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EXHIBIT 10.6
[Execution Copy]
February 28, 2000
The Prudential Insurance Company of North America
c/o Prudential Capital Group
2200 Ross Avenue, Suite 4200E
Dallas, TX 75201
Attention: Managing Director
U.S. Private Placement Fund
Prudential Private Placement Investors, Inc.
Four Gateway Center
100 Mulberry Street
Newark, NJ 07102-4069
Teachers Insurance and Annuity
Association of America
730 Third Avenue
New York, New York 10017
Attention: Securities Division, Private Placements
CIG & Co.
c/o CIGNA Investments, Inc.
900 Cottage Grove Road
Hartford, Connecticut 06152-2307
Attention: Private Securities Division - S-307
United of Omaha Life Insurance Company
Mutual of Omaha Insurance Company
Companion Life Insurance Company
United World Life Insurance Company
Mutual of Omaha Plaza
Omaha, NE 68175
Attention: Investment Division
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First Colony Life Insurance Company
General Electric Capital Assurance Company
c/o GE Financial Assurance
Two Union Square
601 Union Street
Seattle, WA 98101-2336
RE: LENNOX INTERNATIONAL INC.
9.53% SENIOR PROMISSORY NOTES DUE 2001; 7.06% SENIOR
PROMISSORY NOTES DUE 2005; 6.73% SENIOR PROMISSORY NOTES
DUE 2008; 6.56% SENIOR NOTES DUE 2005; AND 6.75% SENIOR NOTES
DUE 2008
Ladies and Gentlemen:
Reference is made to:
(i) three separate Agreements of Assumption and Restatement, dated as
of December 1, 1991 (as amended, the "1991 AGREEMENTS"), between Lennox
International Inc. (the "COMPANY") and each of Teachers Insurance and Annuity
Association of America, Connecticut General Life Insurance Company and INA Life
Insurance Company of New York (collectively, and together with their respective
successors and assigns, the "1991 HOLDERS");
(ii) nine separate Note Purchase Agreements, dated as of December 1,
1993 (as amended, the "1993 NOTE AGREEMENTS"), between the Company and each of
The Prudential Insurance Company of America, Connecticut General Life Insurance
Company, Connecticut General Life Insurance Company, on behalf of One or More
Separate Accounts, Life Insurance Company of North America, United of Omaha Life
Insurance Company, Mutual of Omaha Insurance Company, Companion Life Insurance
Company, United World Life Insurance Company, First Colony Life Insurance
Company and General Electric Capital Assurance Company (as a successor)
(collectively, and together with their respective successors and assigns, the
"1993 HOLDERS");
(iii) the Note Purchase Agreement, dated as of July 6, 1995 (as
amended, the "1995 NOTE AGREEMENT"), between the Company and Teachers Insurance
and Annuity Association of America (together with its successors and assigns,
the "1995 HOLDER");
(iv) eight separate Note Purchase Agreements, dated as of April 3, 1998
(as amended, the "1998 NOTE Agreements"), between the Company and each of The
Prudential Insurance Company of America, U.S. Private Placement Fund, Teachers
Insurance and Annuity Association of America, Connecticut General Life Insurance
Company, Connecticut General Life Insurance Company, on behalf of One or More
Separate Accounts, CIGNA Property and Casualty Insurance Company, United of
Omaha Life Insurance Company and Companion Life Insurance Company (collectively,
and together with their respective successors and assigns, the "1998 HOLDERS");
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(v) the letter agreement dated July 29, 1999 (the "1999 AMENDMENT
AGREEMENT") among the Company and the Holders (as defined below) amending the
Note Agreements (as defined below) to add the "Additional Covenants" set forth
in Schedule A to the 1999 Amendment;
(vi) the Revolving Credit Facility Agreement dated as of July 29, 1999
(the "1999 CREDIT AGREEMENT") entered into among the Company, the lenders listed
in Schedule 2.01 thereto (the "1999 LENDERS"), Chase Bank of Texas, National
Association, as administrative agent, Wachovia Bank, N.A., as syndication agent,
and The Bank of Nova Scotia, as documentation agent; and
(vii) the 364 Day Revolving Credit Facility Agreement dated as of
January 25, 2000 (the "2000 CREDIT AGREEMENT") entered into among the Company,
the lenders listed in Schedule 2.01 thereto (the "2000 LENDERS"), Chase Bank of
Texas, National Association, as administrative agent, Wachovia Bank, N.A., as
syndication agent, and The Bank of Nova Scotia, as documentation agent.
The 1991 Agreements, 1993 Note Agreements, 1995 Note Agreement and 1998 Note
Agreements, as amended, are collectively referred to herein as the "NOTE
AGREEMENTS". The 1991 Holders, 1993 Holders, 1995 Holder and 1998 Holders are
collectively referred to herein as the "HOLDERS". The senior notes issued and
outstanding under each of the Note Agreements are collectively referred to
herein as the "NOTES". Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings set forth in the Note Agreements
(including Schedule A to the 1999 Amendment Agreement).
The Company has requested the Holders to enter into this letter agreement (this
"2000 AMENDMENT AGREEMENT") to evidence amendment of the Note Agreements as set
forth herein. Such amendment shall become effective as set forth in Section 2.
The Company has furnished to the Holders evidence that the 1999 Lenders and the
2000 Lenders have agreed to the same covenant as stated in Section 1 below in an
amendment to the 1999 Credit Agreement and in the 2000 Credit Agreement,
respectively; provided this 2000 Amendment Agreement becomes effective as
provided herein. Therefore, the Holders and the Company hereby agree as follows:
1. Amendment to Additional Covenants. Subject to Section 2 hereof,
Section 3(b) of Schedule A to the 1999 Amendment Agreement is hereby amended to
read in its entirety 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 March 31, 2001.
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2. Effectiveness of Amendment Agreement. This 2000 Amendment Agreement
shall be effective when (i) holders of at least 66-2/3% in aggregate unpaid
principal amount of all Notes under each of the 1991 Note Agreements, the 1993
Note Agreements, the 1995 Note Agreement and the 1998 Note Agreements at the
time outstanding shall have executed a counterpart of this 2000 Amendment
Agreement, and (ii) the Company shall have furnished to each of the Holders
evidence of the satisfaction of clause (i).
3. No Default. The Company hereby represents and warrants that upon the
effectiveness of this 2000 Amendment Agreement, no Default or Event of Default
shall have occurred and be continuing.
4. Miscellaneous. Except as expressly amended by this 2000 Amendment
Agreement, the Note Agreements shall remain in full force and effect. This 2000
Amendment Agreement shall be binding upon and inure to the benefit of the
Holders and their respective successors and permitted assigns. This 2000
Amendment Agreement may be signed in any number of counterparts, each of which
shall constitute an original.
[signature pages follow]
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If the foregoing correctly describes our understanding with respect to
the subject matter of this Amendment Agreement, please execute this letter in
the place indicated below.
Very truly yours,
LENNOX INTERNATIONAL INC.
By: /s/ Clyde Wyant
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Clyde Wyant
Executive Vice President,
Chief Financial Officer
ACCEPTED AND AGREED:
THE PRUDENTIAL INSURANCE COMPANY
OF NORTH AMERICA
By: /s/ Ric E. Abel
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Name: Ric E. Abel
Title: Vice President
U.S. PRIVATE PLACEMENT FUND
By: Prudential Private Placement Investors, L.P.,
Investment Advisor
By: Prudential Private Placement Investors, Inc.,
its General Partner
By: /s/ Ric E. Abel
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Name: Ric E. Abel
Title: Vice President
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TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By: /s/ Loren S. Archibald
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Name: Loren S. Archibald
Title: Managing Director, Private Placements
CIG & CO.
By: /s/ Steven A. Osborn
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Name: Steven A. Osborn
Title: Partner
[remainder of page intentionally blank]
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UNITED OF OMAHA LIFE INSURANCE COMPANY
By: /s/ Curtis R. Caldwell
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Name: Curtis R. Caldwell
Title: First Vice President
MUTUAL OF OMAHA INSURANCE COMPANY
By:. /s/ Curtis R. Caldwell
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Name: Curtis R. Caldwell
Title: First Vice President
COMPANION LIFE INSURANCE COMPANY
By: /s/ Curtis R. Caldwell
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Name: Curtis R. Caldwell
Title: Authorized Signer
UNITED WORLD LIFE INSURANCE COMPANY
By: /s/ Curtis R. Caldwell
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Name: Curtis R. Caldwell
Title: Authorized Signer
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FIRST COLONY LIFE INSURANCE COMPANY
By: /s/ Morian C. Mooers
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Name: Morian C. Mooers
Title: Assistant Vice President and Investment Officer
GENERAL ELECTRIC CAPITAL ASSURANCE COMPANY
By: /s/ Morian C. Mooers
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Name: Morian C. Mooers
Title: Investment Officer
cc: Companion Life Insurance Company
Attention: Financial Division
401 Theodore Fremd Avenue
Rye, NY 10580-1493
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