Exhibit 10.10
LANDLORD COVENANT WAIVER
THIS LANDLORD COVENANT WAIVER (this "Amendment") is made and entered
into as of September 30, 2003, by and between PWE (MULTI) QRS 14-85 INC., a
Delaware corporation (the "Landlord") having an address at c/o W.P. Carey & Co.
LLC, 50 Rockefeller Plaza, 2nd Floor, New York, NY 10020, and PW EAGLE, INC., a
Minnesota corporation ("Tenant"), having an address at 222 South Ninth Street,
Suite 2880, Minneapolis, Minnesota 55402.
W I T N E S S E T H:
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WHEREAS, Landlord and Tenant entered into that certain Lease
Agreement, dated as of February 28, 2002, as amended by that certain First
Amendment To Lease Agreement, dated as of June __, 2002, and as further amended
by that certain Second Amendment to Lease Agreement, dated as of March __, 2003
(as so amended, the "Lease"), pursuant to which Landlord leased to Tenant and
Tenant leased from Landlord certain property located in Tacoma, Washington; West
Jordan, Utah; Perris, California; and Eugene Oregon as more specifically
described in the Lease; and
WHEREAS, Tenant desires that Landlord waive Tenant's violation of
certain provisions of the financial covenants of Tenant contained in the Lease
for the third and fourth quarters of calendar year 2003, and Landlord is willing
to do so subject to the terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Landlord and Tenant covenant and
agree as follows:
1. Nothing herein is intended to or shall be deemed to modify or
amend any of the other terms or provisions of the Lease or constitute a waiver
of any breach or violation by Tenant thereof except as expressly provided for
herein.
2. All undefined capitalized terms used herein shall have the same
meanings as set forth in the Lease.
3. Landlord hereby waives Tenant's failure to maintain a Fixed
Charge Coverage Ratio of not less than 1.05:1 only for the period commencing on
July 1, 2003 and ending on September 30, 2003 ("Q3-03") and for the period
commencing on October 1, 2003 and ending on December 31, 2003 ("Q4-03");
provided and on condition that:
(i) Tenant shall maintain a Fixed Charge Coverage Ratio of not less
than the greater of (A) 0.15:1 for Q3-03 and 0.10:1 for Q4-03,
and (B) the lower of (x) the minimum fixed charge coverage
ratio permitted by Tenant's senior secured lender ("Senior
Lender") under the terms of Tenant's senior
secured credit facility (the "Credit Facility") for Q3-03 and
Q4-03, without constituting a default under the terms thereof,
or (y) 1.05:1;
(ii) Tenant shall pay to Landlord, as consideration for Landlord's
waiver hereunder, the amount of $51,492; provided that,
Landlord acknowledges that it has already received funds from
Tenant in the amount of $32,425 as of the date hereof and shall
apply such funds on account to the amount due hereunder;
(iii) Tenant acknowledges and agrees that Landlord's agreement to
accept the foregoing sum of $51,492 is predicated upon Tenant's
representation that Senior Lender is receiving $128,950 as
consideration from Tenant in connection with such Senior
Lender's agreement to modify the fixed charge coverage ratio
and/or other covenants contained in the Credit Facility
contemporaneously with this Waiver by Landlord. If Tenant (or
any of its affiliates) has paid (or agreed to pay) any
remuneration or consideration in connection with such Senior
Lender's agreement to modify the fixed charge coverage ratio or
other covenants contained in the Credit Facility (or in
connection with any waiver of any covenant breach thereunder by
Tenant), then, to the extent Landlord would be entitled to
receive commensurate pro rata remuneration under the provisions
of the Paragraph 2(c) of Exhibit G of the Lease that is in
excess of $51,492, such excess difference shall nevertheless be
immediately due and payable to Landlord upon demand (together
with interest thereon at the Default Rate from the date hereof
until the date actually paid to Landlord).
(iv) Tenant shall pay all attorney's fees and expenses incurred
by Landlord in connection with the preparation, negotiation
and execution of this Waiver concurrently with Tenant's
execution and delivery hereof.
4. This Waiver may be executed in any number of and by different
parties hereto on separate counterparts, all of which, when so executed, shall
be deemed an original, but all such counterparts shall constitute one and the
same agreement.
5. This Waiver and the Lease together contain the entire
understanding between the parties hereto and supersedes all prior agreements and
understandings, if any, relating to the subject matter hereof or thereof. Any
promises, representations, warranties or guarantees not herein or therein
contained and hereinafter made shall have no force and effect unless in writing,
and executed by the party or parties making such representations, warranties or
guarantees. Neither this Waiver nor the Lease nor any portion or provisions
hereof or thereof may be changed, modified, amended, waived, supplemented,
discharged, cancelled or terminated orally or by any course of dealing, or in
any manner other than by an agreement in writing, signed by the party to be
charged.
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IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be
duly executed under seal as of the day and year first above written.
LANDLORD:
PWE (MULTI) QRS 14-85, INC.,
a Delaware corporation
By: /s/ Tom Lewis
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Name: Tom Lewis
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Title: Assistant Treasurer
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ATTEST: TENANT:
PW EAGLE, INC.,a Minnesota corporation
By: Jeff D. Hannum By: /s/ Scott Long
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Name: Jeff D. Hannum Name: Scott Long
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Title: SEC Accountant Title: CFO
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