Document:

Second Amendment to Debtor-in-Possession Credit and Security Agreement

 Exhibit 4.1 
 Execution Copy 
 SECOND AMENDMENT TO DEBTOR-IN-POSSESSION CREDIT AND SECURITY AGREEMENT

 SECOND AMENDMENT, dated as of February 14, 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 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 15, 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 “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) February 27, 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 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.”; 
 (b) The definition of the term
“Initial Budget” is hereby amended and restated in its entirety to read as follows: 
 “‘Initial
Budget’: the cash requirement forecast setting forth cash collections and disbursements of the Loan Parties for the periods covered thereby (which forecast shall include a calculation of Availability during such period, identify the amount
of financing that will be required during each week of such period and identify, on a schedule thereto, the professionals and the projected professional fees and disbursements expected to be paid to such professionals as Administration Charge
Expenses and US Carve-Out Expenses during such period) prepared on a weekly basis by or on behalf of the Borrower and delivered by the Borrower to the Agents and the Lenders on or before the Second Amendment Effective Date pursuant to Section 4
of the Second Amendment, a summary of which is attached to the Second Amendment as Schedule I-1A (which such forecast shall update and extend the forecast previously delivered on or prior to the Interim Facility Effective Date pursuant to
Section 5.1(v) hereto), together with and as superseded and replaced by the Updated Budget that is required to be delivered by the Borrower to the Agents and the Lenders, in accordance with Section 6.2(g).”; and 
 (c) The following new definitions are hereby inserted into Section 1.1 of the Credit Agreement in the appropriate alphabetical order,
to read as follows: 
 “‘Asset Purchase Agreements’: individually and collectively, the Lumber APA and
the Pulp APA.” 
 “‘Lumber APA’: the Asset Purchase Agreement, dated as of November 19, 2007,
among the Parent, Borrower, Pope & Talbot Lumber Sales, Inc., a Delaware corporation, Pope & Talbot Spearfish Limited Partnership, a South Dakota limited partnership, and International Forest Products Limited, a British Columbia
corporation.” 
  

 -2- 

 “‘Pulp APA’: the Asset Purchase Agreement, dated as of
January 8, 2008, among the Parent, Borrower, Pope & Talbot Pulp Sales U.S., Inc., a Delaware corporation, Mackenzie Pulp Land Ltd., a Province of British Columbia corporation, P&T Power Company, an Oregon corporation , and PT Pindo
Deli Pulp and Paper Mills, an Indonesian corporation.” 
 “‘Second Amendment’: that certain Second
Amendment to Debtor-In-Posssession Credit and Security Agreement, dated as of February 14, 2008, among the Parent, the Borrower, the Lenders and the Agents and as acknowledged and agreed by the Guarantors. 
 ‘Second Amendment Effective Date’: as defined in the Second Amendment”. 
 3. Financial Condition. Section 4.1(d) of the Credit Agreement is hereby amended and restated in its entirety to read as follows: 

“(d) The Loan Parties have no accrued and unpaid liabilities of the type described in Section 2.5(c)(ii) or 2.5(c)(iii) of
this Agreement, including Other Statutory Liabilities, other than those that (i) are provided for in the Initial Budget (subject to deviations that would not constitute Material Adverse Deviations) delivered on or prior to the Interim Facility
Effective Date, (ii) have been disclosed in writing to the Agents (including pursuant to Schedule 2.5(A)) or (iii) do not materially increase the then current or accrued liabilities that have been previously disclosed to the
Agents”. 
 4. 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 “Second 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 Second Amendment
Effective Date shall be true and correct on and as of the Second 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 Second 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 Second Amendment Effective Date the following, each in
form and substance reasonably satisfactory to the Agents and, unless indicated otherwise, dated the Second Amendment Effective Date: 
 (i) counterparts of this Amendment which bear the signatures of the Parent, the Borrower, the Guarantors, the Agents and the Lenders; 
  

 -3- 

 (ii) an acknowledgment and consent, in the form attached as Exhibit A to this Amendment,
duly executed by each Guarantor; and 
 (iii) a copy of the Initial Budget which updates and extends the cash requirement
forecast delivered on or prior to the Interim Facility Effective Date in accordance with Section 5.1(v) of the Credit Agreement, together with a certificate of a duly authorized officer of the Borrower stating that such Initial Budget has been
prepared on a reasonable basis and in good faith and is based on assumptions believed by the Borrower to be reasonable at the time made and is consistent with all information then reasonably available to the Borrower, 
 (d) Orders for Approval of Sale. The Agents shall be satisfied in their Permitted Discretion that each Bankruptcy Court has signed,
made and/or entered one or more orders approving the sale of all or substantially all of the assets of the pulp business to PT Pindo Deli Pulp & Paper Mills, a company organized under the laws of Indonesia pursuant to the terms of the Pulp
APA, each of which shall be in form and substance satisfactory to the Agents. 
 (e) Proceedings. All legal matters
incident to this Amendment shall be reasonably satisfactory to the Agents and their counsel. 
 5. Conditions Subsequent. Subject to
the approval of each Bankruptcy Court, on or prior to February 27, 2008, each Loan Party agrees to execute, deliver and perform the Third Amendment in substantially the same form as Exhibit B attached hereto. 
 6. 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. 
  

 -4- 

 (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 4 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 Second 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 Second Amendment Effective Date or would result from this Amendment becoming effective in accordance with its terms. 
 7. 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 Second
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 

  

 -5- 

 
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. 
 8. 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. 
 9. 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. 
 (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. 
  

 -6- 

 (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] 
  

 -7- 

 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 Person
	
	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, L.P.
		
	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 Investments L.L.C.
 its Investment
Advisor

		
	By:	 	/s/ Kevin O’Neal
		 	Name:	 	Kevin O’Neal
		 	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 and Co-head of
 Distressed Debt
Trading

					
	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/ Anthony Yoseloff
		 	Name:	 	Anthony Yoseloff
		 	Title:	 	General Partner

					
	ABN AMRO BANK N.V., Canada Branch
		
	By:	 	/s/ Aaron Turner
		 	Name:	 	Aaron Turner
		 	Title:	 	Senior Vice President
		
	By:	 	/s/ Darcy Mack
		 	Name:	 	Darcy Mack
		 	Title:	 	First Vice President

 SCHEDULE 1.1A 
 INITIAL BUDGET 
 Pope & Talbot Weekly Cash Forecast 
 Forecast - All Sites Consolidated  
 (USD $000’s) 

  

																																																							
	  	 	 	 	ACTUAL	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Current Week Ending
	 	Week in
Fiscal
Year
Cash
Forecast
Week
1/18/2008	 	3
1
Week
Ending
1/18/2008	 	 	4
2
Week
Ending
1/25/2008	 	 	5
3
Week
Ending
2/1/2008	 	 	6
4
Week
Ending
2/8/2008	 	 	7
5
Week
Ending
2/15/2008	 	 	8
6
Week
Ending
2/22/2008	 	 	9
7
Week
Ending
2/29/2008	 	 	10
8
Week
Ending
3/7/2008	 	 	11
9
Week
Ending
3/14/2008	 	 	12
10
Week
Ending
3/21/2008	 	 	13
11
Week
Ending
3/28/2008	 	 	14
12
Week
Ending
4/4/2008	 	 	Totals	 
	 Operating Cash Flow
	 		 				 				 				 				 				 				 				 				 				 				 				 				 			
	 Total Receipts
	 		 	 	11,924	 	 	 	12,117	 	 	 	10,500	 	 	 	9,687	 	 	 	15,425	 	 	 	13,877	 	 	 	16,485	 	 	 	9,070	 	 	 	12,417	 	 	 	13,852	 	 	 	17,123	 	 	 	12,296	 	 	 	154,773	 
	 Bankruptcy Related Disbursements
	 		 				 				 				 				 				 				 				 				 				 				 				 				 			
	 Utility Deposits
	 		 	$	—  	 	 	$	—  	 	 	$	—  	 	 	$	—  	 	 	$	—  	 	 	$	—  	 	 	$	—  	 	 	$	—  	 	 	$	—  	 	 	$	—  	 	 	$	—  	 	 	$	—  	 	 	$	—  	 
	 Prepetition Freight, Shippers & Warehousers
	 		 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 
	 Prepetition Critical Vendors
	 		 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(400	)	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(400	)
	 Prepetition Lien Holders
	 		 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 
	 Prepetition Sales Agent
	 		 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 
	 Management Incentive Plan
	 		 	 	—  	 	 	 	—  	 	 	 	(436	)	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(382	)	 	 	(818	)
	 Professional Fees
	 		 	 	(280	)	 	 	(473	)	 	 	(1,040	)	 	 	(350	)	 	 	—  	 	 	 	(2,790	)	 	 	—  	 	 	 	(350	)	 	 	—  	 	 	 	(4,320	)	 	 	—  	 	 	 	(350	)	 	 	(9,953	)
	 Other
	 		 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 
		 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Total
	 		 	 	(280	)	 	 	(473	)	 	 	(1,476	)	 	 	(750	)	 	 	—  	 	 	 	(2,790	)	 	 	—  	 	 	 	(350	)	 	 	—  	 	 	 	(4,320	)	 	 	—  	 	 	 	(732	)	 	 	(11,171	)
	 Operating Cash Disbursements
	 		 				 				 				 				 				 				 				 				 				 				 				 				 			
	 Payroll
	 		 	 	(1,159	)	 	 	(1,612	)	 	$	(1,369	)	 	$	(1,421	)	 	$	(1,369	)	 	$	(1,343	)	 	$	(1,369	)	 	$	(1,310	)	 	$	(488	)	 	$	(1,915	)	 	$	(444	)	 	$	(3,319	)	 	$	(17,116	)
	 Vacation Payout
	 		 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 
	 Payroll Taxes and Benefits
	 		 	 	(2,227	)	 	 	(1,283	)	 	 	(1,433	)	 	 	(1,273	)	 	 	(1,433	)	 	 	(1,255	)	 	 	(1,433	)	 	 	(1,238	)	 	 	(561	)	 	 	(1,915	)	 	 	(561	)	 	 	(3,464	)	 	 	(18,077	)
	 Logs & Fiber
	 		 	 	(3,647	)	 	 	(4,976	)	 	 	(4,118	)	 	 	(4,615	)	 	 	(4,489	)	 	 	(5,286	)	 	 	(5,658	)	 	 	(4,760	)	 	 	(4,760	)	 	 	(4,722	)	 	 	(4,776	)	 	 	(4,468	)	 	 	(56,274	)
	 Utilities / Energy
	 		 	 	(2,095	)	 	 	(1,544	)	 	 	(659	)	 	 	(1,191	)	 	 	(1,374	)	 	 	(2,041	)	 	 	(1,527	)	 	 	(720	)	 	 	(1,054	)	 	 	(1,765	)	 	 	(1,566	)	 	 	(490	)	 	 	(16,026	)
	 Freight
	 		 	 	(1,525	)	 	 	(1,734	)	 	 	(1,813	)	 	 	(2,361	)	 	 	(2,330	)	 	 	(2,326	)	 	 	(2,315	)	 	 	(1,961	)	 	 	(1,951	)	 	 	(1,951	)	 	 	(1,911	)	 	 	(1,489	)	 	 	(23,665	)
	 Chemicals
	 		 	 	(873	)	 	 	(1,120	)	 	 	(901	)	 	 	(974	)	 	 	(928	)	 	 	(979	)	 	 	(901	)	 	 	(974	)	 	 	(928	)	 	 	(974	)	 	 	(926	)	 	 	(974	)	 	 	(11,452	)
	 Operating Supplies
	 		 	 	(365	)	 	 	(261	)	 	 	(406	)	 	 	(390	)	 	 	(412	)	 	 	(400	)	 	 	(396	)	 	 	(401	)	 	 	(432	)	 	 	(401	)	 	 	(418	)	 	 	(331	)	 	 	(4,612	)
	 A/P Payments
	 		 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 
	 Maintenance Materials & Contract Services
	 		 	 	(503	)	 	 	(680	)	 	 	(589	)	 	 	(529	)	 	 	(521	)	 	 	(518	)	 	 	(512	)	 	 	(517	)	 	 	(571	)	 	 	(570	)	 	 	(604	)	 	 	(530	)	 	 	(6,645	)
	 Sales Commissions
	 		 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(410	)	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(385	)	 	 	—  	 	 	 	—  	 	 	 	(794	)
	 Lease Payments
	 		 	 	(220	)	 	 	(33	)	 	 	(145	)	 	 	(83	)	 	 	(103	)	 	 	(89	)	 	 	(148	)	 	 	(73	)	 	 	(94	)	 	 	(95	)	 	 	(111	)	 	 	(30	)	 	 	(1,223	)
	 Lumber Duties
	 		 	 	—  	 	 	 	—  	 	 	 	(357	)	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(561	)	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(542	)	 	 	(1,460	)
	 Pension Contribution
	 		 	 	(1,381	)	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(1,381	)
	 Taxes (Property & Other)
	 		 	 	—  	 	 	 	(138	)	 	 	(340	)	 	 	(375	)	 	 	(581	)	 	 	(409	)	 	 	(513	)	 	 	(362	)	 	 	(353	)	 	 	(379	)	 	 	(484	)	 	 	(337	)	 	 	(4,272	)
	 Brussels Office
	 		 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 
	 Insurance
	 		 	 	(371	)	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(225	)	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(597	)
	 Professional Fees
	 		 	 	(11	)	 	 	(122	)	 	 	(23	)	 	 	(24	)	 	 	(23	)	 	 	(271	)	 	 	(23	)	 	 	(21	)	 	 	(26	)	 	 	(271	)	 	 	(23	)	 	 	(21	)	 	 	(855	)
	 Interest and Financing Costs on Revolver
	 		 	 	—  	 	 	 	—  	 	 	 	(470	)	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(428	)	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(519	)	 	 	(1,417	)
	 Capital Expenditures
	 		 	 	—  	 	 	 	—  	 	 	 	(112	)	 	 	(49	)	 	 	(73	)	 	 	(73	)	 	 	(73	)	 	 	(73	)	 	 	(99	)	 	 	(73	)	 	 	(73	)	 	 	(73	)	 	 	(772	)
	 Other
	 		 	 	(364	)	 	 	(152	)	 	 	(350	)	 	 	(131	)	 	 	(146	)	 	 	(135	)	 	 	(501	)	 	 	(145	)	 	 	(131	)	 	 	(131	)	 	 	(136	)	 	 	(132	)	 	 	(2,453	)
		 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Total Operating Disbursements
	 		 	 	(14,741	)	 	 	(13,653	)	 	 	(13,085	)	 	 	(13,415	)	 	 	(13,782	)	 	 	(15,535	)	 	 	(16,154	)	 	 	(12,981	)	 	 	(11,448	)	 	 	(15,546	)	 	 	(12,033	)	 	 	(16,716	)	 	 	(169,091	)
	 Total Disbursements
	 		 	$	(15,022	)	 	$	(14,126	)	 	$	(14,561	)	 	$	(14,165	)	 	$	(13,782	)	 	$	(18,325	)	 	$	(16,154	)	 	$	(13,331	)	 	$	(11,448	)	 	$	(19,866	)	 	$	(12,033	)	 	$	(17,448	)	 	$	(180,262	)
		 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Net Cash Flow
	 		 	$	(3,097	)	 	$	(2,009	)	 	$	(4,061	)	 	$	(4,478	)	 	$	1,643	 	 	$	(4,448	)	 	$	331	 	 	$	(4,261	)	 	$	969	 	 	$	(6,014	)	 	$	5,090	 	 	$	(5,153	)	 	$	(25,489	)
		 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 DIP Commitment Fee
	 		 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 
	 Term Lender Advisor Fees
	 		 	 	—  	 	 	 	—  	 	 	 	(1,000	)	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(1,000	)	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(1,000	)	 	 	(3,000	)
		 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Grand Total Net Cash Flow
	 		 	$	—  	 	 	$	—  	 	 	$	(1,000	)	 	$	—  	 	 	$	—  	 	 	$	—  	 	 	$	—  	 	 	$	(1,000	)	 	$	—  	 	 	$	—  	 	 	$	—  	 	 	$	(1,000	)	 	$	(28,489	)
		 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

  

	[1]	Cash collections during the week ending 2/1/08 are presented on the consolidated summary only as the estimated receipts for the week were not available by division at time of
analysis. 

 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 Second 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 14, 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

 Final Version 
 EXHIBIT B 
 FORM OF THIRD AMENDMENT TO DEBTOR-IN-POSSESSION CREDIT AND SECURITY AGREEMENT

 THIRD AMENDMENT, dated as of February __, 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 

  

 -2- 

 
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 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.”; 
  

 -3- 

 (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 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 “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 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 
  

 -4- 

 (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     , 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”. 
 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 
  

 -5- 

 (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),
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;”. 
 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. 
  

 -6- 

 (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. 
 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 

  

 -7- 

 
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. 
 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. 
  

 -8- 

 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. 
 (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. 
  

 -9- 

 [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:	 	 
		 	Name:	 	
		 	Title:	 	

  

					
	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:	 	 
		 	Name:	 	
		 	Title:	 	

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

					
	ADMINISTRATIVE AGENT AND LENDER:
	
	WELLS FARGO FINANCIAL CORPORATION CANADA
		
	By:	 	 
		 	Name:	 	
		 	Title:	 	

					
	LENDERS:
	
	STYX PARTNERS, L.P.
		
	By:	 	Styx Associates, LLC, as its General Partner
		
	By:	 	 
		 	Name:	 	
		 	Title:	 	

					
	OHSF FINANCING, LTD.
		
	By:	 	 
		 	Name:	 	
		 	Title:	 	
	
	OHSF II FINANCING, LTD.
		
	By:	 	 
		 	Name:	 	
		 	Title:	 	
	
	OAK HILL CREDIT OPPORTUNITIES FINANCING, LTD.
		
	By:	 	 
		 	Name:	 	
		 	Title:	 	
	
	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:	 	 
		 	Name:	 	
		 	Title:	 	

					
	OAK HILL CREDIT ALPHA FINANCE I (OFFSHORE), LTD.
		
	By:	 	 
		 	Name:	 	
		 	Title:	 	
	
	LERNER ENTERPRISES, L.P.
		
	By:	 	Oak Hill Advisors, L.P., as Investment Advisor for Lerner Enterprises, L.P.
		
	By:	 	 
		 	Name:	 	
		 	Title:	 	
	
	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:	 	 
		 	Name:	 	
		 	Title:	 	
	
	OHA CAPITAL SOLUTIONS, LTD.
		
	By:	 	 
		 	Name:	 	
		 	Title:	 	

					
	REGIMENT CAPITAL SPECIAL SITUATIONS FUND III, L.P.
		
	By:	 	 Regiment Capital GP, LLC,
 its General
Partner

		
	By:	 	 
		 	Name:	 	
		 	Title:	 	

					
	DRAWBRIDGE SPECIAL OPPORTUNITIES FUND LP
		
	By:	 	 Drawbridge Special Opportunities GP LLC,
 its
general partner

		
	By:	 	 
		 	Name:	 	
		 	Title:	 	

					
	CREDIT GENESIS CLO 2005-1 LTD.
		
	By:	 	 
		 	Name:	 	
		 	Title:	 	
	
	DURHAM ACQUISITION CO., LLC
		
	By:	 	 
		 	Name:	 	
		 	Title:	 	

					
	HBK MASTER FUND L.P.
		
	By:	 	 HBK Investments L.P.
 its Investment Advisor

		
	By:	 	 
		 	Name:	 	
		 	Title:	 	

					
	BANK OF AMERICA, N.A.
		
	By:	 	 
		 	Name:	 	
		 	Title:	 	

					
	 CONCORDIA PARTNERS, L.P.
 acting by and
through Concordia Advisors, L.L.C.,
 as a Lender

		
	By:	 	 
		 	Name:	 	
		 	Title:	 	

					
	QUADRANGLE MASTER FUNDING LTD
		
	By:	 	 Quadrangle Debt Recovery Advisors LLC
 Its:
Advisor

		
	By:	 	 
		 	Name:	 	
		 	Title:	 	

					
	DK ACQUISITION PARTNERS, L.P.
		
	By:	 	 M.H. Davidson & Co.,
 its General
Partner

		
	By:	 	 
		 	Name:	 	
		 	Title:	 	

					
	ABN AMRO BANK N.V., Canada Branch
		
	By:	 	 
		 	Name:	 	
		 	Title:	 	

 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
    , 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:	 	 
		 	Name:	 	
		 	Title:	 	
	
	PENN TIMBER, INC., as a Debtor and Debtor-in-Possession under the US Bankruptcy Code and as a debtor company under the CCAA
		
	By:	 	 
		 	Name:	 	
		 	Title:	 	
	
	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:	 	 
		 	Name:	 	
		 	Title:	 	
	
	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:	 	 
		 	Name:	 	
		 	Title:	 	

					
	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:	 	 
		 	Name:	 	
		 	Title:	 	
	
	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:	 	 
		 	Name:	 	
		 	Title:	 	
	
	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:	 	 
		 	Name:	 	
		 	Title:	 	

					
	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:	 	 
		 	Name:	 	
		 	Title:	 	
	
	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:	 	 
		 	Name:	 	
		 	Title:	 	
	
	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:	 	 
		 	Name:	 	
		 	Title:	 	

					
	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:	 	 
		 	Name:	 	
		 	Title:	 	
	
	 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:	 	 
		 	Name:	 	
		 	Title:	 	
	
	 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:	 	 
		 	Name:	 	
		 	Title:Severance Agreement dated January 1, 2001

 Exhibit 10.162 
  

					
	 Employee
	 	 Section 2.01 Base Salary
 and Bonus Multiplier
	 	 Section 2.03 Welfare
 Benefit Period

	 	 
	Fredric N. Eshelman	 	3.0	 	2 years
	William Sharbaugh	 	2.0	 	2 years
	Daniel G. Darazsdi	 	2.0	 	2 years
	Paul S. Covington	 	2.5	 	1 year
	Brainard Judd Hartman	 	2.0	 	2 years
	Edward J. Murray	 	1.0	 	1 year
	Paul D. Colvin	 	1.0	 	1 year

 SEVERANCE AGREEMENT 
 THIS AGREEMENT, effective the 1st day of January, 2001, by and between Pharmaceutical Product Development, Inc. and its subsidiaries and affiliates (collectively, “PPD”) and
                                        
(“Employee”). 
 WHEREAS, Employee is a valued employee of PPD and in order to induce Employee to remain in the employ of PPD, PPD
desires to provide the severance benefits hereinafter described in the event of a “Change in Control”, as hereinafter defined, of PPD. 
 NOW, THEREFORE, it is agreed as follows: 
 1. Definitions 
 1.01 “AFR” means the interest rate determined under Section 1274 of the Code. 
 1.02 “Base Amount” shall have the meaning set forth and shall be determined as provided in Section 280G of the Code. 
 1.03 “Change in Control” means (i) a change of control of a nature that would be required to be reported in response to
Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (“Exchange Act”), provided that such a Change in Control shall be deemed to have occurred if any “person” (as such
term is used in Sections 13(d) and 14(d)(2) of the Exchange Act) is or becomes the beneficial owner, directly or indirectly, of securities of PPD representing 50% or more of the combined voting power of PPD’s then outstanding securities;
(ii) a sale of substantially all of the assets of PPD; or (iii) a liquidation of PPD. 
 1.04 “Constructive
Termination” means a termination of Employee’s employment by PPD during the Covered Period initiated by Employee after (i) a substantial diminution or alteration in the duties of Employee, (ii) a reduction by PPD in
Employee’s base salary in effect on the date of the Change in Control, or (iii) the relocation of Employee’s primary work location to a location that is more than twenty-five (25) miles from Employee’s primary work location
prior to the Change in Control. Constructive Termination specifically does not include termination of Employee by reason of death, Disability or retirement at or after age 65. Employee shall give PPD written notice of a Constructive Termination,
which notice shall provide a brief description of the circumstances which Employee asserts gives rise to a right of Constructive Termination, and PPD shall have ten (10) days from receipt of said notice within which to remedy said
circumstances. 
  

 2 

 1.05 “Covered Payment” means the amounts and benefits paid to Employee pursuant to this
Agreement, taken together with any amounts or benefits otherwise paid or distributed to Employee by PPD. 
 1.06 “Covered
Period” means the time period commencing on the date of and coincident with a Change of Control and ending one year thereafter. 
 1.07 “Disability” means the inability of Employee to perform his assigned duties for PPD for a period of three (3) months due to Employee’s physical or mental illness as determined by a reputable medical
doctor. 
 1.08 “Excess Parachute Payment” shall have the meaning set forth and shall be determined as provided in
Section 280G of the Code. 
 1.09 “Excise Tax” shall mean the tax imposed under Section 4999 of the Code on an
Excess Parachute Payment. 
 1.10 “Executive Consultant” shall mean the executive compensation or comparable consultant used
from time to time by PPD in designing its compensation program for executive and senior management employees of PPD; provided, however, that in its sole discretion PPD may at any time designate its independent auditors as its Executive Consultant
for the purpose of performing any calculations required under Section 2.05 of this Agreement. 
 1.11 “Final Determination”
means a final determination by a court of competent jurisdiction or a proceeding of the Internal Revenue Service or its successor agency. 
 1.12 “First Period” means the twelve-month period ending on the Termination Date. 
 1.13 “Internal Revenue
Code” means the Internal Revenue Code of 1986 as heretofore or hereafter amended, and any successor code. References in this agreement to specific sections of the Code shall also include any successor sections. 
 1.14 “Parachute Payments” shall have the meaning set forth and shall be determined as provided in Section 280G of the Code.

 1.15 “Payment Cap” means the maximum amount which may be paid to Employee under the terms of this Agreement without
subjecting Employee to the Excise Tax. 
 1.16 “Payment Date” means the date thirty (30) days following the Termination
Date. 
  

 3 

 1.17 “Stock Awards” means Employee’s outstanding awards of PPD non-qualified stock
options or restricted stock as of the Termination Date. 
 1.18 “Termination for Cause” means (i) an act or acts
involving fraud, embezzlement or theft from PPD, (ii) Employee’s willful and repeated failure to follow directions of the Board of Directors that continues for at least ten (10) days following written notice of the Board of Directors
of such failure to follow directions, or (iii) termination for cause as defined in and made pursuant to a then effective employment agreement, if any, between Employee and PPD. 
 1.19 “Termination Date” means the date on which Employee’s employment is terminated such that Employee is entitled to the
compensation and benefits provided for in Section 2 of this Agreement. 
 2. Compensation Upon Change of Control. If
during the Covered Period (i) PPD terminates Employee’s employment for reason other than Termination for Cause or (ii) Employee’s employment is terminated by reason of Constructive Termination, Employee shall be entitled to the
following compensation and benefits: 
 2.01 Base Salary and Bonus. PPD shall pay Employee an amount equal to
                     times the sum of Employee’s (i) base salary for the First Period (determined as if Employee was employed for
the entire First Period if employed for less than the First Period) and (ii) the greater of (x) Employee’s target bonus under the PPD incentive cash bonus plan in which Employee is eligible to participate immediately prior to the
Termination Date or (y) the average of the cash bonuses received in the First Period and in the twelve-month period immediately preceding the First Period, said amount to be paid on the Payment Date. 
 2.02 Unpaid and Deferred Compensation. PPD shall pay Employee any bonus or deferred compensation (whether in the form of cash, stock or otherwise)
accrued but unpaid as of the Termination Date, said sum to be paid on the Payment Date. 
 2.03 Benefits. For a period of
             after the Termination Date, PPD shall continue to pay for and provide welfare benefits which Employee was receiving immediately prior to the Termination Date, including
life insurance, health, medical, dental, vision and wellness, accidental death and dismemberment and disability benefits; provided, however, that PPD’s obligations under this clause shall terminate from the date that Employee first becomes
eligible after the Termination Date for similar coverage under another employer’s plan. 
 2.04 Stock Awards. Notwithstanding
anything to the contrary in any agreement for Stock Awards, (i) all unvested shares underlying Stock Awards granted more than six months prior to the Termination Date shall become fully vested as of the Termination Date, and (ii) Employee
shall continue to be treated under each award agreement evidencing a Stock Award as if Employee was an employee of PPD until the 

  

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first to occur of (x) the third anniversary of the Termination Date, or (y) the expiration of the exercise period provided for therein; provided,
however, in the event of Employee’s death or his disability (as disability is defined in the award agreement) after the Termination Date, the time for exercise after death or such disability prescribed in the award agreement shall apply. The
provisions of this Section 2.04 shall also apply to any and all substitute awards for nonqualified stock options and restricted stock granted to Employee in exchange for Stock Awards to which this section applies. 
 2.05 Limitation on Payments. 
 a.
Application of Section 2.05. If a Covered Payment hereunder would be an Excess Parachute Payment and would thereby subject Employee to the Excise Tax, the provisions of this Section 2.05 shall apply to determine the amounts payable to
Employee pursuant to this Agreement. 
 b. Calculation of Benefits. At least fifteen (15) days prior to the Payment Date, PPD
shall notify Employee of the aggregate present value of all amounts and benefits to which Employee would be entitled under this Agreement and any other plan, program or arrangement with PPD as of the Termination Date, together with the projected
maximum payments, determined as of such Date of Termination, that could be paid without Employee being subject to the Excise Tax. 
 c.
Imposition of Payment Cap. If (i) the aggregate value of all amounts and benefits to which Employee would be entitled under this Agreement and any other plan, program or arrangement with PPD exceeds the amount which can be paid to Employee
without Employee incurring an Excise Tax and (ii) Employee would receive a greater net after-tax amount (taking into account all applicable taxes payable by Employee, including an Excise Tax) by applying the limitation contained in this
Section 2.05(c), then the amounts otherwise payable to Employee under this Section 2 shall be reduced to an amount equal to the Payment Cap. If Employee receives reduced payments and benefits hereunder, Employee shall have the right to
designate which of the payments and benefits otherwise provided for in this Agreement that Employee will receive in connection with the application of the Payment Cap. 
 d. Application of Code Section 280G. The Executive Consultant shall determine whether any part of the Covered Payment will be subject to the Excise Tax and the amount of such Excise Tax. For purposes of
such determination, the Executive Consultant shall take into consideration and be guided by the following: 
 (i) such Covered Payment
will be treated as Parachute Payments and all Parachute Payments in excess of the Base Amount shall be treated as subject to the Excise Tax, unless and except to the extent that in the good faith judgment of the Executive Consultant, PPD has a
reasonable basis to conclude that such Covered Payment, in whole or in part, either do not constitute Parachute Payments or represent reasonable compensation for personal services actually rendered (within the meaning of 

  

 5 

 
Section 280G of the Code) in excess of the Base Amount, or such Parachute Payments are otherwise not subject to the Excise Tax, and 
 (ii) the value of any noncash benefits or any deferred payment or benefit shall be determined by the Executive Consultant in accordance with the
principles of Section 280G of the Code. 
 (e) Applicable Tax Rates. For purposes of determining whether Employee would receive
a greater net after-tax benefit if the amounts payable under this Agreement are reduced in accordance with Section 2.05(c), Employee shall be deemed to pay: 
 (i) federal income taxes at the highest applicable marginal rate of federal income taxation for the calendar year in which the first amounts are to be paid hereunder, and 
 (ii) any applicable state and local income taxes at the highest applicable marginal rate of taxation for such calendar year, net of the maximum
reduction in federal income taxes which could be obtained from the deduction of such state or local taxes if paid in such year; 
 provided, however, that
Employee may request that such determination be made based on Employee’s individual tax circumstances, which shall govern such determination so long as Employee provides to the Executive Consultant such information and documents as the
Executive Consultant shall reasonably request to determine such individual circumstances. 
 (f) Adjustments in Respect to Payment
Cap. 
 (i) If Employee receives reduced payments and benefits under Section 2.05 or if Section 2.05 is determined not
to be applicable to Employee because the Executive Consultant concludes that Employee is not subject to any Excise Tax, and it is established pursuant to a Final Determination that, notwithstanding the good faith of Employee and PPD in applying the
terms of this Agreement, the aggregate Parachute Payments paid to Employee or for Employee’s benefit are in an amount that would result in Employee being subject to an Excise Tax and Employee would still be subject to the Payment Cap under the
provisions of Section 2.05(c), then the amount in excess of the Payment Cap shall be deemed for all purposes to be a loan to Employee made on the date of the receipt of such excess payment, which Employee shall have an obligation to repay to
PPD on demand, together with interest at the AFR, from the date of the payment hereunder to the date of repayment by Employee. 
 (ii)
If Section 2.05 is not applied to reduce Employee’s entitlements under this Section 2 because the Executive Consultant determines that Employee would not receive a greater net after-tax benefit by applying Section 2.05 and it

  

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is established pursuant to a Final Determination that, notwithstanding the good faith of Employee and PPD in applying the terms of this Agreement, Employee
would have received a greater net after-tax benefit by subjecting Employee’s payments and benefits hereunder to the Payment Cap, then the aggregate Parachute Payments paid to Employee or for Employee’s benefit in excess of the Payment Cap
shall be deemed for all purposes a loan to Employee made on the date of receipt of such excess payments, which Employee shall have an obligation to repay to PPD on demand, together with interest at the AFR, from the date of payment hereunder to the
date of repayment by Employee. 
 (iii) If Employee receives reduced payments and benefits by reason of this Section 2.05 and it
is established pursuant to a Final Determination that Employee could have received a greater amount without exceeding the Payment Cap, then PPD shall promptly thereafter pay Employee the aggregate additional amount which could have been paid without
exceeding the Payment Cap, together with interest on such amount at the AFR, from the original payment due date to the date of actual payment by PPD. 
 3. Miscellaneous. 
 3.01 Successor-in-Interest. PPD will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of PPD, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that PPD would
be required to perform it if no succession had taken place. 
 3.02 Binding Effect. This Agreement shall inure to the benefit of and
be enforceable by Employee’s personal or legal representatives, executives, administrators, successors, heirs, distributees, devisees and legatees. 
 3.03 Notice. For purposes of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be given (i) by certified mail, return receipt requested,
postage prepaid, (ii) by personal delivery or (iii) by recognized overnight carrier, and shall be deemed received when actually received. Notices shall be addressed as follows: 
  

					
	If to PPD:	 	Pharmaceutical Product Development, Inc.	  	 
		 	3151 South 17th Street	  	
		 	Wilmington, North Carolina 28412	  	
		 	Attention: Chief Executive Officer	  	
			
	If to Employee:	 	  
	  	
		 	  
	  	
		 	  
	  	
		 	  
	  	

  

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 Either party hereto may change the notice address by giving notice thereof in the manner provided for herein. 

3.04 Waiver. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any provision or
condition of this Agreement to be performed by such other party shall be deemed a subsequent waiver of the same or similar provisions or conditions. 
 3.05 Entire Agreement. No agreements or representations, oral or otherwise, expressed or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in
this agreement, and this Agreement supersedes and replaces in its entirety all prior agreements and representations, expressed, implied, oral or otherwise, made by PPD to or with Employee, including but not limited to that certain Severance
Agreement dated                      between PPD and Employee. 
 3.06 Governing Law. This Agreement shall be governed by and interpreted under the laws of the State of North Carolina. 
 3.07 Unenforceability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. 
 3.08 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together
shall constitute one and the same instrument. 
 3.09 Headings. Headings used in this Agreement are for convenience only and shall not
be used to construe or interpret this Agreement. 
 3.10 Enforcement by Employee. All legal expenses incurred by Employee in the
successful enforcement of any of the terms of this Agreement shall be paid by PPD. 
 IN WITNESS WHEREOF, the parties have executed this
Agreement effective the date first hereinabove set forth. 
  

							
	Pharmaceutical Product Development, Inc.	 	 	 	Employee
				
	By:	 	  
	 		 	  

	Name:	 		 		 	Name:
	Title:	 		 		 	

  

 8

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