Exhibit 10.5

 

LANDLORD COVENANT WAIVER

 

THIS LANDLORD COVENANT WAIVER (this “Amendment”) is made and entered into as of
March 30, 2004, 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:

 

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 10, 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 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 requirement to maintain a minimum Net Worth
for the period commencing on October 1, 2003 (“Q4-03”) and ending on March 31,
2005 (“Q1-05”).

 

4. Additionally, Landlord hereby waives Tenant’s failure to maintain a Fixed
Charge Coverage Ratio of not less than 1.05:1 for the period commencing on Q4-03
and ending on Q1-05; provided and on condition that Tenant shall maintain a
Fixed Charge Coverage Ratio of the greater of (A) 1.0:1, 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”) without constituting a default under the terms
thereof, or (y) 1.05:1; for the six-month period ending June 30,2004 (“Q2-04”),
the nine-month period ending September 30, 2004 (“Q3-04”), the twelve-month
period ending December 31, 2004 (“Q4-04”), and the twelve-month period ending
March 31, 2005 (“Q1-05”).

 

5. The above-referenced waivers are provided and on condition that (A) Tenant
shall pay to Landlord, as consideration for Landlord’s waiver hereunder, the
amount of $97,075, and (B) Tenant acknowledges and agrees that Landlord’s
agreement to accept the foregoing sum of $97,075 is predicated upon Tenant’s
representation that Senior Lender is receiving $312,911 as consideration from
Tenant in connection with such Senior Lender’s agreement to modify the

 

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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 $97,075, such excess difference shall nevertheless be
due and payable to Landlord upon demand (together with interest thereon at the
Default Rate from the date that Senior Lender receives its remuneration until
the date Landlord receives its pro rata remuneration).

 

6. 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.

 

7. 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.

 

8. 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.

 

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            

Title:

  Second Vice President

ATTEST:

     

TENANT:

                  PW EAGLE, INC., a Minnesota corporation By:   /s/ Jeff D.
Hannum       By:   /s/ Scott Long    

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Name:

  Jeff D. Hannum      

Name:

  Scott Long

Title:

  SEC Accountant      

Title:

  CFO

 

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