Amendment to Amended and Restated Facility Lease



 
Exhibit 4.5

 
December 13, 2002 
 
VIA FACSIMILE (302-651-8882) & FIRST CLASS MAIL 
 
Wilmington Trust Company 
Attn: Corporate Trust Administration 
Rodney Square North 
1100 N. Market Street 
Wilmington, DE 19890-0001

 
VIA FACSIMILE (518-257-8833) & FIRST CLASS MAIL

 
Selco Service Corporation

c/o Key Equipment Finance 
66 S. Pearl St., 7th Floor 
Albany, NY 12207 
Attn: Leveraged Lease Administrator 
 

	 	Re:	 	Amended and Restated Facility Lease dated December 27, 2001 between Wilmington Trust Company, Lessor, and Pope & Talbot, Inc. (“Pope & Talbot”),
Lessee (the “Facility Lease”) and Participation Agreement dated as of December 27, 2001 among Halsey CLO2 Limited Partnership (“Halsey”), Pope & Talbot, Selco Service Corporation (“Selco”), the Note Purchasers named
therein, Wilmington Trust Company, as Owner Trustee, and Wells Fargo Bank Northwest, N.A., as Indenture Trustee (the “Participation Agreement”)  

 
Pope & Talbot, as Lessee under the Facility Lease (capitalized terms used in this letter and not defined
herein having the meanings given to them in Annex I to the Facility Lease), hereby requests that Section 6.3 of the Facility Lease be amended and restated in its entirety as follows: 
 
Section 6.3 Lessee Financial Covenants. Lessee covenants and agrees that it shall: 
 
(a) maintain a Fixed Charge Coverage Ratio of
at least 1.05 to 1, as measured by reference to the amounts reported for the Lessee’s immediately preceding four fiscal quarters on a rolling basis; provided, however, that if as of the end of any such fiscal quarter the Lessee does not
meet the Fixed Charge Coverage Ratio, then the Lessee must maintain, until such time as Lessee regains compliance with such Fixed Charge Coverage Ratio, on a consolidated basis, a minimum balance of $25,000,000 (denominated in United States
Dollars), consisting of one or more of the following: (i) United States cash or cash equivalents; (ii) Canadian cash or cash equivalents; or (iii) immediately available and unused loan commitments from one or more lenders. For purposes of
denominating in United States Dollars any Canadian cash, cash equivalents or loan commitments and availability, the parties will use the “Exchange Rates” in the “Currency Trading” table appearing from time to time in the Wall
Street Journal; 







 
Wilmington Trust Company 
Selco Service Corporation 
December 13, 2002 
Page 2 
 
(b) maintain a ratio of Total Funded Debt to Total Adjusted Capitalization of no more than (i) 67.5% for the fiscal years ending December 31, 2002 and December 31, 2003, (ii) 65.0% for the fiscal year ending December 31,
2004, (iii) 62.5% for the fiscal year ending December 31, 2005 and (iv) 55.0% thereafter; and 
 
(c) maintain a minimum Adjusted Net Worth as of the end of each fiscal quarter of not less than the sum of (i)
U.S.$123,807,000, plus (ii) 50% of cumulative consolidated positive net income for each fiscal quarter ending after December 31, 2002, plus (iii) 100% of the value (net of underwriters’ discounts and customary out-of-pocket costs and expenses
of issuance) of any Equity Interests issued by the Lessee after December 31, 2002 (such amount, the “Net Equity Issuances”), minus (iv) 100% of the value of any Equity Interests repurchased by the Lessee after December 31, 2002 in an
amount not greater than the sum of (x) the Net Equity Issuances plus (y) 50% of cumulative net income for periods commencing on or after January 1, 2003, provided that Lessee may not repurchase Equity Interests if either an Event of Default exists
or Lessee has incurred a net loss in its most recently ended fiscal quarter. 
 
Pope & Talbot and Halsey, as Lessee under the CLO2 Lease, hereby request that Section 6.3 of the Participation Agreement be amended and restated in its entirety as follows: 
 
Section 6.3 Pope & Talbot Financial Covenants. Pope
& Talbot covenants and agrees that it shall: 
 
(a) maintain a Fixed Charge Coverage Ratio of at least 1.05 to 1, as measured by reference to the amounts reported for Pope & Talbot’s immediately preceding four fiscal quarters on a rolling basis; provided, however,
that if as of the end of any such fiscal quarter Pope & Talbot does not meet the Fixed Charge Coverage Ratio, then Pope & Talbot must maintain, until such time as Pope & Talbot regains compliance with such Fixed Charge Coverage
Ratio, on a consolidated basis, a minimum balance of $25,000,000 (denominated in United States Dollars), consisting of one or more of the following: (i) United States cash or cash equivalents; (ii) Canadian cash or cash equivalents; or (iii)
immediately available and unused loan commitments from one or more lenders. For purposes of denominating in United States Dollars any Canadian cash, cash equivalents or loan commitments and availability, the parties will use the “Exchange
Rates” in the “Currency Trading” table appearing from time to time in the Wall Street Journal; 







Wilmington Trust Company 
Selco Service Corporation 
December 13, 2002 
Page 3 
 
(b) maintain a ratio of Total Funded Debt to
Total Adjusted Capitalization of no more than (i) 67.5% for the fiscal years ending December 31, 2002 and December 31, 2003, (ii) 65.0% for the fiscal year ending December 31, 2004, (iii) 62.5% for the fiscal year ending December 31, 2005 and (iv)
55.0% thereafter; and 
 
(c)
maintain a minimum Adjusted Net Worth as of the end of each fiscal quarter of not less than the sum of (i) U.S.$123,807,000, plus (ii) 50% of cumulative consolidated positive net income for each fiscal quarter ending after December 31, 2002, plus
(iii) 100% of the value (net of underwriters’ discounts and customary out-of-pocket costs and expenses of issuance) of any Equity Interests issued by the Lessee after December 31, 2002 (such amount, the “Net Equity Issuances”), minus
(iv) 100% of the value of any Equity Interests repurchased by Pope & Talbot after December 31, 2002 in an amount not greater than the sum of (x) the Net Equity Issuances plus (y) 50% of cumulative net income for periods commencing on or after
January 1, 2003 provided that Pope & Talbot may not repurchase Equity Interests if either an Event of Default exists or Pope & Talbot has incurred a net loss in its most recently ended fiscal quarter. 
 
Copies of this letter are being sent to the Indenture Trustee
under each of the Participation Agreement and the Amended and Restated Participation Agreement dated December 27, 2001 relating to the Facility Lease and to each Note Purchaser. The consent of the Indenture Trustee under each of such participation
agreements, based on the consent of the Required Lenders, is required for these amendments. Pope & Talbot requests that each of Selco, the Owner Trustee, the Indenture Trustee and the Note Purchasers execute a copy of this letter evidencing
their approval of and consent to the foregoing amendments. Upon receipt of a copy of this letter executed by each of Selco, the Required Lenders, Wilmington Trust Company as owner trustee and Wells Fargo Bank Northwest, N.A. as indenture trustee on
or before 4:30 p.m. PST on December 19, 2002, Pope & Talbot will pay Selco and each lender having so executed and delivered the letter an amendment fee equal to .25% of Selco’s current investment in the Mill and the CLO2 Facility or such
lender’s outstanding principal balance on its Notes as of the date of consent, as applicable. 
 
Please feel free to call me if you have any questions. 
 

	 Very truly yours,

	
	 /s/    Maria Pope


	 Maria Pope










Wilmington Trust Company 
Selco Service Corporation 
December 13, 2002 
Page 4 
 
cc: Wells Fargo Bank Northwest, N.A., as Indenture Trustee 
79 South Main Street 
Salt Lake City, UT 84111 
Attn: Corporate Trust Services 
Fax: (801) 246-5053 
 
Fleet Capital Corporation 
One Financial Plaza 
RI DE 03702C 
Providence, RI 02903 
Attn: Bennett F. Viverito 
Fax: (401) 401-453-8022 
 
The CIT Group/Equipment Financing, Inc. 
1540 West Fountainhead Parkway 
Tempe, AZ 85282 
Attn: Richard T. Johnson and MaryAnn Anderson 
Fax: (480) 858-1467 
 
Boeing Capital Corporation 
3780 Kilroy Airport Way, Suite 750 
Long Beach, CA 90806 
Attn: Michael V. Grady 
Fax: (562) 997-3469 
 
General
Electric Capital Business Asset Funding Corporation 
10900 NE Fourth Street, Suite 500 
Bellevue, WA 98004 
Attn: Terry Gray 
Fax: (425) 450-3584 
 
KeyBank National Association 
C/O Key Equipment Finance, a division of Key Corporate Capital, Inc. 
66 S.
Pearl St., 7th Floor 
Albany, NY 12207 
Attn: Leveraged Lease Administrator 
Fax: (518) 257-8833 
 
Heller Financial Leasing, Inc. 
500 Monroe, Suite 2900 
Chicago, IL 60661 
Attn: Ronald Lis 
Fax: 312-441-7395 







 
AGREEMENT
AND CONSENT 
 
Each of the undersigned
agrees and consents to the amendments to Section 6.3 of the Facility Lease and Section 6.3 of the Participation Agreement set forth above, effective as of December 30, 2002: 
 

	 POPE & TALBOT, INC.

	
	 By:
	 	 /s/    Maria M. Pope


	 Name:
	 	 Maria M. Pope


	 Title:
	 	 V.P., Chief Financial Officer




 

	 HALSEY CLO2 LIMITED
PARTNERSHIP                  

	
	 	 	 By: Pope & Talbot, Inc., its general partner

	
	 	 	 By:
	 	 /s/    Maria M. Pope


	 	 	 Name:
	 	 Maria M. Pope


	 	 	 Title:
	 	 V.P., Chief Financial Officer




 
 

	 WILMINGTON TRUST COMPANY, not individually but solely as Owner Trustee

	
	 By:
	 	 /s/    Robert P. Hines, JR


	 Name:
	 	 Robert P. Hines, JR


	 Title:
	 	 Senior Financial Services Officer




 

	 SELCO SERVICE CORPORATION

	
	 By:
	 	 /s/    Richard Remiker


	 Name:
	 	 Richard Remiker


	 Title:
	 	 V.P.











 

	 WELLS FARGO BANK NORTHWEST, N.A., not individually but solely as Indenture Trustee

	
	 By:
	 	 /s/    Brett R. King


	 Name:
	 	 Brett R. King


	 Title:
	 	 Vice President




 

	 FLEET CAPITAL CORPORATION

	
	 By:
	 	 /s/    John F. Cuddy


	 Name:
	 	 John F. Cuddy


	 Title:
	 	 Assistant Vice President




 

	 THE CIT GROUP/EQUIPMENT
 FINANCE, INC

	
	 By:
	 	 /s/    Dana G. Hammond


	 Name:
	 	 Dana G. Hammond


	 Title:
	 	 Executive Vice President




 

	 GENERAL ELECTRIC CAPITAL BUSINESS ASSET FUNDING CORPORATION

	
	 By:
	 	 /s/    Kevin A. Drazic


	 Name:
	 	 Kevin A. Drazic


	 Title:
	 	 Mgr., SAF Group




 

	 BOEING CAPTIAL CORPORATION

	
	 By:
	 	 /s/    James C. Hammersmith


	 Name:
	 	 James C. Hammersmith


	 Title:
	 	 Senior Documentation Officer




 

	 HELLER FINANCIAL LEASING, INC.

	
	 By:
	 	 /s/    Ronald E. Lis


	 Name:
	 	 Ronald E. Lis


	 Title:
	 	 Vice President, Portfolio Manager