions specified in Section 4.1, each Bank that has executed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter either sent by the Agent to such Bank for consent, approval, acceptance or satisfaction, or required thereunder to be consented to or approved by or acceptable or satisfactory to the Bank.

    9.5  Notice of Default.  

    The Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, except with respect to defaults in the payment of principal, interest and fees required to be paid to the Agent for the account of the Banks, unless the Agent shall have received written

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notice from a Bank or the Company referring to this Agreement, describing such Default or Event of Default and stating that such notice is a "notice of default". The Agent will notify the Banks of its receipt of any such notice. The Agent shall take such action with respect to such Default or Event of Default as may be requested by the Required Banks in accordance with Article VII; provided, however, that unless and until the Agent has received any such request, the Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable or in the best interest of the Banks.

    9.6  Credit Decision.  

    Each Bank acknowledges that none of the Agent-Related Persons has made any representation or warranty to it, and that no act by the Agent hereinafter taken, including any review of the affairs of the Company and its Subsidiaries, shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Bank. Each Bank represents to the Agent that it has, independently and without reliance upon any Agent-Related Person and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Company and its Subsidiaries, and all applicable bank regulatory laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to the Company hereunder. Each Bank also represents that it will, independently and without reliance upon any Agent-Related Person and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Company. Except for notices, reports and other documents expressly herein required to be furnished to the Banks by the Agent, the Agent shall not have any duty or responsibility to provide any Bank with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of the Company which may come into the possession of any of the Agent-Related Persons.

    9.7  Indemnification.  

    Whether or not the transactions contemplated hereby are consummated, the Banks shall indemnify upon demand the Agent-Related Persons (to the extent not reimbursed by or on behalf of the Company and without limiting the obligation of the Company to do so), pro rata, from and against any and all Indemnified Liabilities; provided, however, that no Bank shall be liable for the payment to the Agent-Related Persons of any portion of such Indemnified Liabilities resulting from such Person's gross negligence or willful misconduct. Without limitation of the foregoing, each Bank shall reimburse the Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including Attorney Costs) incurred by the Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, the Original Credit Agreement, the 1995 Amended and Restated Credit Agreement, the Initial 1996 Amended and Restated Credit Agreement or the 1996 Amended and Restated Credit Agreement, or any document contemplated by or referred to herein, to the extent that the Agent is not reimbursed for such expenses by or on behalf of the Company. The undertaking in this Section shall survive the payment of all Obligations hereunder and the resignation or replacement of the Agent.

    9.8  Agent in Individual Capacity.  

    Bank of America and its Affiliates may make loans to, issue letters of credit for the account of, enter Swap Contracts with, accept deposits from, acquire equity interests in and generally engage in any kind of banking, trust, financial advisory, underwriting or other business with the Company and its Subsidiaries and Affiliates as though Bank of America were not the Agent hereunder and without

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notice to or consent of the Banks. The Banks acknowledge that, pursuant to such activities, Bank of America or its Affiliates may receive information regarding the Company or its Affiliates (including information that may be subject to confidentiality obligations in favor of the Company or such Subsidiary) and acknowledge that the Agent shall be under no obligation to provide such information to them. With respect to its Loans, Bank of America shall have the same rights and powers under this Agreement as any other Bank and may exercise the same as though it were not the Agent and the terms "Bank" and "Banks" include Bank of America in its individual capacity.

    9.9  Successor Agent.  

    The Agent may, and at the request of the Required Banks shall, resign as Agent upon 30 days' notice to the Banks. If the Agent resigns under this Agreement, the Required Banks shall appoint from among the Banks a successor agent for the Banks. If no successor agent is appointed prior to the effective date of the resignation of the Agent, the Agent may appoint, after consulting with the Banks and the Company, a successor agent from among the Banks. Upon the acceptance of its appointment as successor agent hereunder, such successor agent shall succeed to all the rights, powers and duties of the retiring Agent and the term "Agent" shall mean such successor agent and the retiring Agent's appointment, powers and duties as Agent shall be terminated. After any retiring Agent's resignation hereunder as Agent, the provisions of this Article IX and Sections 10.4 and 10.5 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement. If no successor agent has accepted appointment as Agent by the date which is 30 days following a retiring Agent's notice of resignation, the retiring Agent's resignation shall nevertheless thereupon become effective and the Banks shall perform all of the duties of the Agent hereunder until such time, if any, as the Required Banks appoint a successor agent as provided for above.

    9.10  Withholding Tax.  

    (a) If any Bank is a "foreign corporation, partnership or trust" within the meaning of the Code and such Bank claims exemption from, or a reduction of, U.S. withholding tax under Sections 1441 or 1442 of the Code, such Bank agrees with and in favor of the Agent, to deliver to the Agent:

Such Bank agrees to promptly notify the Agent of any change in circumstances which would modify or render invalid any claimed exemption or reduction.

    (b) If any Bank claims exemption from, or reduction of, withholding tax under a United States tax treaty by providing IRS Form 1001 and such Bank sells, assigns, grants a participation in, or otherwise transfers all or part of the Obligations of the Company to such Bank, such Bank agrees to notify the Agent of the percentage amount in which it is no longer the beneficial owner of Obligations of the Company to such Bank. To the extent of such percentage amount, the Agent will treat such Bank's IRS Form 1001 as no longer valid.

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    (c) If any Bank claiming exemption from United States withholding tax by filing IRS Form 4224 with the Agent sells, assigns, grants a participation in, or otherwise transfers all or part of the Obligations of the Company to such Bank, such Bank agrees to undertake sole responsibility for complying with the withholding tax requirements imposed by Sections 1441 and 1442 of the Code.

    (d) If any Bank is entitled to a reduction in the applicable withholding tax, the Agent may withhold from any interest payment to such Bank an amount equivalent to the applicable withholding tax after taking into account such reduction. If the forms or other documentation required by subsection (a) of this Section are not delivered to the Agent, then the Agent may withhold from any interest payment to such Bank not providing such forms or other documentation an amount equivalent to the applicable withholding tax.

    (e) If the IRS or any other Governmental Authority of the United States or other jurisdiction asserts a claim that the Agent did not properly withhold tax from amounts paid to or for the account of any Bank (because the appropriate form was not delivered, was not properly executed, or because such Bank failed to notify the Agent of a change in circumstances which rendered the exemption from, or reduction of, withholding tax ineffective, or for any other reason) such Bank shall indemnify the Agent fully for all amounts paid, directly or indirectly, by the Agent as tax or otherwise, including penalties and interest, and including any taxes imposed by any jurisdiction on the amounts payable to the Agent under this Section, together with all costs and expenses (including Attorney Costs). The obligation of the Banks under this subsection shall survive the payment of all Obligations and the resignation or replacement of the Agent.

    9.11  Syndication Agent and the Co-Agents.  

    Neither the Syndication Agent nor the Co-Agents shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Banks as such. Without limiting the foregoing, neither the Syndication Agent nor the Co-Agents shall have or be deemed to have any fiduciary relationship with any Bank. Each Bank acknowledges that it has not relied, and will not rely, on the Syndication Agent or either Co-Agent in deciding to enter into this Agreement or in taking or not taking action hereunder.

    9.12  CP Acquisition II Guaranty.  

    As an accommodation to the Borrower, the Agent has maintained under the 1996 Amended and Restated Credit Agreement, and will continue to maintain hereunder, as an identifiable tranche of the outstanding Loans (the "Nevada Acquisition Tranche"), certain Loans in the initial amount of $5,100,000 made under the 1996 Amended and Restated Credit Agreement that the Borrower used to refinance indebtedness assumed in connection with its acquisition of the assets of Desert Lumber, Inc. and Reno Lumber Services, Inc. No payment made by the Company shall be applied to repay the principal amount of the Nevada Acquisition Tranche unless the Company shall so direct or unless the Effective Amount of all outstanding Loans is equal to or less than the outstanding amount of the Nevada Acquisition Tranche. The Banks authorize the Agent, without any notice to or further consent from the Banks, to release the CP Acquisition II Guaranty at any time upon the Company's request provided that no Default or Event of Default then exists.


ARTICLE X

MISCELLANEOUS

    10.1  Amendments and Waivers.  

    No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent with respect to any departure by the Company therefrom, shall be effective unless the same shall be in writing and signed by the Required Banks (or by the Agent at the written request of the

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Required Banks) and the Company, and acknowledged by the Agent, and then any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such waiver, amendment, or consent shall, unless in writing and signed by all the Banks and the Company and acknowledged by the Agent, do any of the following:

and, provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the Agent in addition to the Required Banks or all the Banks, as the case may be, affect the rights or duties of the Agent under this Agreement or any other Loan Document, and (ii) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed by the parties thereto.

    10.2  Notices.  

    (a) All notices, requests and other communications shall be in writing (including, unless the context expressly otherwise provides, by facsimile transmission, provided that any matter transmitted by the Company by facsimile (i) shall be immediately confirmed by a telephone call to the recipient at the number specified on Schedule 10.2, and (ii) shall be followed promptly by delivery of a hard copy original thereof) and mailed, faxed or delivered, to the address or facsimile number specified for notices on Schedule 10.2; or, as directed to the Company or the Agent, to such other address as shall be designated by such party in a written notice to the other parties, and as directed to any other party, at such other address as shall be designated by such party in a written notice to the Company and the Agent.

    (b) All such notices, requests and communications shall, when transmitted by overnight delivery, or faxed, be effective when delivered for overnight (next-day) delivery, or transmitted in legible form by facsimile machine, respectively, or if mailed, upon the third Business Day after the date deposited into the U.S. mail, or if delivered, upon delivery; except that notices pursuant to Article II or IX shall not be effective until actually received by the Agent.

    (c) Any agreement of the Agent and the Banks herein to receive certain notices by telephone or facsimile is solely for the convenience and at the request of the Company. The Agent and the Banks shall be entitled to rely on the authority of any Person purporting to be a Person authorized by the Company to give such notice and the Agent and the Banks shall not have any liability to the Company or other Person on account of any action taken or not taken by the Agent or the Banks in reliance upon such telephonic or facsimile notice. The obligation of the Company to repay the Loans shall not be affected in any way or to any extent by any failure by the Agent and the Banks to receive written confirmation of any telephonic or facsimile notice or the receipt by the Agent and the Banks of a confirmation which is at variance with the terms understood by the Agent and the Banks to be contained in the telephonic or facsimile notice.

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    10.3  No Waiver; Cumulative Remedies.  

    No failure to exercise and no delay in exercising, on the part of the Agent or any Bank, any right, remedy, power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

    10.4  Costs and Expenses.  

    The Company shall:

    10.5  Indemnity.  

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    10.6  Payments Set Aside.  

    To the extent that the Company makes a payment to the Agent or the Banks, or the Agent or the Banks exercise their right of set-off, and such payment or the proceeds of such set-off or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Agent or such Bank in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any Insolvency Proceeding or otherwise, then (a) to the extent of such recovery the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such set-off had not occurred, and (b) each Bank severally agrees to pay to the Agent upon demand its Pro Rata Share of any amount so recovered from or repaid by the Agent.

    10.7  Successors and Assigns.  

    The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that the Company may not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of the Agent and each Bank.

    10.8  Assignments, Participations, Etc.  

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65

    10.9  Set-off.  

    In addition to any rights and remedies of the Banks provided by law, if an Event of Default exists or the Loans have been accelerated, each Bank is authorized at any time and from time to time, without prior notice to the Company, any such notice being waived by the Company to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held by, and other indebtedness at any time owing by, such Bank to or for the credit or the account of the Company against any and all Obligations owing to such Bank, now or hereafter existing, irrespective of whether or not the Agent or such Bank shall have made demand under this Agreement or any Loan Document and although such Obligations may be contingent or unmatured. Each Bank agrees promptly to notify the Company and the Agent after any such set-off and application made by such Bank; provided, however, that the failure to give such notice shall not affect the validity of such set-off and application.

    10.10  Automatic Debits of Fees.  

    With respect to any commitment fee, arrangement fee, or other fee, or any other cost or expense (including Attorney Costs) due and payable to the Agent, Bank of America or the Arranger under the Loan Documents, the Company hereby irrevocably authorizes Bank of America to debit any deposit account of the Company with Bank of America in an amount such that the aggregate amount debited from all such deposit accounts does not exceed such fee or other cost or expense. If there are insufficient funds in such deposit accounts to cover the amount of the fee or other cost or expense then due, such debits will be reversed (in whole or in part, in Bank of America's sole discretion) and such

66

amount not debited shall be deemed to be unpaid. No such debit under this Section shall be deemed a set-off.

    10.11  Notification of Addresses, Lending Offices, Etc.  

    Each Bank shall notify the Agent in writing of any changes in the address to which notices to the Bank should be directed, of addresses of any Lending Office, of payment instructions in respect of all payments to be made to it hereunder and of such other administrative information as the Agent shall reasonably request.

    10.12  Counterparts.  

    This Agreement may be executed in any number of separate counterparts, each of which, when so executed, shall be deemed an original, and all of said counterparts taken together shall be deemed to constitute but one and the same instrument.

    10.13  Severability.  

    The illegality or unenforceability of any provision of this Agreement or any instrument or agreement required hereunder shall not in any way affect or impair the legality or enforceability of the remaining provisions of this Agreement or any instrument or agreement required hereunder.

    10.14  No Third Parties Benefited.  

    This Agreement is made and entered into for the sole protection and legal benefit of the Company, the Banks, the Agent and the Agent-Related Persons, and their permitted successors and assigns, and no other Person shall be a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Agreement or any of the other Loan Documents.

    10.15  Governing Law and Jurisdiction.  

67

    10.16  Waiver of Jury Trial.  

    THE COMPANY, THE BANKS AND THE AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE ORIGINAL CREDIT AGREEMENT, THE 1995 AMENDED AND RESTATED CREDIT AGREEMENT, THE INITIAL 1996 AMENDED AND RESTATED CREDIT AGREEMENT, THE 1996 AMENDED AND RESTATED CREDIT AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE COMPANY, THE BANKS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT, THE ORIGINAL CREDIT AGREEMENT, THE 1995 AMENDED AND RESTATED CREDIT AGREEMENT, THE INITIAL 1996 AMENDED AND RESTATED CREDIT AGREEMENT, THE 1996 AMENDED AND RESTATED CREDIT AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

    10.17  Recourse.  

    Except as otherwise expressly provided in the proviso to this Section, nothing contained herein or in the other Loan Documents shall be construed as creating any liability of any past or present shareholder, limited partner or general partner of the Company or the Partner Entities or any of their respective officers or directors to pay any deficiency or other amount owing on account of the Obligations or to perform any covenant either express or implied of the Company contained herein or in any other Loan Document; provided, however, that nothing in this Section 10.17 shall be construed (i) to relieve any Person from liability for fraud, concealment, or other intentional wrongdoing for which such Person would otherwise be liable under any applicable law, either directly or on behalf of the Company, (ii) to restrict the joinder in any action of any necessary party in order to seek enforcement of rights against the Company or any other party to any Loan Document or to restrict injunctive relief against any Person to the extent necessary to obtain performance by the Company of its Obligations or by any other party to one or more of the Loan Documents, or (iii) to relieve any Person from liability for distributions, payments, or other transfers made to such Person in violation of the Loan Documents, or in violation of or otherwise recoverable under any applicable law.

    10.18  Entire Agreement.  

    This Agreement, together with the other Loan Documents, embodies the entire agreement and understanding among the Company, the Banks, the Syndication Agent, the Co-Agents and the Agent, and supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof and thereof; provided, however, that (a)  the Fee Letter (b) any prior arrangements made with respect to the payment by the Company of (or any indemnification for) any fees, costs or expenses payable to or incurred (or to be incurred) by or on behalf of the Agent or the Banks, and (c) the representations and warranties (as of the dates made and deemed made) and the indemnities of the Company set forth in the Original Credit Agreement, the 1995 Amended and Restated Credit Agreement, the Initial 1996 Amended and Restated Credit

68

Agreement, the 1996 Amended and Restated Credit Agreement and the "Loan Documents" (as defined therein) shall, in each case, survive the execution and delivery of this Agreement.

    IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

    CROWN PACIFIC LIMITED PARTNERSHIP, a Delaware limited partnership
 
 		  
 		  
By:		  
 		  
CROWN PACIFIC MANAGEMENT LIMITED PARTNERSHIP, a Delaware limited partnership, its general partner
 
 		  
 		  
 		  
 		  
By:		  
 		  
 
           
 
 		  
 		  
 		  
 		  
Title:		  
 		  
 
           
 
 		  
 		  
BANK OF AMERICA, N.A., as Agent and as a Bank
 
 		  
 		  
 		  
 		  
By:		  
 		  
 
           
 
 		  
 		  
 		  
 		  
Title:		  
 		  
 
           
 
 		  
 		  
UNION BANK OF CALIFORNIA, N.A., as Syndication Agent and as a Bank
 
 		  
 		  
 		  
 		  
By:		  
 		  
 
           
 
 		  
 		  
 		  
 		  
Title:		  
 		  
 
           
 
 		  
 		  
BANK OF MONTREAL, as Co-Agent and as a Bank
 
 		  
 		  
 		  
 		  
By:		  
 		  
 
           
 
 		  
 		  
 		  
 		  
Title:		  
 		  
 
           
 
 		  
 		  
KEYBANK NATIONAL ASSOCIATION, as Co-Agent and as a Bank
 
 		  
 		  
 		  
 		  
By:		  
 		  
 
           
 
 		  
 		  
 		  
 		  
Title:		  
 		  
 
           

69

 
 		  
 		  
ABN AMRO BANK, N.V.
 
 		  
 		  
 		  
 		  
By:		  
 		  
 
           
 
 		  
 		  
 		  
 		  
Title:		  
 		  
 
           
 
 		  
 		  
 		  
 		  
By:		  
 		  
 
           
 
 		  
 		  
 		  
 		  
Title:		  
 		  
 
           
 
 		  
 		  
SUNTRUST BANK, ATLANTA
 
 		  
 		  
 		  
 		  
By:		  
 		  
 
           
 
 		  
 		  
 		  
 		  
Title:		  
 		  
 
           
 
 		  
 		  
WELLS FARGO BANK, N.A.
 
 		  
 		  
 		  
 		  
By:		  
 		  
 
           
 
 		  
 		  
 		  
 		  
Title:		  
 		  
 
           
 
 		  
 		  
THE SUMITOMO BANK, LIMITED
 
 		  
 		  
 		  
 		  
By:		  
 		  
 
           
 
 		  
 		  
 		  
 		  
Title:		  
 		  
 
           
 
 		  
 		  
PARIBAS
 
 		  
 		  
 		  
 		  
By:		  
 		  
 
           
 
 		  
 		  
 		  
 		  
Title:		  
 		  
 
           
 
 		  
 		  
FIRST UNION NATIONAL BANK
 
 		  
 		  
 		  
 		  
By:		  
 		  
 
           
 
 		  
 		  
 		  
 		  
Title:		  
 		  
 
           

70


SCHEDULE 2.1


COMMITMENTS
AND PRO RATA SHARES

Bank
   Commitment
   Pro Rata Share
  
Bank of America, N.A.   $ 48,000,000   21.428571429 %
 
Union Bank of California, N.A.		  
 		  
$		  
40,000,000		  
 		  
17.857142857		  
%
 
Bank of Montreal		  
 		  
$		  
32,000,000		  
 		  
14.285714286		  
%
 
KeyBank National Association		  
 		  
$		  
32,000,000		  
 		  
14.285714286		  
%
 
ABN AMRO Bank, N.V.		  
 		  
$		  
16,000,000		  
 		  
7.142857143		  
%
 
SunTrust Bank, Atlanta		  
 		  
$		  
16,000,000		  
 		  
7.142857143		  
%
 
Wells Fargo Bank		  
 		  
$		  
16,000,000		  
 		  
7.142857143		  
%
 
First Union National Bank		  
 		  
$		  
8,000,000		  
 		  
3.571428571		  
%
 
Paribas		  
 		  
$		  
8,000,000		  
 		  
3.571428571		  
%
 
The Sumitomo Bank, Limited		  
 		  
$		  
8,000,000		  
 		  
3.571428571		  
%
 
TOTAL		  
 		  
$		  
224,000,000.00		  
 		  
100		  
%


SCHEDULE 10.2


OFFSHORE AND DOMESTIC LENDING OFFICES,
ADDRESSES FOR NOTICES

CROWN PACIFIC LIMITED PARTNERSHIP:
 
Address for notices:
 
Crown Pacific Limited Partnership
c/o Crown Pacific Management Limited Partnership
Bank of America Financial Center
Suite 1500
121 S.W. Morrison Street
Portland, Oregon 97204
Attention:   Richard Snyder
    Chief Financial Officer
    Telephone:  (503) 274-2300
    Facsimile:  (503) 228-4875

1

 
 BANK OF AMERCIA, N.A.
  as Agent and Bank
 
Address for notices:
(a) Credit Notices
 
Bank of America, N.A.
Paper and Forest Products
Mail Code: CA5-705-41-01
555 California Street, 41st Floor
San Francisco, California 94104
Attention:   Michael J. Balok
    Managing Director
    Telephone:  (415) 622-2018
    Facsimile:  (415) 622-4585
 
(b) Operation Notices including borrowings/payments to Agent:
 
Bank of America, N.A.
CCS/Agency Services
Mail Code: CA4-706-05-09
1850 Gateway Boulevard, 5th Floor
Concord, California 94520
Attention:   Phillip Lam
    Associate Agency Officer
    Telephone:  925-675-8435
    Facsimile:  925-969-2833
 
Payment Instructions:
 
Bank of America, N.A.
ABA #111000012
Attn.:  Phillip Lam, CCS/Agency Services
For credit to A/C No. 3750836479
Ref.:  Crown Pacific Limited Partnership
 
Domestic and Offshore Lending Office:
same as address for operations notices

2

UNION BANK OF CALIFORNIA, N.A.
 
Address for notices:
 
(a)		  
 		  
Credit notices:
 
Buddy Montgomery
Vice President
Union Bank of California, N.A.
350 California Street, 6th Floor
San Francisco, CA 94104
 
(b)		  
 		  
Operations notices:
 
Gohar Karapetyan
Union Bank of California, N.A.
Commercial Customer Service Unit
1890 Saturn Street
Monterey Park, CA 91755
 
Payment Instructions:
 
Union Bank of California, N.A.
ABA Number:  122-000-496
Account Number:  070196431
Account Name:  Wire Transfer Clearing
Ref.:  Crown Pacific Limited Partnership
Attention:   192—Note Center CLO

3

BANK OF MONTREAL
 
Addresses for notices:
 
(a)		  
 		  
Credit notices:
 
Bank of Montreal
115 South LaSalle Street, 12th Floor
Chicago, Illinois 60603
Attention:   Kanu Modi
    Director
    Telephone:  (312) 750-3891
    Facsimile:  (312) 750-6057
 
(b)		  
 		  
Operations notices:
 
Bank of Montreal
115 South LaSalle Street, 12th Floor
Chicago, Illinois 60603
Attention:   Nilda Diaz
    Telephone:  (312) 750-3722
    Facsimile:  (312) 750-4159
 
Payment Instructions:
 
Harris Trust and Savings Bank
ABA Number: 071000288
Account Number: 183-320-1
Account Name: Bank of Montreal
Ref.: Crown Pacific Limited Partnership/Type of Payment

4

KEYBANK NATIONAL ASSOCIATION
 
Addresses for notices:
 
(a)		  
 		  
Credit notices:
 
KeyBank National Association
700 Fifth Ave., 46th Floor
Seattle, WA 98104
Attention:   Richard J. Ameny, Jr.
    Telephone:  (206) 684-6014
    Facsimile:  (206) 684-6035
 
(b)		  
 		  
Operations notices:
 
KeyBank National Association
431 E. Park Center Blvd.
Boise, ID 83706
Attention:   N.W. Region Specialty Services
    Telephone:  (800) 297-5518
    Facsimile:  (800) 297-5495
 
Payment Instructions:
 
KeyBank National Association
ABA Number:  125000574
Account Number:  01500163
Account Name:  N.W. Region Specialty Services
Attention:   Crown Pacific

5

ABN AMRO BANK, N.V.
 
Addresses for notices:
 
(a)		  
 		  
Credit notices:
 
ABN AMRO Bank, N.V.
600 University Street, Suite 2323
Seattle, WA 98101-1129
Attention:   David McGinnis
    Telephone:  (208) 587-0342
    Facsimile:  (208) 682-5641
 
(b)		  
 		  
Operations notices:
 
ABN AMRO Bank, N.V.
208 South LaSalle, Suite 1500
Chicago, IL 60604-1003
Attention:   Credit Administration
    Telephone:  (312) 992-5110
    Facsimile:  (312) 992-5111
 
Payment Instructions:
 
ABN AMRO BANK, N.V.
ABA Number:  026009580
Account Number:  650-001-1789-41
Ref.:  CPU MTI #00401293, Crown Pacific L.P.

6

SUNTRUST BANK, ATLANTA
 
Addresses for notices:
 
(a)		  
 		  
Credit notices:
 
SunTrust Bank, Atlanta
711 Fifth Avenue, 16th Floor
New York, NY 10022
Attention:   Craig Farnsworth
    Telephone:  (212) 583-2608
    Facsimile:  (212) 371-9386
 
(b)		  
 		  
Operations notices:
 
SunTrust Bank, Atlanta
25 Park Place, 21st Floor, center 112
Atlanta, GA 30303
Attention:   Datanian Oldham
    Telephone:  (404) 588-8375
    Facsimile:  (404) 575-2730
 
Payment Instructions:
 
SunTrust Bank, Atlanta
ABA Number:  061000104
Account Number:  9088000112
Account Name:  Corporate Banking Operations
Ref:  Crown Pacific Partners
Attention:   Isabelle Trentham

7


WELLS FARGO BANK, N.A.

Addresses for notices:

(a)   Credit notices:
 
Wells Fargo Bank, N.A.
555 Montgomery Street
San Francisco, CA 94111
Attention:   John Stewart
Vice President
Telephone: (415) 396-7889
Facsimile: (415) 362-5081
 
(b)		  
 		  
Operations notices:
 
Wells Fargo Bank, N.A.
201 Third Street
San Francisco, CA 94105
Attention:   Stephen Elring
Manager
Telephone: (415) 477-5425
Facsimile: (415) 979-0675
 
Payment Instructions:
 
Wells Fargo Bank
ABA Number: 121000248
Account Number: 2712507201
Account Name: Corporate Loan Operations
Ref.: Crown Pacific

8

PARIBAS
 
Addresses for notices:
 
(a)		  
 		  
Credit notices:
 
Paribas
101 California Street, Suite 3150
San Francisco, CA 94111
Attention:   Susan Bowes
Vice President
Telephone: (415) 398-6811
Facsimile: (415) 398-4240
 
(b)		  
 		  
Operations notices:
 
Paribas
2029 Century Park East, Suite 3900
Los Angeles, CA 90067
Attention:   Shirley Williams
A.V.P.
Telephone: (310) 551-7360
Facsimile: (310) 553-1504
 
Payment Instructions:
 
Bank of America
ABA Number: 121000358
Account Number: 62902-10150
For credit to Paribas, Los Angeles Agency
Ref.: Crown Pacific
Attention:   Shirley Williams

9

THE SUMITOMO BANK, LIMITED
 
Addresses for notices:
 
(a)		  
 		  
Credit notices:
 
The Sumitomo Bank, Limited.
1201 3rd Avenue, Suite 5320
Seattle, WA 98101
Attention:   Bruce Kendrex
Vice President
Telephone: (206) 223-4051
Facsimile: (206) 623-8551
 
(b)		  
 		  
Operations notices:
 
The Sumitomo Bank, Limited.
277 Park Ave. 6th Floor
New York, NY 10172
Attention:   Noel Swift
Deal Administrator
Telephone: (212) 224-4185
Facsimile: (212) 224-5197
 
Payment Instructions:
 
Citibank, N.A., New York
ABA Number: 021000089
Account Number: 36023837
Ref.: The Sumitomo Bank
Attention:   Loan Operations

10

FIRST UNION NATIONAL BANK
 
Addresses for notices:
 
(a)		  
 		  
Credit notices:
 
First Union National Bank
301 South College Street
Charlotte, NC 28288-0737
Attention:   Andy Phelps
Assistant Vice President
Telephone: (704) 383-7239
Facsimile: (704) 374-4793
 
(b)		  
 		  
Operations notices:
 
First Union National Bank
201 South College Street
Charlotte, NC 28288-1152
Attention:   Gary Burkart
Assistant Vice President
Telephone: (704) 374-6613
Facsimile: (704) 383-7999
 
Payment Instructions:
 
First Union National Bank
ABA Number: 053000219
Account Number: 145916 8103013
Ref.: Forest Products
Attention:   Gary Burkart

11


QuickLinks

TABLE OF CONTENTS
AMENDED AND RESTATED CREDIT AGREEMENT
ARTICLE I
DEFINITIONS
ARTICLE II
THE CREDITS
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
ARTICLE IV
CONDITIONS PRECEDENT
ARTICLE V
REPRESENTATIONS AND WARRANTIES
ARTICLE VI
AFFIRMATIVE COVENANTS
ARTICLE VII
NEGATIVE COVENANTS
ARTICLE VIII
EVENTS OF DEFAULT
ARTICLE IX
THE AGENT
ARTICLE X
MISCELLANEOUS
SCHEDULE 2.1
COMMITMENTS AND PRO RATA SHARES
SCHEDULE 10.2
OFFSHORE AND DOMESTIC LENDING OFFICES, ADDRESSES FOR NOTICES


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