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<P>&nbsp;</P></DIV></DIV><BR>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><B><FONT
size=2>UNITED STATES</FONT></B></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><B><FONT
size=2>SECURITIES AND EXCHANGE COMMISSION</FONT></B></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><B><FONT
size=2>WASHINGTON, D.C. 20549</FONT></B></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><B><FONT
size=2>FORM 8-K</FONT></B></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><B><FONT
size=2>CURRENT REPORT</FONT></B></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><B><FONT
size=2>Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934</FONT></B></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT
size=2>Date of Report (Date of earliest event reported):</FONT><U><FONT
size=2>&nbsp;&nbsp;</FONT><B><FONT size=2>October 26, 2005</FONT></B><FONT
size=2>&nbsp;&nbsp;</FONT></U></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><FONT
size=2></FONT>&nbsp;</P>
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    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; BORDER-LEFT-COLOR: gray; BORDER-BOTTOM-COLOR: gray; PADDING-BOTTOM: 0in; BORDER-TOP-COLOR: gray; PADDING-TOP: 0in; BORDER-RIGHT-COLOR: gray"
    vAlign=top width=605>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><B><FONT
      size=2>MAXXAM INC.</FONT></B></P></TD></TR></TABLE>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT
size=2>(Exact name of registrant as specified in its charter)</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT
size=2></FONT>&nbsp;</P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width=600 border=0>
  <TR>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width=223>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><B><FONT
      size=2>Delaware</FONT></B></P></TD>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top colSpan=5>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><B><FONT
      size=2>1-3924</FONT></B></P></TD>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width=210>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><B><FONT
      size=2>95-2078752</FONT></B></P></TD></TR>
  <TR>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width=223>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT
      size=2>(State or other jurisdiction of incorporation or
      organization)</FONT></P></TD>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top colSpan=5>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT
      size=2>(Commission File Number)</FONT></P></TD>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width=210>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT
      size=2>(I.R.S. Employer Identification No.)</FONT></P></TD></TR>
  <TR>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width=223>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top colSpan=5>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width=210>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT
      size=1></FONT>&nbsp;</P></TD></TR>
  <TR>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top colSpan=3>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><B><FONT
      size=2>1330 Post Oak Boulevard</FONT></B><BR><B><FONT size=2>Suite
      2000</FONT></B></P>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><B><FONT
      size=2>Houston, Texas</FONT></B></P></TD>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top colSpan=2>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top colSpan=2>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"></P>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><B><FONT
      size=2>77056</FONT></B></P></TD></TR>
  <TR>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top colSpan=3>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT
      size=2>(Address of principal executive offices)</FONT></P></TD>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top colSpan=2>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top colSpan=2>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT
      size=2>(Zip Code)</FONT></P></TD></TR>
  <TR>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top colSpan=2>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top colSpan=2>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top colSpan=3>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT
      size=1></FONT>&nbsp;</P></TD></TR>
  <TR>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top colSpan=2>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top colSpan=2>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top colSpan=3>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT
      size=1></FONT>&nbsp;</P></TD></TR>
  <TR>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top colSpan=7>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT
      size=2>Registrant's telephone number, including area code: </FONT><B><FONT
      size=2>(713) 975-7600</FONT></B></P></TD></TR>
  <TR>
    <TD width=223></TD>
    <TD width=36></TD>
    <TD width=96></TD>
    <TD width=12></TD>
    <TD width=4></TD>
    <TD width=20></TD>
    <TD width=210></TD></TR></TABLE>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><FONT
size=2>Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><FONT
size=2><img src="ballot.jpg"> Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><FONT
size=2><img src="ballot.jpg"> Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 1.85%; TEXT-INDENT: -1.85%; TEXT-ALIGN: justify"><FONT
size=2><img src="ballot.jpg"> Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17&nbsp;CFR 240.14d-2(b))</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 1.85%; TEXT-INDENT: -1.85%; TEXT-ALIGN: justify"><FONT
size=2><img src="ballot.jpg"> Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17&nbsp;CFR 240.13e-4(c))</FONT></P>
<DIV
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<DIV
style="BORDER-RIGHT: medium none; PADDING-RIGHT: 0in; BORDER-TOP: medium none; PADDING-LEFT: 0in; PADDING-BOTTOM: 1pt; BORDER-LEFT: medium none; PADDING-TOP: 0in; BORDER-BOTTOM: 0.05em solid">
<P>&nbsp;</P></DIV></DIV><BR>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P><BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P><PAGE>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-ALIGN: left"><B><FONT
size=2>Item 1.01.</FONT></B><FONT
size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><FONT size=2>Entry Into a
Material Definitive Agreement.</FONT></B></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: justify"><I><FONT
size=2>Amendment of Revolving Credit Agreement and Term Loan
Agreement</FONT></I></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: justify"><FONT
size=2>On October 26, 2005, the Registrant's indirect wholly owned subsidiary,
The Pacific Lumber Company ("Palco"), and Palco's subsidiary, Britt Lumber Co.,
Inc. ("Britt"), and certain of their affiliates entered into an Omnibus Amendment
to Revolving Credit Agreement, Term Loan Agreement, Intercreditor Agreement and
Guarantee and Collateral Agreements (the "Amendment"). The Amendment amends the
revolving credit facility and the term loan facility which were entered into by
Palco and Britt on April 19, 2005.</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: justify"><FONT
size=2>The Amendment temporarily increases the amount of the revolving credit
facility from $30 million to $35 million and temporarily increases the advance
rate applicable to the borrowers' inventory from 75% to 80%. The increase in the
inventory advance rate is subject to satisfactory inventory appraisals, and the
amount of the increase in such advances is capped at $1.5 million. The increase
in the amount of the revolving credit facility and the increase in the inventory
advance rate will be phased out beginning in January 2006, and will be
completely phased out by March 2006. The Amendment also revises financial
covenants applicable to the revolving credit facility and the term loan
facility. </FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: justify"><FONT
size=2>MAXXAM Group Inc., Palco's immediate parent, has furnished cash
collateral of $2 million as additional security for the borrowers' obligations
under the revolving credit facility and the term loan facility. This cash
collateral will be released on April 1, 2006, so long as the borrowers have achieved earnings and borrowing availability targets that are
to be determined by the revolving lenders.</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-ALIGN: left"><B><FONT
size=2>Item 2.03</FONT></B><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><FONT
size=2>Creation of a Direct Financial Obligation or and Obligation under and Off-Balance Sheet
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Arrangement or a Registrant.</FONT></B></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: justify"><FONT
size=2>To the extent applicable, the contents of Item 1.01 above are
incorporated into this Item 2.03 by reference.</FONT></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="56%" border=0>
  <TR>
    <TD
    style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 12pt; PADDING-TOP: 0in"
    vAlign=top width="27%">
      <P
      style="MARGIN-TOP: 0pt; BORDER-LEFT-COLOR: gray; MARGIN-BOTTOM: 0pt; BORDER-BOTTOM-COLOR: gray; MARGIN-LEFT: 0pt; BORDER-TOP-COLOR: gray; TEXT-INDENT: 0pt; TEXT-ALIGN: left; BORDER-RIGHT-COLOR: gray"><B><FONT
      size=2>Item 9.01</FONT></B></P></TD>
    <TD
    style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 12pt; PADDING-TOP: 0in"
    vAlign=top width="72%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><B><FONT
      size=2>Financial Statements and
Exhibits.</FONT></B></P></TD></TR></TABLE>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-ALIGN: left"><FONT
size=2>c) Exhibits</FONT></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width=600 border=0>
  <TR>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width=89>
      <P
      style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 3pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><B><FONT
      size=2>Exhibit </FONT></B><U><B><FONT size=2>Number</FONT></B></U></P></TD>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width=542>
      <P
      style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 3pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><BR><U><B><FONT
      size=2>Description</FONT></B></U></P></TD></TR>
  <TR>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width=89>
      <P
      style="MARGIN-TOP: 3pt; MARGIN-BOTTOM: 3pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT
      size=2>10.1</FONT></P></TD>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width=542>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Omnibus Amendment to Revolving Credit Agreement, Term Loan
      Agreement, Intercreditor Agreement and Guarantee and Collateral
      Agreements</FONT></P></TD></TR></TABLE>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: justify"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P><BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P><PAGE>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: justify"></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 24pt; TEXT-ALIGN: center"><B><FONT
size=2>SIGNATURES</FONT></B></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: justify"><FONT
size=2>Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.</FONT></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="67%" border=0>
  <TR>
    <TD
    style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0.5in; PADDING-TOP: 0in"
    vAlign=top width="11%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><FONT
      size=2>Date:</FONT></P></TD>
    <TD
    style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0.5in; PADDING-TOP: 0in"
    vAlign=top width="56%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><FONT
      size=2>October 28, 2005</FONT></P></TD>
    <TD
    style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 0.5in; PADDING-TOP: 0in"
    vAlign=top width="31%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: justify"><B><FONT
      size=2>MAXXAM INC.</FONT></B></P></TD></TR></TABLE>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 44.31%; TEXT-ALIGN: left"><FONT
size=2>By: </FONT><FONT size=1>&nbsp;&nbsp;&nbsp;</FONT><U><FONT size=2>/s/
Bernard L.
Birkel&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></U></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD vAlign=top width="43%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top width="7%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Name:</FONT></P></TD>
    <TD vAlign=top width="20%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Bernard L. Birkel</FONT></P></TD>
    <TD width="28%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD></TR>
  <TR>
    <TD vAlign=top width="43%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top width="7%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Title:</FONT></P></TD>
    <TD vAlign=top colSpan=2>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Secretary &amp; Senior Assistant General
  Counsel</FONT></P></TD></TR></TABLE>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 44.31%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
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size=2></FONT>&nbsp;</P>
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size=2></FONT>&nbsp;</P>
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size=2></FONT>&nbsp;</P>
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size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2>0093FMS5.VM.DOC</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P><BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P><PAGE>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: right"><B><FONT
size=2>EXHIBIT 10.1</FONT></B></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: right"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><B><FONT
size=2>OMNIBUS AMENDMENT TO REVOLVING CREDIT AGREEMENT, TERM LOAN AGREEMENT,
INTERCREDITOR AGREEMENT AND GUARANTEE AND COLLATERAL AGREEMENTS</FONT></B></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>This OMNIBUS AMENDMENT TO REVOLVING CREDIT AGREEMENT, TERM LOAN
AGREEMENT, INTERCREDITOR AGREEMENT AND GUARANTEE AND COLLATERAL AGREEMENTS (this
"</FONT><U><FONT size=2>Amendment</FONT></U><FONT size=2>") is entered into as
of this 26th day of October, 2005, by THE PACIFIC LUMBER COMPANY, a Delaware
corporation ("</FONT><U><FONT size=2>Palco</FONT></U><FONT size=2>"), THE BRITT
LUMBER CO., INC., a California corporation ("</FONT><U><FONT
size=2>Britt</FONT></U><FONT size=2>" and together with Palco, the
"</FONT><U><FONT size=2>Borrowers</FONT></U><FONT size=2>"), the other Loan
Parties (as defined in the Term Loan Agreement and Revolving Credit Agreement,
each as hereinafter defined) signatory hereto, THE CIT GROUP/BUSINESS CREDIT,
INC., as administrative agent (the "</FONT><U><FONT size=2>Revolving
Agent</FONT></U><FONT size=2>") for itself and the Lenders under and as defined
in the Revolving Credit Agreement (the "</FONT><U><FONT size=2>Revolving
Lenders</FONT></U><FONT size=2>"), the Revolving Lenders and CREDIT SUISSE, NEW
YORK BRANCH (f/k/a Credit Suisse First Boston, acting through its New York
Branch), as administrative agent (the "</FONT><U><FONT size=2>Term
Agent</FONT></U><FONT size=2>") for itself and the Lenders under and as defined
in the Term Loan Agreement (the "</FONT><U><FONT size=2>Term
Lenders</FONT></U><FONT size=2>"), and the Term Lenders.</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-ALIGN: center"><U><B><FONT
size=2>RECITALS</FONT></B></U></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>WHEREAS, (i) the Borrowers, the Revolving Agent and the Revolving Lenders
have entered into that certain Revolving Credit Agreement, dated as of April 19,
2005 (as amended, supplemented, restated or otherwise modified from time to
time, the "</FONT><U><FONT size=2>Revolving Credit Agreement</FONT></U><FONT
size=2>") and (ii) the Borrowers, the other Loan Parties and the Revolving Agent
have entered into that certain Guarantee and Collateral Agreement, dated as of
April 19, 2005 (as amended, supplemented, restated or otherwise modified from
time to time, the "</FONT><U><FONT size=2>Revolving Security
Agreement</FONT></U><FONT size=2>"); </FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>WHEREAS, (i) the Borrowers, the Term Agent and the Term Lenders have
entered into that certain Term Loan Agreement, dated as of April 19, 2005 (as
amended, supplemented, restated or otherwise modified from time to time, the
"</FONT><U><FONT size=2>Term Loan Agreement</FONT></U><FONT size=2>" and
together with the Revolving Credit Agreement, the "</FONT><U><FONT size=2>Credit
Agreements</FONT></U><FONT size=2>") and (ii) the Borrowers, the other Loan
Parties and the Term Agent have entered into that certain Guarantee and
Collateral Agreement, dated as of April 19, 2005 (as amended, supplemented,
restated or otherwise modified from time to time, the "</FONT><U><FONT
size=2>Term Security Agreement</FONT></U><FONT size=2>");</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>WHEREAS, the Borrowers, the other Loan Parties, the Term Agent and the
Revolving Agent have entered into that certain Intercreditor Agreement, dated as
of April 19, 2005 (as amended, supplemented, restated or otherwise modified from
time to time, the "</FONT><U><FONT size=2>Intercreditor
Agreement</FONT></U><FONT size=2>");</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>WHEREAS, the parties hereto have agreed to amend certain of the Loan
Documents (as defined in the Revolving Credit Agreement, the "</FONT><U><FONT
size=2>Revolving Loan Documents</FONT></U><FONT size=2>") and certain of the
Loan Documents (as defined in the Term Loan Agreement, and together with the
Revolving Loan Documents, the "</FONT><U><FONT size=2>Loan
Documents</FONT></U><FONT size=2>");</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=1></FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P><BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P><PAGE>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>NOW THEREFORE, in consideration of the foregoing recital, mutual
agreements contained herein and for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows:</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="72%" border=0>
  <TR>
    <TD
    style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 12pt; PADDING-TOP: 0in"
    vAlign=top width="21%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><B><FONT
      size=2>SECTION 1.</FONT></B></P></TD>
    <TD
    style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 12pt; PADDING-TOP: 0in"
    vAlign=top width="78%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><U><FONT
      size=2><B>Amendments to the Revolving Credit Agreement</B></FONT></U><FONT
      size=2>. </FONT></P></TD></TR></TABLE>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>(a)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U><FONT
size=2>Section 1.01</FONT></U><FONT size=2> of the Revolving Credit Agreement is
hereby amended by amending and restating the following defined terms to read in
their entirety as follows:</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>""</FONT><U><FONT size=2>Borrowing Base</FONT></U><FONT size=2>" means,
at any time, an amount equal to (a)&nbsp;the sum of (A) eighty-five percent
(85%) of the Net Amount of Eligible Accounts plus (B) seventy-five percent (75%)
of the value (being the lower of cost (on a first-in first-out basis) or market)
of Eligible Inventory plus (C) after the Administrative Agent has received an
updated inventory appraisal from an appraiser satisfactory to Revolving Agent
and in form, substance and with results satisfactory to the Administrative
Agent, the lesser of (x) the Incremental Percentage of the value (being the
lower of cost (on a first-in first-out basis) or market) of Eligible Inventory
and (y) $1,500,000; minus (b) Reserves from time to time established by the
Administrative Agent in its reasonable credit judgment."</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>""</FONT><U><FONT size=2>Combined EBITDA</FONT></U><FONT size=2>" shall
mean, for any period, Combined Net Income for such period plus (a) without
duplication and to the extent deducted in determining such Combined Net Income,
the sum of&nbsp;(i)&nbsp;Combined Interest Expense for such period,&nbsp;(ii)
combined income tax expense for such period,&nbsp;(iii)&nbsp;all amounts
attributable to depreciation and amortization for such period and
(iv)&nbsp;depletion for such period (</FONT><U><FONT
size=2>provided</FONT></U><FONT size=2> that to the extent that all or any
portion of the income of any person is excluded from Combined Net Income
pursuant to the definition thereof for all or any portion of such period any
amounts set forth in the preceding clauses (i) through&nbsp;(iv)&nbsp;that are
attributable to such person shall not be included for purposes of this
definition for such period or portion thereof),&nbsp;and minus&nbsp;(b) without
duplication and&nbsp;to the extent included in determining such Combined Net
Income, any extraordinary gains and all non-cash items of income for such
period, all determined on a combined basis in accordance with GAAP (except that
Inventory is presented on a FIFO basis)."</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>""</FONT><U><FONT size=2>Total Revolving Credit
Commitment</FONT></U><FONT size=2>" shall mean, at any time, the aggregate
amount of the Revolving Credit Commitments, as in effect at such time. The Total
Revolving Credit Commitment as of the Omnibus Amendment Effective Date is
$35,000,000."</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>(b)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U><FONT
size=2>Section 1.01</FONT></U><FONT size=2> of the Revolving Credit Agreement is
hereby amended by adding the following new defined terms thereto in their proper
alphabetical order:</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>""</FONT><U><FONT size=2>Omnibus Amendment</FONT></U><FONT size=2>" shall
mean that certain Omnibus Amendment to Revolving Credit Agreement, Term Loan
Agreement, Intercreditor Agreement and Guarantee and Collateral Agreements,
dated as of October 26, 2005, by and among the Administrative Agent, the
Lenders, the administrative agent and lenders under the Term Loan Agreement, and
the Loan Parties."</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>""</FONT><U><FONT size=2>Omnibus Amendment Effective Date</FONT></U><FONT
size=2>" shall mean the date which all the conditions to the effectiveness of
the Omnibus Amendment have been satisfied."</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=1></FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P><BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P><PAGE>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>""</FONT><U><FONT size=2>Incremental Percentage</FONT></U><FONT size=2>"
shall mean at all times (i) on or prior to February 28, 2006, five percent (5%),
(ii) after February 28, 2006 but on or prior to March 31, 2006, 3% and (iii)
after March 31, 2006, 0%.</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>(c)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U><FONT
size=2>Section 2.09(b)</FONT></U><FONT size=2> of the Revolving Credit Agreement
is hereby amended and restated to read in its entirety as follows:</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>"(b)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2>Upon
at least three Business Days' prior irrevocable written or fax notice to the
Administrative Agent, the Borrowers may at any time in whole permanently
terminate, or from time to time in part permanently reduce, the Commitments;
provided, however, that (i) each partial reduction of the Commitments shall be
in an integral multiple of $1,000,000 and in a minimum amount of $1,000,000 and
(ii) the Commitments shall not be reduced to an amount that is less than the
Aggregate Revolving Credit Exposure then in effect. In addition, on each date
set forth below the Revolving Credit Commitments of the Lenders shall be
reduced, on a pro rata basis, so that after giving effect to such reduction the
Aggregate Revolving Credit Exposure shall be reduced to an amount equal to the
lesser of the Total Revolving Credit Commitment otherwise in effect on such date
or the amount set forth below opposite such date:</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="62%" border=0>
  <TR>
    <TD vAlign=top width="24%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 162%; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top width="49%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><U><FONT
      size=2>Date</FONT></U></P></TD>
    <TD vAlign=top width="18%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><U><FONT
      size=2>Amount</FONT></U></P></TD>
    <TD width="7%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD></TR>
  <TR>
    <TD vAlign=top width="24%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 162%; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top width="49%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>January 2, 2006</FONT></P></TD>
    <TD vAlign=top colSpan=2>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>$34,500,000</FONT></P></TD></TR>
  <TR>
    <TD vAlign=top width="24%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 162%; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top width="49%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>January 9, 2006</FONT></P></TD>
    <TD vAlign=top colSpan=2>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>$34,000,000</FONT></P></TD></TR>
  <TR>
    <TD vAlign=top width="24%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 162%; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top width="49%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>January 16, 2006</FONT></P></TD>
    <TD vAlign=top colSpan=2>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>$33,500,000</FONT></P></TD></TR>
  <TR>
    <TD vAlign=top width="24%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 162%; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top width="49%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>January 23, 2006</FONT></P></TD>
    <TD vAlign=top colSpan=2>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>$33,000,000</FONT></P></TD></TR>
  <TR>
    <TD vAlign=top width="24%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 162%; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top width="49%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>January 30, 2006</FONT></P></TD>
    <TD vAlign=top colSpan=2>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>$32,500,000</FONT></P></TD></TR>
  <TR>
    <TD vAlign=top width="24%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 162%; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top width="49%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>February 6, 2006</FONT></P></TD>
    <TD vAlign=top colSpan=2>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>$32,000,000</FONT></P></TD></TR>
  <TR>
    <TD vAlign=top width="24%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 162%; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top width="49%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>February 13, 2006</FONT></P></TD>
    <TD vAlign=top colSpan=2>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>$31,500,000</FONT></P></TD></TR>
  <TR>
    <TD vAlign=top width="24%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 162%; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top width="49%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>February 20, 2006</FONT></P></TD>
    <TD vAlign=top colSpan=2>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>$31,000,000</FONT></P></TD></TR>
  <TR>
    <TD vAlign=top width="24%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 162%; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top width="49%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>February 27, 2006</FONT></P></TD>
    <TD vAlign=top colSpan=2>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>$30,500,000</FONT></P></TD></TR>
  <TR>
    <TD vAlign=top width="24%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 162%; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top width="49%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>March 6, 2006</FONT></P></TD>
    <TD vAlign=top colSpan=2>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>$30,000,000</FONT></P></TD></TR></TABLE>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>To the extent that any reduction in the Total Revolving Credit Commitment
set forth in the above table results in the Aggregate Revolving Credit Exposure
exceeding the Commitments, the Borrowers shall immediately prepay the Revolving
Loans by such amount."</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>(d)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U><FONT
size=2>Section 5.04(k)</FONT></U><FONT size=2> of the Revolving Credit Agreement
is hereby amended and restated in its entirety to read as follows:</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>"(k)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2>from
time to time, if Administrative Agent determines in its sole discretion that
obtaining appraisals is necessary or appropriate for any reason, the
Administrative Agent will, at Borrower's expense, obtain appraisal reports in
form and substance and from appraisers </FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=1></FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P><BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P><PAGE>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2>satisfactory to the Administrative Agent stating the then current market
values of all or any portion of the Real Property and personal property owned by
any of the Loan Parties;"</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>(e)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U><FONT
size=2>Section 6.11</FONT></U><FONT size=2> of the Revolving Credit Agreement is
hereby amended and restated in its entirety to read as follows:</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 7.69%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>"Section 6.11 </FONT><FONT size=2>&nbsp;&nbsp;&nbsp;</FONT><U><FONT
size=2>Minimum Combined EBITDA</FONT></U><FONT size=2>. Permit the Combined
EBITDA for the 12-month period (unless otherwise indicated below) then ended at
the end of any such fiscal month (or at the end of the then preceding fiscal
month) set forth below to be less than the amount set forth opposite such fiscal
month set forth below: </FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<TABLE style="MARGIN-LEFT: 0.5in; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="82%" border=0>
  <TR>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width="49%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><U><FONT
      size=2>Period Ending</FONT></U></P></TD>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width="50%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><U><FONT
      size=2>Amount</FONT></U></P></TD></TR>
  <TR>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width="65%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>One month period ending September 30, 2005</FONT></P>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width="50%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT
      size=2>($1,400,000)</FONT></P></TD></TR>
  <TR>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width="49%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Two month period ending October 31, 2005</FONT></P>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width="50%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT
      size=2>($2,350,000)</FONT></P></TD></TR>
  <TR>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width="65%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Three month period ending November 30, 2005</FONT></P>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width="65%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT
      size=2>($1,350,000)</FONT></P></TD></TR>
  <TR>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width="65%">
 <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Four Month period ending December 31, 2005</FONT></P>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width="65%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT
      size=2>$850,000</FONT></P></TD></TR>
  <TR>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width="65%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Five month period ending January 31, 2006</FONT></P>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2></FONT></P>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width="50%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT
      size=2>$750,000</FONT></P></TD></TR>
  <TR>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width="65%">
 <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Six month period ending February 28, 2006</FONT></P>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width="50%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT
      size=2>$400,000</FONT></P></TD></TR>
  <TR>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width="49%">
 <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Seven month period ending March 31, 2006</FONT></P>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width="50%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><FONT
      size=2>$800,000</FONT></P></TD></TR></TABLE>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>After March 31, 2006, the minimum Combined EBITDA for any period shall be
the Agent Determined Amount. As used herein, the "Agent Determined Amount" means
the amount (and for such periods) determined in good faith (and delivered in
writing to the Borrowers) by the Administrative Agent (which the Administrative
Agent currently intends to determine following receipt by Administrative Agent
of Borrowers' projections for Fiscal Year 2006).</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-ALIGN: left"><B><FONT
size=2>SECTION 2.</FONT></B><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U><B><FONT
size=2>Amendment to Lender Addendum</FONT></B></U><B><FONT size=2>. </FONT></B><FONT
size=2>The Lender Addendum (as defined in the Revolving Credit Agreement)
executed by The CIT Group/Business Credit, Inc., as Revolving Lender, is hereby
amended by amending and restating paragraph 2 of Schedule 1 thereto to read in
its entirety as follows:</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=1></FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P><BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P><PAGE>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>"Revolving Credit Commitment: $30,000,000 as of the Closing Date and
increased to $35,000,000 as of the Omnibus Amendment Effective Date, and as
subsequently reduced in accordance with Section 2.09 of the Credit
Agreement."</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-ALIGN: left"><B><FONT
size=2>SECTION 3.</FONT></B><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U><B><FONT
size=2>Amendment to Term Loan Agreement</FONT></B></U><B><FONT size=2>.
</FONT></B><U><FONT size=2>Section 6.11</FONT></U><FONT size=2> of the Term Loan
Agreement is hereby amended and restated in its entirety as follows:</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>"Section 6.11</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U><FONT
size=2>Minimum Combined EBITDA</FONT></U><FONT size=2>. Permit the Combined
EBITDA for the 12-month period (unless otherwise indicated below) then ended at
the end of any fiscal quarter set forth below to be less than the amount set
forth opposite such fiscal quarter set forth below: </FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<TABLE style="MARGIN-LEFT: 0.5in; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="82%" border=0>
  <TR>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width="49%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: center"><U><FONT
      size=2>Period Ending</FONT></U></P></TD>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width="50%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0.1pt; TEXT-ALIGN: center"><U><FONT
      size=2>Amount</FONT></U></P></TD></TR>
  <TR>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width="65%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>One month period ending September 30, 2005</FONT></P>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width="50%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0.1pt; TEXT-ALIGN: center"><FONT
      size=2>($1,400,000)</FONT></P></TD></TR>
  <TR>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width="65%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Four month period ending December 31, 2005</FONT></P>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width="50%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0.1pt; TEXT-ALIGN: center"><FONT
      size=2>$850,000</FONT></P></TD></TR>
  <TR>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width="65%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Seven month period ending March 31, 2006</FONT></P></TD>
    <TD
    style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; PADDING-TOP: 0in"
    vAlign=top width="50%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0.1pt; TEXT-ALIGN: center"><FONT
      size=2>$800,000</FONT></P></TD></TR></TABLE>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>After March 31, 2006, the minimum Combined EBITDA for any period shall be
the Agent Determined Amount. As used herein, the "</FONT><U><FONT size=2>Agent
Determined Amount</FONT></U><FONT size=2>" means the amount (and for such
periods) determined in good faith (and delivered in writing to the Borrowers) by
the Administrative Agent (which the Administrative Agent currently intends to
determine following receipt by Administrative Agent of Borrowers' projections
for Fiscal Year 2006).</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-ALIGN: left"><B><FONT
size=2>SECTION 4.</FONT></B><FONT size=2> </FONT><U><B><FONT size=2>Amendment to
Guarantee and Collateral Agreements</FONT></B></U><B><FONT size=2>. </FONT></B></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>(a)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U><FONT
size=2>Section 1.01</FONT></U><FONT size=2> of the Term Loan Agreement is hereby
amended by amending and restating the following defined term to read in its
entirety as follows:</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>""</FONT><U><FONT size=2>Combined EBITDA</FONT></U><FONT size=2>" shall
mean, for any period, Combined Net Income for such period plus (a) without
duplication and to the extent deducted in determining such Combined Net Income,
the sum of&nbsp;(i)&nbsp;Combined Interest Expense for such period,&nbsp;(ii)
combined income tax expense for such period,&nbsp;(iii)&nbsp;all amounts
attributable to depreciation and amortization for such period and
(iv)&nbsp;depletion for such period (</FONT><U><FONT
size=2>provided</FONT></U><FONT size=2> that to the extent that all or any
portion of the income of any person is excluded from Combined Net Income
pursuant to the definition thereof for all or any portion of such period any
amounts set forth in the preceding clauses (i) through&nbsp;(iv)&nbsp;that are
attributable to such person shall not be included for purposes of this
definition for such period or portion thereof),&nbsp;and minus&nbsp;(b) without
duplication and&nbsp;to the extent included in determining such Combined Net
Income, any extraordinary gains and all non-cash items of income for such
period, all determined on a combined basis in accordance with GAAP (except that
Inventory is presented on a FIFO basis)."</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=1></FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P><BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P><PAGE>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>(b)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U><FONT
size=2>Section 1</FONT></U><FONT size=2> of the Revolving Security Agreement is
hereby amended by adding the following new defined terms thereto in their proper
alphabetical order:</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>""</FONT><U><FONT size=2>Cash Collateral</FONT></U><FONT size=2>" means
cash in the amount of $2,000,000 to be deposited by Holdings with the
Administrative Agent, and to be held by the Administrative Agent as cash
collateral."</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>""</FONT><U><FONT size=2>CIT Rate</FONT></U><FONT size=2>" means the rate
of interest per annum announced by JPMorgan Chase Bank, N.A. (or its successor)
from time to time as its "prime rate" in effect at its principal office in New
York City </FONT><U><FONT size=2>minus</FONT></U><FONT size=2> 3.25%.</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>(c)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U><FONT
size=2>Section 3(a)</FONT></U><FONT size=2> of the Revolving Security Agreement
is hereby amended and restated to read in its entirety as follows:</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>"(a) </FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2>Holdings
hereby assigns and transfers (and in the case of clause (i) below continues the
assignment and transfer) to the Administrative Agent, and hereby grants (and in
the case of (i) below continues the grant) to the Administrative Agent, for the
ratable benefit of the Secured Parties, a security interest in (i) all equity
interests in Palco and all Proceeds thereof (the "Palco Equity Interests") and
(ii) the Cash Collateral (together with the Palco Equity Interests, the
"Holdings Collateral"), as collateral security for the prompt and complete
payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of all Obligations. Any reference to Collateral
herein with respect to Holdings shall be understood to be a reference to the
Holdings Collateral."</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>(d)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U><FONT
size=2>Section 8.15</FONT></U><FONT size=2> of the Revolving Security Agreement
is hereby amended by adding the following new clause (d) thereto:</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>"(d)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2>At
such time after March 31, 2006 as (i) Borrowers' have achieved Combined EBITDA
and Borrowing Availability in amounts and for periods determined in good faith
(and delivered in writing to the Borrowers) by the Administrative Agent (which
the Administrative Agent currently intends to determine following receipt by
Administrative Agent of Borrowers' projections for Fiscal Year 2006), (ii) the
Aggregate Revolving Credit Exposure is no greater than $30,000,000 and (iii) no
Event of Default has occurred or is continuing, upon written request of
Borrowers, the Administrative Agent shall return, and release the Liens created
hereby on, the Cash Collateral, and concurrently pay to Holdings interest
accrued (from the Omnibus Amendment Effective Date to the date the Cash
Collateral is released) on the Cash Collateral at the CIT Rate (computed on the
basis of the actual number of days elapsed over a year of 365 or 366 days, as
the case may be). "</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>(e)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U><FONT
size=2>Section 1</FONT></U><FONT size=2> of the Term Security Agreement is
hereby amended by adding the following new defined terms in their proper
alphabetical order:</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>""</FONT><U><FONT size=2>Cash Collateral</FONT></U><FONT size=2>" means
cash in the amount of $2,000,000 to be deposited by Holdings with the Revolving
Credit Agent, and to be held by the Revolving Credit Agent as cash
collateral."</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=1></FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P><BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P><PAGE>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>""</FONT><U><FONT size=2>Revolving Credit Agent</FONT></U><FONT size=2>"
means CIT Group/Business Credit, Inc., as administrative agent under the
Revolving Credit Agreement."</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>""</FONT><U><FONT size=2>Revolving Security Agreement</FONT></U><FONT size=2>"
means that certain Guarantee and Collateral Agreement dated as of April
19, 2005 by and among the Revolving Credit Agent and the Loan
Parties.</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>(f)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U><FONT
size=2>Section 3(a)</FONT></U><FONT size=2> of the Term Security Agreement is
hereby amended and restated in its entirety as follows:</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>"(a) </FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2>Holdings
hereby assigns and transfers (and in the case of clause (i) below continues the
assignment and transfer) to the Administrative Agent, and hereby grants (and in
the case of (i) below continues the grant) to the Administrative Agent, for the
ratable benefit of the Secured Parties, a security interest in (i) all equity
interests in Palco and all Proceeds thereof (the "Palco Equity Interests") and
(ii) the Cash Collateral (together with the Palco Equity Interests, the
"Holdings Collateral"), as collateral security for the prompt and complete
payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of all Obligations. Any reference to Collateral
herein with respect to Holdings shall be understood to be a reference to the
Holdings Collateral."</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>(g)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U><FONT
size=2>Section 8.15</FONT></U><FONT size=2> of the Term Security Agreement is
hereby amended by adding the following new clause (d) thereto:</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>"(d) </FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2>At such
time as the Revolving Credit Agent has returned and released its Lien on the
Cash Collateral in accordance with the terms and conditions of </FONT><U><FONT
size=2>Section 8.15</FONT></U><FONT size=2> of the Revolving Security Agreement
(as in effect on the Omnibus Amendment Effective Date), the Administrative
Agent's Lien on the Cash Collateral shall be automatically simultaneously
released."</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="63%" border=0>
  <TR>
    <TD
    style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 12pt; PADDING-TOP: 0in"
    vAlign=top width="24%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><B><FONT
      size=2>SECTION 5.</FONT></B></P></TD>
    <TD
    style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 12pt; PADDING-TOP: 0in"
    vAlign=top width="75%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><U><B><FONT
      size=2>Amendment to Intercreditor Agreement</FONT></B></U><B><FONT size=2>.
      </FONT></B></P></TD></TR></TABLE>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>(a)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U><FONT
size=2>Section 1</FONT></U><FONT size=2> of the Intercreditor Agreement is
hereby amended by adding the following new defined term thereto in its
applicable alphabetical order:</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>""</FONT><U><FONT size=2>Cash Collateral</FONT></U><FONT size=2>" means
cash in the amount of $2,000,000 to be deposited by Holdings with the Revolving
Credit Agent, and to be held by the Revolving Credit Agent as cash
collateral."</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>(b)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U><FONT
size=2>Section 1</FONT></U><FONT size=2> of the Intercreditor Agreement is
hereby amended by amending and restating the definition of "Revolving Credit
Primary Collateral" in its entirety as follows:</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: justify"><FONT
size=2>""</FONT><U><FONT size=2>Revolving Credit Primary
Collateral</FONT></U><FONT size=2>" means all now owned or hereafter acquired
Revolving Credit Collateral which constitutes: (a) Accounts, other than "payment
intangibles" (as defined in Article 9 of the UCC) which constitute identifiable
proceeds of Term Loan Primary Collateral, (b) all Inventory or documents of
title for any Inventory; (c) Hedge Agreements, (d) Deposit Accounts, Securities
Accounts (including all cash, marketable securities and other funds held in or
on deposit in either of the foregoing) Instruments, Chattel Paper
</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=1></FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><FONT
size=2></FONT>&nbsp;</P><BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P><PAGE>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><FONT
size=2>and Cash Collateral; </FONT><U><FONT size=2>provided</FONT></U><FONT size=2>,
</FONT><U><FONT size=2>however</FONT></U><FONT size=2>, that to the extent that
Instruments or Chattel Paper constitute identifiable proceeds of Term Loan
Primary Collateral or other identifiable proceeds of Term Loan Primary
Collateral are deposited or held in any such Bank Accounts or Securities
Accounts after an Enforcement Notice, then (as provided in Section 3.5 below)
such Instruments, Chattel Paper or other identifiable proceeds shall be treated
as Term Loan Primary Collateral; (e) Revolving Credit General Intangibles; (f)
Records, "supporting obligations" (as defined in Article 9 of the UCC),
commercial tort claims or other claims and causes of action , in each case, to
the extent related primarily to any of the foregoing; and (g) substitutions,
replacements, accessions, products and proceeds (including, without limitation,
insurance proceeds, licenses, royalties, income, payments, claims, damages and
proceeds of suit) of any or all of the foregoing.</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>(c)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U><FONT
size=2>Section 3.2(a)(2)</FONT></U><FONT size=2> of the Intercreditor Agreement
is hereby amended by replacing the term "Term Loan Collateral" which appears
therein with the term "Term Loan Primary Collateral".</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: justify"><FONT
size=2>(d)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U><FONT
size=2>Section 3.2(b)</FONT></U><FONT size=2> of the Intercreditor Agreement is
hereby amended by replacing "Term Loan Collateral" which appear therein with the
term "Term Loan Primary Collateral".</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-ALIGN: left"><B><FONT
size=2>SECTION 6.</FONT></B><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U><B><FONT
size=2>Effectiveness</FONT></B></U><B><FONT size=2>. </FONT></B><FONT size=2>The
effectiveness of this Amendment is subject to the satisfaction of each the
following conditions precedent:</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>(a)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
size=2>the Revolving Agent shall have received, for the ratable benefit of the
Revolving Lenders, payment of an amendment fee in an amount equal to $25,000
(which shall be fully earned and payable as of the date hereof); </FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>(b)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
size=2>the Revolving Agent shall have received $2,000,000 in cash from Holdings
to be held by the Revolving Agent as Cash Collateral; </FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>(c)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
size=2>this Amendment shall have been duly executed and delivered by the
Borrower, the Loan Parties, the Revolving Agent, the Revolving Lender, the Term
Agent and the Term Lenders; </FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>(d)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
size=2>the representations and warranties contained herein shall be true and
correct in all respects; </FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>(e)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
size=2>the Borrowers shall have executed an Amended and Restated Revolving Note
in the form attached hereto as </FONT><U><FONT size=2>Exhibit A</FONT></U><FONT
size=2>; and</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>(f)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
size=2>the Borrowers shall have provided to each of the Revolving Agent and Term
Agent a Secretary's Certificate certifying and attaching the (i) articles of
incorporation and bylaws of each Loan Party that is a corporation, (ii) the
certificate of formation and limited liability company agreement of each Loan
Party that is a limited liability company and (iii) duly adopted resolutions of
each Loan Party with respect to this Amendment and the transaction contemplated
thereby. In the case of items (i) and (ii), any Loan Party can in lieu thereof
certify that no changes have occurred to such documents since April 19, 2005
(except for a May 4, 2005 amendment to the limited liability company agreement
of Salmon Creek LLC, a copy of which has previously been furnished to Lenders'
counsel).</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=1></FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P><BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P><PAGE>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-ALIGN: left"><B><FONT
size=2>SECTION 7.</FONT></B><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U><B><FONT
size=2>Opinion of Counsel</FONT></B></U><B><FONT size=2>. </FONT></B><FONT size=2>No
later than November 4, 2005, Borrowers shall deliver to the Revolving Agent and
the Term Agent an opinion of counsel with respect to this Amendment in form and
substance reasonably acceptable to each of the Revolving Agent and the Term
Agent.</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-ALIGN: left"><B><FONT
size=2>SECTION 8.</FONT></B><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U><B><FONT
size=2>Representations and Warranties</FONT></B></U><B><FONT size=2>.
</FONT></B><FONT size=2>In order to induce the Revolving Agent, the Revolving
Lenders and Term Agent to enter into this Amendment, each Loan Party hereby
represents and warrants to the Revolving Agent, the Revolving Lenders and the
Term Agent, which representations and warranties shall survive the execution and
delivery of this Amendment, that:</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>(a)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
size=2>all of the representations and warranties contained in each of Credit
Agreements and each Loan Document are true and correct as of the date hereof
after giving effect to this Amendment, except to the extent that any such
representations and warranties expressly relate to an earlier date;</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>(b)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
size=2>the execution, delivery and performance by such Loan Party of this
Amendment has been duly authorized by all necessary corporate action required on
its part and this Amendment, and each of the Credit Agreements is the legal,
valid and binding obligation of such Loan Party enforceable against such Loan
Party in accordance with its terms, except as its enforceability may be affected
by the effect of bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to or affecting the rights or
remedies of creditors generally; </FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>(c)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
size=2>neither the execution, delivery and performance of this Amendment by such
Loan Party, the performance by such Loan Party of each of the Credit Agreements
nor the consummation of the transactions contemplated hereby does or shall
contravene, result in a breach of, or violate (i) any provision of any Loan
Party's certificate or articles of incorporation or bylaws or other similar
documents, or agreements, (iii) any law or regulation, or any order or decree of
any court or government instrumentality, or (iii) any indenture, mortgage, deed
of trust, lease, agreement or other instrument to which any Loan Party or any of
its subsidiaries is a party or by which any Loan Party or any of its
subsidiaries or any of their property is bound, except in any such case to the
extent such conflict or breach has been waived herein or by a written waiver
document, a copy of which has been delivered to Agent on or before the date
hereof; and</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>(d)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
size=2>no Default or Event of Default (in each case, as defined in either Credit
Agreement) has occurred and is continuing.</FONT></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="74%" border=0>
  <TR>
    <TD
    style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 12pt; PADDING-TOP: 0in"
    vAlign=top width="20%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><B><FONT
      size=2>SECTION 9.</FONT></B></P></TD>
    <TD
    style="PADDING-RIGHT: 0in; PADDING-LEFT: 0in; PADDING-BOTTOM: 12pt; PADDING-TOP: 0in"
    vAlign=top width="79%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><U><B><FONT
      size=2>Reference to and Effect Upon the Loan Documents</FONT></B></U><FONT
      size=2>.</FONT></P></TD></TR></TABLE>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>(a)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
size=2>Except as specifically set forth above, each of Credit Agreements and the
Loan Documents shall remain in full force and effect and are hereby ratified and
confirmed; and</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>(b)</FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
size=2>The amendment set forth herein is effective solely for the purposes set
forth herein and shall be limited precisely as written, and shall not be deemed
to (i) be a consent to any amendment, waiver or modification of any other term
or condition of either Credit Agreement or any other Loan Document, (ii) operate
as a waiver or otherwise prejudice any right, power or </FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=1></FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P><BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P><PAGE>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-ALIGN: left"><FONT
size=2>remedy that the Agent or the Lenders may now have or may have in the
future under or in connection with either Credit Agreement or any other Loan
Document or (iii) constitute a waiver of any provision of either Credit
Agreement or any Loan Document, except as specifically set forth herein. Upon
the effectiveness of this Amendment, each reference in the Credit Agreement to
"this Agreement", "herein", "hereof" and words of like import and each reference
in either Credit Agreement and the Loan Documents to either Credit Agreement
shall mean the Credit Agreement as amended hereby, as applicable. </FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-ALIGN: left"><B><FONT
size=2>SECTION 10.</FONT></B><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U>
<B><FONT
size=2>Costs And Expenses</FONT></B></U><B><FONT size=2>. </FONT></B><FONT size=2>As
provided in </FONT><U><FONT size=2>Section 9.05</FONT></U><FONT size=2> of each
Credit Agreement, the Borrowers agree to reimburse Revolving Agent and Term
Agent for all fees, costs, and expenses, including the reasonable fees, costs,
and expenses of counsel or other advisors for advice, assistance, or other
representation in connection with this Amendment.</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-ALIGN: left"><B><FONT
size=2>SECTION 11.</FONT></B><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U>
<B><FONT
size=2>Reaffirmation of Guaranties</FONT></B></U><B><FONT size=2>. </FONT></B><FONT
size=2>The Loan Parties signatory hereto hereby reaffirm their Guarantees (as
defined in each Credit Agreement) of the Obligations (as defined in each Credit
Agreement), taking into account the provisions of this Amendment.</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-ALIGN: left"><B><FONT
size=2>SECTION 12.</FONT></B><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U><B><FONT
size=2>GOVERNING LAW</FONT></B></U><B><FONT size=2>. </FONT></B><FONT size=2>THIS
AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF NEW YORK.</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-ALIGN: left"><B><FONT
size=2>SECTION 13.</FONT></B><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U><B><FONT
size=2>Headings</FONT></B></U><B><FONT size=2>. </FONT></B><FONT size=2>Section
headings in this Amendment are included herein for convenience of reference only
and shall not constitute part of this Amendment for any other
purposes.</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 12pt; TEXT-ALIGN: left"><B><FONT
size=2>SECTION 14.</FONT></B><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U><B><FONT
size=2>Counterparts</FONT></B></U><B><FONT size=2>. </FONT></B><FONT size=2>This
Amendment may be executed in any number of counterparts, each of which when so
executed shall be deemed an original, but all such counterparts shall constitute
one and the same instrument.</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT
size=2>(signature page follows)</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=1></FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P><BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P><PAGE>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment as of the date first written above.</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><B><FONT
size=2>BORROWERS:</FONT></B></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><B><FONT
size=2>THE PACIFIC LUMBER COMPANY</FONT></B></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2>By: </FONT><U><FONT size=2>/s/ GARY L.
CLARK&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD vAlign=top width="39%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top width="29%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Name: GARY L. CLARK</FONT></P></TD>
    <TD width="31%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD></TR>
  <TR>
    <TD vAlign=top width="39%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top colSpan=2>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Title: Vice President Finance &amp; Administration and
      CFO</FONT></P></TD></TR></TABLE>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><B><FONT
size=2>BRITT LUMBER CO., INC.</FONT></B></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2>By: </FONT><U><FONT size=2>/s/ GARY L.
CLARK&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD vAlign=top width="39%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top width="29%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Name: GARY L. CLARK</FONT></P></TD>
    <TD width="31%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD></TR>
  <TR>
    <TD vAlign=top width="39%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top colSpan=2>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Title: Vice President Finance &amp; Administration and
      CFO</FONT></P></TD></TR></TABLE>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><B><FONT
size=2>ADMINISTRATIVE AGENTS AND LENDERS:</FONT></B></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><B><FONT
size=2>THE CIT GROUP/BUSINESS CREDIT, INC., </FONT></B><FONT size=2>as
Administrative Agent and Lender under the Revolving Credit Agreement</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2>By: </FONT><U><FONT size=2>/s/ ANTHONY
LAVINIO&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2>Name: </FONT><U><FONT size=2>ANTHONY
LAVINIO&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="95%" border=0>
  <TR>
    <TD vAlign=top width="42%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top width="7%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Title: </FONT></P></TD>
    <TD vAlign=top width="50%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><U><FONT
      size=2>Vice President
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;</FONT></U></P></TD></TR></TABLE>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><B><FONT
size=2>CREDIT SUISSE, NEW YORK BRANCH </FONT></B><FONT size=2>as Administrative
Agent and Lender under the Term Loan Agreement</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2>By: </FONT><U><FONT size=2>/s/ David
Dodd&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2>Name: </FONT><U><FONT size=2>David
Dodd&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="95%" border=0>
  <TR>
    <TD vAlign=top width="42%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top width="7%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Title: </FONT></P></TD>
    <TD vAlign=top width="50%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><U><FONT
      size=2>Vice President
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;</FONT></U></P></TD></TR></TABLE>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2>By: </FONT><U><FONT size=2>/s/ Mikhail
Favbusovich&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2>Name: </FONT><U><FONT size=2>Mikhail
Favbusovich&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="96%" border=0>
  <TR>
    <TD vAlign=top width="41%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top width="7%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Title: </FONT></P></TD>
    <TD vAlign=top width="50%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><U><FONT
      size=2>Associate&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U></P></TD></TR></TABLE>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=1></FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P><BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P><PAGE>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-INDENT: 46.15%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><B><FONT
size=2>GSO CREDIT OPPORTUNITIES FUND (HELIOS)</FONT></B><FONT size=2>, as a
Lender under the Term Loan Agreement</FONT><FONT
size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><FONT
size=2>By: </FONT><U><FONT size=2>/s/ J. Albert
Smith&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><FONT
size=2>Name: </FONT><U><FONT size=2>J. Albert
Smith&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="96%" border=0>
  <TR>
    <TD vAlign=top width="48%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top width="7%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Title: </FONT></P></TD>
    <TD vAlign=top width="44%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><U><FONT
      size=2>Partner&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U></P></TD></TR></TABLE>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><B><FONT
size=2>CREDIT OPPORTUNITIES FUND (EMPLOYEE)</FONT></B><FONT size=2>, as a Lender
under the Term Loan Agreement</FONT><FONT
size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><FONT
size=2>By: </FONT><U><FONT size=2>/s/ J. Albert
Smith&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><FONT
size=2>Name: </FONT><U><FONT size=2>J. Albert
Smith&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="96%" border=0>
  <TR>
    <TD vAlign=top width="48%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top width="7%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Title: </FONT></P></TD>
    <TD vAlign=top width="44%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><U><FONT
      size=2>Partner&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U></P></TD></TR></TABLE>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><B><FONT
size=2>MARATHON STRUCTURED FINANCE FUND, L.P.</FONT></B><FONT size=2>, as a
Lender under the Term Loan Agreement</FONT><FONT
size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><FONT
size=2>By: </FONT><U><FONT size=2>/s/ Gary L.
Lembo&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><FONT
size=2>Name: </FONT><U><FONT size=2>Gary L.
Lembo&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="95%" border=0>
  <TR>
    <TD vAlign=top width="48%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top width="7%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Title: </FONT></P></TD>
    <TD vAlign=top width="44%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><U><FONT
      size=2>Director&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U></P></TD></TR></TABLE>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><B><FONT
size=2>AVILA MASTER FUND, L.P.</FONT></B><FONT size=2>, as a Lender under the
Term Loan Agreement</FONT><FONT
size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="94%" border=0>
  <TR>
    <TD vAlign=top width="48%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top width="51%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>By: Alcentra Inc., as its Investment
  Advisor</FONT></P></TD></TR></TABLE>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><FONT
size=2>By: </FONT><U><FONT size=2>/s/ An Pham,
Jr.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><FONT
size=2>Name: </FONT><U><FONT size=2>An Pham,
Jr.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="96%" border=0>
  <TR>
    <TD vAlign=top width="48%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top width="7%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Title: </FONT></P></TD>
    <TD vAlign=top width="44%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><U><FONT
      size=2>Vice
      President&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U></P></TD></TR></TABLE>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=1></FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P><BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P><PAGE>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>IN WITNESS WHEREOF, this Amendment has been duly executed as of the date
first written above by below Persons in their capacity as Loan Parties and not
as a Borrower.</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><B><FONT
size=2>SALMON CREEK LLC</FONT></B></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2>By: </FONT><U><FONT size=2>/s/ GARY L.
CLARK&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="71%" border=0>
  <TR>
    <TD vAlign=top width="56%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top colSpan=2>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Name: GARY L. CLARK</FONT></P></TD>
    <TD width="1%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD></TR>
  <TR>
    <TD vAlign=top width="56%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top width="11%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Title: </FONT></P></TD>
    <TD vAlign=top colSpan=2>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>President and CEO</FONT></P></TD></TR>
  <TR>
    <TD width=302></TD>
    <TD width=61></TD>
    <TD width=165></TD>
    <TD width=6></TD></TR></TABLE>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><B><FONT
size=2>SCOTIA INN INC.</FONT></B></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2>By: </FONT><U><FONT size=2>/s/ GARY L.
CLARK&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="70%" border=0>

  <TR>
    <TD vAlign=top width="57%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top width="42%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Name: GARY L. CLARK</FONT></P></TD></TR></TABLE>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2>Title: Vice President Finance &amp; Administration and CFO</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><B><FONT
size=2>MAXXAM GROUP INC.</FONT></B></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2>By: </FONT><U><FONT size=2>/s/ GARY L.
CLARK&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="71%" border=0>
  <TR>
    <TD vAlign=top width="56%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top colSpan=2>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Name: GARY L. CLARK</FONT></P></TD>
    <TD width="1%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD></TR>
  <TR>
    <TD vAlign=top width="56%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top width="11%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Title: </FONT></P></TD>
    <TD vAlign=top colSpan=2>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>President and CFO</FONT></P></TD></TR>
  <TR>
    <TD width=302></TD>
    <TD width=61></TD>
    <TD width=165></TD>
    <TD width=6></TD></TR></TABLE>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 40.31%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 38.46%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=1></FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P><BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P><PAGE>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><U><B><FONT
size=2>EXHIBIT A</FONT></B></U></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT
size=2>FORM OF AMENDED AND RESTATED REVOLVING NOTE</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: right"><FONT
size=2>New York, New York</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: right"><FONT
size=2>$35,000,000.00</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: right"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>FOR VALUE RECEIVED, each of the undersigned (each individually a
"</FONT><U><FONT size=2>Borrower</FONT></U><FONT size=2>" and collectively, the
"</FONT><U><FONT size=2>Borrowers</FONT></U><FONT size=2>"), HEREBY PROMISES TO
PAY to the order of THE CIT GROUP/BUSINESS CREDIT, INC. ("</FONT><U><FONT
size=2>Lender</FONT></U><FONT size=2>"), at the offices of The CIT
Group/Business Credit, Inc., as Administrative Agent for Lenders
("</FONT><U><FONT size=2>Administrative Agent</FONT></U><FONT size=2>"), at its
address at 1211 Avenue of the Americas, 12<SUP>th</SUP> floor, New York, New
York, or at such other place as Administrative Agent may designate from time to
time in writing, in lawful money of the United States of America and in
immediately available funds, the amount of THIRTY FIVE MILLION DOLLARS AND NO
CENTS ($35,000,000.00) or, if less, the aggregate unpaid amount of all Loans
(each, a "</FONT><U><FONT size=2>Revolving Credit Advance</FONT></U><FONT
size=2>") made to the undersigned pursuant to Section 2.01 of the "Credit
Agreement" (as hereinafter defined). All capitalized terms used but not
otherwise defined herein have the meanings given to them in the Credit
Agreement.</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>This Amended and Restated Revolving Note (this "</FONT><U><FONT
size=2>Revolving Note</FONT></U><FONT size=2>") is one of the Revolving Notes
issued pursuant to that certain Revolving Credit Agreement dated as of April 19,
2005 by and among Borrowers, Administrative Agent, Lender and the other Persons
signatory thereto from time to time as Lenders (including all annexes, exhibits
and schedules thereto, and as from time to time amended, restated, supplemented
or otherwise modified, the "</FONT><U><FONT size=2>Credit
Agreement</FONT></U><FONT size=2>"), and is entitled to the benefit and security
of the Credit Agreement, the Guarantee and Collateral Agreement and all of the
other Loan Documents referred to therein. Reference is hereby made to the Credit
Agreement for a statement of all of the terms and conditions under which the
Loans evidenced hereby are made and are to be repaid. The date and amount of
each Revolving Credit Advance made by Lenders to Borrowers, the rates of
interest applicable thereto and each payment made on account of the principal
thereof, shall be recorded by Administrative Agent on its books; provided that
the failure of Administrative Agent to make any such recordation shall not
affect the obligations of Borrowers to make a payment when due of any amount
owing under the Credit Agreement or this Revolving Note in respect of the
Revolving Credit Advances made by Lender to Borrowers.</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>The principal amount of the indebtedness evidenced hereby shall be
payable in the amounts and on the dates specified in the Credit Agreement, the
terms of which are hereby incorporated herein by reference. Interest thereon
shall be paid until such principal amount is paid in full at such interest rates
and at such times, and pursuant to such calculations, as are specified in the
Credit Agreement. The terms of the Credit Agreement are hereby incorporated
herein by reference.</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>If any payment on this Revolving Note becomes due and payable on a day
other than a Business Day, the payment thereof shall be extended to the next
succeeding Business Day and, </FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=1></FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P><BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P><PAGE>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2>with respect to payments of principal, interest thereon shall be payable
at the then applicable rate during such extension.</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>This Revolving Note may, as provided in the Credit Agreement, be
declared, and immediately shall become, due and payable.</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>Time is of the essence of this Revolving Note.</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2>Except as provided in the Credit Agreement, this Revolving Note may not
be assigned by Lender to any Person.</FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: center"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=1></FONT></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P><BR>
<HR align=center width="100%" noShade SIZE=2>

<P style="PAGE-BREAK-BEFORE: always"></P><PAGE>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><B><FONT
size=2>THIS REVOLVING NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES.</FONT></B></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 7.69%; TEXT-ALIGN: left"><B><FONT
size=2>THIS REVOLVING NOTE IS ISSUED IN FULL SUBSTITUTION FOR AND REPLACEMENT
OF, BUT NOT IN PAYMENT OF THE REVOLVING NOTE OF BORROWERS EXECUTED AS OF APRIL
19, 2005, PAYABLE TO THE ORDER OF THE CIT GROUP/BUSINESS CREDIT, INC. IN THE
ORIGINAL PRINCIPAL AMOUNT OF THIRTY MILLION DOLLARS
($30,000,000).</FONT></B></P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><FONT
size=2>THE PACIFIC LUMBER COMPANY</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><FONT
size=2>By:______________________________</FONT></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="59%" border=0>
  <TR>
    <TD vAlign=top width="83%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top colSpan=2>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Name:</FONT></P></TD></TR>
  <TR>
    <TD vAlign=top width="83%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top width="14%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Title:</FONT></P></TD>
    <TD width="2%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD></TR></TABLE>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><FONT
size=2>BRITT LUMBER CO., INC.</FONT></P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P
style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 46.15%; TEXT-ALIGN: left"><FONT
size=2>By:______________________________</FONT></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="59%" border=0>
  <TR>
    <TD vAlign=top width="83%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top colSpan=2>
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Name:</FONT></P></TD></TR>
  <TR>
    <TD vAlign=top width="83%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD>
    <TD vAlign=top width="14%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=2>Title:</FONT></P></TD>
    <TD width="2%">
      <P
      style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; TEXT-ALIGN: left"><FONT
      size=1></FONT>&nbsp;</P></TD></TR></TABLE>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=1></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
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size=1></FONT>&nbsp;</P>
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size=1></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=1></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
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size=1></FONT>&nbsp;</P>
<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=1>CH\790939.10</FONT></P>
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<P style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left"><FONT
size=2></FONT>&nbsp;</P></DIV></BODY></HTML>
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{"company-data": {"conformed-name": "MAXXAM INC", "cik": "0000063814", "assigned-sic": "3334", "irs-number": "952078752", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-03924", "film-number": "051162573"}, "business-address": {"street1": "1330 POST OAK BOULEVARD", "street2": "SUITE 2000", "city": "HOUSTON", "state": "TX", "zip": "77056-3058", "phone": "7139757600"}, "mail-address": {"street1": "1330 POST OAK BOULEVARD", "street2": "SUITE 2000", "city": "HOUSTON", "state": "TX", "zip": "77056-3058"}, "former-company": [{"former-conformed-name": "MCO HOLDINGS INC", "date-changed": "19881115"}, {"former-conformed-name": "MCCULLOCH OIL CORP", "date-changed": "19800630"}, {"former-conformed-name": "MCCULLOCH OIL CORP OF CALIFORNIA", "date-changed": "19691118"}]}
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of Report (Date of earliest event reported):
October 26, 2005
MAXXAM INC.
(Exact name of registrant as specified in its charter)
Delaware
1-3924
95-2078752
(State or other jurisdiction of incorporation or
      organization)
(Commission File Number)
(I.R.S. Employer Identification No.)
1330 Post Oak Boulevard
Suite
      2000
Houston, Texas
77056
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code:
(713) 975-7600
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01.
Entry Into a
Material Definitive Agreement.
Amendment of Revolving Credit Agreement and Term Loan
Agreement
On October 26, 2005, the Registrant's indirect wholly owned subsidiary,
The Pacific Lumber Company ("Palco"), and Palco's subsidiary, Britt Lumber Co.,
Inc. ("Britt"), and certain of their affiliates entered into an Omnibus Amendment
to Revolving Credit Agreement, Term Loan Agreement, Intercreditor Agreement and
Guarantee and Collateral Agreements (the "Amendment"). The Amendment amends the
revolving credit facility and the term loan facility which were entered into by
Palco and Britt on April 19, 2005.
The Amendment temporarily increases the amount of the revolving credit
facility from $30 million to $35 million and temporarily increases the advance
rate applicable to the borrowers' inventory from 75% to 80%. The increase in the
inventory advance rate is subject to satisfactory inventory appraisals, and the
amount of the increase in such advances is capped at $1.5 million. The increase
in the amount of the revolving credit facility and the increase in the inventory
advance rate will be phased out beginning in January 2006, and will be
completely phased out by March 2006. The Amendment also revises financial
covenants applicable to the revolving credit facility and the term loan
facility.
MAXXAM Group Inc., Palco's immediate parent, has furnished cash
collateral of $2 million as additional security for the borrowers' obligations
under the revolving credit facility and the term loan facility. This cash
collateral will be released on April 1, 2006, so long as the borrowers have achieved earnings and borrowing availability targets that are
to be determined by the revolving lenders.
Item 2.03
Creation of a Direct Financial Obligation or and Obligation under and Off-Balance Sheet
               
            Arrangement or a Registrant.
To the extent applicable, the contents of Item 1.01 above are
incorporated into this Item 2.03 by reference.
Item 9.01
Financial Statements and
Exhibits.
c) Exhibits
Exhibit
Number
Description
10.1
Omnibus Amendment to Revolving Credit Agreement, Term Loan
      Agreement, Intercreditor Agreement and Guarantee and Collateral
      Agreements
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date:
October 28, 2005
MAXXAM INC.
By:
/s/
Bernard L.
Birkel
Name:
Bernard L. Birkel
Title:
Secretary & Senior Assistant General
  Counsel
0093FMS5.VM.DOC
EXHIBIT 10.1
OMNIBUS AMENDMENT TO REVOLVING CREDIT AGREEMENT, TERM LOAN AGREEMENT,
INTERCREDITOR AGREEMENT AND GUARANTEE AND COLLATERAL AGREEMENTS
This OMNIBUS AMENDMENT TO REVOLVING CREDIT AGREEMENT, TERM LOAN
AGREEMENT, INTERCREDITOR AGREEMENT AND GUARANTEE AND COLLATERAL AGREEMENTS (this
"
Amendment
") is entered into as
of this 26th day of October, 2005, by THE PACIFIC LUMBER COMPANY, a Delaware
corporation ("
Palco
"), THE BRITT
LUMBER CO., INC., a California corporation ("
Britt
" and together with Palco, the
"
Borrowers
"), the other Loan
Parties (as defined in the Term Loan Agreement and Revolving Credit Agreement,
each as hereinafter defined) signatory hereto, THE CIT GROUP/BUSINESS CREDIT,
INC., as administrative agent (the "
Revolving
Agent
") for itself and the Lenders under and as defined
in the Revolving Credit Agreement (the "
Revolving
Lenders
"), the Revolving Lenders and CREDIT SUISSE, NEW
YORK BRANCH (f/k/a Credit Suisse First Boston, acting through its New York
Branch), as administrative agent (the "
Term
Agent
") for itself and the Lenders under and as defined
in the Term Loan Agreement (the "
Term
Lenders
"), and the Term Lenders.
RECITALS
WHEREAS, (i) the Borrowers, the Revolving Agent and the Revolving Lenders
have entered into that certain Revolving Credit Agreement, dated as of April 19,
2005 (as amended, supplemented, restated or otherwise modified from time to
time, the "
Revolving Credit Agreement
") and (ii) the Borrowers, the other Loan Parties and the Revolving Agent
have entered into that certain Guarantee and Collateral Agreement, dated as of
April 19, 2005 (as amended, supplemented, restated or otherwise modified from
time to time, the "
Revolving Security
Agreement
");
WHEREAS, (i) the Borrowers, the Term Agent and the Term Lenders have
entered into that certain Term Loan Agreement, dated as of April 19, 2005 (as
amended, supplemented, restated or otherwise modified from time to time, the
"
Term Loan Agreement
" and
together with the Revolving Credit Agreement, the "
Credit
Agreements
") and (ii) the Borrowers, the other Loan
Parties and the Term Agent have entered into that certain Guarantee and
Collateral Agreement, dated as of April 19, 2005 (as amended, supplemented,
restated or otherwise modified from time to time, the "
Term Security Agreement
");
WHEREAS, the Borrowers, the other Loan Parties, the Term Agent and the
Revolving Agent have entered into that certain Intercreditor Agreement, dated as
of April 19, 2005 (as amended, supplemented, restated or otherwise modified from
time to time, the "
Intercreditor
Agreement
");
WHEREAS, the parties hereto have agreed to amend certain of the Loan
Documents (as defined in the Revolving Credit Agreement, the "
Revolving Loan Documents
") and certain of the
Loan Documents (as defined in the Term Loan Agreement, and together with the
Revolving Loan Documents, the "
Loan
Documents
");
NOW THEREFORE, in consideration of the foregoing recital, mutual
agreements contained herein and for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows:
SECTION 1.
Amendments to the Revolving Credit Agreement
.
(a)
Section 1.01
of the Revolving Credit Agreement is
hereby amended by amending and restating the following defined terms to read in
their entirety as follows:
""
Borrowing Base
" means,
at any time, an amount equal to (a) the sum of (A) eighty-five percent
(85%) of the Net Amount of Eligible Accounts plus (B) seventy-five percent (75%)
of the value (being the lower of cost (on a first-in first-out basis) or market)
of Eligible Inventory plus (C) after the Administrative Agent has received an
updated inventory appraisal from an appraiser satisfactory to Revolving Agent
and in form, substance and with results satisfactory to the Administrative
Agent, the lesser of (x) the Incremental Percentage of the value (being the
lower of cost (on a first-in first-out basis) or market) of Eligible Inventory
and (y) $1,500,000; minus (b) Reserves from time to time established by the
Administrative Agent in its reasonable credit judgment."
""
Combined EBITDA
" shall
mean, for any period, Combined Net Income for such period plus (a) without
duplication and to the extent deducted in determining such Combined Net Income,
the sum of (i) Combined Interest Expense for such period, (ii)
combined income tax expense for such period, (iii) all amounts
attributable to depreciation and amortization for such period and
(iv) depletion for such period (
provided
that to the extent that all or any
portion of the income of any person is excluded from Combined Net Income
pursuant to the definition thereof for all or any portion of such period any
amounts set forth in the preceding clauses (i) through (iv) that are
attributable to such person shall not be included for purposes of this
definition for such period or portion thereof), and minus (b) without
duplication and to the extent included in determining such Combined Net
Income, any extraordinary gains and all non-cash items of income for such
period, all determined on a combined basis in accordance with GAAP (except that
Inventory is presented on a FIFO basis)."
""
Total Revolving Credit
Commitment
" shall mean, at any time, the aggregate
amount of the Revolving Credit Commitments, as in effect at such time. The Total
Revolving Credit Commitment as of the Omnibus Amendment Effective Date is
$35,000,000."
(b)
Section 1.01
of the Revolving Credit Agreement is
hereby amended by adding the following new defined terms thereto in their proper
alphabetical order:
""
Omnibus Amendment
" shall
mean that certain Omnibus Amendment to Revolving Credit Agreement, Term Loan
Agreement, Intercreditor Agreement and Guarantee and Collateral Agreements,
dated as of October 26, 2005, by and among the Administrative Agent, the
Lenders, the administrative agent and lenders under the Term Loan Agreement, and
the Loan Parties."
""
Omnibus Amendment Effective Date
" shall mean the date which all the conditions to the effectiveness of
the Omnibus Amendment have been satisfied."
""
Incremental Percentage
"
shall mean at all times (i) on or prior to February 28, 2006, five percent (5%),
(ii) after February 28, 2006 but on or prior to March 31, 2006, 3% and (iii)
after March 31, 2006, 0%.
(c)
Section 2.09(b)
of the Revolving Credit Agreement
is hereby amended and restated to read in its entirety as follows:
"(b)
Upon
at least three Business Days' prior irrevocable written or fax notice to the
Administrative Agent, the Borrowers may at any time in whole permanently
terminate, or from time to time in part permanently reduce, the Commitments;
provided, however, that (i) each partial reduction of the Commitments shall be
in an integral multiple of $1,000,000 and in a minimum amount of $1,000,000 and
(ii) the Commitments shall not be reduced to an amount that is less than the
Aggregate Revolving Credit Exposure then in effect. In addition, on each date
set forth below the Revolving Credit Commitments of the Lenders shall be
reduced, on a pro rata basis, so that after giving effect to such reduction the
Aggregate Revolving Credit Exposure shall be reduced to an amount equal to the
lesser of the Total Revolving Credit Commitment otherwise in effect on such date
or the amount set forth below opposite such date:
Date
Amount
January 2, 2006
$34,500,000
January 9, 2006
$34,000,000
January 16, 2006
$33,500,000
January 23, 2006
$33,000,000
January 30, 2006
$32,500,000
February 6, 2006
$32,000,000
February 13, 2006
$31,500,000
February 20, 2006
$31,000,000
February 27, 2006
$30,500,000
March 6, 2006
$30,000,000
To the extent that any reduction in the Total Revolving Credit Commitment
set forth in the above table results in the Aggregate Revolving Credit Exposure
exceeding the Commitments, the Borrowers shall immediately prepay the Revolving
Loans by such amount."
(d)
Section 5.04(k)
of the Revolving Credit Agreement
is hereby amended and restated in its entirety to read as follows:
"(k)
from
time to time, if Administrative Agent determines in its sole discretion that
obtaining appraisals is necessary or appropriate for any reason, the
Administrative Agent will, at Borrower's expense, obtain appraisal reports in
form and substance and from appraisers
satisfactory to the Administrative Agent stating the then current market
values of all or any portion of the Real Property and personal property owned by
any of the Loan Parties;"
(e)
Section 6.11
of the Revolving Credit Agreement is
hereby amended and restated in its entirety to read as follows:
"Section 6.11
Minimum Combined EBITDA
. Permit the Combined
EBITDA for the 12-month period (unless otherwise indicated below) then ended at
the end of any such fiscal month (or at the end of the then preceding fiscal
month) set forth below to be less than the amount set forth opposite such fiscal
month set forth below:
Period Ending
Amount
One month period ending September 30, 2005
($1,400,000)
Two month period ending October 31, 2005
($2,350,000)
Three month period ending November 30, 2005
($1,350,000)
Four Month period ending December 31, 2005
$850,000
Five month period ending January 31, 2006
$750,000
Six month period ending February 28, 2006
$400,000
Seven month period ending March 31, 2006
$800,000
After March 31, 2006, the minimum Combined EBITDA for any period shall be
the Agent Determined Amount. As used herein, the "Agent Determined Amount" means
the amount (and for such periods) determined in good faith (and delivered in
writing to the Borrowers) by the Administrative Agent (which the Administrative
Agent currently intends to determine following receipt by Administrative Agent
of Borrowers' projections for Fiscal Year 2006).
SECTION 2.
Amendment to Lender Addendum
.
The Lender Addendum (as defined in the Revolving Credit Agreement)
executed by The CIT Group/Business Credit, Inc., as Revolving Lender, is hereby
amended by amending and restating paragraph 2 of Schedule 1 thereto to read in
its entirety as follows:
"Revolving Credit Commitment: $30,000,000 as of the Closing Date and
increased to $35,000,000 as of the Omnibus Amendment Effective Date, and as
subsequently reduced in accordance with Section 2.09 of the Credit
Agreement."
SECTION 3.
Amendment to Term Loan Agreement
.
Section 6.11
of the Term Loan
Agreement is hereby amended and restated in its entirety as follows:
"Section 6.11
Minimum Combined EBITDA
. Permit the Combined
EBITDA for the 12-month period (unless otherwise indicated below) then ended at
the end of any fiscal quarter set forth below to be less than the amount set
forth opposite such fiscal quarter set forth below:
Period Ending
Amount
One month period ending September 30, 2005
($1,400,000)
Four month period ending December 31, 2005
$850,000
Seven month period ending March 31, 2006
$800,000
After March 31, 2006, the minimum Combined EBITDA for any period shall be
the Agent Determined Amount. As used herein, the "
Agent
Determined Amount
" means the amount (and for such
periods) determined in good faith (and delivered in writing to the Borrowers) by
the Administrative Agent (which the Administrative Agent currently intends to
determine following receipt by Administrative Agent of Borrowers' projections
for Fiscal Year 2006).
SECTION 4.
Amendment to
Guarantee and Collateral Agreements
.
(a)
Section 1.01
of the Term Loan Agreement is hereby
amended by amending and restating the following defined term to read in its
entirety as follows:
""
Combined EBITDA
" shall
mean, for any period, Combined Net Income for such period plus (a) without
duplication and to the extent deducted in determining such Combined Net Income,
the sum of (i) Combined Interest Expense for such period, (ii)
combined income tax expense for such period, (iii) all amounts
attributable to depreciation and amortization for such period and
(iv) depletion for such period (
provided
that to the extent that all or any
portion of the income of any person is excluded from Combined Net Income
pursuant to the definition thereof for all or any portion of such period any
amounts set forth in the preceding clauses (i) through (iv) that are
attributable to such person shall not be included for purposes of this
definition for such period or portion thereof), and minus (b) without
duplication and to the extent included in determining such Combined Net
Income, any extraordinary gains and all non-cash items of income for such
period, all determined on a combined basis in accordance with GAAP (except that
Inventory is presented on a FIFO basis)."
(b)
Section 1
of the Revolving Security Agreement is
hereby amended by adding the following new defined terms thereto in their proper
alphabetical order:
""
Cash Collateral
" means
cash in the amount of $2,000,000 to be deposited by Holdings with the
Administrative Agent, and to be held by the Administrative Agent as cash
collateral."
""
CIT Rate
" means the rate
of interest per annum announced by JPMorgan Chase Bank, N.A. (or its successor)
from time to time as its "prime rate" in effect at its principal office in New
York City
minus
3.25%.
(c)
Section 3(a)
of the Revolving Security Agreement
is hereby amended and restated to read in its entirety as follows:
"(a)
Holdings
hereby assigns and transfers (and in the case of clause (i) below continues the
assignment and transfer) to the Administrative Agent, and hereby grants (and in
the case of (i) below continues the grant) to the Administrative Agent, for the
ratable benefit of the Secured Parties, a security interest in (i) all equity
interests in Palco and all Proceeds thereof (the "Palco Equity Interests") and
(ii) the Cash Collateral (together with the Palco Equity Interests, the
"Holdings Collateral"), as collateral security for the prompt and complete
payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of all Obligations. Any reference to Collateral
herein with respect to Holdings shall be understood to be a reference to the
Holdings Collateral."
(d)
Section 8.15
of the Revolving Security Agreement
is hereby amended by adding the following new clause (d) thereto:
"(d)
At
such time after March 31, 2006 as (i) Borrowers' have achieved Combined EBITDA
and Borrowing Availability in amounts and for periods determined in good faith
(and delivered in writing to the Borrowers) by the Administrative Agent (which
the Administrative Agent currently intends to determine following receipt by
Administrative Agent of Borrowers' projections for Fiscal Year 2006), (ii) the
Aggregate Revolving Credit Exposure is no greater than $30,000,000 and (iii) no
Event of Default has occurred or is continuing, upon written request of
Borrowers, the Administrative Agent shall return, and release the Liens created
hereby on, the Cash Collateral, and concurrently pay to Holdings interest
accrued (from the Omnibus Amendment Effective Date to the date the Cash
Collateral is released) on the Cash Collateral at the CIT Rate (computed on the
basis of the actual number of days elapsed over a year of 365 or 366 days, as
the case may be). "
(e)
Section 1
of the Term Security Agreement is
hereby amended by adding the following new defined terms in their proper
alphabetical order:
""
Cash Collateral
" means
cash in the amount of $2,000,000 to be deposited by Holdings with the Revolving
Credit Agent, and to be held by the Revolving Credit Agent as cash
collateral."
""
Revolving Credit Agent
"
means CIT Group/Business Credit, Inc., as administrative agent under the
Revolving Credit Agreement."
""
Revolving Security Agreement
"
means that certain Guarantee and Collateral Agreement dated as of April
19, 2005 by and among the Revolving Credit Agent and the Loan
Parties.
(f)
Section 3(a)
of the Term Security Agreement is
hereby amended and restated in its entirety as follows:
"(a)
Holdings
hereby assigns and transfers (and in the case of clause (i) below continues the
assignment and transfer) to the Administrative Agent, and hereby grants (and in
the case of (i) below continues the grant) to the Administrative Agent, for the
ratable benefit of the Secured Parties, a security interest in (i) all equity
interests in Palco and all Proceeds thereof (the "Palco Equity Interests") and
(ii) the Cash Collateral (together with the Palco Equity Interests, the
"Holdings Collateral"), as collateral security for the prompt and complete
payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of all Obligations. Any reference to Collateral
herein with respect to Holdings shall be understood to be a reference to the
Holdings Collateral."
(g)
Section 8.15
of the Term Security Agreement is
hereby amended by adding the following new clause (d) thereto:
"(d)
At such
time as the Revolving Credit Agent has returned and released its Lien on the
Cash Collateral in accordance with the terms and conditions of
Section 8.15
of the Revolving Security Agreement
(as in effect on the Omnibus Amendment Effective Date), the Administrative
Agent's Lien on the Cash Collateral shall be automatically simultaneously
released."
SECTION 5.
Amendment to Intercreditor Agreement
.
(a)
Section 1
of the Intercreditor Agreement is
hereby amended by adding the following new defined term thereto in its
applicable alphabetical order:
""
Cash Collateral
" means
cash in the amount of $2,000,000 to be deposited by Holdings with the Revolving
Credit Agent, and to be held by the Revolving Credit Agent as cash
collateral."
(b)
Section 1
of the Intercreditor Agreement is
hereby amended by amending and restating the definition of "Revolving Credit
Primary Collateral" in its entirety as follows:
""
Revolving Credit Primary
Collateral
" means all now owned or hereafter acquired
Revolving Credit Collateral which constitutes: (a) Accounts, other than "payment
intangibles" (as defined in Article 9 of the UCC) which constitute identifiable
proceeds of Term Loan Primary Collateral, (b) all Inventory or documents of
title for any Inventory; (c) Hedge Agreements, (d) Deposit Accounts, Securities
Accounts (including all cash, marketable securities and other funds held in or
on deposit in either of the foregoing) Instruments, Chattel Paper
and Cash Collateral;
provided
,
however
, that to the extent that
Instruments or Chattel Paper constitute identifiable proceeds of Term Loan
Primary Collateral or other identifiable proceeds of Term Loan Primary
Collateral are deposited or held in any such Bank Accounts or Securities
Accounts after an Enforcement Notice, then (as provided in Section 3.5 below)
such Instruments, Chattel Paper or other identifiable proceeds shall be treated
as Term Loan Primary Collateral; (e) Revolving Credit General Intangibles; (f)
Records, "supporting obligations" (as defined in Article 9 of the UCC),
commercial tort claims or other claims and causes of action , in each case, to
the extent related primarily to any of the foregoing; and (g) substitutions,
replacements, accessions, products and proceeds (including, without limitation,
insurance proceeds, licenses, royalties, income, payments, claims, damages and
proceeds of suit) of any or all of the foregoing.
(c)
Section 3.2(a)(2)
of the Intercreditor Agreement
is hereby amended by replacing the term "Term Loan Collateral" which appears
therein with the term "Term Loan Primary Collateral".
(d)
Section 3.2(b)
of the Intercreditor Agreement is
hereby amended by replacing "Term Loan Collateral" which appear therein with the
term "Term Loan Primary Collateral".
SECTION 6.
Effectiveness
.
The
effectiveness of this Amendment is subject to the satisfaction of each the
following conditions precedent:
(a)
the Revolving Agent shall have received, for the ratable benefit of the
Revolving Lenders, payment of an amendment fee in an amount equal to $25,000
(which shall be fully earned and payable as of the date hereof);
(b)
the Revolving Agent shall have received $2,000,000 in cash from Holdings
to be held by the Revolving Agent as Cash Collateral;
(c)
this Amendment shall have been duly executed and delivered by the
Borrower, the Loan Parties, the Revolving Agent, the Revolving Lender, the Term
Agent and the Term Lenders;
(d)
the representations and warranties contained herein shall be true and
correct in all respects;
(e)
the Borrowers shall have executed an Amended and Restated Revolving Note
in the form attached hereto as
Exhibit A
; and
(f)
the Borrowers shall have provided to each of the Revolving Agent and Term
Agent a Secretary's Certificate certifying and attaching the (i) articles of
incorporation and bylaws of each Loan Party that is a corporation, (ii) the
certificate of formation and limited liability company agreement of each Loan
Party that is a limited liability company and (iii) duly adopted resolutions of
each Loan Party with respect to this Amendment and the transaction contemplated
thereby. In the case of items (i) and (ii), any Loan Party can in lieu thereof
certify that no changes have occurred to such documents since April 19, 2005
(except for a May 4, 2005 amendment to the limited liability company agreement
of Salmon Creek LLC, a copy of which has previously been furnished to Lenders'
counsel).
SECTION 7.
Opinion of Counsel
.
No
later than November 4, 2005, Borrowers shall deliver to the Revolving Agent and
the Term Agent an opinion of counsel with respect to this Amendment in form and
substance reasonably acceptable to each of the Revolving Agent and the Term
Agent.
SECTION 8.
Representations and Warranties
.
In order to induce the Revolving Agent, the Revolving
Lenders and Term Agent to enter into this Amendment, each Loan Party hereby
represents and warrants to the Revolving Agent, the Revolving Lenders and the
Term Agent, which representations and warranties shall survive the execution and
delivery of this Amendment, that:
(a)
all of the representations and warranties contained in each of Credit
Agreements and each Loan Document are true and correct as of the date hereof
after giving effect to this Amendment, except to the extent that any such
representations and warranties expressly relate to an earlier date;
(b)
the execution, delivery and performance by such Loan Party of this
Amendment has been duly authorized by all necessary corporate action required on
its part and this Amendment, and each of the Credit Agreements is the legal,
valid and binding obligation of such Loan Party enforceable against such Loan
Party in accordance with its terms, except as its enforceability may be affected
by the effect of bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to or affecting the rights or
remedies of creditors generally;
(c)
neither the execution, delivery and performance of this Amendment by such
Loan Party, the performance by such Loan Party of each of the Credit Agreements
nor the consummation of the transactions contemplated hereby does or shall
contravene, result in a breach of, or violate (i) any provision of any Loan
Party's certificate or articles of incorporation or bylaws or other similar
documents, or agreements, (iii) any law or regulation, or any order or decree of
any court or government instrumentality, or (iii) any indenture, mortgage, deed
of trust, lease, agreement or other instrument to which any Loan Party or any of
its subsidiaries is a party or by which any Loan Party or any of its
subsidiaries or any of their property is bound, except in any such case to the
extent such conflict or breach has been waived herein or by a written waiver
document, a copy of which has been delivered to Agent on or before the date
hereof; and
(d)
no Default or Event of Default (in each case, as defined in either Credit
Agreement) has occurred and is continuing.
SECTION 9.
Reference to and Effect Upon the Loan Documents
.
(a)
Except as specifically set forth above, each of Credit Agreements and the
Loan Documents shall remain in full force and effect and are hereby ratified and
confirmed; and
(b)
The amendment set forth herein is effective solely for the purposes set
forth herein and shall be limited precisely as written, and shall not be deemed
to (i) be a consent to any amendment, waiver or modification of any other term
or condition of either Credit Agreement or any other Loan Document, (ii) operate
as a waiver or otherwise prejudice any right, power or
remedy that the Agent or the Lenders may now have or may have in the
future under or in connection with either Credit Agreement or any other Loan
Document or (iii) constitute a waiver of any provision of either Credit
Agreement or any Loan Document, except as specifically set forth herein. Upon
the effectiveness of this Amendment, each reference in the Credit Agreement to
"this Agreement", "herein", "hereof" and words of like import and each reference
in either Credit Agreement and the Loan Documents to either Credit Agreement
shall mean the Credit Agreement as amended hereby, as applicable.
SECTION 10.
Costs And Expenses
.
As
provided in
Section 9.05
of each
Credit Agreement, the Borrowers agree to reimburse Revolving Agent and Term
Agent for all fees, costs, and expenses, including the reasonable fees, costs,
and expenses of counsel or other advisors for advice, assistance, or other
representation in connection with this Amendment.
SECTION 11.
Reaffirmation of Guaranties
.
The Loan Parties signatory hereto hereby reaffirm their Guarantees (as
defined in each Credit Agreement) of the Obligations (as defined in each Credit
Agreement), taking into account the provisions of this Amendment.
SECTION 12.
GOVERNING LAW
.
THIS
AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF NEW YORK.
SECTION 13.
Headings
.
Section
headings in this Amendment are included herein for convenience of reference only
and shall not constitute part of this Amendment for any other
purposes.
SECTION 14.
Counterparts
.
This
Amendment may be executed in any number of counterparts, each of which when so
executed shall be deemed an original, but all such counterparts shall constitute
one and the same instrument.
(signature page follows)
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment as of the date first written above.
BORROWERS:
THE PACIFIC LUMBER COMPANY
By:
/s/ GARY L.
CLARK
Name: GARY L. CLARK
Title: Vice President Finance & Administration and
      CFO
BRITT LUMBER CO., INC.
By:
/s/ GARY L.
CLARK
Name: GARY L. CLARK
Title: Vice President Finance & Administration and
      CFO
ADMINISTRATIVE AGENTS AND LENDERS:
THE CIT GROUP/BUSINESS CREDIT, INC.,
as
Administrative Agent and Lender under the Revolving Credit Agreement
By:
/s/ ANTHONY
LAVINIO
Name:
ANTHONY
LAVINIO
Title:
Vice President
CREDIT SUISSE, NEW YORK BRANCH
as Administrative
Agent and Lender under the Term Loan Agreement
By:
/s/ David
Dodd
Name:
David
Dodd
Title:
Vice President
By:
/s/ Mikhail
Favbusovich
Name:
Mikhail
Favbusovich
Title:
Associate
GSO CREDIT OPPORTUNITIES FUND (HELIOS)
, as a
Lender under the Term Loan Agreement
By:
/s/ J. Albert
Smith
Name:
J. Albert
Smith
Title:
Partner
CREDIT OPPORTUNITIES FUND (EMPLOYEE)
, as a Lender
under the Term Loan Agreement
By:
/s/ J. Albert
Smith
Name:
J. Albert
Smith
Title:
Partner
MARATHON STRUCTURED FINANCE FUND, L.P.
, as a
Lender under the Term Loan Agreement
By:
/s/ Gary L.
Lembo
Name:
Gary L.
Lembo
Title:
Director
AVILA MASTER FUND, L.P.
, as a Lender under the
Term Loan Agreement
By: Alcentra Inc., as its Investment
  Advisor
By:
/s/ An Pham,
Jr.
Name:
An Pham,
Jr.
Title:
Vice
      President
IN WITNESS WHEREOF, this Amendment has been duly executed as of the date
first written above by below Persons in their capacity as Loan Parties and not
as a Borrower.
SALMON CREEK LLC
By:
/s/ GARY L.
CLARK
Name: GARY L. CLARK
Title:
President and CEO
SCOTIA INN INC.
By:
/s/ GARY L.
CLARK
Name: GARY L. CLARK
Title: Vice President Finance & Administration and CFO
MAXXAM GROUP INC.
By:
/s/ GARY L.
CLARK
Name: GARY L. CLARK
Title:
President and CFO
EXHIBIT A
FORM OF AMENDED AND RESTATED REVOLVING NOTE
New York, New York
$35,000,000.00
FOR VALUE RECEIVED, each of the undersigned (each individually a
"
Borrower
" and collectively, the
"
Borrowers
"), HEREBY PROMISES TO
PAY to the order of THE CIT GROUP/BUSINESS CREDIT, INC. ("
Lender
"), at the offices of The CIT
Group/Business Credit, Inc., as Administrative Agent for Lenders
("
Administrative Agent
"), at its
address at 1211 Avenue of the Americas, 12
th
floor, New York, New
York, or at such other place as Administrative Agent may designate from time to
time in writing, in lawful money of the United States of America and in
immediately available funds, the amount of THIRTY FIVE MILLION DOLLARS AND NO
CENTS ($35,000,000.00) or, if less, the aggregate unpaid amount of all Loans
(each, a "
Revolving Credit Advance
") made to the undersigned pursuant to Section 2.01 of the "Credit
Agreement" (as hereinafter defined). All capitalized terms used but not
otherwise defined herein have the meanings given to them in the Credit
Agreement.
This Amended and Restated Revolving Note (this "
Revolving Note
") is one of the Revolving Notes
issued pursuant to that certain Revolving Credit Agreement dated as of April 19,
2005 by and among Borrowers, Administrative Agent, Lender and the other Persons
signatory thereto from time to time as Lenders (including all annexes, exhibits
and schedules thereto, and as from time to time amended, restated, supplemented
or otherwise modified, the "
Credit
Agreement
"), and is entitled to the benefit and security
of the Credit Agreement, the Guarantee and Collateral Agreement and all of the
other Loan Documents referred to therein. Reference is hereby made to the Credit
Agreement for a statement of all of the terms and conditions under which the
Loans evidenced hereby are made and are to be repaid. The date and amount of
each Revolving Credit Advance made by Lenders to Borrowers, the rates of
interest applicable thereto and each payment made on account of the principal
thereof, shall be recorded by Administrative Agent on its books; provided that
the failure of Administrative Agent to make any such recordation shall not
affect the obligations of Borrowers to make a payment when due of any amount
owing under the Credit Agreement or this Revolving Note in respect of the
Revolving Credit Advances made by Lender to Borrowers.
The principal amount of the indebtedness evidenced hereby shall be
payable in the amounts and on the dates specified in the Credit Agreement, the
terms of which are hereby incorporated herein by reference. Interest thereon
shall be paid until such principal amount is paid in full at such interest rates
and at such times, and pursuant to such calculations, as are specified in the
Credit Agreement. The terms of the Credit Agreement are hereby incorporated
herein by reference.
If any payment on this Revolving Note becomes due and payable on a day
other than a Business Day, the payment thereof shall be extended to the next
succeeding Business Day and,
with respect to payments of principal, interest thereon shall be payable
at the then applicable rate during such extension.
This Revolving Note may, as provided in the Credit Agreement, be
declared, and immediately shall become, due and payable.
Time is of the essence of this Revolving Note.
Except as provided in the Credit Agreement, this Revolving Note may not
be assigned by Lender to any Person.
THIS REVOLVING NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES.
THIS REVOLVING NOTE IS ISSUED IN FULL SUBSTITUTION FOR AND REPLACEMENT
OF, BUT NOT IN PAYMENT OF THE REVOLVING NOTE OF BORROWERS EXECUTED AS OF APRIL
19, 2005, PAYABLE TO THE ORDER OF THE CIT GROUP/BUSINESS CREDIT, INC. IN THE
ORIGINAL PRINCIPAL AMOUNT OF THIRTY MILLION DOLLARS
($30,000,000).
THE PACIFIC LUMBER COMPANY
By:______________________________
Name:
Title:
BRITT LUMBER CO., INC.
By:______________________________
Name:
Title:
CH\790939.10