Document:

2007 Stock Option Plan of Braintech, Inc.

 EXHIBIT 4.1 
 2007 STOCK OPTION PLAN 
 BRAINTECH, INC. 
 MARCH 22, 2007 
 ARTICLE I

 PURPOSE OF PLAN 
 The purpose of this Plan is to strengthen Braintech, Inc. (hereinafter referred to as the “Company”) by providing an additional means of attracting and retaining competent directors, officers, employees and consultants and by
providing to such persons added incentive for high levels of performance and for unusual efforts to increase the sales and earnings of the Company. The Plan seeks to accomplish these purposes and results by providing a means whereby such persons may
purchase shares of the capital stock of the Company pursuant to options. 
 ARTICLE II 
 ADMINISTRATION OF PLAN 
 Section 2.01. Board to Administer. This Plan shall be administered by the Compensation Committee (hereinafter referred to as the “Committee”) of the Board of Directors of Braintech, Inc. (hereinafter referred to
as the “Board”). Any action of the Committee with respect to administration of the Plan shall be taken pursuant to a majority vote, or to the written consent of a majority of its members. 
 Section 2.02. Authority. Subject to the express provisions of the Plan, the Committee shall have the authority to construe and
interpret the Plan and to define the terms used herein; to prescribe, amend and rescind the rules and regulations relating to the administration of the Plan; and to make all other determinations necessary or advisable for the administration of the
Plan. The determination of the Committee on the foregoing matters shall be conclusive. Subject to the express provisions of the Plan, the Committee shall determine from the eligible class the individuals who shall receive options, and the terms and
provisions of the options (which need not be identical). 

 ARTICLE III 
 PARTICIPATION 
 Section 3.01. Eligibility. Directors, officers and
employees of the Company and consultants to the Company shall be eligible for selection to participate in the Plan. An individual who has been granted an option may, if otherwise eligible, be granted an additional option or options if the Committee
shall so determine. 
 Section 3.02. Time of Granting Option. The granting of an option pursuant to this Plan shall take
place at the time the Committee designates an eligible director, officer, employee or consultant as a participant in the Plan; provided, however, that if the appropriate resolutions of the Committee indicate that an option is to be granted as of and
at some future date, the date of grant shall be such future date. 
 ARTICLE IV 
 STOCK SUBJECT TO THE PLAN 
 Subject to the adjustments as provided in
Article XII of this Plan, the stock to be offered under this Plan shall be shares of the Company’s authorized but unissued common stock, including reaquired common stock or common stock previously issued but cancelled. Subject to the following
proviso, the aggregate amount of stock to be delivered upon the exercise of all options granted under this Plan shall not exceed 10 million (10,000,000) shares. At no time shall the aggregate amount of stock to be delivered upon exercise
of all options granted under this Plan, the April 16, 2003 Stock Option Plan, the February 11, 2000 Stock Option Plan, and the December 17, 1997 Stock Option Plan exceed 25% of the outstanding shares of the Common Stock of the
Company. If any option granted hereunder shall expire or terminate for any reason without having been exercised in full, the unpurchased shares subject thereto shall again be available for the purposes of this Plan. Subject to the general
limitations contained in this Plan, the Committee may make any adjustment in the exercise price, the number of shares subject to, or the term of an option by amendment of said option 

 
or by cancellation of an outstanding option and subsequent regranting of an option. An option that is the result of amendment or substitution may have an
exercise price which is higher or lower than the prior option, provide for a greater or lesser number of shares subject to the option, or a longer or shorter term than the prior option, and may otherwise be changed as the Committee, in its
discretion, sees fit. 
 ARTICLE V 
 OPTION PRICE 
 The purchase price of stock covered by each option shall be determined by the Committee. The purchase
price of any stock purchased shall be paid in full by bank draft or by certified cheque at the time of each purchase, or shall be paid in such other manner as the Committee may determine in compliance with applicable laws. 
 ARTICLE VI 
 OPTION PERIOD

 Each option and all rights or obligations thereunder shall expire on such date as the Committee shall determine, but not later than the
fifth (5th) anniversary of the date on which the option is granted, and shall be subject to earlier termination as hereinafter provided. 
 ARTICLE VII 
 PRIVILEGES OF STOCK OWNERSHIP 
 The holder of an option pursuant to the Plan shall not be entitled to the privileges of stock ownership as to any shares of stock not actually issued and
delivered to him. 

 ARTICLE VIII 
 EXERCISE OF OPTION 
 Each option may be exercised in accordance with its terms and the total
number of shares subject thereto may be purchased, in instalments, which need not be equal. No option or instalment thereof shall be exercisable except in respect to whole shares, and fractional share interests shall be disregarded. 
 ARTICLE IX 
 COMPLIANCE WITH
SECURITIES LAWS 
 Shares shall not be issued pursuant to the exercise of an option unless the exercise of such option and the
issuance and delivery of such shares pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, the rules and
regulations promulgated thereunder, and the requirements of any Stock Exchange. 
 As a condition to the exercise of an option, the optionor
may require the optionee to represent and warrant at the time of any such exercise that the shares purchased are being purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel
for the optionor, such a representation is required by law. 
 Further, the optionor shall have no liability whatsoever (including, but not
restricted to, alternate compensation) to the optionee if a change in the exercise price or a change in the terms and provisions of an option and/or this Stock Option Plan hereof is required pursuant to any applicable laws. 
 The optionor and optionee shall comply with all relevant provisions of law relating to this Stock Option Plan and any option granted hereunder.

 ARTICLE X 
 DEATH AND TERMINATION 
 Section 10.01. Agreement to Remain in Employ of
Company. Each person to whom an option is granted is not required to remain in the employ of the Company following the date of the grant of the option. Nothing contained in this Plan, or in any option granted pursuant to this Plan, shall
confer upon any employee any right to continue in the employ of the Company or constitute any contract or agreement of employment or interfere in any way with the right of the Company to reduce such person’s compensation from the rate in
existence at the time of the granting of an option or to terminate such person’s employment, but nothing contained herein or in any option agreement shall affect any contractual rights of an employee. 
 Section 10.02. Death of an Employee. If any option holder dies while employed by the Company, such holder’s option shall, subject
to earlier termination pursuant to Article VI, expire two years (2) years after the date of such death, and during such period after such death such option may, to the extent that the optionee may have exercised the option if alive during such
period, be exercised by the person or persons to whom the options holder’s rights under the option shall pass by will or by the applicable laws of descent and distribution. 
 Section 10.03 Termination. Subject to section 10.02 and earlier termination purusant to Article VI, if the optionee resigns or ceases
to be employed by the optionor for any reason other than death, such optionee’s option shall expire and become null and void thirty (30) days after the optionee ceases to be a director, officer, employee or consultant of the Company (or
such period of time greater than 30 days as the Committee may determine or the Company may have agreed to contractually) and, during such period, the option shall be exercisable only to the extent the optionee could have exercised the option at the
date the optionee ceased to be a director, officer, employee or consultant of the Company. 
 ARTICLE XI 
 NONTRANSFERABILITY OF OPTIONS 
 An option granted under this Plan shall, by its terms, be nontransferable by the option holder other than by will or by the laws of descent and distribution and shall be exercisable during his lifetime only by the option holder. 

 ARTICLE XII 
 ADJUSTMENTS UPON CHANGES IN CAPITALIZATION 
 Section 12.01. Corporate
Reorganizations. If the outstanding shares of the stock of the Company are increased, decreased or changed into, or exchanged for, a different number or kind of shares or securities of the Company through reorganization, recapitalization,
reclassification, stock split, stock dividend, stock consolidation, or merger as a result of which the Company is the surviving corporation, or otherwise, an appropriate and proportionate adjustment shall be made in the number and kind of shares as
to which options may be granted. A corresponding adjustment changing the number of shares and the exercise price per share allocated to unexercised options or portions thereof, which shall have been granted prior to any such change, shall likewise
be made. Any such adjustment, however, in an outstanding option shall be made without change in the total price applicable to the unexercised portion of the option but with a corresponding adjustment in the price for each share covered by the
option. 
 Section 12.02 Dissolution, Liquidation. Upon the dissolution or liquidation of the Company, or upon
reorganization, merger or consolidation of the Company with one or more corporations as a result of which the Company is not the surviving corporation, or upon the sale of substantially all of the property of the Company to another corporation, this
Plan shall terminate, and any option theretofore granted hereunder shall terminate, unless provision be made in connection with such transaction for the assumption of options theretofore granted, or the substitution for such options of new options
covering the stock of a successor employer corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices. 
 Section 12.03 Adjustments Made by Board. Adjustments pursuant to this Article XII shall be made by the Board, whose determination as to what adjustments shall be made, and the extent thereof, shall
be final, binding, and conclusive. No fractional shares of stock shall be issued under the Plan on account of any such adjustment. 

 ARTICLE XIII 
 INCOME TAX LAWS 
 The Company and all optionees shall comply with all applicable income tax
laws and other tax laws (eg. any withholding tax or similar obligations). 
 ARTICLE XIV 
 AMENDMENT AND TERMINATION 
 The
Board may at any time suspend, amend or terminate this Plan as the Board, in its own discretion, sees fit. No option may be granted during any suspension of the Plan or after such termination. The amendment, suspension or termination of the Plan
shall not, without the consent of the option holder, alter or impair any rights or obligations under any option theretofore granted under the Plan. 

 ARTICLE XV 
 TERMINATION 
 Unless terminated sooner by the Board of Directors, this Plan shall terminate at
the close of business on March 22, 2017. 
 This Stock Option Plan was approved and confirmed at a Meeting of the Board of Directors of Braintech, Inc.
held March 22, 2007. 
  

	
	 /s/ Edward White

	Per: Edward A. White, SecretaryThird Amendment to Debtor-in-Possession Credit and Security Agreement

 Exhibit 4.1 
 Execution Version 
 THIRD AMENDMENT TO DEBTOR-IN-POSSESSION CREDIT AND SECURITY AGREEMENT

 THIRD AMENDMENT, dated as of February 26, 2008 (this “Amendment”), to the Debtor-in-Possession Credit
and Security Agreement, dated as of November 19, 2007, as amended by the First Amendment and Waiver to Debtor-In-Posssession Credit and Security Agreement, dated as of December 20, 2007, as further amended by the Second Amendment to
Debtor-In-Posssession Credit and Security Agreement, dated as of February 14, 2008 (as heretofore amended or otherwise modified, the “Credit Agreement”), by and among POPE & TALBOT, INC., a Delaware corporation, as a
debtor and debtor-in-possession under the US Bankruptcy Code and as a debtor company under the CCAA (the “Parent”), POPE & TALBOT LTD., a Canadian corporation, as a debtor and debtor-in-possession under the US Bankruptcy
Code, and as a debtor company under the CCAA (the “Borrower”), the Guarantors set forth on the signature pages thereto, the several banks and other financial institutions or entities from time to time parties thereto (the
“Lenders”), WELLS FARGO FINANCIAL CORPORATION CANADA, a Nova Scotia unlimited liability company, as administrative agent (in such capacity, together with its permitted successors and assigns, the “Administrative
Agent”), ABLECO FINANCE LLC, as Collateral Agent (in such capacity, together with its permitted successors and assigns, the “Collateral Agent”), and ABLECO FINANCE LLC, as Term Loan B Agent (in such capacity, together with
its permitted successors and assigns, the “Term Loan B Agent” and together with the Administrative Agent and the Collateral Agent, each an “Agent” and collectively, the “Agents”). 
 WHEREAS, the Revolving Loan Commitment (as defined in the Credit Agreement) and the Term Loan B Commitment (as defined in the Credit Agreement) are due
to terminate and the Obligations (as defined in the Credit Agreement) are due to be repaid in full on February 27, 2008; 
 WHEREAS,
Parent and the Borrower have requested that the Agents and the Lenders consent to the amendment of certain terms and conditions of the Credit Agreement as hereinafter set forth, including without limitation, the extension of the Final Maturity Date
(as defined in the Credit Agreement); and 
 WHEREAS, the Agents and the Lenders are willing to enter into this Amendment in order to amend
certain terms and conditions of the Credit Agreement, subject to the terms and conditions set forth in this Amendment. 
 NOW, THEREFORE, the
Parent, the Borrower, the Agents and the Lenders hereby agree as follows: 
 1. Capitalized Terms. Any capitalized term used herein
which is defined in the Credit Agreement shall have the meaning assigned to it in the Credit Agreement. 

 2. Definitions. Section 1.1 of the Credit Agreement is hereby amended as follows: 

(a) The definition of the term “Agreed Administrative Expense Priorities” is hereby amended and restated in its entirety to
read as follows: 
 “‘Agreed Administrative Expense Priorities’: administrative expenses with respect to
the Loan Parties and, with respect to sub-clauses (ii) and (iii) of clause “first”, any Official Committee, which shall have the following order of priority: 
 first, without duplication (i) the Canadian Carve-Out Expenses, (ii) the US Carve-Out Expenses, (iii) the Wind-Down
Costs, (iv) accrued and unpaid disbursements up to the aggregate of the amounts set forth opposite each line item in the Initial Budget (subject only to deviations that would not constitute Material Adverse Deviations), including, trade and
utility expenses, in each case, for the period from the Filing Date through the earlier to occur of the Acceleration Date and the Final Maturity Date; provided, that the aggregate amount payable pursuant to this clause (iv) shall not
exceed $2,000,000, and (v) accrued and unpaid payroll, payroll taxes and benefits as set forth opposite each such line item in the Initial Budget not to exceed the aggregate amount for the two week period immediately preceding such
Acceleration Date or Final Maturity Date, as applicable; provided, that, the aggregate amount payable pursuant to clauses (i), (ii), (iv) and (v) above (other than with respect to the Directors’ Charge), shall not exceed the
sum of (without duplication) (a) (i) the cumulative aggregate principal amount of the Loans projected to have been incurred for payment of such disbursements as of the Acceleration Date or the Final Maturity Date, as applicable, under the
Initial Budget (plus any deviation from the Initial Budget that does not constitute a Material Adverse Deviation), minus (ii) the cumulative aggregate principal amount of the Loans actually outstanding as of the Acceleration Date
or Final Maturity Date, as applicable (without giving effect to any Loans incurred to repay Pre-Petition Revolving Loan Obligations) plus (b) accrued and unpaid payroll, payroll taxes and benefits as set forth opposite each such line
item in the Initial Budget not to exceed the aggregate amount for the two week period immediately preceding such Acceleration Date or Final Maturity Date (which amount may only be used to fund such disbursements) plus (c) an amount not
to exceed $5,000,000 for accrued and unpaid professional fees through such Acceleration Date or Final Maturity Date, as applicable (which amount may only be used to fund such disbursements); provided, further, that, in the case of
clauses (i), (ii), (iii) and (iv) above, such disbursements, expenses and fees shall not include any disbursements, expenses or fees (1) in excess of $100,000 incurred by the Official Committee related to the investigation of any
claims against (x) the Agents or any Lender or their claims or security interests in or Liens on, the Collateral whether under this Agreement or any other Loan Document and (y) any Pre-Petition Agent or any Pre-Petition Lender under the
Pre-Petition Credit Agreement or their claims or security interests in connection with the Pre-Petition Credit Agreement or any of the other loan documents or instruments entered into in connection therewith, (2) in connection with using or
seeking to use cash collateral without the consent of the Agents, (3) in connection with using or seeking to use any insurance proceeds related to the Collateral without the consent of the Agents, (4) in connection with incurring
Indebtedness other than in accordance with the Initial Budget or other than as expressly permitted herein, (5) in connection with any other action contrary to the Bankruptcy Court Orders or this Agreement, or (6) incurred by the Official

  

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Committee or the Monitor, in each case, in respect of any Avoidance Action or otherwise related to the preparation for, or commencement or prosecution of,
any claims or proceedings against (x) the Agents or any Lender or their claims or security interests in or Liens on, the Collateral whether under this Agreement or any other Loan Document and (y) any Pre-Petition Agent or any Pre-Petition
Lender under the Pre-Petition Credit Agreement or their claims or security interests in connection with the Pre-Petition Credit Agreement or any of the other loan documents or instruments entered into in connection therewith. 
 second, all Obligations in accordance with Section 11.5, 
 third, the junior superpriority administrative claims of the Pre-Petition Lenders under Section 507(b) of the US Bankruptcy
Code, and 
 fourth, all other allowed administrative expenses under Section 503(b) of the US Bankruptcy
Code.”; 
 (b) The definition of the term “Asset Sale” is hereby amended by adding a new sentence to the end
thereof to read as follows 
 “Notwithstanding anything to the contrary set forth in this definition, from and after the
date on which the transactions contemplated by any Asset Purchase Agreement are consummated, the receipt, collection or recovery of any proceeds from any sale, transfer, liquidation or other Disposition of any asset included in the definition of
“Excluded Asset” (as defined in any applicable Asset Purchase Agreement), including, without limitation, any such Disposition or collection of Receivables or Finished Goods Inventory (as such terms are defined in any applicable Asset
Purchase Agreement) shall constitute an Asset Sale for purposes of this Agreement.”; 
 (c) The definition of the term
“Directors’ Charge” is hereby amended and restated in its entirety to read as follows: 
 “‘Directors’ Charge’: a charge not to exceed CDN$13,000,000 to secure the Directors’ Charge Expenses; as such charge shall be reduced to the greater of (i) the amount of any liabilities in respect of
Directors’ Charge Expenses that remain unpaid after giving effect to (A) any express assumption of any such liabilities in writing by a purchaser in any Asset Sale consummated from and after the Second Amendment Effective Date and
(B) any payment and satisfaction from and after the Second Amendment Effective Date of any such liabilities by any Loan Party and (ii) CDN$5,000,000.”; 
 (d) The definition of the term “Final Maturity Date” is hereby amended and restated in its entirety to read as follows:

 “‘Final Maturity Date’: the date which is the earliest of (i) April 4, 2008, (ii) the
date of both (A) the earlier of the effective date and the substantial consummation (as defined in Section 1101(2) of the US Bankruptcy Code), in each case, of a plan of reorganization in the Chapter 11 Cases that shall have been confirmed
by an order entered by the US Bankruptcy 

  

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Court and (B) the earlier of the effective date and the substantial implementation, in each case, of a plan of compromise or arrangement in the CCAA
Proceedings that shall have been sanctioned by an order entered by the Canadian Bankruptcy Court, (iii) the date upon which the Stay of Proceedings expires, (iv) the date of the closing of a sale of all or substantially all of the Loan
Parties’ assets (which shall include a sale of both the lumber and pulp divisions of the Loan Parties) pursuant to Section 363 of the US Bankruptcy Code and the CCAA, and (v) such earlier date on which all Loans and other extensions
of credit shall become due and payable in accordance with the terms of this Agreement and the other Loan Documents.”; 
 (e) The definition of the term “Material Adverse Deviation” is hereby amended and restated in its entirety to read as follows: 
 “Material Adverse Deviation”: as of any period, a negative deviation (downward, in the case of collections, and upward, in the case of disbursements) of more than (i) 15% in the case of any single line
item set forth in the Initial Budget for the applicable period or (ii) 10% in the aggregate with respect to all items set forth in the Initial budget for the applicable period, in each case, calculated for the period from the Second Amendment
Effective Date to and including the Final Maturity Date, on a weekly basis; provided, that, in the case of clause (i) and (ii) above, no amounts shall be included in the calculation of the deviation for (x) any portion of the Budget
Carryover Amount that constitutes a disbursement or payments during such period, and (y) disbursements that constitute the professional fees of the Lenders; provided, further, that (A) in the case of disbursements, the deviation in
disbursements from the Initial Budget for any weekly period shall be calculated as a percentage of, and by reference to, the disbursements set forth in the Initial Budget for such period, without giving effect to any Budget Carryover Amount
permitted to be used for such period and (B) in the case of collections, the Budget Carryover Amount shall be added to the actual collections in any given period to determine whether there has been a Material Adverse Deviation in collections
for such period. For the avoidance of doubt the first proviso and the second proviso of the foregoing definition shall be read together. The definition of the term “Net Cash Proceeds” is hereby amended and restated in its entirety to read
as follows: 
 “‘Net Cash Proceeds’: (a) the amount of all proceeds constituting cash and Cash
Equivalents of any Asset Sale or Recovery Event received by Parent, the Borrower and/or their respective Subsidiaries (including any such proceeds received by way of deferred payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and when received) minus the sum of the following (which amounts may be paid out of the gross proceeds of any such Asset Sale or Recovery Event): (i) (A) reasonable and
customary attorneys’ fees, accountants’ fees, investment banking fees (including, but not limited to, any Transaction Fee which is earned upon, and paid from the proceeds of any sale of the Loan Parties’ assets approved by the
Bankruptcy Court that gives rise to the obligation to pay such Transaction Fee), in an aggregate amount for this clause (A) not to exceed $5,000,000 in respect of all Asset Sales and Recovery Events, and (B) relocation expenses, consulting
and appraisal fees and expenses, amounts required to be applied to the repayment of Indebtedness secured by a Lien expressly permitted hereunder on any asset which is the subject of, or is owned by a Person that is the subject of, such Asset Sale or
Recovery Event (other than any Lien 

  

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pursuant to a Security Document) to the extent such Indebtedness is required to be, and is repaid in connection with such Asset Sale or Recovery Event and
reasonable and customary fees and expenses actually incurred in connection therewith and net of any income or transfer taxes paid or reasonably estimated to be payable as a result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements) and (ii) solely in connection with any such Asset Sale, any reserve established in accordance with GAAP, provided, that any such reserved amount shall be Net Cash Proceeds to the extent and at
the time such reserve is no longer required in accordance with GAAP, and (b) the amount of proceeds constituting cash and Cash Equivalents received by the Parent, the Borrower and/or any of their respective Subsidiaries from the issuance or
sale of equity securities or debt securities or instruments or the incurrence of Indebtedness, in each case net of reasonable and customary attorneys’ fees, investment banking fees, accountants’ fees, underwriting discounts and commissions
and other customary fees and expenses actually incurred in connection therewith; in each case of clause (a) and (b) to the extent, but only to the extent, that the amounts so deducted are (x) actually paid or required to be paid to a
Person that, except in the case of reasonable out-of-pocket expenses, is not an Affiliate of such Person or any of its Subsidiaries and (y) properly attributable to such transaction or to the asset that is the subject thereof.”; and

 (f) The following new definitions are hereby inserted into Section 1.1 of the Credit Agreement in the appropriate
alphabetical order, to read as follows: 
 “‘Third Amendment’: that certain Third Amendment to
Debtor-In-Posssession Credit and Security Agreement, dated as of February 26, 2008, among the Parent, the Borrower, the Lenders and the Agents and as acknowledged and agreed by the Guarantors. 
 ‘Third Amendment Effective Date’: as defined in the Third Amendment.”. 
 3. Termination or Reduction of Commitments. Section 2.11(b) of the Credit Agreement is hereby amended and restated to read as
follows: 
 “(b) The Revolving Loan Commitment shall automatically reduce by the amount of any Net Cash Proceeds applied
to repay Revolving Credit Loans under Section 2.19(a)(i) and Section 2.19(a)(iii), and shall be reduced to zero at 12:00 Noon California Time on the Final Maturity Date. Once reduced the Revolving Loan Commitment may not be increased. Each
such reduction of the Revolving Loan Commitment shall reduce the Revolving Loan Commitment of each Lender proportionately in accordance with its Pro Rata Share thereof. 
 4. Application and Allocation of Payments. Section 2.19(a)(i) of the Credit Agreement is hereby amended by inserting the following language immediately after the phrase “with respect thereto” and
immediately prior to the phrase “(other than payments made using proceeds of Revolving Credit Loans)” in the second line thereof, to read as follows: 
 “(x) an Asset Sale of “Excluded Assets” (as defined in any applicable Asset Purchase Agreement) constituting Revolving
Priority Collateral and Net Cash Proceeds thereof, (y) Revolving Priority Collateral and Proceeds thereof and (z) payments made using Revolving Priority Collateral and Proceeds thereof”. 
  

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 5. Letters of Credit. Section 3.1 of the Credit Agreement is hereby amended by inserting the
following sentence at the end of such section: “Notwithstanding anything herein to the contrary, the Issuing Lender shall have no obligation to issue, amend, renew or extend any Letter of Credit after the Third Amendment Effective Date.”

 6. Sale Procedure. Section 6.17 of the Credit Agreement is hereby amended as follows: 
 (a) Section 6.17(b)(iv) of the Credit Agreement is hereby amended and restated in its entirety to read as follows: 
 “(iv) Consummate, as soon as practicable after the conditions to closing as set forth in the relevant asset purchase agreement are
satisfied and/or waived, but in any event no later than the Final Maturity Date, one or more sales of all or substantially all of the assets of the wood products business.”; and 
 (b) Section 6.17(c)(iv) of the Credit Agreement is hereby amended and restated in its entirety to read as follows: 
 “(iv) Consummate, as soon as practicable after the conditions to closing as set forth in the relevant asset purchase agreement are
satisfied and/or waived, but in any event no later than the Final Maturity Date, one or more sales of all or substantially all of the assets of the pulp business.”. 
 7. Appointment of Chief Restructuring Officer. Section 6 of the Credit Agreement is hereby amended by adding a new covenant and with respect thereto inserting a new Section 6.18 to read as follows:

 “Section 6.18 Appointment of Chief Restructuring Officer. As soon as reasonably practical and in any event by
March 1, 2008, appoint, pursuant to an engagement letter or other agreement (in form and substance reasonably satisfactory to the Agents as to the terms and scope of engagement) and subject to approval by each Bankruptcy Court, a chief
restructuring officer reasonably satisfactory to the Agents.” 
 8. Event of Default. Section 8 of the Credit Agreement is
hereby amended by (a) inserting the word “or” immediately after the semicolon at the end of subsection (bb), and (b) inserting after subsection (bb) a new subsection (cc) to read as follows: 
 “(cc) with respect to any of the Asset Purchase Agreements, any such agreement shall at any time for any reason cease to be in full
force and effect;”. 
  

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 9. Conditions. This Amendment shall become effective as of the date hereof, but only upon the
satisfaction in full, in a manner reasonably satisfactory to the Agents, of the following conditions precedent (the first date upon which all such conditions have been satisfied being herein called the “Third Amendment Effective
Date”): 
 (a) Representations and Warranties. The representations and warranties contained in this Amendment
and in Section 4 of the Credit Agreement and in each other Loan Document, certificate or other writing delivered on or on behalf of any Loan Party to any Agent or any Lender pursuant to the Credit Agreement or any other Loan Document on or
prior to the Third Amendment Effective Date shall be true and correct on and as of the Third Amendment Effective Date as though made on and as of such date (except where such representations and warranties relate to an earlier date in which case
such representations and warranties shall be true and correct as of such earlier date). 
 (b) No Event of Default. No
Default or Event of Default shall have occurred and be continuing on the Third Amendment Effective Date or would result from this Amendment becoming effective in accordance with its terms. 
 (c) Delivery of Documents. The Agents shall have received on or before the Third Amendment Effective Date the following, each in
form and substance reasonably satisfactory to the Agents and, unless indicated otherwise, dated the Third Amendment Effective Date: 
 (i) counterparts of this Amendment which bear the signatures of the Parent, the Borrower, the Guarantors, the Agents and the Lenders; and 
 (ii) an acknowledgment and consent, in the form attached as Exhibit A to this Amendment, duly executed by each Guarantor. 
 (d) Bankruptcy Court Orders. Each Bankruptcy Court shall have signed, made and/or entered appropriate orders approving the amendments and other transactions contemplated by this Amendment and the Administrative
Agent and the Collateral Agent shall have received a true and complete copy of each such order in form and substance satisfactory to the Agents, and each such order shall be in full force and effect and shall not have been reversed, modified,
amended, stayed or vacated and shall not be subject to a pending appeal or motion for leave to appeal or other proceeding to set aside any such order absent prior written consent of the Agents, the Lenders and the Borrower. 
 (e) Proceedings. All legal matters incident to this Amendment shall be reasonably satisfactory to the Agents and their counsel.

 (f) Amendment Fee. The Administrative Agent shall have received, for the account of the Revolving Credit Lenders, a
non-refundable amendment fee in an amount equal to $50,000, which shall be deemed fully earned when paid. 
  

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 10. Representations and Warranties. To induce the Agents and Lenders to enter into this Amendment,
each of the Parent and the Borrower hereby represents and warrants to the Agents and Lenders as follows: 
 (a)
Organization, Good Standing, Etc. Each Loan Party (i) is duly organized, validly existing and in good standing under the laws of the state or jurisdiction of its organization, (ii) has all requisite power and authority to conduct
the business in which it is currently engaged, and to execute and deliver this Amendment, and to consummate the transactions contemplated hereby and by the Credit Agreement, as amended hereby, and (iii) is duly qualified to do business and is
in good standing in each jurisdiction in which its ownership, lease or operation of Property or the conduct of its business requires such qualification, except where the failure to be so qualified could not reasonably be expected to have a Material
Adverse Effect. 
 (b) Authorization, Etc. The execution, delivery and performance of this Amendment and each other
Loan Document being executed in connection with this Amendment by each Loan Party that is a party thereto, and the performance of the Credit Agreement as amended hereby (i) have been duly authorized by all necessary action, (ii) do not and
will not contravene any Loan Party’s Constituent Documents or any applicable law or any material contractual restriction binding on or otherwise affecting it or any of its properties, (iii) do not and will not result in or require the
creation of any Lien (other than pursuant to any Loan Document) upon or with respect to any of its properties, and (iv) do not and will not result in any default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of
any material permit, license, authorization or approval applicable to its operations or any of its properties. 
 (c)
Governmental Approvals. No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or other regulatory body or any Bankruptcy Court is required in connection with the due execution, delivery
and performance by any Loan Party of this Amendment or any other Loan Document to which it is a party being executed in connection with this Amendment, or for the performance of the Credit Agreement, as amended hereby, except to the extent any such
authorization, approval, action, notice or filing has been obtained, taken, given or filed (as the case maybe) and is in full force and effect or is referred to in clause (d) of Section 7 of this Amendment. 
 (d) Enforceability of Loan Documents. Each of this Amendment, the Credit Agreement, as amended hereby, and each other Loan Document
is a legal, valid and binding obligation of each Loan Party party thereto, enforceable against such Loan Party in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws of general application relating to the enforcement of creditor’s rights and by general equitable principles. 
 (e) Representations and Warranties; No Event of Default. The representations and warranties herein, in Section 4 of the Credit Agreement and in each other Loan Document are true and correct on and as of
the Third Amendment Effective Date as though made on and as of such date (except where such representations and warranties relate to an earlier date in which case such representations and warranties shall be true and correct as of such earlier
date), and no Default or Event of Default has occurred and is continuing as of the Third Amendment Effective Date or would result from this Amendment becoming effective in accordance with its terms. 
  

 -8- 

 11. Continued Effectiveness of the Credit Agreement and Loan Documents. Each of the Parent and the
Borrower hereby (i) acknowledges and consents to this Amendment, (ii) confirms and agrees that each Loan Document to which it is a party is, and shall continue to be, in full force and effect and is hereby ratified and confirmed in all
respects except that on and after the Third Amendment Effective Date all references in any such Loan Document to “the Credit Agreement”, the “Agreement”, “thereto”, “thereof”, “thereunder” or words
of like import referring to the Credit Agreement shall mean the Credit Agreement as amended by this Amendment, and (iii) confirms and agrees that to the extent that any such Loan Document purports to assign or pledge to the Collateral Agent for
the ratable benefit of the Secured Parties, or to grant to the Collateral Agent for the ratable benefit of the Secured Parties a security interest in or Lien on, any Collateral as security for the Obligations of any Loan Party from time to time
existing in respect of the Credit Agreement and the Loan Documents, such pledge, assignment and/or grant of the security interest or Lien is hereby ratified and confirmed in all respects. This Amendment does not and shall not affect any of the
Obligations of any Loan Party, other than as expressly provided herein. 
 12. Amendment as Loan Document. Each of the Parent and the
Borrower hereby acknowledges and agrees that this Amendment constitutes a “Loan Document” under the Credit Agreement. Accordingly, it shall be an Event of Default under the Credit Agreement if (1) any representation or warranty made
by the Parent or the Borrower under or in connection with this Amendment shall have been untrue, false or misleading in any material respect when made, or (2) the Parent or the Borrower shall fail to perform or observe any term, covenant or
agreement contained in this Amendment. 
 13. Miscellaneous. 
 (a) This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which
shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of this Amendment by telefacsimile or electronic mail shall be equally effective as delivery of an
original executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by telefacsimile or electronic mail also shall deliver an original executed counterpart of this Amendment, but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability and binding effect of this Amendment. 
 (b)
Section and paragraph headings herein are included for convenience of reference only and shall not constitute a part of this Amendment for any other purpose. 
 (c) The Borrower will pay on demand all reasonable fees, costs and expenses of the Agents in connection with the preparation, execution
and delivery of this Amendment and all documents incidental hereto, including, without limitation, the reasonable fees, disbursements and other charges of counsel to the Collateral Agent and the Administrative Agent. 
  

 -9- 

 (d) THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK. 
 (e) Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. 
 (f) THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AMENDMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. 
 [Signature Page Follows] 
  

 -10- 

 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered as of the
date set forth on the first page hereof. 
  

					
	PARENT:
	
	POPE & TALBOT, INC., as a Debtor and Debtor-in-Possession under the US Bankruptcy Code and as a debtor company under the CCAA
		
	By:	 	/s/ R. Neil Stuart
		 	Name:	 	R. Neil Stuart
		 	Title:	 	VP & CFO
	
	BORROWER:
	
	POPE & TALBOT LTD., as a Debtor and Debtor-in-Possession under the US Bankruptcy Code and as a debtor company under the CCAA
		
	By:	 	/s/ R. Neil Stuart
		 	Name:	 	R. Neil Stuart
		 	Title:	 	VP & CFO

					
	COLLATERAL AGENT AND TERM LOAN B AGENT:
	
	 ABLECO FINANCE LLC,
 on behalf of itself and
its Affiliate assigns

		
	By:	 	/s/ Dan Wolf
		 	Name:	 	Dan Wolf
		 	Title:	 	President

					
	ADMINISTRATIVE AGENT AND LENDER:
	
	WELLS FARGO FINANCIAL CORPORATION CANADA
		
	By:	 	/s/ Nick Scarfo
		 	Name:	 	Nick Scarfo
		 	Title:	 	Vice President

					
	LENDERS:
	
	STYX PARTNERS, L.P.
		
	By:	 	Styx Associates, LLC, as its General Partner
		
	By:	 	/s/ Jeffrey L Lomasky
		 	Name:	 	Jeffrey L Lomasky
		 	Title:	 	Sr. Managing Director

					
	OHSF FINANCING, LTD.
		
	By:	 	/s/ Robert Okun
		 	Name:	 	Robert Okun
		 	Title:	 	Authorized
	
	OHSF II FINANCING, LTD.
		
	By:	 	/s/ Robert Okun
		 	Name:	 	Robert Okun
		 	Title:	 	Authorized Person
	
	OAK HILL CREDIT OPPORTUNITIES FINANCING, LTD.
		
	By:	 	/s/ Robert Okun
		 	Name:	 	Robert Okun
		 	Title:	 	Authorized Person
	
	OAK HILL CREDIT ALPHA FINANCE I, LLC
		
	By:	 	Oak Hill Credit Alpha Fund, L.P., its Member
		
	By:	 	Oak Hill Credit Alpha Gen Par, L.P., its General Partner
		
	By:	 	Oak Hill Credit Alpha MGP, LLC, its General Partner
		
	By:	 	/s/ Robert Okun
		 	Name:	 	Robert Okun
		 	Title:	 	Authorized Person

					
	OAK HILL CREDIT ALPHA FINANCE I (OFFSHORE), LTD.
		
	By:	 	/s/ Robert Okun
		 	Name:	 	Robert Okun
		 	Title:	 	Authorized Person
	
	LERNER ENTERPRISES, LLC (fka Lerner Enterprises, LP)
		
	By:	 	Oak Hill Advisors, L.P., as Investment Advisor for Lerner Enterprises, L.P.
		
	By:	 	/s/ Robert Okun
		 	Name:	 	Robert Okun
		 	Title:	 	Authorized Person
	
	OHA CAPITAL SOLUTIONS, L.P.
		
	By:	 	OHA Capital Solutions GenPar, L.P., its General Partner
		
	By:	 	OHA Capital Solutions MGP, LLC, its General Partner
		
	By:	 	/s/ Robert Okun
		 	Name:	 	Robert Okun
		 	Title:	 	Authorized Person
	
	OHA CAPITAL SOLUTIONS, LTD.
		
	By:	 	/s/ Robert Okun
		 	Name:	 	Robert Okun
		 	Title:	 	Authorized Person

					
	REGIMENT CAPITAL SPECIAL SITUATIONS FUND III, L.P.
		
	By:	 	Regiment Capital GP, LLC, its General Partner
		
	By:	 	/s/ Richard T. Miller
		 	Name:	 	Richard T. Miller
		 	Title:	 	Authorized Signatory

					
	DRAWBRIDGE SPECIAL OPPORTUNITIES FUND LP
		
	By:	 	Drawbridge Special Opportunities GP LLC, its general partner
		
	By:	 	/s/ Constantine M. Dakolias
		 	Name:	 	Constantine M. Dakolias
		 	Title:	 	President

					
	CREDIT GENESIS CLO 2005-1 LTD.
		
	By:	 	/s/ Maurine R. Bartlett
		 	Name:	 	Maurine R. Bartlett
		 	Title:	 	 Partner, Cadwalader, Wickersham & Taft LLP
 Pursuant to a Power of Attorney

	
	DURHAM ACQUISITION CO., LLC
		
	By:	 	/s/ Maurine R. Bartlett
		 	Name:	 	Maurine R. Bartlett
		 	Title:	 	 Partner, Cadwalader, Wickersham & Taft LLP
 Pursuant to a Power of Attorney

					
	HBK MASTER FUND L.P.
		
	By:	 	HBK Services LLC its Investment Advisor
		
	By:	 	/s/ J. Baker Gentry, Jr.
		 	Name:	 	J. Baker Gentry, Jr.
		 	Title:	 	Authorized Signatory

					
	BANK OF AMERICA, N.A.
		
	By:	 	/s/ Jonathan M. Barnes
		 	Name:	 	Jonathan M. Barnes
		 	Title:	 	Vice President

					
	CONCORDIA PARTNERS, L.P. acting by and through Concordia Advisors, L.L.C., as a Lender
		
	By:	 	/s/ Allan A. Brown
		 	Name:	 	Allan A. Brown
		 	Title:	 	Portfolio Manager

					
	MONARCH MASTER FUNDING LTD
		
	By:	 	Monarch Alternative Capital LP
		 	Its:	 	Advisor

					
		
	By:	 	/s/ Andrew J. Herenstein
		 	Name:	 	Andrew J. Herenstein
		 	Title:	 	Managing Principal

					
	DK ACQUISITION PARTNERS, L.P.
		
	By:	 	M.H. Davidson & Co., its General Partner
		
	By:	 	/s/ Avram Friedman
		 	Name:	 	Avram Friedman
		 	Title:	 	General Partner

					
	ABN AMRO BANK N.V., Canada Branch
		
	By:	 	/s/ David W. Stack
		 	Name:	 	David W. Stack
		 	Title:	 	Senior Vice President
		
	By:	 	/s/ William J. Fitzgerald
		 	Name:	 	William J. Fitzgerald
		 	Title:	 	Group Senior Vice President

 EXHIBIT A 
 ACKNOWLEDGMENT AND CONSENT 
 The undersigned, as a party to one or more Loan Documents, as defined in
the Debtor-in-Possession Credit and Security Agreement dated as of November 19, 2007 (as heretofore amended or otherwise modified, the “Credit Agreement”), by and among POPE & TALBOT, INC., a Delaware corporation, as a
debtor and debtor-in-possession under the US Bankruptcy Code (the “Parent”), POPE & TALBOT LTD., a Canadian corporation, as a debtor and debtor-in-possession under the US Bankruptcy Code, and as a debtor company under the
CCAA (the “Borrower”), the Guarantors set forth on the signature pages thereto, the several banks and other financial institutions or entities from time to time parties thereto (the “Lenders”), WELLS FARGO FINANCIAL
CORPORATION CANADA, a Nova Scotia unlimited liability company, as administrative agent (in such capacity, together with its permitted successors and assigns, the “Administrative Agent”), ABLECO FINANCE LLC, as Collateral Agent (in
such capacity, together with its permitted successors and assigns, the “Collateral Agent”), and ABLECO FINANCE LLC, as Term Loan B Agent (in such capacity, together with its permitted successors and assigns, the “Term Loan B
Agent” and together with the Administrative Agent and the Collateral Agent, each an “Agent” and collectively, the “Agents”), hereby (i) acknowledges and consents to the First Amendment dated the date
hereof (the “Amendment”, all terms defined therein being used herein as defined therein) to the Credit Agreement; (ii) confirms and agrees that each Loan Document to which it is a party is, and shall continue to be, in full
force and effect and is hereby ratified and confirmed in all respects except that on and after the Third Amendment Effective Date all references in any such Loan Documents to “the Credit Agreement”, “thereto”,
“thereof”, “thereunder” or words of like import referring to the Credit Agreement shall mean the Credit Agreement as amended by the Amendment; and (iii) confirms and agrees that to the extent that any such Loan Document
purports to assign or pledge to the Collateral Agent, for the benefit of the Secured Parties, or to grant to the Collateral Agent, for the benefit of the Secured Parties, a security interest in or lien on, any collateral as security for the
obligations of any Guarantor from time to time existing in respect of the Loan Documents, such pledge, assignment and/or grant of a security interest or lien is hereby ratified and confirmed in all respects as security for, in addition to the other
obligations secured thereby, all obligations of such Guarantors outstanding upon the taking effect of the Amendment. 
 Dated: as of February 26, 2008

 [signature pages follow] 

					
	POPE & TALBOT SPEARFISH LIMITED PARTNERSHIP, as a Debtor and Debtor-in-Possession under the US Bankruptcy Code
		
	By:	 	POPE & TALBOT LTD., as a Debtor and Debtor-in-Possession under the US Bankruptcy Code and as a debtor company under the CCAA, as its General Partner
		
	By:	 	/s/ R. Neil Stuart
		 	Name:	 	R. Neil Stuart
		 	Title:	 	VP & CFO
	
	PENN TIMBER, INC., as a Debtor and Debtor-in-Possession under the US Bankruptcy Code and as a debtor company under the CCAA
		
	By:	 	/s/ R. Neil Stuart
		 	Name:	 	R. Neil Stuart
		 	Title:	 	VP & CFO
	
	POPE & TALBOT RELOCATION SERVICES, INC., as a Debtor and Debtor-in-Possession under the US Bankruptcy Code and as a debtor company under the CCAA
		
	By:	 	/s/ R. Neil Stuart
		 	Name:	 	R. Neil Stuart
		 	Title:	 	VP & CFO
	
	P&T POWER COMPANY, as a Debtor and Debtor-in-Possession under the US Bankruptcy Code and as a debtor company under the CCAA
		
	By:	 	/s/ R. Neil Stuart
		 	Name:	 	R. Neil Stuart
		 	Title:	 	VP & CFO

					
	POPE & TALBOT PULP SALES U.S., INC., as a Debtor and Debtor-in-Possession under the US Bankruptcy Code and as a debtor company under the CCAA
		
	By:	 	/s/ R. Neil Stuart
		 	Name:	 	R. Neil Stuart
		 	Title:	 	VP & CFO
	
	POPE & TALBOT LUMBER SALES, INC., as a Debtor and Debtor-in-Possession under the US Bankruptcy Code and as a debtor company under the CCAA
		
	By:	 	/s/ R. Neil Stuart
		 	Name:	 	R. Neil Stuart
		 	Title:	 	VP & CFO
	
	MACKENZIE PULP LAND LTD., as a Debtor and Debtor-in-Possession under the US Bankruptcy Code and as a debtor company under the CCAA
		
	By:	 	/s/ R. Neil Stuart
		 	Name:	 	R. Neil Stuart
		 	Title:	 	VP & CFO

					
	P&T LFP INVESTMENT LIMITED PARTNERSHIP, as a Debtor and Debtor-in-Possession under the US Bankruptcy Code
		
	By:	 	P&T FUNDING LTD., as a Debtor and Debtor-in-Possession under the US Bankruptcy Code and as a debtor company under the CCAA, as its General Partner
		
	By:	 	/s/ R. Neil Stuart
		 	Name:	 	R. Neil Stuart
		 	Title:	 	VP & CFO
	
	P&T FUNDING LTD., as a Debtor and Debtor-in-Possession under the US Bankruptcy Code and as a debtor company under the CCAA
		
	By:	 	/s/ R. Neil Stuart
		 	Name:	 	R. Neil Stuart
		 	Title:	 	VP & CFO
	
	P&T FINANCE ONE LIMITED PARTNERSHIP, as a Debtor and Debtor-in-Possession under the US Bankruptcy Code
		
	By:	 	PENN TIMBER, INC., as a Debtor and Debtor-in-Possession under the US Bankruptcy Code and as a debtor company under the CCAA, as its General Partner
		
	By:	 	/s/ R. Neil Stuart
		 	Name:	 	R. Neil Stuart
		 	Title:	 	VP & CFO

					
	 P&T FINANCE TWO LIMITED PARTNERSHIP,
 as
a Debtor and Debtor-in-Possession under the US Bankruptcy Code

		
	By:	 	PENN TIMBER, INC., as a Debtor and Debtor-in-Possession under the US Bankruptcy Code and as a debtor company under the CCAA, as its General Partner
		
	By:	 	/s/ R. Neil Stuart
		 	Name:	 	R. Neil Stuart
		 	Title:	 	VP & CFO
	
	P&T FACTORING LIMITED PARTNERSHIP as a Debtor and Debtor-in-Possession under the US Bankruptcy Code
		
	By:	 	POPE & TALBOT PULP SALES U.S., INC., as a Debtor and Debtor-in-Possession under the US Bankruptcy Code and as a debtor company under the CCAA, as its Managing General
Partner
		
	By:	 	/s/ R. Neil Stuart
		 	Name:	 	R. Neil Stuart
		 	Title:	 	VP & CFO
	
	P&T FINANCE THREE LLC, as a Debtor and Debtor-in-Possession under the US Bankruptcy Code and as a debtor company under the CCAA
		
	By:	 	POPE & TALBOT LTD., as a Debtor and Debtor-in-Possession under the US Bankruptcy Code and as a debtor company under the CCAA, as its Manager
		
	By:	 	/s/ R. Neil Stuart
		 	Name:	 	R. Neil Stuart
		 	Title:	 	VP & CFO

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