THIRD AMENDMENT TO SECOND AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT
EXHIBIT 10.1
THIRD AMENDMENT TO SECOND AMENDED AND RESTATED
REVOLVING CREDIT FACILITY AGREEMENT
REVOLVING CREDIT FACILITY AGREEMENT
This THIRD AMENDMENT TO SECOND AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT
(“Amendment”) is made effective as of the 3rd day of August, 2007 (the
“Amendment Effective Date”), by and between LENNOX INTERNATIONAL INC., a Delaware
corporation (the “Borrower”), BANK OF AMERICA, N.A. (“Bank of America”), as
Administrative Agent for the Lenders (in such capacity, the “Administrative Agent”), and
the Lenders which are parties hereto.
W I T N E S S E T H :
WHEREAS, the Borrower on July 8, 2005 entered into that certain Second Amended and Restated
Revolving Credit Facility Agreement, as amended by that certain First Amendment to Second Amended
and Restated Revolving Credit Facility Agreement, dated as of August 17, 2006, and as further
amended by that certain Second Amendment to Second Amended and Restated Revolving Credit Facility
Agreement, dated as of January 11, 2007 (as the same may be further amended, restated, supplemented
or otherwise modified from time to time, the “Credit Agreement”), with the Administrative
Agent and the Lenders governing the loans described therein (collectively, the “Loan”);
WHEREAS, to evidence the Loan, the Borrower executed certain promissory notes (collectively,
the “Notes”) dated of even date with the Credit Agreement and made payable to the order of
certain of the Lenders;
WHEREAS, the Credit Agreement, the Guaranty, the Notes and all other documents, agreements,
certificates and instruments representing, evidencing or securing the Loan are collectively
referred to herein as the “Loan Documents”;
WHEREAS, the Borrower and each of the Guarantors have requested that the Administrative Agent
and the Lenders acknowledge and consent in all respects to (a) the execution, delivery and
performance by the Borrower and the Guarantors of a three hundred sixty-four day unsecured credit
facility with Bank of America, N.A. as administrative agent, pursuant to which the Borrower may
obtain revolving credit loans in the aggregate principal amount not to exceed $300,000,000 at any
time outstanding for the purpose of repurchasing issued and outstanding shares of its common stock
(the “Bridge Credit Agreement”), (b) the execution, delivery and performance by the
Guarantors of a guaranty agreement unconditionally and irrevocably guaranteeing the prompt and
complete payment and performance of all of the obligations of the Borrower under the Bridge Credit
Agreement (the “Bridge Guaranty”), and (c) the consummation of the transactions
contemplated pursuant to the Bridge Credit Agreement and the Bridge Guaranty and such other
documents, agreements, instruments and certificates executed in connection with the Bridge Credit
Agreement and the Bridge Guaranty (the documents and agreements referred to in clauses (a) – (c)
above are collectively referred to hereinafter as the “Bridge Transaction Documents”);
WHEREAS, the Administrative Agent and the Lenders have agreed to consent to the Bridge
Transaction Documents and the consummation of the transactions contemplated thereby and amend the
Credit Agreement for the purpose of providing the Borrower with the ability to repurchase an
additional amount of its issued and outstanding common stock upon the terms and conditions set
forth herein.
NOW, THEREFORE, for and in consideration of the premises and the mutual covenants and
agreements contained herein and in the Credit Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this
Agreement hereby agree as follows.
ARTICLE I.
Definitions and References
1.1 Terms Defined in the Credit Agreement. Unless the context otherwise requires or
unless otherwise expressly defined herein, the terms defined in the Credit Agreement shall have the
same meanings whenever used in this Amendment.
ARTICLE II.
Amendments to Credit Agreement
2.1 Defined Terms. Section 1.01 of the Credit Agreement is hereby amended by
adding thereto the following defined term in its appropriate alphabetical order:
“‘Bridge Credit Facility’ means a three-hundred sixty-four day
revolving credit facility with Bank of America, N.A., as administrative agent, in an
aggregate principal amount not to exceed $300,000,000 at any time outstanding for
the purpose of repurchasing issued and outstanding shares of the Borrower’s common
stock.”
2.2 Section 3.12. Section 3.12 of the Credit Agreement is hereby amended in
its entirety to read as follows:
“Section 3.12. Use of Proceeds. The Borrower will apply the proceeds
of the Loans to refinance existing indebtedness, for capital expenditures, to make
acquisitions, for working capital and for other general corporate purposes,
including, without limitation, the repurchase of issued and outstanding shares of
its common stock. The Letters of Credit shall be issued to support transactions of
the Borrower and the Subsidiaries entered into in the ordinary course of business.”
2.3 Section 3.15. Section 3.15 of the Credit Agreement is hereby amended in
its entirety to read as follows:
“Section 3.15. Margin Regulations; Investment Company Act.
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(a) No part of the proceeds of any Borrowing or drawing under any Letter of
Credit, and no other extensions of credit hereunder, will be used for any purpose
that violates the provisions of Regulations T, U, or X of the Board. Following the
application of the proceeds of each Borrowing or drawing under each Letter of
Credit, not more than 25% of the value of the assets subject to the restrictions of
Section 5.13 (either of the Borrower only or of the Borrower and its
Subsidiaries on a consolidated basis) will be margin stock.
(b) If requested by any Lender or the Administrative Agent, the Borrower will
execute and furnish to the Administrative Agent and each Lender a FR Form G-3 or FR
Form U-1, as applicable, referred to in Regulation U of the Board.
(c) Neither the Borrower nor any Subsidiary is subject to regulation under the
Investment Company Act of 1940, as amended.”
2.4 Section 5.12. Section 5.12 of the Credit Agreement is hereby amended by
(i) deleting the word “and” located at the end of clause (p) thereof, (ii) deleting the period
located at the end of clause (q) thereof and substituting in lieu thereof the phrase “; and”, and
(iii) adding to the end thereof a new clause (r) that reads as follows:
“(r) Indebtedness of the Borrower and any Guarantee thereof by any Subsidiary
(other than the Insurance Subsidiary) under the Bridge Credit Facility.”
2.5 Section 5.13. Section 5.13 of the Credit Agreement is hereby amended by
(i) adding to the end of the second parenthetical located in the lead in to Section 5.13
the phrase “but excluding any shares of the Borrower’s common stock repurchased by the Borrower”
and (ii) adding the following sentence to the end of Section 5.13: “For the avoidance of
doubt, any issued and outstanding common stock of the Borrower repurchased by the Borrower is not
deemed to be any property or asset of the Borrower for purposes of this Section 5.13, and
therefore, is not subject to the restrictions contained in this Section 5.13.”
2.6 Section 5.14. Section 5.14 of the Credit Agreement is hereby amended in
its entirety to read as follows:
“Restricted Payments. The Borrower will not, and will not permit any
of its Subsidiaries to declare or make, or incur any liability to declare or make,
any Restricted Payment, except: (a) Subsidiaries may declare and pay dividends
ratably with respect to the Equity Interests they have issued and (b) the Borrower
may declare and pay dividends and repurchase shares of its common stock during any
fiscal quarter as long as on the date of determination:
(i) no Default or Event of Default exists or would result therefrom; and
(ii) the sum of (A) the amount of the dividends or repurchases proposed to
be made in such fiscal quarter, plus (B) the aggregate amount of the
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dividends and repurchases previously made by the Borrower in the same fiscal
quarter, and (C) the aggregate amount of all dividends and repurchases made in
the prior three fiscal quarters does not exceed an amount equal to the
greater of (1) fifty percent (50%) of Consolidated Net Income (calculated
for the four fiscal quarters then most recently ended prior to the date of
determination) or (2) $40,000,000;
provided, however, that in addition to the share repurchases
permitted by clause (b)(ii) above, the Borrower may make additional repurchases
of its issued and outstanding common stock in an aggregate amount not to exceed
the sum of (1) fifty percent (50%) of the principal amount of the Subordinated
Notes converted into common stock of the Borrower on or prior to October 6,
2005, plus (2) on or after August 17, 2006, $550,000,000.”
2.7 Section 5.15. Subpart (c) of Section 5.15 of the Credit Agreement is
hereby amended in its entirety to read as follows:
“(c) Consolidated Net Worth. The Borrower will not permit Consolidated
Net Worth as of any date to be less than the sum of (i) $396,624,000.00;
plus (ii) 50% of the sum of (A) its aggregate Consolidated Net Income (but
only if a positive number) for the period beginning April 1, 2005 and ending as of
the most recently completed fiscal quarter prior to the date of determination
minus (B) any non-recurring and non-cash charges not included in determining
such Consolidated Net Income under clause (g) of the definition thereof;
plus (iii) 100% of the net proceeds from the issuance of any Equity
Interests by the Borrower occurring after the Effective Date (including, or in
addition, any increase in equity attributable to the conversion of the Borrower’s
Subordinated Notes to common stock); minus (iv) the total aggregate amount
expended by the Borrower for the repurchase of shares of its common stock on or
after August 17, 2006 under the additional $550,000,000 exception provided for in
clause (2) of the proviso to Section 5.14.”
2.8 Section 5.16. Section 5.16 of the Credit Agreement is hereby amended by
amending clause (i) to the proviso located therein to read as follows: “(i) the foregoing shall not
apply to restrictions and conditions imposed by law or by any Loan Document, the Senior Note
Purchase Agreements, Subordinated Notes, or any agreement, document, instrument or certificate
executed and delivered in connection with the Bridge Credit Facility;”.
ARTICLE III.
Conditions to Effectiveness; Representations; Warranties and Acknowledgements
3.1 Effective Date. This Amendment shall become effective as of the Amendment
Effective Date when and only when all of the following conditions precedent have been satisfied:
(i) the Administrative Agent and the Lenders shall have received copies of all documents,
agreements, instruments, certificates or other evidence which the Administrative Agent, the
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Lenders or their counsel may reasonably request in connection herewith, including, without
limitation, the following:
(a) duly executed counterparts of this Amendment signed by the Borrower, the
Administrative Agent, and the Required Lenders; and
(b) a duly executed counterpart of the Consent attached to this Amendment signed by all
of the Guarantors, and
(ii) the Borrower shall have paid to each Lender who delivers a duly executed counterpart to
this Amendment a fully earned and nonrefundable amendment fee in an amount equal to five basis
points (.05%) of such Lender’s Commitment on the Amendment Effective Date.
3.2 Representations and Warranties; Acknowledgments by the Borrower. Except as
modified hereby, the terms and provisions of the Credit Agreement and other Loan Documents are
ratified and confirmed and shall remain in full force and effect in accordance with their terms.
The Borrower hereby acknowledges, agrees and represents that (i) the Borrower is indebted to the
Lenders pursuant to the terms of the Notes and the Credit Agreement as amended hereby; (ii)
contemporaneously with the effectiveness of this Amendment, the representations and warranties of
the Borrower and the Guarantors contained in the Loan Documents are true and correct in all
material respects, except to the extent that such representations and warranties specifically refer
to an earlier date, in which case they are true and correct in all material respects as of such
earlier date; (iii) no condition exists which presently constitutes a Default or an Event of
Default; and (iv) this Amendment and the Credit Agreement (as amended hereby) have been duly
authorized by all necessary organizational action of the Borrower and constitute legal, valid and
binding obligations of the Borrower, enforceable against the Borrower in accordance with their
respective terms.
ARTICLE IV.
Miscellaneous
4.1 Reference to and Effect on the Loan Documents.
(a) Upon the effectiveness of this Amendment, on and after the Amendment Effective Date, each
reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like
import referring to the Credit Agreement, and each reference in the other Loan Documents to “the
Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit
Agreement, shall mean and be a reference to the Credit Agreement as amended hereby.
(b) Except as expressly amended, modified or supplemented by this Amendment, the Credit
Agreement and all of the other Loan Documents, are and shall continue to be in full force and
effect, enforceable against the Borrower in accordance with their respective terms, and are hereby
ratified and confirmed by the Borrower in all respects.
(c) Except as expressly set forth herein, the execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any right, power or remedy of the
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Administrative Agent or any Lender under any of the Loan Documents, nor constitute a waiver of
any provision of any of the Loan Documents.
4.2 Consent to Bridge Transaction Documents. The Administrative Agent and the Lenders
party hereto hereby consent to (i) the execution, delivery and performance of the Bridge
Transaction Documents and the consummation of the transactions contemplated thereby and (ii) each
lender under the Bridge Credit Agreement becoming a “Lender” under the Intercreditor Agreement (and
the Bridge Credit Agreement being referred to in all respects as a “Credit Facility” thereunder)
upon the receipt by the Collateral Agent (as defined in the Intercreditor Agreement) of a duly
executed Supplement to Intercreditor Agreement substantially in the form of Attachment B to the
Intercreditor Agreement pursuant to Section 7.03 of the Intercreditor Agreement.
4.3 Costs and Expenses. Contemporaneously with the execution and delivery hereof, the
Borrower shall pay, or cause to be paid, all costs and expenses incident to the preparation hereof
and the consummation of the transaction contemplated hereby, including, but not limited to,
reasonable fees and expenses of legal counsel to the Administrative Agent (which fees and expenses,
as to legal counsel of the Administrative Agent, shall be paid directly to legal counsel of the
Administrative Agent upon presentation of a xxxx for legal services rendered).
4.4 Governing Law. THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF TEXAS AND THE
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
4.5 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AMENDMENT, THE CREDIT
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
4.6 Time is of the Essence. Time is of the essence in the performance of the
covenants contained herein and in the Loan Documents.
4.7 Binding Agreement. This Amendment shall be binding upon the successors and
assigns of the parties hereto; provided, however, the foregoing shall not be deemed or construed to
(i) permit, sanction, authorize or condone the assignment of all or any part of any interest in and
to the Borrower or any Guarantor except as expressly authorized in the Loan Documents, or
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(ii) confer any right, title, benefit, cause of action or remedy upon any person or entity not
a party hereto, which such party would not or did not otherwise possess.
4.8 Headings. The section headings hereof are inserted for convenience of reference
only and shall in no way alter, amend, define or be used in the construction or interpretation of
the text of such section.
4.9 Construction. Whenever the context hereof so required, reference to the singular
shall include the plural and likewise, the plural shall include the singular; words denoting gender
shall be construed to mean the masculine, feminine or neuter, as appropriate; and specific
enumeration shall not exclude the general but shall be construed as cumulative of the general
recitation.
4.10 Counterparts. This Amendment may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so executed and delivered
shall be deemed to be an original and all of which taken together shall constitute but one and the
same agreement. Delivery of an executed counterpart by facsimile or other electronic means shall
be effective as delivery of an original executed counterpart of this Amendment.
4.11 No Reliance. In executing this Amendment, the Borrower warrants and represents
that the Borrower is not relying on any statement or representation other than those in this
Amendment and the other Loan Documents and is relying upon its own judgment and advice of its
attorneys.
4.12 ENTIRE AGREEMENT. THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS COLLECTIVELY
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment effective as of the date
first set forth above.
| BORROWER: LENNOX INTERNATIONAL INC., a Delaware corporation |
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| By: | /s/ Xxxx X. Xxxxxx | |||
| Xxxx X. Xxxxxx, | ||||
| Vice President and Treasurer | ||||
| ADMINISTRATIVE AGENT BANK OF AMERICA, N.A., in its capacity as Administrative Agent for the Lenders |
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| By: | /s/ Xxxxxxx Xxxxxxxx | |||
| Xxxxxxx Xxxxxxxx | ||||
| Vice President | ||||
| BANK OF AMERICA, N.A., as a Lender, as an Issuing Bank and as Swingline Lender |
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| By: | /s/ Xxxxxxx X. Xxxxxxxx | |||
| Xxxxxxx X. Xxxxxxxx | ||||
| Vice President | ||||
| JPMORGAN CHASE BANK, N.A. |
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| By: | /s/ Xxxxx XxXxxxxx | |||
| Name: | Xxxxx XxXxxxxx | |||
| Title: | Vice President | |||
| THE BANK OF NOVA SCOTIA |
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| By: | /s/ W. Xxxxxxx Xxxxxxxx | |||
| Name: | W. Xxxxxxx Xxxxxxxx | |||
| Title: | Director | |||
Signature Page – Third Amendment to Second Amended and Restated Credit Facility Agreement
| THE BANK OF TOKYO-MITSUBISHI UFJ, LTD. |
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| By: | /s/ Xxxxx Xxxxxxx | |||
| Name: | Xxxxx Xxxxxxx | |||
| Title: | Vice President | |||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxx | |||
| Title: | Manager, Southwest Corporate | |||
| XXXXX FARGO BANK, N.A. |
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| By: | /s/ Xxxx Xxxxxxxx | |||
| Name: | Xxxx Xxxxxxxx | |||
| Title: | Vice President | |||
| THE ROYAL BANK OF SCOTLAND plc |
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| By: | /s/ Xxxxxx X. Xxxxx, Xx. | |||
| Name: | Xxxxxx Xxxxx | |||
| Title: | Managing Director | |||
| WACHOVIA BANK, NA |
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| By: | /s/ Xxxxxxxx X. Xxxxxx | |||
| Name: | Xxxxxxxx X. Xxxxxx | |||
| Title: | Senior Vice President | |||
| BANK OF TEXAS, N.A. |
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| By: | /s/ Xxxxxx X. Gulberti | |||
| Name: | Bianca A Gulberti | |||
| Title: | Vice President | |||
| U.S. BANK NATIONAL ASSOCIATION |
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| By: | /s/ Xxxxx X. Xxxxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxxxx | |||
| Title: | Vice President | |||
Signature Page – Third Amendment to Second Amended and Restated Credit Facility Agreement
| COMPASS BANK |
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| By: | /s/ Xxxxxx Xxxxx | |||
| Name: | Xxxxxx Xxxxx | |||
| Title: | Senior Vice President | |||
| THE NORTHERN TRUST COMPANY |
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| By: | /s/ Xxxxx X. Xxxxxx | |||
| Name: | Xxxxx X. Xxxxxx | |||
| Title: | Vice President | |||
| COMERICA BANK |
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| By: | /s/ Xxxxxxx X. Xxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxx | |||
| Title: | Vice President | |||
| AMEGY BANK NATIONAL ASSOCIATION |
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| By: | /s/ Xxxxxxx Xxxxxxx | |||
| Name: | Xxxxxxx Xxxxxxx | |||
| Title: | Senior Vice President | |||
| UBS LOAN FINANCE LLC |
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| By: | /s/ Xxxxx X. Xxxxx | |||
| Name: | Xxxxx X. Xxxxx | |||
| Title: | Associate Director | |||
| By: | /s/ Xxxx X. Xxxx | |||
| Name: | Xxxx X. Xxxx | |||
| Title: | Associate Director | |||
Signature Page – Third Amendment to Second Amended and Restated Credit Facility Agreement
| CALYON NEW YORK BRANCH |
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| By: | /s/ Xxxxxx Xxxxx | |||
| Name: | Xxxxxx Xxxxx | |||
| Title: | Managing Director | |||
| By: | /s/ Xxxxxx Xxxxxx | |||
| Name: | Xxxxxx Xxxxxx | |||
| Title: | Managing Director | |||
| FIRST TENNESSEE BANK NATIONAL ASSOCIATION |
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| By: | /s/ Xxxxxxx X. Xxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxx | |||
| Title: | ||||
| REGIONS BANK
|
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| By: | ||||
| Name: | ||||
| Title: | ||||
| THE BANK OF NEW YORK |
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| By: | /s/ Xxxx X. Xxxx | |||
| Name: | Xxxx X Xxxx | |||
| Title: | Vice President | |||
CONSENT
The undersigned, as Guarantors under that certain Second Amended and Restated Subsidiary Guaranty
Agreement, dated as of July 8, 2005 (the “Subsidiary Guaranty”) in favor of Bank of
America, N.A., as Administrative Agent (the “Administrative Agent”) for the Lenders parties
to the Credit Agreement referred to in the Third Amendment to Second Amended and Restated Credit
Facility Agreement (the “Amendment”), dated as of August ___, 2007, among Lennox
International Inc., as Borrower, the lenders party thereto (the “Lenders”) and the
Administrative Agent, hereby consent to the execution and delivery of the Amendment, and hereby
confirm and agree that the Subsidiary Guaranty 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 effective
date of the Amendment, each reference in the Subsidiary Guaranty to “the Credit Agreement”,
“thereunder”, “thereof” or words of like import referring to the Credit Agreement shall mean and be
a reference to the Credit Agreement as amended by the Amendment.
| GUARANTORS: LENNOX INDUSTRIES INC. ALLIED AIR ENTERPRISES INC. SERVICE EXPERTS INC. LENNOX GLOBAL LTD. |
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| By: | /s/ Xxxx X. Xxxxxx | |||
| Xxxx X. Xxxxxx | ||||
| Treasurer | ||||
| On behalf of each of the Guarantors identified above | ||||
Signature Page – Third Amendment to Second Amended and Restated Credit Facility Agreement
