December 13, 2002
Exhibit 4.5
December 13, 2002
VIA FACSIMILE (302-651-8882) & FIRST CLASS MAIL
Wilmington Trust Company
Attn: Corporate Trust Administration
Xxxxxx Square North
0000 X. Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
VIA FACSIMILE (518-257-8833) & FIRST CLASS MAIL
Selco Service Corporation
c/o Key Equipment Finance
00 X. Xxxxx Xx., 0xx Xxxxx
Xxxxxx, XX 00000
Attn: Leveraged Lease Administrator
| Re: | Amended and Restated Facility Lease dated December 27, 2001 between Wilmington Trust Company, Lessor, and Xxxx & Talbot, Inc. (“Xxxx & Xxxxxx”), Lessee (the “Facility Lease”) and Participation Agreement dated as of December 27, 2001 among Xxxxxx CLO2 Limited Partnership (“Xxxxxx”), Xxxx & Xxxxxx, Selco Service Corporation (“Selco”), the Note Purchasers named therein, Wilmington Trust Company, as Owner Trustee, and Xxxxx Fargo Bank Northwest, N.A., as Indenture Trustee (the “Participation Agreement”) |
Xxxx & Xxxxxx, 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.
Xxxx & Talbot and Xxxxxx, 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 Xxxx & Talbot Financial Covenants. Xxxx & Xxxxxx 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 Xxxx & Talbot’s immediately preceding four fiscal quarters on a rolling basis; provided, however, that if as of the end of any such fiscal quarter Xxxx & Xxxxxx does not meet the Fixed Charge Coverage Ratio, then Xxxx & Talbot must maintain, until such time as Xxxx & Xxxxxx 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 Xxxx & 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 Xxxx & Xxxxxx may not repurchase Equity Interests if either an Event of Default exists or Xxxx & 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. Xxxx & Xxxxxx 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 Xxxxx Fargo Bank Northwest, N.A. as indenture trustee on or before 4:30 p.m. PST on December 19, 2002, Xxxx & Xxxxxx 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/ Xxxxx Xxxx | ||
| Xxxxx Xxxx | ||
Wilmington Trust Company
Selco Service Corporation
December 13, 2002
Page 4
cc: Xxxxx Fargo Bank Northwest, N.A., as Indenture Trustee
00 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, XX 00000
Attn: Corporate Trust Services
Fax: (000) 000-0000
Fleet Capital Corporation
Xxx Xxxxxxxxx Xxxxx
XX XX 00000X
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx
Fax: (000) 000-000-0000
The CIT Group/Equipment Financing, Inc.
0000 Xxxx Xxxxxxxxxxxx Xxxxxxx
Xxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx and XxxxXxx Xxxxxxxx
Fax: (000) 000-0000
Boeing Capital Corporation
0000 Xxxxxx Xxxxxxx Xxx, Xxxxx 000
Xxxx Xxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx
Fax: (000) 000-0000
General Electric Capital Business Asset Funding Corporation
00000 XX Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attn: Xxxxx Xxxx
Fax: (000) 000-0000
KeyBank National Association
C/O Key Equipment Finance, a division of Key Corporate Capital, Inc.
00 X. Xxxxx Xx., 0xx Xxxxx
Xxxxxx, XX 00000
Attn: Leveraged Lease Administrator
Fax: (000) 000-0000
Xxxxxx Financial Leasing, Inc.
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxxx Xxx
Fax: 000-000-0000
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:
| XXXX & TALBOT, INC. | ||
| By: |
/s/ Xxxxx X. Xxxx | |
| Name: |
Xxxxx X. Xxxx | |
| Title: |
V.P., Chief Financial Officer | |
| XXXXXX CLO2 LIMITED PARTNERSHIP | ||||
| By: Xxxx & Talbot, Inc., its general partner | ||||
| By: |
/s/ Xxxxx X. Xxxx | |||
| Name: |
Xxxxx X. Xxxx | |||
| Title: |
V.P., Chief Financial Officer | |||
| WILMINGTON TRUST COMPANY, not individually but solely as Owner Trustee | ||
| By: |
/s/ Xxxxxx X. Xxxxx, XX | |
| Name: |
Xxxxxx X. Xxxxx, XX | |
| Title: |
Senior Financial Services Officer | |
| SELCO SERVICE CORPORATION | ||
| By: |
/s/ Xxxxxxx Xxxxxxx | |
| Name: |
Xxxxxxx Xxxxxxx | |
| Title: |
X.X. | |
| XXXXX FARGO BANK NORTHWEST, N.A., not individually but solely as Indenture Trustee | ||
| By: |
/s/ Xxxxx X. Xxxx | |
| Name: |
Xxxxx X. Xxxx | |
| Title: |
Vice President | |
| FLEET CAPITAL CORPORATION | ||
| By: |
/s/ Xxxx X. Xxxxx | |
| Name: |
Xxxx X. Xxxxx | |
| Title: |
Assistant Vice President | |
| THE CIT GROUP/EQUIPMENT FINANCE, INC | ||
| By: |
/s/ Xxxx X. Xxxxxxx | |
| Name: |
Xxxx X. Xxxxxxx | |
| Title: |
Executive Vice President | |
| GENERAL ELECTRIC CAPITAL BUSINESS ASSET FUNDING CORPORATION | ||
| By: |
/s/ Xxxxx X. Xxxxxx | |
| Name: |
Xxxxx X. Xxxxxx | |
| Title: |
Mgr., SAF Group | |
| BOEING CAPTIAL CORPORATION | ||
| By: |
/s/ Xxxxx X. Xxxxxxxxxxx | |
| Name: |
Xxxxx X. Xxxxxxxxxxx | |
| Title: |
Senior Documentation Officer | |
| XXXXXX FINANCIAL LEASING, INC. | ||
| By: |
/s/ Xxxxxx X. Xxx | |
| Name: |
Xxxxxx X. Xxx | |
| Title: |
Vice President, Portfolio Manager | |
