Exhibit 10.14
LETTER AMENDMENT NO. 2
TO
MASTER SHELF AGREEMENT DATED AS OF OCTOBER 15, 1999
January 23, 2001
The Prudential Insurance Company
of America
c/o Prudential Capital Group
2200 Ross Avenue, Suite 4200E
Dallas, Texas 75201
Ladies and Gentlemen:
We refer to the Master Shelf Agreement dated as of October 15, 1999, as
amended by Letter Amendment No. 1 dated February 28, 2000 (as so amended, the
"AGREEMENT") among the undersigned, Lennox International Inc. (the "COMPANY"),
and The Prudential Insurance Company of America ("PRUDENTIAL"). Unless otherwise
defined herein, the terms defined in the Agreement shall be used herein as
therein defined.
The Company has requested that Prudential enter into this Letter Amendment
No. 2 to evidence amendment of the Agreement as set forth herein. You have
indicated your willingness to so agree. Accordingly, it is hereby agreed by you
and us as follows:
The Agreement is, effective the date first above written, hereby amended as
follows:
PARAGRAPH 10.12.3. FINANCIAL COVENANTS. The first sentence of clause
(b) of paragraph 10.12.3 is amended in full to read as follows:
"(b) CONSOLIDATED INDEBTEDNESS TO ADJUSTED EBITDA. As of the last
day of each fiscal quarter during the periods described below, the
Company shall not permit the ratio of Consolidated Indebtedness
outstanding as of such day to the Adjusted EBITDA for the four (4)
fiscal quarters then ended to exceed: (i) 3.00 to 1.00 at all times
other than as described in the following clause (ii); or (ii) 3.25 to
1.00 for all fiscal quarters ending prior to September 30, 2001."
SCHEDULE B. DEFINED TERMS. The definition of "Consolidated Net Income"
in Schedule B is amended in full to read as follows:
"CONSOLIDATED NET INCOME" for any period means the net income (or net
loss) of the Company and its Restricted Subsidiaries for such period,
determined in accordance with GAAP, EXCLUDING:
(a) the proceeds of any life insurance policy;
(b) any gain arising from (1) the sale or other disposition of any
assets (other than current assets) to the extent that the aggregate amount
of gains exceeds the aggregate amount of losses from the sale, abandonment
or other disposition of assets (other than current assets and other than
the losses excluded from Consolidated Net Income under clause (f) below),
(2) any write-up of assets, or (3) the acquisition by the Company or any
Restricted Subsidiary of its outstanding securities constituting
Indebtedness;
(c) any amount representing the interest of the Company or any
Restricted Subsidiary in the undistributed earnings of any other Person;
(d) any earnings of any other Person accrued prior to the date it
becomes a Restricted Subsidiary or is merged into or consolidated with the
Company or a Restricted Subsidiary and any earnings, prior to the date of
acquisition, of any other Person acquired in any other manner;
(e) any deferred credit (or amortization of a deferred credit) arising
from the acquisition of any Person;
(f) any non-recurring loss arising from the sale or other disposition
of any asset in 2001 but only to the extent that the aggregate amount of
such losses is less than $25,000,000; and
(g) any non-recurring restructuring charges recorded in 2001 but only
to the extent that the aggregate amount of such restructuring charges is
less than $25,000,000."
On and after the effective date of this Letter Amendment No. 2, each
reference in the Agreement to "this Agreement", "hereunder", "hereof", or words
of like import referring to the Agreement, and each reference in the Notes to
"the Agreement", "thereunder", "thereof", or words of like import referring to
the Agreement, shall mean the Agreement as amended by this Letter Amendment No.
2. The Agreement, as amended by this Letter Amendment No. 2, is and shall
continue to be in full force and effect and is hereby in all respects ratified
and confirmed. The execution, delivery and effectiveness of this Letter
Amendment No. 2 shall not, except as expressly provided herein, operate as a
waiver of any right, power or remedy under the Agreement nor constitute a waiver
of any provision of the Agreement.
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This Letter Amendment No. 2 may be executed in any number of counterparts
and by any combination of the parties hereto in separate counterparts, each of
which counterparts shall be an original and all of which taken together shall
constitute one and the same letter amendment.
If you agree to the terms and provisions hereof, please evidence your
agreement by executing and returning at least a counterpart of this Letter
Amendment No. 2 to Lennox International Inc., 2140 Lake Park Blvd., Richardson,
TX 75080, Attention of Chief Financial Officer. This Letter Amendment No. 2
shall become effective as of the date first above written when and if (i)
counterparts of this Letter Amendment No. 2 shall have been executed by us and
you; (ii) holders of at least 66-2/3% in aggregate unpaid principal amount of
all notes under each of the1993 Note Agreements, the 1995 Note Agreement and the
1998 Note Agreement (as each such term is defined in Exhibit A attached hereto)
at the time outstanding shall have executed an amendment similar to this Letter
Amendment No. 2; and (iii) the Company shall have furnished to Prudential
evidence of the satisfaction of clause (ii).
Very truly yours,
LENNOX INTERNATIONAL INC.
By: /s/ CARL E. EDWARDS, JR.
------------------------
Carl E. Edwards, Jr.
Executive Vice President
Agreed as of the date first above written:
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: /s/ RIC E. ABEL
---------------
Ric E. Abel
Vice President
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