SECOND AMENDMENT TO 364 DAY REVOLVING CREDIT FACILITY AGREEMENT
SECOND AMENDMENT TO 364 DAY REVOLVING CREDIT FACILITY AGREEMENT
THIS SECOND AMENDMENT TO 364 DAY REVOLVING CREDIT FACILITY AGREEMENT (the “Amendment”), dated as of June 29, 2001, is among LENNOX INTERNATIONAL INC., a Delaware corporation (the “Borrower”), each of the lenders listed as a lender on the signatures pages hereto (individually, a “LENDER” and, collectively, the "LENDERS"), THE CHASE MANHATTAN BANK (as the successor in interest by merger to Chase Bank of Texas, National Association), as administrative agent for the Lenders (in such capacity, the “Administrative Agent”), WACHOVIA BANK, N.A., a national banking association, as syndication agent (in such capacity, the "Syndication Agent" and together with the Administrative Agent, herein the “Agents”) and THE BANK OF NOVA SCOTIA, as documentation agent.
The Borrower, the Agents and the Lenders are party to that certain 364 Day Revolving Credit Facility Agreement dated as of January 25, 2000 (as amended or otherwise modified by the First Amendment to 364 Day Revolving Credit Facility Agreement dated as of January 22, 2001, the “CREDIT AGREEMENT”). The Borrower, the Lenders and the Agents desire to amend the Credit Agreement as herein set forth.
NOW, THEREFORE, in consideration of the premises herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows effective as of the date hereof:
ARTICLE 1
Definitions
Section 1.1 Definitions. Capitalized terms used in this Amendment and defined in the Credit Agreement, to the extent not otherwise defined herein shall have the same meaning as in the Credit Agreement, as amended hereby.
ARTICLE 2
Amendments
Section 2.1 Additions to Section 1.01. The following definitions are added to SECTION 1.01 of the Credit Agreement in proper alphabetical order:
| “Approved Receivables Securitization” means a receivables securitization or other receivables sale program as long as the aggregate amount of the commitments to purchase receivables under all such programs does not at any time exceed $225,000,000. |
| “Collateral Agent ” means The Chase Manhattan Bank, as collateral agent under the terms of the Intercreditor Agreement (for the benefit of the Lenders, the lenders under the Revolving Credit Facility, the lenders party to the Senior Note Purchase Agreements and any other lenders which become entitled to the benefits of the Liens granted in the Pledge Agreement under the terms of the Intercreditor Agreement) and its successors and assigns in such capacity. |
| “Intercreditor Agreement” means that certain Intercreditor Agreement to be executed pursuant to Section 5.23(a) initially among the Borrower, the Material Restricted Subsidiaries, The Chase Manhattan Bank, as collateral agent thereunder, the |
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| Administrative Agent, the administrative agent under the Revolving Credit Facility and the lenders party to the Senior Note Purchase Agreements, as approved by the Required Lenders and as the same may be amended or otherwise modified from time to time. |
| “ Lender Affiliates” shall have the meaning assigned it in Section 8.04(b). |
| “Material Restricted Subsidiary” means Lennox Industries Inc., ▇▇▇▇▇▇▇▇▇ Air Conditioning Inc., Excel Comfort Systems Inc., Service Experts Inc. and each other Restricted Subsidiary (except LPAC Corp.) the book value (determined in accordance with GAAP) of whose total assets equals or exceeds ten percent (10%) of the book value (determined in accordance with GAAP) of the consolidated total assets of Borrower and all Subsidiaries as determined as of the last day of each fiscal quarter. |
| “Material Transfer” shall mean, with respect to the Borrower or any Restricted Subsidiary, any transaction or group of related transactions having a value in excess of $10,000,000 in which such Person sells, conveys, transfers or leases (as lessor) any of its property, including capital stock of, or a Security issued by, a Subsidiary; provided that, the term “Material Transfer” shall not include the sale of receivables sold by the Borrower and the Restricted Subsidiaries under an Approved Receivables Securitization. For purposes of this definition the term “value” of any property transferred shall be equal to the transfer price specified in the applicable sale, lease or other transfer documents for the property in question. |
| “Maximum Rate” shall have the meaning assigned it in Section 8.13. |
| “ Obligated Parties” means the Borrower and the Material Restricted Subsidiaries. |
| “Pledge Agreement” means that certain Pledge Agreement to be executed by the Borrower in favor of the Collateral Agent, pursuant to Section 5.23(a), as the same may be modified from time to time. |
| “Revolving Credit Facility” means that certain Revolving Credit Facility Agreement dated July 29, 1999 among the Borrower, Chase Bank of Texas, National Association [now The Chase Manhattan Bank], as administrative agent, the other agents named therein and the lenders named therein, as the same has been and may hereafter be amended or otherwise modified. |
| “Subsidiary Guaranty” means the guaranty of the Material Restricted Subsidiaries in favor of the Administrative Agent, the Issuing Bank and the Lenders, substantially in the form of Exhibit D hereto, as the same may be modified pursuant to one or more Subsidiary Joinder Agreements and as the same may otherwise be modified from time to time. |
| “Subsidiary Joinder Agreement” means an agreement which has been or will be executed by a Material Restricted Subsidiary adding it as a party to the Subsidiary Guaranty, in substantially the form of Exhibit E hereto. |
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Section 2.2 Amendments to Existing Definitions in Section 1.01. The following existing definitions contained in SECTION 1.01 of the Credit Agreement are amended as follows:
| (a) The following defined terms are amended in their respective entireties to read as follows: |
| “Applicable Percentage” means, with respect to any Lender, the percentage of the total Commitments represented by such Lender’s Commitment. If the Commitments have terminated or expired, the Applicable Percentage shall be determined based upon the Revolving Exposures, or if all Loans and Swingline Loans have been repaid, based on the Commitments in effect immediately prior to their termination or expiration. |
| “EBITDA” means, for any period, the total of the following calculated for Borrower and the Restricted Subsidiaries without duplication on a consolidated basis in accordance with GAAP consistently applied for such period: (a) Consolidated Net Income from operations; PLUS (b) any deduction for (or less any gain from) income or franchise taxes included in determining Consolidated Net Income; PLUS (c) interest expense (including the interest portion of Capital Leases) deducted in determining Consolidated Net Income; PLUS (d) amortization and depreciation expense deducted in determining Consolidated Net Income; PLUS (e) any non-recurring and non cash charges resulting from application of GAAP that requires a charge against earnings for the impairment of goodwill to the extent not already added back or not included in determining Consolidated Net Income. |
| “Fee Letter”shall mean the following: (i) that certain letter agreement among the Borrower, ▇▇ ▇▇▇▇▇▇ Securities Inc. (formerly Chase Securities Inc.) and Chase dated as of June 29, 2001; and (ii) that certain letter agreement among the Borrower, Chase Securities Inc. and Chase dated January 4, 2000. |
| “Interest Payment Date” shall mean (a) with respect to any ABR Borrowing or the payment of the Letter of Credit fees under Section 2.04(c), each March 31, June 30, September 30 and December 31, beginning on the first such date after the date hereof; (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable thereto and, in the case of such a Eurodollar Loan with an Interest Period of more than three months, each day that would have been an Interest Payment Date for such Eurodollar Loan had successive Interest Periods of three months duration, as the case may be, been applicable to such Eurodollar Loan; (c) with respect to any Negotiated Rate Borrowing, the last day of the Interest Period applicable thereto; (d) with respect to all Borrowings, the date of any prepayment thereof and the Maturity Date; and (e) in addition, with respect to the payment of the Letter of Credit fees under Section 2.04(c), the Maturity Date. |
| “Material Adverse Effect” shall mean a material adverse effect on (a) the business, operations, affairs, financial condition, assets or properties of the Borrower and its Restricted Subsidiaries taken as a whole, or (b) the ability of the Borrower to perform its obligations under this Agreement and the ability of the Material Restricted Subsidiaries to perform their respective obligations under the Subsidiary Guaranty, taken as a whole, or (c) the validity or enforceability of this Agreement, the Pledge Agreement or the Subsidiary Guaranty. |
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| “ Senior Note Purchase Agreements” shall mean the following: |
| (i) nine separate Note Purchase Agreements, dated as of December 1, 1993, as each of the same have been amended, between the Borrower 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, 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, General Electric Capital Assurance Company (as a successor) and GE Life and Annuity Assurance Company (as a successor); |
| (ii) the Note Purchase Agreement, dated as of July 6, 1995 between the Borrower and Teachers Insurance and Annuity Association of America, as the same has been amended; |
| (iii) eight separate Note Purchase Agreements, dated as of April 3, 1998, as each of the same have been amended, between the Borrower 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; and |
| (iv) that certain Master Shelf Agreement dated as of October 15, 1999 between the Borrower and the Prudential Insurance Company of America, as the same has been amended. |
(b) Clause (ii) of the definition of the term “Adjusted EBITDA” is amended in its entirety to read as follows:
| (ii) to the extent deducted in computing such consolidated net income (or loss), without duplication, the sum of (a) any deduction for (or less any gain from) income or franchise taxes included in determining such consolidated net income (or loss); PLUS (b) interest expense (including the interest portion of Capital Leases) deducted in determining such consolidated net income (or loss); PLUS (c) amortization and depreciation expense deducted in determining such consolidated net income (or loss) PLUS (d) any non-recurring and non cash charges resulting from the application of GAAP that requires a charge against earnings for the impairment of goodwill to the extent not already added back or not included in determining such consolidated net income (or loss); MINUS, |
(c) Clauses (f) and (g)of the definition of the term “Consolidated Net Income” are amended in their respective entireties to read as follows and a new clause (h) is added thereto to read as follows:
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(f) any non-recurring loss arising from the sale or other disposition of assets recorded (i) during the fiscal quarter ended June 30, 2001, but only to the extent that the aggregate amount of such losses PLUS the restructuring charges allowed in
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Clause (g)(i) hereof for such fiscal quarter is less than $32,400,000; and (ii) after June 30, 2001, in an aggregate amount for such period not to exceed $25,000,000;(g) any non-recurring restructuring charges recorded (i) during the fiscal quarter ended June 30, 2001, but only to the extent that the aggregate amount of such restructuring charges PLUS the losses allowed in Clause (f)(i) hereof for such fiscal quarter is less than $32,400,000; and (ii) after June 30, 2001, in an aggregate amount for such period not to exceed $25,000,000 but provided that cash charges included in such restructuring charges shall at no time exceed $12,500,000; and
(h) any non-recurring and non cash charges resulting from the application of GAAP that requires a charge against earnings for the impairment of goodwill.
Section 2.3 Amendment to Section 2.06. Section 2.06 of the Credit Agreement is amended in its entirety to read as follows:
Section 2.06 Interest On Loans; Margin and Fees.
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(a) Subject to the provisions of Section 2.07, the Loans and Swingline Loans comprising each Eurodollar Borrowing shall bear interest (computed on the basis of the actual number of days elapsed over a year of 360 days) at a rate per annum equal to the LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Margin from time to time in effect. Subject to the provisions of Section 2.07, the Swingline Loans comprising each Negotiated Rate Borrowing shall bear interest (computed on the basis of the actual number of days elapsed over a year of 360 days) at a rate per annum equal to the Negotiated Rate for the Interest Period in effect for such Borrowing.
(b) Subject to the provisions of Section 2.07, the Loans and Swingline Loans comprising each ABR Borrowing shall bear interest (computed on the basis of the actual number of days elapsed over a year of 365 or 366 days, as the case may be, for periods during which the Alternate Base Rate is determined by reference to the Prime Rate and 360 days for other periods and including for all calculations the first day of any period but excluding the last) at a rate per annum equal to the Alternate Base Rate.
(c) Interest on each Loan and Swingline Loan shall be payable on each Interest Payment Date applicable to such Loan or Swingline Loan except as otherwise provided in this Agreement. The applicable LIBO Rate or Alternate Base Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error; provided that the Administrative Agent shall, upon request, provide to the Borrower a certificate setting forth in reasonable detail the basis for such determination.
(d) The Applicable Margin identified in this Section 2.06 and the Commitment Fee Percentage identified in Section 2.04 shall be defined and determined as follows:
| “Applicable Margin” shall mean (i) during the period commencing on the July 12, 2001 and ending on but not including the |
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| first Adjustment Date (as defined below), 2.00% per annum and (ii) during each period from and including one Adjustment Date to but excluding the next Adjustment Date (herein a “CALCULATION PERIOD”), the percent per annum set forth in the table below under the heading “Margin” opposite the Debt to Adjusted EBITDA Ratio which corresponds to the Debt to Adjusted EBITDA Ratio set forth in, and as calculated in accordance with, the applicable Compliance Certificate. |
| “Commitment Fee Percentage” shall mean (1) during the period commencing on the July 12, 2001 and ending on but not including the first Adjustment Date, 0.375% per annum and (2) during each Calculation Period, the percent per annum set forth in the table below under the heading “Commitment Fee Percentage” opposite the Debt to Adjusted EBITDA Ratio which corresponds to the Debt to Adjusted EBITDA Ratio set forth in, and as calculated in accordance with, the applicable Compliance Certificate. |
Commitment Debt to Adjusted EBITDA Ratio Margin Fee Percentage ----------------------------- ------ -------------- Greater than 3.50 to 1.00 2.250% 0.500% Greater than 3.25 to 1.0 but less than or equal 2.000% 0.375% to 3.50 to 1.0 Greater than 3.00 to 1.0 but less than or equal 1.750% 0.375% to 3.25 to 1.0 Greater than 2.75 to 1.0 but less than or equal 1.500% 0.300% to 3.00 to 1.0 Greater than 2.50 to 1.0 but less than or equal 1.125% 0.300% to 2.75 to 1.0 Greater than 2.00 to 1.0 but less than or equal 0.875% 0.250% to 2.50 to 1.0 Greater than 1.50 to 1.0 but less than or equal 0.750% 0.200% to 2.00 to 1.0 Greater than 1.00 to 1.0 but less than or equal 0.625% 0.1875% to 1.50 to 1.0 Less than or equal to 1.00 to 1.00 0.500% 0.150%
| Upon delivery of the Compliance Certificate pursuant to Section 5.20(g) in connection with the financial statements of the Borrower and its Subsidiaries required to be delivered pursuant to Sections 5.20(a) and (b), commencing with such Compliance Certificate delivered with respect to the fiscal quarter ending on June 30, 2001, the Applicable Margin (for Interest Periods commencing after the applicable Adjustment Date) and the Commitment Fee Percentage shall automatically be adjusted in accordance with the Debt to Adjusted EBITDA Ratio set forth therein and the table set forth above, such automatic adjustment to take effect as of the first Business Day after the receipt by the Agent of the related Compliance Certificate pursuant to Section 5.20(g) (each such Business Day when such margin or fees change pursuant to this sentence or the next following sentence, herein an “ADJUSTMENT DATE”). If the Borrower fails to deliver such Compliance Certificate which so sets forth the Debt to Adjusted EBITDA Ratio within the period of time required by Section 5.20(g): (i) the Applicable Margin (for Interest Periods commencing after the applicable Adjustment Date) shall automatically be adjusted to 2.250% per annum; and (ii) the Commitment Fee Percentage shall automatically be adjusted to 0.500% per annum, such automatic adjustments to take effect as of the first |
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| Business Day after the last day on which the Borrower was required to deliver the applicable Compliance Certificate in accordance with Section 5.20(g) and to remain in effect until subsequently adjusted in accordance herewith upon the delivery of a Compliance Certificate. |
Section 2.4 Amendment to Sections 2.09. Clause (c) of Section 2.09 of the Credit Agreement is amended in its entirety, and new clauses (d) and (e) are added to Section 2.09, each to read as follows:
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(c) Immediately after giving effect to a Transfer authorized under Section 5.11(c) that is a Material Transfer, 60% of the net, after tax proceeds of such Transfer shall be used to reduce the commitments under the revolving Senior Secured Credit Facilities and/or the principal amounts outstanding under any other Senior Secured Credit Facilities. The Borrower shall have the option of determining which Senior Secured Credit Facility or Facilities to which to apply such proceeds. If any of such proceeds are applied to this Agreement, the amount the Borrower has determined to apply to this Agreement shall be used to reduce the Total Commitments and make any repayments of the Loans or Swingline Loans required by such reduction. The term "SENIOR SECURED CREDIT FACILITIES" means this Agreement, the Revolving Credit Facility, the Senior Note Purchase Agreements and any other facility providing Indebtedness which refinances any of the foregoing or is otherwise entitled under the Intercreditor Agreement to the benefits of the Liens granted under the Pledge Agreement.
(d) If the Borrower wants any Indebtedness that is hereafter incurred to be entitled under the Intercreditor Agreement to the benefits of the Liens granted under the Pledge Agreement, the Borrower shall use the proceeds of such Indebtedness to reduce the commitments under the revolving Senior Secured Credit Facilities in existence on June 29, 2001 and/or the outstanding under any other Senior Secured Credit Facilities in existence on June 29, 2001. The Borrower shall have the option of determining which Senior Secured Credit Facility or Facilities to which to apply such proceeds. If any of such proceeds are applied to this Agreement, the amount the Borrower has determined to apply to this Agreement shall be used to reduce the Total Commitments and make any repayments of the Loans or Swingline Loans required by such reduction.
(e) Each reduction in the Total Commitment hereunder shall be made ratably among the Lenders in accordance with their respective Commitments. The Borrower shall pay to the Administrative Agent for the account of the Lenders, on the date of each termination or reduction of the Total Commitment, the Commitment Fees on the amount of the Commitments so terminated or reduced accrued through the date of such termination or reduction.
Section 2.5 Amendments to Section 2.10. The heading and Clause (b) of Section 2.10 of the Credit Agreement are amended in their respective entireties to read as follows:
Section 2.10 Prepayment Including Prepayment as a Result of a Change of Control and Material Transfer.
| (b) On the date of any termination or reduction of the Total Commitment pursuant to Section 2.09 (including without limitation, any reduction arising as a result of a Material Transfer), the Borrower shall pay or prepay so much of the |
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| Borrowings as shall be necessary in order that the aggregate outstanding principal amount of the Loans and Swingline Loans will not exceed the sum of the Total Commitment minus all Letter of Credit Liabilities, after giving effect to such termination or reduction. |
Section 2.6 Amendment to Section 2.14. Sections 2.14 of the Credit Agreement is amended in its entirety to read as follows:
| Section 2.14 Sharing of Setoffs. Subject to the terms of the Intercreditor Agreement which shall have precedence over any conflicting provisions in this Section 2.14, each Lender agrees that if it shall, through the exercise of a right of banker’s lien, setoff or counterclaim, or pursuant to a secured claim under Section 506 of Title 11 of the United States Code or other security or interest arising from, or in lieu of, such secured claim, received by such Lender under any applicable bankruptcy, insolvency or other similar law or otherwise, or by any other means, obtain payment (voluntary or involuntary) in respect of any amounts due hereunder as a result of which the unpaid principal portion of such amount shall be proportionately less than the unpaid principal portion of such amount owed to any other Lender, it shall be deemed simultaneously to have purchased from such other Lender at face value, and shall promptly pay to such other Lender the purchase price for, a participation in such amounts of such other Lender, so that the aggregate unpaid principal amount of the obligations owed by the Borrower hereunder and participations in such obligations held by each Lender shall be in the same proportion to the aggregate unpaid principal amount of all obligations owed by the Borrower hereunder then outstanding as the principal amount of such obligations prior to such exercise of banker’s lien, setoff or counterclaim or other event was to the principal amount of all such obligations outstanding prior to such exercise of banker’s lien, setoff or counterclaim or other event; PROVIDED, HOWEVER, that, if any such purchase or purchases or adjustments shall be made pursuant to this Section 2.14 and the payment giving rise thereto shall thereafter be recovered, such purchase or purchases or adjustments shall be rescinded to the extent of such recovery and the purchase price or prices or adjustment restored without interest. The Borrower expressly consents to the foregoing arrangements and agrees that any Lender holding a participation in the obligations owed hereunder deemed to have been so purchased may exercise any and all rights of banker’s lien, setoff or counterclaim with respect to any and all moneys owing by the Borrower to such Lender by reason thereof as fully as if such Lender had made a Loan in the amount of such participation. |
Section 2.7 Amendment to Section 2.18. The phrase “, under the Subsidiary Guaranty or under the Intercreditor Agreement” is hereby added to Section 2.18 of the Credit Agreement between the word “hereunder” and the phrase“ for the account of”.
Section 2.8 Amendment to Section 2.20. The $25,000,000 figure in the last sentence of Clause (a) of Section 2.20 of the Credit Agreement is amended to be $35,000,000.
Section 2.9 Amendment to Section 3.02. Section 3.02 of the Credit Agreement is amended in its entirety to read as follows:
| Section 3.02 Authorization. The execution, delivery and performance by the Borrower of this Agreement, the Pledge Agreement and the Intercreditor Agreement, the Borrowings hereunder, the pledge of the stock of the Material Restricted Subsidiaries under the Pledge Agreement and the issuance of Letters of Credit hereunder (collectively, the “Transactions”) (a) have been duly authorized by all requisite corporate action and |
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| (b) will not (i) violate (A) any provision of any law, statute, rule or regulation to which any Obligated Party is subject or of the certificate of incorporation or other constituent documents or by-laws of the Borrower or any of its Subsidiaries, (B) any order of any Applicable Governmental Authority or (C) any provision of any Material indenture, agreement or other instrument to which the Borrower or any of its Subsidiaries is a party or by which it or any of its property is or may be bound (including the Senior Note Purchase Agreements and the Indebtedness limitations set forth in any Senior Note Purchase Agreement), (ii) be in conflict with, result in a breach of or constitute (alone or with notice or lapse of time or both) a default under any such indenture, agreement or other instrument or (iii) result in the creation or imposition of any Lien upon any property or assets of the Borrower or any of its Subsidiaries, except as contemplated by the Pledge Agreement. |
Section 2.10 Amendment to Section 3.05. Clause (a) of Section 3.05 of the Credit Agreement is amended in its entirety to read as follows.
| (a) Schedule 3.05 is (except as noted therein) a complete and correct list of the Borrower’s Subsidiaries as of May 31, 2001 showing, as to each Subsidiary, the correct name thereof, the jurisdiction of its organization, the percentage of its capital stock or similar equity interests owned by the Borrower and each other Subsidiary, and specifying whether such Subsidiary is a Restricted Subsidiary and a Material Restricted Subsidiary. Schedule 3.05A correctly sets forth the authorized, issued, and outstanding capital stock of each Material Restricted Subsidiary. All of the outstanding capital stock of each Material Restricted Subsidiary has been validly issued, is fully paid, and is nonassessable. There are no outstanding subscriptions, options, warrants, calls, or rights (including preemptive rights) to acquire, and no outstanding securities or instruments convertible into, capital stock of any Material Restricted Subsidiary. |
Section 2.11 Amendment to Section 3.13. The reference to "December 31, 1999" contained in Section 3.13 of the Credit Agreement is amended to read "May 26, 2001".
Section 2.12 Amendment to Section 5.11. The period at the end of Subclause (iii) of Clause (c) of Section 5.11 is deleted and replaced with “; or“, the last sentence of Section 5.11 is deleted therefrom and a new Clause (d) is added to the end of Section 5.11 to read in its entirety as follows:
| (d) such Transfer is the sale of receivables, or undivided interests therein, pursuant to an Approved Receivables Securitization. |
Section 2.13 Amendment to section 5.12. The following sentence is added after the first sentence of Section 5.12 of the Credit Agreement:
| In addition to and not in limitation of the other provisions of this Section 5.12, from June 29, 2001 until the date that the Debt to Adjusted EBITDA Ratio is less than 3.00 to 1.00 as calculated for any fiscal quarter after March 31, 2001 and established by the delivery of a Covenant Compliance Certificate under Section 5.20(g)(i) (such period, herein the “RESTRICTION PERIOD”), Borrower shall not permit any Restricted Subsidiary to, directly or indirectly, create, incur, assume, guarantee, or otherwise become directly or indirectly liable with respect to or otherwise permit any Indebtedness, except Indebtedness of such Subsidiaries disclosed on Schedule 3.13 hereto and additional Indebtedness in an aggregate amount not to exceed $10,000,000 for all Restricted Subsidiaries during the Restriction Period. |
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Section 2.14 Amendment to Section 5.13. Section 5.13 of the Credit Agreement is amended as follows:
(a) Clauses (f) and (g) are amended in their entireties to read as follows:
| (f) Liens on property or assets of the Borrower (other than the capital stock of the Material Restricted Subsidiaries) or any of its Restricted Subsidiaries securing Indebtedness or other obligations owing to the Borrower or to a Wholly Owned Restricted Subsidiary; |
| (g) financing statements filed in respect of operating leases, liens granted under capital leases in existence as of June 29, 2001 provided that the amount secured thereby does not exceed $25,000, other Liens existing on June 29, 2001 and described on Schedule 5.13 and Liens granted to the Collateral Agent under the Pledge Agreement; and |
(b) New Clauses (h) and (i) are added to Section 5.13 to read as follows:
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| (h) any Lien renewing, extending or refunding any Lien permitted by Subsection (g) above, provided that (i) the principal amount of Indebtedness secured by such Lien immediately prior to such extension, renewal or refunding is not increased or the maturity thereof reduced, (ii) such Lien is not extended to any other property, and (iii) immediately after such extension, renewal or refunding no Default or Event of Default would exist and the Borrower would be permitted by the provisions of Sections 5.12 and 5.17 to incur at least $1.00 of additional Indebtedness and $1.00 of additional Restricted Indebtedness, respectively; and |
| (i) other Liens not otherwise permitted by Subsections (a) through (h) above, provided that (i) the fair market value of the assets subject to such other Liens shall not exceed $15,000,000, (ii) such Liens secure Indebtedness of the Borrower or a Restricted Subsidiary permitted hereby, (iii) the aggregate principal amount of the Indebtedness secured by all Liens granted under the permissions of this clause (i) does not exceed $10,000,000 and (iv) immediately after giving effect to the creation thereof, no Default or Event of Default shall exist. |
Section 2.15 Amendment to Section 5.14. Section 5.14 of the Credit Agreement is amended to add the following to the end thereof:
| In addition to the foregoing restrictions, the Borrower will not, and will not permit any of its Restricted Subsidiaries to redeem or otherwise acquire any of its stock or other equity interests or any warrants, rights or other options to purchase such stock or other equity interests except: |
| (a) when solely in exchange for such stock or other equity interests; |
| (b) when made contemporaneously from the net proceeds of a sale of such stock or other equity interests; |
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| (c) the repurchase of up to 577,500 shares of the Borrower’s capital stock for an aggregate purchase price not to exceed $7,500,000 in connection with its obligation to do so arising in connection with the documentation of its acquisition of ▇▇▇▇▇ ▇ ▇▇▇▇▇ Pty Ltd; |
| (d) the repurchase by LPAC Corp. from Restricted Subsidiaries of LPAC Corp's preferred stock with proceeds of collections on accounts receivable in connection with an Approved Receivables Securitization; and |
| (e) other redemptions or acquisitions of such stock or equity interests if, as of the date of the payment thereof, the Debt to Adjusted EBITDA Ratio is less than 3.00 to 1.00 as calculated for any fiscal quarter: (i) that has elapsed since March 31, 2001; (ii) that has ended before the date of payment; and (iii) for which a Covenant Compliance Certificate under Section 5.20(g)(i) has been delivered. |
Section 2.16 Amendments to Section 5.15. Section 5.15 of the Credit Agreement is amended as follows:
| (a) The introductory phrase is amended to read in its entirety as follows: |
| The Borrower covenants and agrees that, so long as any Lender has any Commitment hereunder or any obligations to acquire or fund any participation in any Swingline Loan or Letter of Credit or the Swingline Lender is obligated to make Swingline Loans or the Issuing Bank is obligated to issue any Letter of Credit, or any amount payable hereunder remains unpaid, the Borrower will perform and observe the following financial covenants: |
| (b) The first sentence of Clause (a) is amended in its entirety to read as follows: |
| As of the end of each fiscal quarter, the Borrower shall not permit the ratio of Cash Flow for the four (4) fiscal quarters then ending to Interest Expenses for such period to be less than (i) 2.65 to 1.00 for the fiscal quarter ended June 30, 2001; (ii) 2.75 to 1.00 for the fiscal quarter ended September 30, 2001; and (iii) 3.00 to 1.00 for all fiscal quarters ending thereafter. |
| (c) Clause (b) is amended in its entirety 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 Borrower 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) 3.90 to 1.00 for the fiscal quarter ended June 30, 2001; (ii) 3.75 to 1.00 for the fiscal quarters ended September 30, 2001 and December 31, 2001; (iii) 3.50 to 1.00 for the fiscal quarters ended March 31, 2002 and June 30, 2002; (iv) 3.25 to 1.00 for the fiscal quarters ended September 30, 2002 and December 31, 2002; and (v) 3.00 to 1.00 for all fiscal quarters ending after December 31, 2002. |
Section 2.17 Amendment to Section 5.20. The phrase ", the then existing Material Restricted Subsidiaries," is added to Subclause (i) of Clause (g) of Section 5.20 of the Credit Agreement after the phrase " the Commitment Fee Percentage".
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Section 2.18 Addition of Sections 5.23 and 5.24. Sections 5.23 and 5.24 are added to the Credit Agreement following SECTION 5.22 to read in their entirety as follows:
| Section 5.23 Post Closing Agreements; New Material Restricted Subsidiaries. |
| (a) Items Due by August 15, 2001. On or before August 15, 2001, the Borrower shall deliver or cause to be delivered to the Administrative Agent, each of the following, all in form and substance acceptable to the Lenders: |
| (i) The Intercreditor Agreement executed by all the parties thereto; the Pledge Agreement executed by the Borrower pursuant to which the Borrower shall have pledged to the Collateral Agent all the capital stock of each Material Restricted Subsidiary; certificates representing the capital stock of the Material Restricted Subsidiaries pledged pursuant to the Pledge Agreement together with undated stock powers duly executed in blank for all such certificates; UCC, tax and judgment Lien search reports listing all documentation on file against the Borrower and each Material Restricted Subsidiary in each jurisdiction in which it has its principal place of business and jurisdiction of organization; such executed documentation as the Collateral Agent may deem necessary to perfect or protect its Liens, including, without limitation, financing statements under the UCC and other applicable documentation under the laws of any jurisdiction with respect to the perfection of Liens; and duly executed UCC-3 termination statements and such other documentation as shall be necessary to terminate or release all Liens encumbering the collateral pledged pursuant to the Pledge Agreement. To assist the Borrower in complying with the requirements of this paragraph, the Lenders agree to use commercially reasonable efforts to cause the Required Lenders to approve an Intercreditor Agreement which is in form and substance satisfactory to them on or before August 15, 2001. |
| (ii) a favorable written opinion from counsel to the Borrower and the Material Restricted Subsidiaries addressed to the Lenders and satisfactory to Jenkens & ▇▇▇▇▇▇▇▇▇, a Professional Corporation, counsel for the Administrative Agent, as to such matters relating to the Intercreditor Agreement, the Pledge Agreement, the collateral pledged pursuant thereto and the capitalization of the Material Restricted Subsidiaries as the Administrative Agent may request (and the Borrower hereby instructs its counsel to deliver such opinion to the Administrative Agent for the benefit of the Lenders). |
| (iii) A certificate of the Secretary or an Assistant Secretary of the Borrower certifying that attached thereto is a true and complete copy of resolutions, duly adopted by the Board of Directors authorizing the execution, delivery and performance of the Pledge Agreement, the Intercreditor Agreement and the Transactions, and that such resolutions have not been modified, rescinded or amended and are in full force and effect. |
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| (iv) A certificate of the Secretary or an Assistant Secretary of each Material Restricted Subsidiary certifying that attached thereto is a true and complete copy of resolutions, duly adopted by the Board of Directors authorizing the execution, delivery and performance of the Intercreditor Agreement and that such resolutions have not been modified, rescinded or amended and are in full force and effect. |
| (b) New Material Restricted Subsidiaries. Within forty-five (45) days after the end of each fiscal quarter, the Borrower shall cause each Material Restricted Subsidiary created or acquired during the fiscal quarter then ending, and each Restricted Subsidiary that, as a result of a change in assets, became a Material Restricted Subsidiary during such fiscal quarter (any such Material Restricted Subsidiary, herein a (“New Material Subsidiary”), to execute and deliver to the Administrative Agent a Subsidiary Joinder Agreement joining it as a guarantor under the Subsidiary Guaranty and such other documentation as the Administrative Agent may reasonably request to cause such New Material Subsidiary to evidence or otherwise implement the guaranty of the repayment of the obligations contemplated by the Subsidiary Guaranty and this Agreement. In addition, within forty-five (45) days after the end of a fiscal quarter in which a New Material Subsidiary has been created, acquired or comes into existence, the Borrower shall take such action as the Collateral Agent may request to cause the capital stock of each such New Material Subsidiary to be pledged to the Collateral Agent under the Pledge Agreement, including without limitation, the proper completion, execution and delivery of a Pledge Amendment under the terms of the Pledge Agreement, the delivery of the stock certificates evidencing the stock to be pledged, along with blank stock powers executed in blank, Uniform Commercial Code Financing Statements and such other documentation as the Collateral Agent may reasonably request to cause such stock to be pledged under the Pledge Agreement and for such pledge to be perfected and protected. |
| Section 5.24 Restrictions On Transfers to Unrestricted Subsidiaries. In addition to the other limitations of the this Agreement, from June 29, 2001 until the date that the Debt to Adjusted EBITDA Ratio is less than 3.00 to 1.00 as calculated for any fiscal quarter after March 31, 2001 and established by the delivery of a Covenant Compliance Certificate under Section 5.20(g)(i) (such period, herein the “Section 5.24 Restriction Period”), the Borrower will not, and will not permit any Restricted Subsidiary to, consummate any Unrestricted Subsidiary Transfer except: |
| (a) the sale of inventory to Unrestricted Subsidiaries in the ordinary course of business; |
| (b) payments made to Unrestricted Subsidiaries after June 30, 2001 in an aggregate amount not to exceed $30,500,000 to be used to satisfy the obligations owed to the seller(s) arising under the documentation governing the acquisition of ▇▇▇▇▇ ▇ ▇▇▇▇▇ Pty Ltd; and |
| (c) if no Default or Event of Default exists or would result therefrom, Unrestricted Subsidiary Transfers, in addition to the Transfers described in clauses (a) and (b) above, provided that the aggregate amount of the Unrestricted Subsidiary Transfers consummated during the Section 5.24 Restriction Period under the permissions of this clause (c) shall not exceed $60,000,000. The aggregate amount of the Unrestricted Subsidiary Transfers for purposes of determining compliance with this |
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| clause (c) as of any date shall equal the sum of the following: (i) the aggregate outstanding amount of all loans, advances and extensions of credit made by the Borrower and the Restricted Subsidiaries to Unrestricted Subsidiaries and outstanding on such date; plus (ii) the aggregate amount of all obligations of the Unrestricted Subsidiaries outstanding on such date that are guaranteed by Borrower or any Restricted Subsidiary or secured by a Lien granted by Borrower or a Restricted Subsidiary; plus (iii) the aggregate Fair Market Value (determined for each Unrestricted Subsidiary Transfer as of the date of the applicable Unrestricted Subsidiary Transfer) of all other property (i.e., other than the property described in clauses (i) and (ii) of this sentence) disposed of during the Restriction Period in Unrestricted Subsidiary Transfers consummated under the permissions of this clause (c). |
| The term “Unrestricted Subsidiary Transfer” means, a transaction in any form in which an Unrestricted Subsidiary receives (either directly or indirectly) anything (including money or other property) of value from Borrower or any Restricted Subsidiary, including, any loan, advance or other extension of credit; any sale, lease, or other disposition of assets; any merger, consolidation or other corporate combination; any purchase or repurchase of stocks, bonds, notes, debentures or other securities or any other capital contribution or investment; any transaction in which a Person provides a Guaranty or grants Liens to secure obligations or Indebtedness of another Person. All covenants in this Agreement shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants (including this Section 5.24), the fact that it would be permitted by an exception to, or be otherwise within the limitations of, another covenant shall not avoid the occurrence of a Default if such action is taken or such condition exists. |
Section 2.19 Amendment to Article 6. Article 6 of the Credit Agreement is amended as follows:
(a) Clauses (a) through (e) are amended in their entireties to read as follows:
| (a) the Borrower defaults in the payment of any principal on any Loan or Swingline Loan or the reimbursement of any LC Disbursement, in each case when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise; or |
| (b) the Borrower defaults in the payment of any interest on any Loan or Swingline Loan for more than five Business Days after the same becomes due and payable; or |
| (c) the Borrower defaults in the performance of or compliance with any term applicable to the Borrower and contained in Section 5.20(d), Section 5.23, Section 5.24 or Sections 5.10 through 5.19 or contained in the Pledge Agreement or any Material Restricted Subsidiary defaults in the performance of or compliance with any term applicable to it contained in clause (c) of paragraph 6 of the Subsidiary Guaranty; or |
| (d) (i) the Borrower defaults in the performance of or compliance with any term contained herein (other than those referred to in paragraphs (a), (b) and (c) of this Article 6) or contained in the Intercreditor Agreement or with any Additional Covenant and such default is not remedied within 30 days after the earlier of (A) a Responsible Officer obtaining actual knowledge of such default and (B) the Borrower |
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| receiving written notice of such default from either Agent or any Lender (any such written notice to be identified as a “notice of default” and to refer specifically to this paragraph (d) of Article 6) or (ii) any Material Restricted Subsidiary defaults in the performance of or compliance with any term contained in the Subsidiary Guaranty (other than those referred to in paragraphs (a), (b) and (c) of this Article 6) or contained in the Intercreditor Agreement or with any Additional Covenant and such default is not remedied within 30 days after the earlier of (A) a Responsible Officer obtaining actual knowledge of such default and (B) the Borrower receiving written notice of such default from either Agent or any Lender (any such written notice to be identified as a “notice of default” and to refer specifically to this paragraph (d) of Article 6); or |
| (e) any representation or warranty made in writing by or on behalf of any Obligated Party or by any officer of any Obligated Party in this Agreement, the Pledge Agreement, the Intercreditor Agreement, the Subsidiary Guaranty or any writing furnished in connection with the transactions contemplated hereby proves to have been false or incorrect in any material respect on the date as of which made; or |
(b) New Clauses (k) and (l) are added to read as follows:
| (k) the occurrence of an Event of Default (as defined in the Intercreditor Agreement); or |
| (l) either the Subsidiary Guaranty or the Pledge Agreement shall for any reason cease to be in full force and effect and valid, binding and enforceable in accordance with its terms, or the Borrower or any Material Restricted Subsidiary shall so state in writing; |
(c) The last section of Article 6 (as it exists without giving effect to this Amendment) which follows the existing Clause (j) is amended in its entirety to read as follows:
| then, and in every such event, and at any time thereafter during the continuance of such event, the Administrative Agent, at the request of the Required Lenders, shall, by notice to the Borrower, take any or all of the following actions, at the same or different times: (i) terminate forthwith the right of the Borrower to borrow hereunder or to request the issuance, amendment, extension or renewal or other modification of any Letter of Credit, (ii) exercise any rights that may be available upon an Event of Default to terminate or cancel any outstanding Letters of Credit, and (iii) declare the Borrowings (including all Loans and Swingline Loans) and all reimbursement obligations for LC Disbursements, then outstanding to be forthwith due and payable in whole or in part, whereupon the principal of the Borrowings (including all Loans and Swingline Loans) and the reimbursement obligations for LC Disbursements, so declared to be due and payable, together with accrued interest thereon and any unpaid accrued Fees and all other liabilities of the Borrower accrued hereunder, shall become forthwith due and payable, without presentment, demand, protest, notice of intent to accelerate, notice of acceleration or any other notice of any kind, all of which are hereby expressly waived, anything contained herein to the contrary notwithstanding; provided that in the case of any event described in paragraph (g) or (h) above with respect to the Borrower or any Material Restricted Subsidiary, all the Commitments of the Lenders, the commitment of the Swingline Lender to make Swingline Loans and the obligation of the Issuing Bank hereunder to issue Letters of Credit shall automatically terminate and the principal amount of all Borrowings (including all Loans and Swingline Loans) and all |
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| reimbursement obligations for LC Disbursements, then outstanding, together with accrued interest thereon and any unpaid accrued Fees and all other liabilities of the Borrower accrued hereunder shall automatically become due and payable, without presentment, demand, protest, notice of intent to accelerate, notice of acceleration or any other notice of any kind, all of which are hereby expressly waived by the Borrower, anything contained herein to the contrary notwithstanding. In addition to the other rights and remedies that the Lenders may have upon the occurrence of an Event of Default, the Required Lenders may direct: (i) the Collateral Agent to exercise the rights and remedies available to the Collateral Agent under the Intercreditor Agreement and the Pledge Agreement and (ii) the Administrative Agent to exercise the rights and remedies available to it under the Subsidiary Guaranty. |
Section 2.20 Amendment to Article 7. Article 7 of the Credit Agreement is amended as follows:
(a) The first three paragraphs are amended in their entirety to read as follows:
| In order to expedite the transactions contemplated by this Agreement, Chase is hereby appointed to act as Administrative Agent, on behalf of the Lenders and the Issuing Bank. Each of the Lenders and the Issuing Bank hereby irrevocably authorizes the Administrative Agent to take such actions on behalf of such Lender or the Issuing Bank and to exercise such powers as are specifically delegated to the Administrative Agent by the terms and provisions hereof, by the terms and provisions of the Subsidiary Guaranty and by the terms and provisions of the Intercreditor Agreement, together with such actions and powers as are reasonably incidental thereto. The Administrative Agent is hereby expressly authorized by the Lenders and the Issuing Bank, without hereby limiting any implied authority, (a) to receive on behalf of the Lenders and the Issuing Bank, as applicable, all payments of principal of and interest on the Loans and all other amounts due to the Lenders and the Issuing Bank hereunder or under the Subsidiary Guaranty or from the Collateral Agent under the Intercreditor Agreement, and promptly to distribute to each Lender and the Issuing Bank its share of each payment so received; (b) to give notice on behalf of each of the Lenders and the Issuing Bank to the Borrower of any Event of Default of which the Administrative Agent has actual knowledge acquired in connection with its agency hereunder; (c) to distribute to each Lender and the Issuing Bank copies of all notices, financial statements and other materials delivered by the Borrower pursuant to this Agreement or the Subsidiary Guaranty as received by the Administrative Agent and (d) to execute and deliver the Intercreditor Agreement on its behalf and bind it to the terms thereof. |
| Neither Administrative Agent nor any of its directors, officers, employees or agents shall be liable as such for any action taken or omitted by any of them except for its or his or her own gross negligence or willful misconduct, or be responsible for any statement, warranty or representation herein or the contents of any document delivered in connection herewith, or be required to ascertain or to make any inquiry concerning the performance or observance by the Borrower or any Material Restricted Subsidiary of any of the terms, conditions, covenants or agreements contained in this Agreement, the Pledge Agreement, the Intercreditor Agreement or the Subsidiary Guaranty. The Administrative Agent shall not be responsible to the Lenders or the Issuing Bank for the due execution, genuineness, validity, enforceability or effectiveness of this Agreement, the Pledge Agreement, the Intercreditor Agreement, the Subsidiary Guaranty or other instruments or agreements; provided that the foregoing exclusion shall not have the effect |
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| of releasing the Administrative Agent from its stated responsibilities herein to receive executed agreements, documents and instruments on behalf of the Lenders and the Issuing Bank. The Administrative Agent may deem and treat the Lender which makes any Loan or Swingline Loan or participates in any Swingline Loan or in the obligation to reimburse the Issuing Bank for any LC Disbursement as the holder of the indebtedness resulting therefrom for all purposes hereof until it shall have received notice from such Lender, given as provided herein, of the transfer thereof. The Administrative Agent shall in all cases be fully protected in acting, or refraining from acting, in accordance with written instructions signed by the Required Lenders and, except as otherwise specifically provided herein, such instructions and any action or inaction pursuant thereto shall be binding on all the Lenders and the Issuing Bank. The Administrative Agent shall, in the absence of knowledge to the contrary, be entitled to rely on any instrument or document believed by it in good faith to be genuine and correct and to have been signed or sent by the proper Person or Persons. Neither the Administrative Agent nor any of its directors, officers, employees or agents shall have any responsibility to the Borrower or any Material Restricted Subsidiary on account of the failure of or delay in performance or breach by any Lender or the Issuing Bank of any of its obligations hereunder or to any Lender on account of the failure of or delay in performance or breach by any Lender or the Issuing Bank or the Borrower of any of their respective obligations hereunder, under the Pledge Agreement, under the Intercreditor Agreement or in connection herewith or by any Material Restricted Subsidiary of any of their respective obligations under the Subsidiary Guaranty. The Administrative Agent may execute any and all duties hereunder by or through agents or employees and shall be entitled to rely upon the advice of legal counsel selected by it with respect to all matters arising hereunder and shall not be liable for any action taken or suffered in good faith by it in accordance with the advice of such counsel. |
| The Lenders and the Issuing Bank hereby acknowledge that the Administrative Agent shall be under no duty to take any discretionary action permitted to be taken by it pursuant to the provisions of this Agreement, the Subsidiary Guaranty or the Intercreditor Agreement unless it shall be requested in writing to do so by the Required Lenders. |
(b) The fifth and sixth paragraphs are amended in their entirety to read as follows:
| With respect to the Loans and Swingline Loans made by it hereunder, the Administrative Agent, in its individual capacity as a Lender and the Swingline Lender and not as Administrative Agent shall have the same rights and powers as any other Lender and may exercise the same as though it were not the Administrative Agent, and the Administrative Agent and its Affiliates may accept deposits from, lend money to, act as collateral agent under the Intercreditor Agreement and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent. |
| Each Lender agrees (i) to reimburse the Administrative Agent, on demand, in the amount of its Applicable Percentage of any expenses incurred for the benefit of the Lenders or the Issuing Bank in its role as Administrative Agent, including reasonable counsel fees and compensation of agents and employees paid for services rendered on behalf of the Lenders or the Issuing Bank, which shall not have been reimbursed by the Borrower AND (II) TO INDEMNIFY AND HOLD HARMLESS THE ADMINISTRATIVE AGENT AND ANY OF ITS DIRECTORS, OFFICERS, |
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| EMPLOYEES OR AGENTS, ON DEMAND, IN THE AMOUNT OF SUCH APPLICABLE PERCENTAGE, FROM AND AGAINST ANY AND ALL LIABILITIES, TAXES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST IT IN ANY WAY RELATING TO OR ARISING OUT OF THIS AGREEMENT, THE PLEDGE AGREEMENT, THE INTERCREDITOR AGREEMENT, THE SUBSIDIARY GUARANTY OR ANY ACTION TAKEN OR OMITTED BY IT UNDER ANY SUCH DOCUMENTS TO THE EXTENT THE SAME SHALL NOT HAVE BEEN REIMBURSED BY THE BORROWER (INCLUDING WITHOUT LIMITATION, ALL LIABILITIES, TAXES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES, OR DISBURSEMENTS ARISING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF THE ADMINISTRATIVE AGENT); PROVIDED THAT NO LENDER SHALL BE LIABLE TO THE ADMINISTRATIVE AGENT FOR ANY PORTION OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS RESULTING FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE ADMINISTRATIVE AGENT OR ANY OF ITS DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS. |
Section 2.21 Amendment to Section 8.04. The phrase “an Affiliate of such Lender” in subclause (i) of Clause (b) of Section 8.04 of the Credit Agreement is amended to read “a Lender Affiliate” and the following definition is added to the end of Clause (b):
| As used herein, the term “Lender Affiliate” means, (a) with respect to any Lender, (i) an Affiliate of such Lender or (ii) any entity (whether a corporation, partnership, trust or otherwise) that is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course of its business and is administered or managed by a Lender or an Affiliate of such Lender and (b) with respect to any Lender that is a fund which invests in bank loans and similar extensions of credit, any other fund that invests in bank loans and similar extensions of credit and is managed by the same investment advisor as such Lender or by an Affiliate of such investment advisor. |
Section 2.22 Amendment to Section 8.05. Clause (a) of Section 8.05 of the Credit Agreement is amended in its entirety to read as follows:
| (a) The Borrower agrees to pay all reasonable out-of-pocket expenses incurred by either Agent, JPMorgan Securities Inc. (formerly Chase Securities Inc.), Wachovia Securities, Inc. or the Issuing Bank in connection with entering into this Agreement, the Intercreditor Agreement, the Pledge Agreement and the Subsidiary Guaranty and in connection with any amendments, modifications or waivers of the provisions thereof (but only if such amendments, modifications or waivers are requested by the Borrower or a Material Restricted Subsidiary) (whether or not the transactions hereby contemplated are consummated) or in connection with the issuance, modification, extension or renewal of any Letter of Credit, or incurred by either Agent, the Issuing Bank, or any Lender in connection with the enforcement of their rights in connection with this Agreement, the Intercreditor Agreement, the Pledge Agreement or the Subsidiary Guaranty or in connection with the Loans and Swingline Loans made and Letters of Credit issued hereunder, including the reasonable fees and disbursements of |
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| counsel for either Agent and the Issuing Bank or, in the case of enforcement following an Event of Default, the Lenders. |
Section 2.23 Amendment to Section 8.09. Section 8.09 of the Credit Agreement is amended in its entirety to read as follows:
| Section 8.09 Entire Agreement. THIS AGREEMENT (INCLUDING THE SCHEDULES AND EXHIBITS HERETO), THE FEE LETTERS, THE INTERCREDITOR AGREEMENT, THE PLEDGE AGREEMENT, THE SUBSIDIARY GUARANTY AND THE OTHER DOCUMENTATION EXECUTED PURSUANT HERETO (INCLUDING, BUT NOT LIMITED TO ANY LETTER OF CREDIT ISSUED HEREUNDER) CONSTITUTE A “LOAN AGREEMENT” AS DEFINED IN SECTION 26.03(a) OF THE TEXAS BUSINESS AND COMMERCE CODE, AND REPRESENT THE ENTIRE CONTRACT AMONG THE PARTIES RELATIVE TO THE SUBJECT MATTER HEREOF AND THEREOF. ANY PREVIOUS AGREEMENT AMONG THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF IS SUPERSEDED BY THIS AGREEMENT, THE FEE LETTERS THE INTERCREDITOR AGREEMENT, THE PLEDGE AGREEMENT, THE SUBSIDIARY GUARANTY AND THE OTHER DOCUMENTATION EXECUTED PURSUANT HERETO (INCLUDING, BUT NOT LIMITED TO ANY LETTER OF CREDIT ISSUED HEREUNDER). THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. NOTHING IN THIS AGREEMENT, EXPRESSED OR IMPLIED, IS INTENDED TO CONFER UPON ANY PARTY OTHER THAN THE PARTIES HERETO ANY RIGHTS, REMEDIES, OBLIGATIONS OR LIABILITIES UNDER OR BY REASON OF THIS AGREEMENT. |
Section 2.24 Amendment to Section 8.13. Clause (a) of Section 8.13 to the Credit Agreement is amended in its entirety to read as follows:
| (a) Notwithstanding anything herein to the contrary, if at any time the applicable interest rate, together with all fees and charges which are treated as interest under applicable law (collectively the “Charges”), as provided for herein or in any other document executed in connection herewith, or otherwise contracted for, charged, received, taken or reserved by any Lender, shall exceed the Maximum Rate (as defined below) which may be contracted for, charged, taken, received or reserved by such Lender in accordance with applicable law, the rate of interest payable on the Loans or Swingline Loans of such Lender, together with all Charges payable to such Lender, shall be limited to the Maximum Rate. As used herein, the term “Maximum Rate” means, at any time and with respect to any Lender, the maximum rate of non-usurious interest under applicable law that such Lender may charge Borrower. The Maximum Rate shall be calculated in a manner that takes into account any and all fees, payments, and other charges contracted for, charged, or received in connection with the Loan Documents that constitute interest under applicable law. Each change in any interest rate provided for herein based upon the Maximum Rate resulting from a change in the Maximum Rate shall take effect without notice to Borrower at the time of such change in the Maximum Rate. For purposes of determining the Maximum Rate under Texas law, the applicable rate ceiling shall be the weekly ceiling described in, and computed in accordance with Chapter 303 of the Texas Finance Code. |
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Section 2.25 ADDITION OF EXHIBITS. Exhibits D and E are added to the Credit Agreement and shall read as set forth on Exhibits D and E attached hereto, respectively.
Section 2.26 AMENDMENT TO SCHEDULES. Schedules 3.05A and 5.13 are added to the Credit Agreement and shall read as set forth on Schedules 3.05A and 5.13 attached hereto, respectively. Schedules 3.05, 3.06, and 3.13 are amended in their entirety to read as set forth on Schedules 3.05, 3.06 and 3.13 attached hereto.
ARTICLE 3
Conditions
Section 3.1 CONDITIONS. The effectiveness of Article 2 of this Amendment is subject to the satisfaction of the following conditions precedent on or before July 12, 2001 (the "Closing Date"):
(a) The Administrative Agent shall have received a favorable written opinion from counsel to the Borrower and the Material Restricted Subsidiaries, dated the Closing Date and addressed to the Lenders and satisfactory to Jenkens & ▇▇▇▇▇▇▇▇▇, a Professional Corporation, counsel for the Administrative Agent, to the effect set forth in Exhibit C hereto (and the Borrower hereby instructs its counsel to deliver such opinion to the Administrative Agent for the benefit of the Lenders).
(b) The Administrative Agent shall have received: (i) a certificate as to the good standing of the Borrower as of a recent date from such Secretary of State; (ii) a certificate of the Secretary or an Assistant Secretary of the Borrower dated the Closing Date and certifying (A) that the Borrower's bylaws previously certified to the Administrative Agent under the Assistant Secretary's Certificate dated July 29, 1999 remain in full force and effect on and as of the Closing Date without further modifications or amendments in any respect; (B) attached thereto is a true and complete copy of resolutions, duly adopted by the Board of Directors authorizing the execution, delivery and performance of this Amendment and that such resolutions have not been modified, rescinded or amended and are in full force and effect, (C) that the Articles of Incorporation dated January 12, 2001 previously delivered to the Administrative Agent in January 2001 remain in full force and effect on and as of the Closing Date without further modifications or amendments in any respect; and (D) as to the incumbency and specimen signature of each officer executing this Agreement or any other document delivered in connection herewith on behalf of the Borrower; (iii) a certificate of another officer of the Borrower as to the incumbency and specimen signature of the Secretary or Assistant Secretary executing the certificate pursuant to (ii) above; and (iv) such other documents as the Lenders or the Administrative Agent, shall reasonably request.
(c) The Administrative Agent shall have received a certificate, dated the Closing Date and signed by a Senior Financial Officer of the Borrower confirming compliance with the conditions precedent set forth in paragraphs (b) and (c) of Section 4.01 of the Credit Agreement.
(d) The Agents shall have received all Fees and other amounts due and payable on or prior to the Closing Date.
(e) The Administrative Agent shall have received (i) a copy of the certificate of incorporation, including all amendments thereto, of each Material Restricted Subsidiary, certified as of a recent date by the Secretary of State of its state of incorporation, and a certificate as to the good standing of such Material Restricted Subsidiary as of a recent date from such Secretary of State; (ii) a certificate of the Secretary or an Assistant Secretary of each Material Restricted Subsidiary dated the Closing Date and certifying (A) that attached thereto is a true and complete copy of the by-laws of such Material Restricted
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Subsidiary as in effect on the Closing Date and at all times since a date prior to the date of the resolutions described in clause (B) below, (B) that attached thereto is a true and complete copy of resolutions, duly adopted by the Board of Directors authorizing the execution, delivery and performance of the Subsidiary Guaranty, and that such resolutions have not been modified, rescinded or amended and are in full force and effect, (C) that the certificate of incorporation referred to in clause (i) above has not been amended since the date of the last amendment thereto shown on the certificate of good standing furnished pursuant to such clause (i) and (D) as to the incumbency and specimen signature of each officer executing the Subsidiary Guaranty or any other document delivered in connection herewith on behalf of such Material Restricted Subsidiary; (iii) a certificate of another officer of each Material Restricted Subsidiary as to the incumbency and specimen signature of the Secretary or Assistant Secretary executing the certificate pursuant to clause (ii) above; and (iv) such other documents as the Lenders or the Administrative Agent, shall reasonably request.
(f) The Administrative Agent shall have received evidence that all Persons who have the benefit of the provisions similar or substantially similar to the terms of Section 5.06 of the Credit Agreement (including without limitation, the holders of the notes under the Senior Note Purchase Agreements) shall have consented to the terms of this Amendment and any consent or amendment executed in connection therewith must be in form and substance acceptable to the Administrative Agent.
(g) As of the Closing Date, all representations and warranties contained in the Credit Agreement (as amended hereby) shall be true, correct, and complete in all material respects except for representations specifically relating to a prior date;
(h) No Default or Event of Default shall have occurred and be continuing;
(i) All corporate proceedings taken in connection with the transactions contemplated by this Amendment and all other agreements, documents, and instruments executed and/or delivered pursuant hereto, and all legal matters incident thereto, shall be satisfactory to the Administrative Agent and its legal counsel;
(j) Payment or reimbursement to the Lenders, and the Agents of all outstanding expenses, fees and other costs incurred by, or due to, the Lenders, and the Agents for which such entity has presented an invoice to the Borrower prior to the Closing Date; and
(k) The Administrative Agent shall have received such additional agreements, certificates, documents, instruments and information as the Administrative Agent or its legal counsel may request to effect the transactions contemplated hereby.
ARTICLE 4
Miscellaneous
Section 4.1 Notice of Reduction of Total Commitment; Ratifications. Pursuant to Section 2.09 of the Credit Agreement, the Borrower hereby provides irrevocable written notice of the reduction of the Total Commitment by an aggregate amount equal to $25,000,000, such reduction to be effective as of July 12, 2001. The Lenders party hereto waive the three day notice period applicable thereto to the extent it is applicable to such reduction. After giving effect to such reduction, Schedule 2.01 of the Credit Agreement would read as set forth on Schedule 2.01 attached hereto. The terms and provisions set forth in this Amendment shall modify and supersede all inconsistent terms and provisions set forth in the Credit Agreement and except as expressly modified and superseded by this Amendment, the terms and provisions of the Credit Agreement are ratified and confirmed and shall
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continue in full force and effect. The Borrower, the Agents and the Lenders agree that the Credit Agreement as amended hereby shall continue to be legal, valid, binding and enforceable in accordance with its terms. Interest and fees accrued under the Credit Agreement prior to July 12, 2001 shall continue to be payable under the Credit Agreement, as amended hereby but at the rates and amounts provided for in the provisions of the Credit Agreement in effect prior to July 12, 2001.
Section 4.2 Fees and Expenses. In accordance with the terms of Section 8.05 of the Credit Agreement, the Borrower agrees to pay all costs and expenses incurred by either Agent in connection with the preparation, negotiation and execution of this Amendment, including, without limitation, the costs and fees of legal counsel.
Section 4.3 Applicable Law. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
Section 4.4 SUCCESSORS AND ASSIGNS. This Amendment is binding upon and shall inure to the benefit of the Agents, the Lenders and Borrower and their respective successors and assigns.
Section 4.5 Counterparts. This Amendment may be executed in one or more counterparts and on telecopy counterparts, each of which when so executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same agreement.
Section 4.6 Headings. The headings, captions, and arrangements used in this Amendment are for convenience only and shall not affect the interpretation of this Amendment.
Section 4.7 ENTIRE AGREEMENT. THIS AMENDMENT EMBODIES THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS AMENDMENT, AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSION OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.
Section 4.8 Required Lenders. Pursuant to Section 8.08(b) of the Credit Agreement, the Credit Agreement may be modified as provided in this Amendment with the agreement of the Required Lenders which means Lenders having sixty-six and two-thirds percent (66-2/3%) or more of the Total Commitments (such percentage applicable to a Lender, herein such Lender's “Required Lender Percentage”). For purposes of determining the effectiveness of this Amendment, each Lender's Required Lender Percentage is set forth on Schedule 4.8 hereto.
Executed as of the date first written above.
LENNOX INTERNATIONAL INC. By: -------------------------------------------------- ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President and Chief Financial Officer
23
THE CHASE MANHATTAN BANK, as successor in interest by
merger to Chase Bank of Texas, National Association
individually as Lender, Issuing Bank, and as
Administrative Agent
By: --------------------------------------------------
▇▇▇▇▇ ▇▇▇▇
Vice President
WACHOVIA BANK, N.A., individually as a
Lender and as Syndication Agent
By: --------------------------------------------------
Name: -------------------------------------------
Title: ------------------------------------------
THE BANK OF NOVA SCOTIA,
individually as a Lender and as
documentation agent
By: --------------------------------------------------
Name: -------------------------------------------
Title: ------------------------------------------
ABN AMRO BANK N.V.
By: --------------------------------------------------
Name: -------------------------------------------
Title: ------------------------------------------
FIRST UNION NATIONAL BANK
By: --------------------------------------------------
Name: -------------------------------------------
Title: ------------------------------------------
FIRSTAR BANK N.A. (formerly Mercantile Bank
National Association)
By: --------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
24
ROYAL BANK OF CANADA,
as a Lender
By: --------------------------------------------------
Name: -------------------------------------------
Title: ------------------------------------------
THE BANK OF NEW YORK
By: --------------------------------------------------
Name: -------------------------------------------
Title: ------------------------------------------
THE BANK OF TOKYO-MITSUBISHI, LTD.
By: --------------------------------------------------
Name: -------------------------------------------
Title: ------------------------------------------
THE NORTHERN TRUST COMPANY,
individually as a lender and as a co-agent
By: --------------------------------------------------
Name: -------------------------------------------
Title: ------------------------------------------
UBS AG, Stamford Branch
By: --------------------------------------------------
Name: -------------------------------------------
Title: ------------------------------------------
By: --------------------------------------------------
Name: -------------------------------------------
Title: ------------------------------------------
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INDEX TO SCHEDULES AND EXHIBITS
Schedule 4.8 Required Lender Percentage
Exhibit C Matters to be Covered in Opinion of Counsel
Exhibit D Subsidiary Guaranty Agreement
Exhibit E Subsidiary Joinder Agreement
Schedule 2.01 Commitments
Schedule 3.05 Lennox International Inc. Subsidiaries
Schedule 3.05A Material Restricted Subsidiary Capitalization
Schedule 3.06 Financial Statements
Schedule 3.13 Existing Indebtedness
Schedule 5.13 Existing Liens
1
Schedule 4.8
to
Fourth Amendment to Credit Agreement
REQUIRED LENDER PERCENTAGE
Lenders Agreeing to Amendment
(insert % from prior column if
Required Lender Lender signs this Amendment then
Lender Percentage Held total percentages in this column)
------ --------------- ---------------------------------
The Chase Manhattan Bank 13.5385% 13.5385%
Wachovia Bank, N.A. 12.9231% 12.9231%
The Bank of Nova Scotia 9.2308% 9.2308%
ABN AMRO BANK N.V. 7.6923% 7.6923%
First Union National Bank 12.3077% 12.3077%
Firstar Bank N.A. 9.2308% 9.2308%
Royal Bank of Canada 9.8462% 9.8462%
The Bank of New York 3.0769% 3.0769%
The Bank of Tokyo - 3.0769% 3.0769%
Mitsubishi, Ltd.
The Northern Trust Company 3.6923% 3.6923%
UBS AG, Stamford Branch 15.3846% 15.6846%
------- -------
TOTAL 100.00% 100.00%
2
EXHIBIT C
Matters to be Covered in
Opinion of Counsel to Borrower and Material Subsidiaries
| 1. | The Borrower and each Material Restricted Subsidiary is duly incorporated, validly existing and in good standing. The Borrower and each Material Restricted Subsidiary is duly qualified and in good standing as a foreign corporation in appropriate jurisdictions. |
| 2. | The Borrower has requisite corporate power and authority to execute, deliver and perform the Amendment. Each Material Restricted Subsidiary has requisite corporate power and authority to execute, deliver and perform the Subsidiary Guaranty. |
| 3. | Due authorization and execution of the Amendment and the Subsidiary Guaranty and such documents being legal, valid, binding and enforceable. |
| 4. | No conflicts with charter documents, laws or other agreements. |
| 5. | All consents required to execute, deliver or perform the Amendment and the Subsidiary Guaranty having been obtained. |
| 6. | No litigation questioning validity of the Amendment or the Subsidiary Guaranty or as to which there is otherwise the reasonable likelihood of a Material Adverse Effect. |
| 7. | No violation of Regulations T, U or X of the Federal Reserve Board. |
| 8. | Neither the Borrower nor any Material Restricted Subsidiary is an "investment company", or a company "controlled" by an "investment company", under the Investment Company Act of 1940, as amended. |
EXHIBIT D
SUBSIDIARY GUARANTY AGREEMENT
WHEREAS, Lennox International Inc., a Delaware corporation (the “Borrower”), has entered into that certain 364 Day Revolving Credit Facility Agreement dated as of January 25, 2000, among the Borrower, the lenders party thereto (the “Lenders”) and Chase Bank of Texas, National Association (now The Chase Manhattan Bank), as administrative agent for the Lenders (the “Administrative Agent”) (such 364 Day Revolving Credit Facility Agreement, as the same has been and may hereafter be amended or otherwise modified from time to time, being hereinafter referred to as the “Credit Agreement”, and capitalized terms not otherwise defined herein shall have the same meaning as set forth in the Credit Agreement);
WHEREAS, the execution of this Subsidiary Guaranty Agreement (the “Guaranty Agreement”) is a condition to the Administrative Agent’s, the Issuing Bank’s, and each Lender’s obligations under the Credit Agreement;
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which are hereby acknowledged, each of the undersigned parties and any Material Restricted Subsidiary hereafter added as a “Guarantor” hereto pursuant to a Subsidiary Joinder Agreement (individually a “Guarantor” and collectively the “Guarantors”), hereby jointly, severally, irrevocably and unconditionally guarantees to the Administrative Agent the full and prompt payment and performance of the Guaranteed Obligations (hereinafter defined), this Guaranty Agreement being upon the following terms:
1. THE GUARANTEED OBLIGATIONS. The term “Guaranteed Obligations” means all obligations, indebtedness, and liabilities of Borrower to the Agents, the Issuing Bank and the Lenders, or any of them, arising pursuant to the Credit Agreement, the Intercreditor Agreement, the Pledge Agreement or any document executed and delivered in connection with the foregoing (collectively, the “Transaction Documents”), whether any of such obligations, indebtedness and liabilities are now existing or hereafter arising, whether are direct, indirect, related, unrelated, fixed, contingent, liquidated, unliquidated, joint, several, or joint and several, including, without limitation, (i) the obligation of Borrower to repay the Loans and Swingline Loans, interest on the Loans and Swingline Loans, the obligation of the Borrower to reimburse the Issuing Bank for all LC Disbursements and all fees, costs, and expenses (including attorneys’ fees and expenses) provided for in the Credit Agreement and (ii) all post-petition interest and expenses (including attorneys’ fees) whether or not allowed under any bankruptcy, insolvency, or other similar law. However, the Guaranteed Obligations shall be limited, with respect to each Guarantor, to an aggregate amount equal to the largest amount that would not render such Guarantor’s obligations hereunder subject to avoidance under Section 544 or 548 of the United States Bankruptcy Code or under any applicable state law relating to fraudulent transfers or conveyances. This Guaranty Agreement is an absolute, present and continuing Guaranty Agreement of payment and not of collectibility and is in no way conditional or contingent upon any attempt to collect from the Borrower, any collateral securing the Guaranteed Obligations or any other guarantor of the obligations guarantied hereby or upon any other action, occurrence or circumstance whatsoever. In the event that the Borrower shall fail so to pay any of such Guaranteed Obligations, the Guarantors jointly and severally agree to pay the same when due to the Administrative Agent, without demand, presentment, protest or notice of any kind. Each default in payment of principal of, premium, if any, or interest on any obligation guarantied hereby shall give rise to a separate cause of action hereunder and separate suits may be brought hereunder as each cause of action arises.
2. INDEMNIFICATION. EACH GUARANTOR AGREES TO INDEMNIFY EACH AGENT, THE ISSUING BANK, EACH LENDER, EACH OF THEIR AFFILIATES AND THE
1
DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS OF THE FOREGOING (EACH SUCH PERSON BEING CALLED AN “INDEMNITEE”) AGAINST, AND TO HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES, LIABILITIES AND RELATED EXPENSES, INCLUDING REASONABLE COUNSEL FEES AND EXPENSES, INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF (i) THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS GUARANTY AGREEMENT OR THE CREDIT AGREEMENT, (ii) THE USE OF THE PROCEEDS OF THE LOANS OR THE USE OF ANY LETTER OF CREDIT OR (iii) ANY CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF THE FOREGOING, WHETHER OR NOT ANY INDEMNITEE IS A PARTY THERETO (INCLUDING, WITHOUT LIMITATION, ANY LOSSES, CLAIMS, DAMAGES, LIABILITIES AND RELATED EXPENSES ARISING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF THE INDEMNITEE); PROVIDED THAT SUCH INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES (i) ARE DETERMINED TO HAVE RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE OR (ii) RESULT FROM ANY LITIGATION BROUGHT BY SUCH INDEMNITEE AGAINST THE BORROWER OR ANY GUARANTOR OR BY THE BORROWER OR ANY GUARANTOR AGAINST SUCH INDEMNITEE, IN WHICH THE BORROWER OR SUCH GUARANTOR IS THE PREVAILING PARTY.
3. OBLIGATIONS ABSOLUTE. The obligations of each Guarantor hereunder shall be primary, continuing, absolute, joint, several, irrevocable and unconditional, irrespective of the validity, regularity or enforceability of any Transaction Document, shall not be subject to any counterclaim, setoff, deduction or defense based upon any claim any Guarantor may have against the Borrower, the Administrative Agent, any Lender or the Issuing Bank or otherwise or any claim the Borrower may have against the Administrative Agent, any Lender or the Issuing Bank or otherwise, and shall remain in full force and effect without regard to, and shall not be released, discharged or in any way affected by, any circumstance or condition whatsoever (whether or not such Guarantor shall have any knowledge or notice thereof), including, without limitation: (a) any amendment, modification of or supplement to any Transaction Document or any other instrument referred to therein (except that the obligations of any Guarantor hereunder shall apply to the applicable Transaction Document or such other instruments as so amended, modified or supplemented) or any assignment or transfer of any thereof or of any interest therein, or any furnishing, acceptance or release of any security for the obligations due under any Transaction Document, (b) any waiver, consent, extension, indulgence or other action or inaction under or in respect of any Transaction Document; (c) any bankruptcy, insolvency, readjustment, composition, liquidation or similar proceeding with respect to the Borrower or its property; (d) any merger, amalgamation or consolidation of any Guarantor or of the Borrower into or with any other corporation or any sale, lease or transfer of any or all of the assets of any Guarantor or of the Borrower to any Person; (e) any failure on the part of the Borrower for any reason to comply with or perform any of the terms of any other agreement with any Guarantor; or (f) any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor (other than a release of the obligations of a Guarantor hereunder granted in accordance with the provisions of paragraph 21 hereof). Each Guarantor covenants that its obligations hereunder will not be discharged except by payment in full of all of the Guaranteed Obligations or a release granted in accordance with the provisions of paragraph 21.
4. WAIVER. Each Guarantor unconditionally waives to the fullest extent permitted by law, (a) notice of acceptance hereof, of any action taken or omitted in reliance hereon and of any defaults by the Borrower in the payment of any amounts due under any Transaction Document, and of any of the matters referred to in paragraph 2 or 3 hereof, (b) all notices which may be required by statute, rule of law or otherwise to preserve any of the rights of the Administrative Agent, the Lenders, and the Issuing Bank from time to time against any Guarantor, including, without limitation, presentment to or demand for
2
payment from the Borrower or any Guarantor, notice to the Borrower or to any Guarantor of default or protest for nonpayment or dishonor and the filing of claims with a court in the event of the bankruptcy of the Borrower, (c) any right to the enforcement, assertion or exercise by the Administrative Agent, any Lender or the Issuing Bank of any right, power or remedy conferred in this Guaranty Agreement or any Transaction Document, (d) any requirement or diligence on the part of the Administrative Agent, the Lenders or the Issuing Bank and (e) any other act or omission or thing or delay to do any other act or thing which might in any manner or to any extent vary the risk of any Guarantor or which might otherwise operate as a discharge of any Guarantor. The exercise by the Administrative Agent, the Issuing Bank and the Lenders of any right or remedy hereunder or under any other instrument, or at law or in equity, shall not preclude the concurrent or subsequent exercise of any other right or remedy.
5. OBLIGATIONS UNIMPAIRED. Each Guarantor authorizes the Administrative Agent, the Lenders and the Issuing Bank without notice or demand to any Guarantor and without affecting the obligations of any Guarantor hereunder, from time to time (a) to renew, compromise, extend, accelerate or otherwise change the time for payment of, or otherwise change the terms of, all or any part of any Transaction Document or any other instrument referred to therein, (b) to take and hold security for the payment and performance of the obligations under any Transaction Document, for the performance of this Guaranty Agreement or otherwise for the indebtedness guaranteed hereby and to exchange, enforce, waive and release any such security, (c) to apply any such security and to direct the order or manner of sale thereof as the Administrative Agent in its sole discretion may determine; (d) to obtain additional or substitute endorsers or guarantors; (e) to exercise or refrain from exercising any rights against the Borrower and others; and (f) to apply any sums, by whomsoever paid or however realized, to the payment of the principal of, premium, if any, and interest on the obligations under the Transaction Documents and any other Guaranteed Obligation. Each Guarantor waives any right to require the Administrative Agent, the Lenders or the Issuing Bank to proceed against any additional or substitute endorsers or guarantors or to pursue or exhaust any security provided by the Borrower, any Guarantor or any other Person or to pursue any other remedy available to such entities.
6. COVENANTS. Each Guarantor agrees that, so long as any Lender has any commitment or any other obligations under any Transaction Document, or any amount payable hereunder remains unpaid:
(a) Corporate Existence Subject to clause (c) of this paragraph 6 each Guarantor will at all times preserve and keep in full force and effect its corporate existence and all of its rights and franchises unless, in its good faith judgment, the termination of or failure to preserve and keep in full force and effect such right or franchise would not, individually or in the aggregate, have a Material Adverse Effect.
(b) Each Guarantor shall permit the representatives of the Administrative Agent and each Lender: (i) If no Default or Event of Default then exists, at the expense of such Agent or Lender and upon reasonable prior notice to the Borrower, to visit the principal executive office of each Guarantor, to discuss the affairs, finances and accounts of each Guarantor with their respective officers and (with the consent of a Guarantor, which consent will not be unreasonably withheld) its independent public accountants, and (with the consent of a Guarantor, which consent will not be unreasonably withheld) to visit the other offices and properties of each Guarantor, all at such reasonable times and as often as may be reasonably requested in writing; and (ii) If a Default or Event of Default then exists, at the expense of the Guarantor to visit and inspect any of the offices or properties of any Guarantor, to examine all their respective books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers and independent public accountants (and by this provision each Guarantor authorizes said accountants to discuss the affairs, finances and accounts of the Guarantors), all at such
3
times and as often as may be requested. Anything herein to the contrary notwithstanding, no Guarantor shall have any obligations to disclose pursuant to this Guaranty Agreement any engineering, scientific, or other technical data without significance to the analysis of the financial position of the Guarantor and its Subsidiaries.
(c) Merger, Consolidation, Etc. No Guarantor shall consolidate with or merge with any other corporation or convey, transfer or lease substantially all of its assets in a single transaction or series of transactions to any Person except (1) in connection with the sale of a Guarantor or of all or substantially all of its assets in a transaction permitted by Section 5.11 of the Credit Agreement to a third party not affiliated with the Borrower or such Guarantor or (2) unless:
(i) the successor formed by such consolidation or the survivor of such merger or the Person that acquires by conveyance, transfer or lease substantially all of the assets of such Guarantor as an entirety, as the case may be, shall be a solvent corporation or other entity organized and existing under the laws of the United States or any State thereof (including the District of Columbia), and, if such Guarantor is not such corporation or other entity, such corporation or other entity shall have executed and delivered to the Administrative Agent its assumption of the due and punctual performance and observance of each covenant and condition of this Guaranty Agreement, together with a favorable opinion of counsel satisfactory to the Administrative Agent covering such matters relating to such corporation or other entity and such assumption as the Administrative Agent may reasonably request; and
(ii) immediately after giving effect to such transaction, no Default or Event of Default would exist; and
(iii) immediately prior to and after giving effect to such transaction, the Borrower and the Restricted Subsidiaries would be permitted by the provisions of Sections 5.12 and 5.17 of the Credit Agreement to incur at least $1.00 of additional Indebtedness and $1.00 of additional Restricted Indebtedness, respectively.
No such conveyance, transfer or lease of substantially all of the assets of any Guarantor shall have the effect of releasing such Guarantor or any successor corporation that shall theretofore have become such in the manner prescribed in this clause (c) of paragraph 6 from its liability under this Guaranty Agreement provided that a Guarantor may be released from its obligations hereunder in accordance with paragraph 21 hereof if it or all or substantially all of its assets are sold to a third party not affiliated with the Borrower or such Guarantor in a transaction permitted by Section 5.11 of the Credit Agreement.
(d) Compliance With Loan Documents. Each Guarantor shall comply with all covenants set forth in the Credit Agreement and any other Transaction Document applicable to it.
7. SUBROGATION. Each Guarantor agrees that it will not exercise any rights which it may have acquired by way of subrogation under this Guaranty Agreement, by any payment made hereunder or otherwise, or accept any payment on account of such subrogation rights, or any rights of reimbursement or indemnity or any rights or recourse to any security for the obligations under the Credit Agreement or this Guaranty Agreement unless and until all of the obligations, undertakings or conditions to be performed or observed by the Borrower pursuant to the Transaction Documents at the time of any Guarantor's exercise of any such right shall have been performed, observed or paid in full. For a period of one year after the payment in full of the Guaranteed Obligations, each Guarantor hereby waives (x) all rights of subrogation which it may at any time otherwise have as a result of this Guaranty Agreement (whether, statutory or otherwise) to the claims of the Administrative Agent, the Lenders and the Issuing Bank against the Borrower or any other guarantor of the Guaranteed Obligations ( Borrower and such
4
other guarantors are each herein referred to as an “Other Party”) and all contractual, statutory or common law rights of reimbursement, contribution or indemnity from any Other Party which it may at any time otherwise have as a result of this Guaranty Agreement; and (y) any right to enforce any other remedy which the Administrative Agent, the Lenders and the Issuing Bank now have or may hereafter have against any Other Party, any endorser or any other guarantor of all or any part of the Guaranteed Obligations.
8. CONTRIBUTION. The Guarantors collectively desire to allocate among themselves in a fair and equitable manner, their obligations arising under this Guaranty Agreement. Accordingly, in the event any payment or distribution is made by a Guarantor under this Guaranty Agreement (a “Funding Guarantor”) that exceeds its Fair Share (as defined below), that Funding Guarantor shall, subject to paragraph 6 hereof, be entitled to a contribution from each of the other Guarantors in the amount of such other Guarantor's Fair Share Shortfall (as defined below), with the result that all such contributions will cause each Guarantor's Aggregate Payments (as defined below) to equal its Fair Share. “Fair Share” means, with respect to a Guarantor as of any date of determination, an amount equal to (i) the ratio of (x) the Adjusted Maximum Amount (as defined below) with respect to such Guarantor to (y) the aggregate of the Adjusted Maximum Amounts with respect to all Guarantors, multiplied by (ii) the aggregate amount paid or distributed on or before such date by all Funding Guarantors under this Guaranty Agreement in respect of the obligations guarantied. “Fair Share Shortfall” means, with respect to a Guarantor as of any date of determination, the excess, if any, of the Fair Share of such Guarantor over the Aggregate Payments of such Guarantor. “Adjusted Maximum Amount” means, with respect to a Guarantor as of any date of determination, the maximum aggregate amount of the obligations of such Guarantor under this Guaranty Agreement determined in accordance with the provisions hereof (including, without limitation, the limitations on such obligations contained in paragraph 1 hereof); provided that, solely for purposes of calculating the “Adjusted Maximum Amount” with respect to any Guarantor for purposes of this paragraph 8 the assets or liabilities arising by virtue of any rights to or obligations of contribution hereunder shall not be considered as assets or liabilities of such Guarantor. “Aggregate Payments” means, with respect to a Guarantor as of any date of determination, the aggregate amount of all payments and distributions made on or before such date by such Contributing Guarantor in respect of this Guaranty Agreement (including, without limitation, in respect of this paragraph 8). The amounts payable as contributions hereunder shall be determined as of the date on which the related payment or distribution is made by the applicable Funding Guarantor. The allocation among Guarantors of their obligations as set forth in this paragraph 8 shall not be construed in any way to limit the liability of any Guarantor hereunder.
9. REINSTATEMENT OF GUARANTY AGREEMENT. This Guaranty Agreement shall continue to be effective, or be reinstated, as the case may be, if and to the extent at any time payment, in whole or in part, of any of the sums due to the Administrative Agent, any Lender or the Issuing Bank for principal, premium, if any, or interest on the obligations under any Transaction Document or any of the other Guaranteed Obligations is rescinded or must otherwise be restored or returned by such entity upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or any Guarantor, or upon or as a result of the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to the Borrower, any Guarantor or any substantial part of their respective properties, or otherwise, all as though such payments had not been made. If an event permitting the acceleration of the maturity of the principal due under any Transaction Document shall at any time have occurred and be continuing and such acceleration shall at such time be prevented or the right of the Administrative Agent, any Lender or the Issuing Bank to receive any payment under the applicable Transaction Document shall at such time be delayed or otherwise affected by reason of the pendency against the Borrower of a case or proceeding under a bankruptcy or insolvency law, each Guarantor agrees that, for purposes of this Guaranty Agreement and its obligations hereunder, the maturity of such principal amount shall be deemed to have been accelerated with the same effect as if the Administrative Agent, the Lenders or the Issuing
5
Bank had accelerated the same in accordance with the terms of the applicable Transaction Documents, and any Guarantor shall forthwith pay such accelerated principal amount, accrued interest and premium, if any, thereon and any other amounts guaranteed hereunder.
10. PAYMENTS. Each Guarantor hereby, jointly and severally, guarantees that the Borrower shall pay the Guaranteed Obligations to the Administrative Agent in lawful currency of the United States of America and in immediately available funds, at the times and places provided in, and otherwise strictly in accordance with the terms and provisions of, the Credit Agreement or other applicable Transaction Documents (regardless of any law, regulation or decree now or hereafter in effect which might in any manner affect the Guaranteed Obligations, or the rights of any such entity with respect thereto as against the Borrower, or cause or permit to be invoked any alteration in the time, amount or manner of payment by the Borrower of any or all of the Guaranteed Obligations), without set-off or counterclaim and free and clear of, and without reduction for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions, withholdings now or hereafter imposed, levied, collected, withheld or assessed by any country (or by any political subdivision or taxing authority thereof or therein) excluding income and franchise taxes of the United States of America or any political subdivision, state or taxing authority thereof or therein (including Puerto Rico) such non-excluded taxes being called “Foreign Taxes”). If any Foreign Taxes are required to be withheld from any amount payable to the Administrative Agent, any Lender or the Issuing Bank under this Guaranty Agreement, under the Credit Agreement or any other Transaction Document, the amounts so payable to such holder shall be increased to the extent necessary to yield to such entity (after payment of all Foreign Taxes) interest or any such other amounts at the rates or in the amounts specified in the applicable Transaction Document. In the event any payment is made by a Guarantor under this Guaranty Agreement, then such Guarantor shall, subject to paragraph 6 hereof, be subrogated to the rights then held by the Administrative Agent, the Issuing Bank and the Lenders with respect to the Guaranteed Obligations to the extent to which the Guaranteed Obligations was discharged by such Guarantor. All payments received by the Administrative Agent under this Guaranty Agreement shall be allocated pro rata among the Lenders in accordance with the Lenders'; Applicable Percentages unless the Intercreditor Agreement directs that the proceeds shall be distributed in another manner.
11. RANK OF GUARANTY AGREEMENT. Each Guarantor agrees that its obligations under this Guaranty Agreement shall rank at least pari passu with all other unsecured senior obligations of such Guarantor now or hereafter existing.
12.
REPRESENTATIONS AND WARRANTIES OF THE GUARANTORS.
EachGuarantor represents and warrants to the Administrative Agent the Issuing Bank
and each Lender as follows:
(a) Existence. It: (i) is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (ii) has all requisite power and authority to own its property and assets and to carry on its business as now conducted and as proposed to be conducted, (iii) is qualified to do business in every jurisdiction where such qualification is required, except where the failure so to qualify would not result in a Material Adverse Effect, and (iv) has the corporate power and authority to execute, deliver and perform its obligations under this Guaranty Agreement and the Intercreditor Agreement.
(b) Authorization. Its execution, delivery and performance of this Guaranty Agreement and the Intercreditor Agreement (i) have been duly authorized by all requisite corporate action and (ii) will not (A) violate (1) any provision of any law, statute, rule or regulation to which it is subject or of its certificate of incorporation or other constituent documents or by-laws, (2) any order of any
6
Applicable Governmental Authority or (3) any provision of any Material indenture, agreement or other instrument to which it is a party or by which it or any of its property is or may be bound, (ii) be in conflict with, result in a breach of or constitute (alone or with notice or lapse of time or both) a default under any such indenture, agreement or other instrument or (iii) result in the creation or imposition of any Lien upon any of its property or assets.
(c) Enforceability. This Guaranty Agreement constitutes, and when entered into, the Intercreditor Agreement will constitute, its legal, valid and binding obligation enforceable against it in accordance with their respective terms, as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
(d) No Consents. No action, consent or approval of, registration or filing with or other action by any Applicable Governmental Authority is or will be required in connection with its execution, delivery or performance of this Guaranty Agreement or the Intercreditor Agreement.
(e) Credit Agreement Representations. All representations and warranties in the Credit Agreement relating to it are true and correct as of the date hereof and are restated herein with the same force and effect as if such representations and warranties had been made on and as of such date except to the extent that such representations and warranties relate specifically to another date.
(f) Information. It has adequate means to obtain from the Borrower on a continuing basis information concerning the financial condition and assets of the Borrower and it is not relying upon the Administrative Agent, the Issuing Bank or any Lender to provide (and neither the Administrative Agent, the Issuing Bank nor any Lender shall have any duty to provide) any such information to it either now or in the future.
(g) Benefit. The Borrower provides the Guarantors financing from time to time and some of the funds used by the Borrower to provide such financing have been and will hereafter be borrowed by the Borrower under the Credit Agreement. As a result, the value of the consideration received and to be received by each Guarantor as a result of the Borrower and the Lenders entering into the Credit Agreement and each Guarantor’s executing and delivering this Guaranty Agreement (in light of, among other things, the contribution provisions of paragraph 8 hereof) is reasonably worth at least as much as the liability and obligation of each Guarantor hereunder, and such liability and obligation and the Credit Agreement have benefited and may reasonably be expected to benefit each Guarantor directly or indirectly.
(h) Solvency. Each Guarantor both individually and on a consolidated basis: (i) owns and will own assets (included in such assets the rights of contribution set forth in paragraph 8 hereof) the fair saleable value of which are (A) greater than the total amount of its liabilities (including contingent liabilities) and (B) greater than the amount that will be required to pay probable liabilities of then existing debts as they become absolute and matured considering all financing alternatives and potential asset sales reasonably available to it; (ii) has capital that is not unreasonably small in relation to its business as presently conducted; and (iii) does not intend to incur and does not believe that it will incur debts beyond its ability to pay such debts as they become due.
13.
SETOFF. If an Event of
Default shall have occurred and be continuing each Lender is hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Lender to or for the credit or the account of the any
7
Guarantor against any of and all the obligations of such Guarantor now or hereafter existing under this Guaranty Agreement, irrespective of whether or not such Lender shall have made any demand under this Guaranty Agreement and although such obligations may be unmatured. The rights of each Lender under this paragraph are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.
14. SUBORDINATED INDEBTEDNESS. In addition and not in limitation of paragraph 6 hereof, each Guarantor agrees as follows:
(a) Each Guarantor hereby agrees that the Subordinated Indebtedness (as defined below) shall be subordinate and junior in right of payment to the prior payment in full of all Guaranteed Obligations as herein provided. The Subordinated Indebtedness shall not be payable, and no payment of principal, interest or other amounts on account thereof, and no property or guarantee of any nature to secure or pay the Subordinated Indebtedness shall be made or given, directly or indirectly by or on behalf of any Other Party (as defined in paragraph 7 above) or received, accepted, retained or applied by any Guarantor unless and until the Guaranteed Obligations shall have been paid in full in cash for one year; except that prior to receipt of a notice from the Administrative Agent under this paragraph (which may be given at any time an Event of Default exists), a Guarantor shall have the right to receive payments on the Subordinated Indebtedness made in the ordinary course of business. After receipt of the notice from the Administrative Agent delivered under the preceding sentence, no payments of principal or interest or any other amounts may be made or given, directly or indirectly, by or on behalf of any Other Party or received, accepted, retained or applied by any Guarantor unless and until the Guaranteed Obligations shall have been paid in full in cash for one year. If any sums shall be paid to a Guarantor by any Other Party or any other Person on account of the Subordinated Indebtedness when such payment is not permitted hereunder, such sums shall be held in trust by such Guarantor for the benefit of the Administrative Agent, the Issuing Bank and the Lenders and shall forthwith be paid to the Administrative Agent without affecting the liability of any Guarantor under this Guaranty Agreement and may be applied by the Administrative Agent against the Guaranteed Obligations in accordance with the Credit Agreement. Upon the request of the Administrative Agent, a Guarantor shall execute, deliver, and endorse to the Administrative Agent such documentation as the Administrative Agent may request to perfect, preserve, and enforce its rights hereunder. For purposes of this Guaranty Agreement and with respect to a Guarantor, the term “Subordinated Indebtedness” means, with respect to any Guarantor, all indebtedness, liabilities, and obligations of any Other Party to such Guarantor, whether such indebtedness, liabilities, and obligations now exist or are hereafter incurred or arise, or are direct, indirect, contingent, primary, secondary, several, joint and several, or otherwise, and irrespective of whether such indebtedness, liabilities, or obligations are evidenced by a note, contract, open account, or otherwise, and irrespective of the Person or Persons in whose favor such indebtedness, obligations, or liabilities may, at their inception, have been, or may hereafter be created, or the manner in which they have been or may hereafter be acquired by such Guarantor.
(b) Each Guarantor agrees that any and all Liens (including any judgment liens), upon any Other Party’s assets securing payment of any Subordinated Indebtedness shall be and remain inferior and subordinate to any and all Liens upon any Other Party’s assets securing payment of the Guaranteed Obligations or any part thereof, regardless of whether such Liens in favor of a Guarantor, the Administrative Agent, the Issuing Bank or any Lender presently exist or are hereafter created or attached. Without the prior written consent of the Administrative Agent and otherwise subject to the restrictions set forth in paragraph 7 hereof when an Event of Default exists, no Guarantor shall (i) file suit against any Other Party or exercise or enforce any other creditor’s right it may have against any Other Party, or (ii) foreclose, repossess, sequester, or otherwise take steps or institute any action or proceedings (judicial or otherwise, including without limitation the commencement of, or joinder in, any liquidation,
8
bankruptcy, rearrangement, debtor’s relief or insolvency proceeding) to enforce any obligations of any Other Party to such Guarantor or any Liens held by such Guarantor on assets of any Other Party.
(c) In the event of any receivership, bankruptcy, reorganization rearrangement, debtor’s relief, or other insolvency proceeding involving any Other Party as debtor, the Administrative Agent shall have the right to prove and vote any claim under the Subordinated Indebtedness and to receive directly from the receiver, trustee or other court custodian all dividends, distributions, and payments made in respect of the Subordinated Indebtedness until the Guaranteed Obligations has been paid in full in cash. The Administrative Agent may apply any such dividends, distributions, and payments against the Guaranteed Obligations in accordance with the Credit Agreement.
15. NOTICES. Unless otherwise specifically provided herein, all notices consents, directions, approvals, instructions, requests and other communications required or permitted by the terms hereof shall be in writing, and any such communication shall become effective when received, addressed in the following manner: (a) if to any Guarantor, in care of the Borrower in accordance with the notice provisions in the Credit Agreement or (b) if to any Lender or the Issuing Bank, to the respective address set forth in the notice provisions of the Credit Agreement, with a copy to the Administrative Agent; or (c) if to the Administrative Agent, to the respective address set forth in the notice provisions of the Credit Agreement; provided, however, that any such addressee may change its address for communications by notice given as aforesaid to the other parties hereto.
16. CONSTRUCTION. The section and subsection headings in this Guaranty Agreement are for convenience of reference only and shall neither be deemed to be a part of this Guaranty Agreement nor modify, define, expand or limit any of the terms or provisions hereof. All references herein to numbered sections or paragraphs, unless otherwise indicated, are to sections and paragraphs of this Guaranty Agreement. Words and definitions in the singular shall be read and construed as though in the plural and vice versa, and words in the masculine, neuter or feminine gender shall be read and construed as though in either of the other genders where the context so requires.
17. SEVERABILITY. If any provision of this Guaranty Agreement, or the application thereof to any Person or circumstances, shall, for any reason or to any extent, be invalid or unenforceable, such invalidity or unenforceability shall not in any manner affect or render invalid or unenforceable the remainder of this Guaranty Agreement, and the application of that provision to other persons or circumstances shall not be affected but, rather, shall be enforced to the extent permitted by applicable law.
18. STATUTE OF LIMITATIONS. To the extent permitted by law, any acknowledgment or new promise, whether by payment of principal or interest or otherwise and whether by the Borrower or others (including any Guarantor), with respect to any of the Guaranteed Obligations shall, if the statute of limitations in favor of any Guarantor against the Administrative Agent, the Issuing Bank or any Lender shall have commenced to run, toll the running of such statute of limitations and, if the period of such statute of limitations shall have expired, prevent the operation of such statute of limitations.
19. FEES. The Guarantors shall, jointly and severally, pay on demand all reasonable attorneys’ fees and all other reasonable costs and expenses incurred by the Administrative Agent, the Issuing Bank and the Lenders in connection with the administration, enforcement, or collection of this Guaranty Agreement.
20. SUCCESSORS. The terms and provisions of this Guaranty Agreement shall be binding upon and inure to the benefit of each Guarantor, the Administrative Agent, the Lenders and the Issuing Bank from time to time and their respective permitted successors, transferees and assigns.
9
21. ENTIRE AGREEMENT; AMENDMENT; RELEASE. THIS GUARANTY AGREEMENT CONSTITUTES A “LOAN AGREEMENT” AS DEFINED IN SECTION 26.03(a) OF THE TEXAS BUSINESS AND COMMERCE CODE, AND REPRESENTS THE ENTIRE CONTRACT AMONG THE PARTIES RELATIVE TO THE SUBJECT MATTER HEREOF AND THEREOF. ANY PREVIOUS AGREEMENT AMONG THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF IS SUPERSEDED BY THIS GUARANTY AGREEMENT. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. NOTHING IN THIS GUARANTY AGREEMENT, EXPRESSED OR IMPLIED, IS INTENDED TO CONFER UPON ANY PARTY OTHER THAN THE PARTIES HERETO ANY RIGHTS, REMEDIES, OBLIGATIONS OR LIABILITIES UNDER OR BY REASON OF THIS GUARANTY AGREEMENT. THIS GUARANTY AGREEMENT IS INTENDED BY EACH GUARANTOR, THE ADMINISTRATIVE AGENT, THE ISSUING BANK AND THE LENDERS AS A FINAL AND COMPLETE EXPRESSION OF THE TERMS OF THE GUARANTY AGREEMENT, AND NO COURSE OF DEALING AMONG ANY GUARANTOR, THE ADMINISTRATIVE AGENT, THE ISSUING BANK AND THE LENDERS, NO COURSE OF PERFORMANCE, NO TRADE PRACTICES, AND NO EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE SHALL BE USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS GUARANTY AGREEMENT. No amendment of or supplement to this Guaranty Agreement, or waiver or modification of, or consent under, the terms hereof shall be effective unless in writing and signed by the Guarantors, the Administrative Agent and the Required Lenders; except that without the agreement of the Guarantors, the Administrative Agent or any Lender, any Material Restricted Subsidiary may be added hereto as a “Guarantor” by its execution and delivery of a Subsidiary Joinder Agreement. Notwithstanding the foregoing, no Guarantor shall be released from its obligations under this Guaranty Agreement without the prior written consent of all the Lenders, except that the Administrative Agent may, without the consent or agreement of any Lender, release a Guarantor if such Guarantor or its assets have been sold to a third party not affiliated with the Borrower or any other Guarantor in a transaction permitted by Section 5.11 of the Credit Agreement.
22. TERM OF GUARANTY AGREEMENT. Subject to the release provisions of paragraph 21, this Guaranty Agreement and all guarantees, covenants and agreements of the Guarantors contained herein shall continue in full force and effect and shall not be discharged until such time as all of the Guaranteed Obligations shall be paid or otherwise discharged in full and all commitments of the Lenders and the Issuing Bank under any Transaction Document terminated.
23. SURVIVAL. All warranties, representations and covenants made by the Guarantors herein or in any certificate or other instrument delivered by such Guarantors on their behalf under this Guaranty Agreement shall be considered to have been relied upon by the Administrative Agent, the Lenders and the Issuing Bank and shall survive the execution and delivery of this Guaranty Agreement, regardless of any investigation made by, or on behalf of, the Administrative Agent, the Lender or the Issuing Bank.
24. FURTHER ASSURANCES. Each Guarantor hereby agrees to execute and deliver all such instruments and take all such action as the Administrative Agent may from time to time reasonably request in order to effectuate fully the purposes of this Guaranty Agreement.
25. EXERCISE OF REMEDIES. Each Guarantor agrees that the Administrative Agent, the Issuing Bank and the Lenders may exercise any and all rights granted to any of them under the Credit Agreement without affecting the validity or enforceability of this Guaranty Agreement.
26. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS.
10
27. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY 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 GUARANTY AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY 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 BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
28. NO WAIVER. No failure on the part of the Administrative Agent, the Issuing Bank or any Lender to exercise, and no delay in exercising, any right, power, or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power, or privilege. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.
29. RELIANCE. Each Guarantor recognizes that the Administrative Agent, the Issuing Bank and the Lenders are relying upon this Guaranty Agreement and the undertakings of each Guarantor hereunder in making extensions of credit to the Borrower under the Credit Agreement and further recognizes that the execution and delivery of this Guaranty Agreement is a material inducement to the Administrative Agent, the Issuing Bank and the Lenders in entering into the Credit Agreement and continuing to extend credit thereunder. Each Guarantor hereby acknowledges that there are no conditions to the full effectiveness of this Guaranty Agreement.
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty Agreement to be duly executed and delivered as of the 29th day of June 2001.
GUARANTORS:
LENNOX INDUSTRIES INC.
SERVICE EXPERTS INC.
▇▇▇▇▇▇▇▇▇ AIR CONDITIONING INC.
EXCEL COMFORT SYSTEMS INC.
By:
______________________________________
Name:
______________________________________
Authorized officer for each Guarantor
11
EXHIBIT E
SUBSIDIARY JOINDER AGREEMENT
This SUBSIDIARY JOINDER AGREEMENT (the “Agreement”) dated as of _______ __, 200_ is executed by the undersigned (“Debtor”) for the benefit of THE CHASE MANHATTAN BANK in its capacity as administrative agent for the Lenders party to the hereafter identified Credit Agreement (in such capacity herein, the “Administrative Agent”) and for the benefit of such Lenders in connection with that certain 364 Day Revolving Credit Facility Agreement dated as of January 25, 2001, among the Administrative Agent, Lennox International Inc. (the “Borrower”), and the Lenders party thereto (as modified, the “Credit Agreement”, and capitalized terms not otherwise defined herein being used herein as defined in the Credit Agreement).
The Debtor is a newly formed or newly acquired Material Restricted Subsidiary or, as a result of a change in assets, has become a Material Restricted Subsidiary and is required to execute this Subsidiary Joinder Agreement pursuant to the Credit Agreement.
NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Debtor hereby agrees as follows:
1. The Debtor hereby assumes all the obligations of a “Guarantor” under the Subsidiary Guaranty (“Guaranty”) and agrees that it is a “Guarantor” and bound as a “Guarantor” under the terms of the Guaranty as if it had been an original signatory thereto. In accordance with the forgoing and for valuable consideration, the receipt and adequacy of which are hereby acknowledged, Debtor irrevocably and unconditionally guarantees to the Administrative Agent, the Issuing Bank and the Lenders the full and prompt payment and performance of the Guaranteed Obligations (as defined in the Guaranty) upon the terms and conditions set forth in the Guaranty.
2. This Agreement shall be deemed to be part of, and a modification to, the Guaranty and shall be governed by all the terms and provisions of the Credit Agreement and the Guaranty, which terms are incorporated herein by reference, are ratified and confirmed and shall continue in full force and effect as valid and binding agreements of Debtor enforceable against Debtor. The Debtor hereby waives notice of the Administrative Agent’s, the Issuing Bank’s or any Lender’s acceptance of this Agreement.
IN WITNESS WHEREOF, the Debtor has executed this Agreement as of the day and year first written above.
DEBTOR:
-----------------------------------------
By:
--------------------------------------
Name:
---------------------------------
Title:
---------------------------------
Solo
SCHEDULE 2.01
LENDER NAME COMMITMENT TITLE
----------- ---------- -----
The Chase Manhattan Bank 18,615,384.62 Administrative Agent
Wachovia Bank, N.A. 17,769,230.77 Syndication Agent
The Bank of Nova Scotia 12,692,307.69 Documentation Agent
The Northern Trust Company 5,076,923.08 Managing Agent
Royal Bank of Canada 13,538,461.54 Managing Agent
Bank of Tokoyo - Mitsubishi, Ltd. 4,230,769.23 Co-Agent
ABN AMRO Bank, N.V. 10,576,923.08 Co-Agent
UBS AG, Stamford Branch 21,153,846.15 Co-Agent
First Union National Bank 16,923,076.92 Participant
The Bank of New York 4,230,769.23 Participant
Firstar Bank N.A. 12,692,307.69 Participant
TOTAL 137,500,000.00
Solo
SCHEDULE 3.05
LENNOX INTERNATIONAL INC. SUBSIDIARIES
AS OF MAY 31, 2001
R = Restricted
MR = Material Restricted
UR = Unrestricted
LOCATION OF
JURISDICTION SUBSTANTIAL RESTRICTED/
NAME OWNERSHIP OF INC. OPERATING ASSETS UNRESTRICTED
---- --------- ------- ---------------- ------------
Lennox Industries Inc. 100% Iowa United States MR
SEE ANNEX A
Heatcraft Inc 100% Mississippi United States R
LGL de Mexico, S.A. de C.V 1% Mexico Mexico UR
Lennox Participacoes Ltda 1% Brazil Brazil UR
▇▇▇▇▇-▇▇▇▇ do Brasil Ltda 99% Brazil Brazil UR
Heatcraft do Brazil Ltda 84.47% Brazil Brazil UR
SIWA S.A 100% Brazil Brazil UR
LPAC Corp. 5% Delaware N/A R
Livernois Engineering Co. 100% Michigan United States R
Heatcraft Advanced Techologies Inc. 100% Delaware United States R
Heatcraft Heat Transfer Inc. 100% Delaware United States R
Advanced Distributor Products LLC 100% Delaware United States R
Heatcraft Refrigeration Products LLC 100% Delaware United States R
▇▇▇▇▇▇▇▇▇ Air Conditioning Inc. 100% Ohio United States ▇▇
▇▇▇▇▇▇-▇▇▇▇▇ Supply Co. 100% Nebraska United States R
▇▇▇▇▇▇▇▇▇ Distributors Inc. 100% Delaware United States R
LPAC Corp. 5% Delaware N/A R
Allied Air Enterprises Inc. 100% Delaware United States R
Heatcraft Technologies Inc. 100% Delaware United States R
LGL Peru S.A.C 10% Peru Peru UR
LPAC Corp. 80% Delaware N/A R
Strong LGL Columbia Ltda 50% Columbia Columbia UR
Excel Comfort Systems Inc. 100% Delaware United States MR
National Air Systems, Inc. 100% California United States R
Service Experts Inc. 100% Delaware United States MR
SEE ANNEX C
Lennox Inc. 100% Canada Canada UR
Lennox Canada Inc. 100% Canada Canada UR
SEE ANNEX B
Lennox Global Ltd. 100% Delaware United States UR
SEE ANNEX D
SCHEDULE 3.05
ANNEX A
LENNOX INDUSTRIES INC. SUBSIDIARIES
LOCATION OF
JURISDICTION SUBSTANTIAL RESTRICTED/
NAME OWNERSHIP OF INC. OPERATING ASSETS UNRESTRICTED
---- --------- ------- ---------------- ------------
Lennox Industries (Canada) Ltd. 100% Canada Canada UR
LHP Holdings Inc. 100% Delaware United States R
Lennox Hearth Products Inc. 100% California United States R
Marcomp
Securite Cheminees International Ltee 100% Canada Canada UR
SARL Cheminees Securite 100% France France UR
Security Chimneys UK Limited 100% UK UK UR
Security USA 100% United States R
The Earth Stove, Inc. 100% Oregon United States R
Products Acceptance Corporation 100% Iowa N/A R
Lennox Manufacturing Inc. 100% Delaware United States R
Lennox Finance Inc. 100% Canada Canada UR
LPAC Corp. 10% Delaware N/A R
Solo
SCHEDULE 3.05
ANNEX B
LENNOX CANADA INC. SUBSIDIARIES
The following are all in Canada, owned 100% by Lennox Canada Inc. and
Unrestricted Subsidiaries:
▇▇▇▇▇▇▇ Air Conditioning Limited
Valley Refrigeration Limited
Dearie Contracting Inc.
Dearie Martino Contractors Ltd.
▇▇▇▇▇▇ Air Conditioning Limited
▇▇▇▇▇▇ Heating & Cooling Co. Ltd.
▇▇▇▇▇▇ Newco Inc.
Montwest Air Ltd.
Fahrhall Mechanical Contractors Limited
Arpi’s Industries Canada Ltd.
Arpi's Holdings Ltd.
Advance Mechanical Ltd.
Welldone Plumbing, Heating & Air Conditioning
Solo
SCHEDULE 3.05
ANNEX C
SERVICE EXPERTS INC. SUBSIDIARIES
The following are all in the United States, owned 100% by Service Experts Inc.
and Restricted Subsidiaries:
A. ▇▇▇▇▇ ▇▇▇▇▇ and Sons LLC – Virginia
AC/DAC, L.L.C. – Tennessee
Academy Air Service Experts, Inc. – Tennessee
Ainsley & Son Heating LLC – Ohio
Air Conditioning and Heating, LLC – Tennessee
Air Engineers, Inc. – Florida
Air Experts LLC – Georgia
Air Experts LLC – Ohio
Air Systems of Florida, Inc. – Florida
Aire-Tech LLC – Ohio
Airmaster Heating & Air Conditioning LLC – Michigan
▇▇▇▇▇▇▇▇▇▇ Plumbing, Heating and Air Conditioning Service, Inc. – Tennessee
Alliance Mechanical Heating & Air Conditioning, Inc. – California
Andros Refrigeration LLC – Arizona
▇▇▇▇ ▇▇▇▇▇ Heating & Air Conditioning LLC – North Carolina
▇▇▇▇ ▇▇▇▇▇ Heating & Air Conditioning, Inc. – Georgia
Arrow Heating & Air Conditioning, Inc. – Wisconsin
Artic Aire of Chico, Inc. – California
Atlantic Air Conditioning and Heating LLC – Maryland
Atmostemp LLC – New Jersey
Austin Brothers, Inc. – Tennessee
▇▇▇▇▇▇ Heating and Air Conditioning LLC – Delaware
▇▇▇▇▇▇▇ Heating & Air Conditioning LLC – Colorado
▇▇▇▇▇ Heating & Cooling LLC – Delaware
Ben Peer Heating LLC – New York
Berkshire Air Conditioning LLC – Tennessee
Berkshire Heating & Cooling LLC – Delaware (to merge out on 6/23/01)
Blue Springs Heating & Air Conditioning LLC – Missouri
Broad Ripple Heating & Air Conditioning Inc. – Indiana
Burnsville Heating & Air Conditioning LLC – Minnesota
▇. ▇▇▇▇▇▇▇▇▇▇ Company LLC – Delaware
▇. ▇▇▇▇▇ Company LLC – Delaware
Calverley Air Conditioning & Heating LLC – Delaware
▇▇▇▇▇▇ Air LLC – Florida
Chief/▇▇▇▇▇ Heating & Air Conditioning LLC – Delaware
Claire’s Air Conditioning and Refrigeration, Inc. – Tennessee
Climate Control LLC – Alabama
Climate Design Systems LLC – Tennessee
Climate Masters Service LLC – Colorado
Coastal Air Conditioning Service LLC – Georgia
Comfort Masters Heating & Cooling LLC – Delaware
Comfort Tech Cooling & Heating LLC – Tennessee
Comfortech, Inc. – Tennessee
Contractor Success Group, Inc. – Missouri – Merged out?
Controlled Comfort LLC – Nebraska
▇▇▇▇ Heating & Air Conditioning LLC – Michigan
▇▇▇▇ Heating and Air Conditioning LLC – Delaware
Cool Breeze LLC – Ohio
1
SERVICE EXPERTS INC. SUBSIDIARIES - CONT'D
Cool Power LLC – New York
▇.▇. ▇▇▇▇▇▇▇ LLC – New York
▇▇▇ ▇▇▇▇▇▇ Heating & Cooling LLC – Pennsylvania
▇▇▇▇▇ the Plumber LLC – New Mexico
Dial One ▇▇▇▇▇▇▇ Plumbing, Heating & Cooling, Inc. – Tennessee
▇▇▇▇▇▇▇ Mechanical LLC – Ohio
Dodge Heating & Air Conditioning LLC – ▇▇▇▇▇▇▇
▇▇▇▇▇ Plumbing & Heating LLC – Delaware
Economy Heating & Air Conditioning LLC – Pennsylvania
Edison Heating and Cooling LLC – New Jersey
▇▇▇▇▇▇▇▇ LLC – South Carolina
Eveready LLC – ▇▇▇▇▇▇▇▇
▇▇▇▇▇ Service Experts LLC – New York
Fras-Air Contracting LLC – New Jersey
▇▇▇▇▇▇▇ Air Systems, Inc. – Tennessee
Frosty Mechanical Contractors LLC – Delaware – to become Service Experts
of the Berkshires LLC
Future Acquisition Sub, Inc. – Tennessee
Gables Air Conditioning LLC – Florida
General Conditioning LLC – New Jersey
General Conditioning Plumbing, Inc. – New Jersey
Getzschman Heating & Sheet Metal Contractors LLC – Nebraska
Golden Seal Heating & Air Conditioning LLC – Delaware
▇▇▇▇▇▇'▇ Specialty Company LLC – Oklahoma
▇▇▇▇ Refrigeration LLC – Delaware
Greenwood Heating & A/C LLC – Washington
▇▇▇▇▇▇▇'▇ Plumbing Co. LLC – Oklahoma
▇.▇. ▇▇▇▇▇▇▇▇▇ & Sons LLC – Ohio
▇▇▇▇▇▇ Sales & Service LLC – Iowa
Industrial Building Services, Inc. – Florida
International Service Leadership Inc. – Delaware
▇▇▇▇ ▇▇▇▇▇▇ Co. LLC – Oklahoma
▇▇▇▇▇▇ Heating and Air Conditioning LLC – Delaware
Jebco Heating & Air Conditioning LLC – Colorado
JM Mechanical LLC – Delaware
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Co. LLC – Ohio
K & S Heating, Air Conditioning & Plumbing LLC – Minnesota
Kiko Heating & Air Conditioning LLC – Ohio
▇▇▇▇▇▇▇▇▇ LLC – Delaware
Knochelmann Plumbing, Heating & Air LLC – Kentucky
▇▇▇▇▇ LLC – Tennessee
Kruger's Heating & Air Conditioning LLC – Delaware
Lake Arbor Heating LLC – Colorado
▇▇▇ ▇▇▇▇▇▇▇ Plumbing & Heating LLC – Ohio
Local Furnace LLC – Colorado – to become Service Experts of Fort ▇▇▇▇▇▇▇ LLC
Marco Cooling and Refrigeration LLC – Florida
▇▇▇▇▇▇▇ Heating & Air Conditioning LLC – Tennessee
▇▇▇▇ Heating & Air Conditioning LLC – New York
McPhee Service Experts, Inc. – Colorado
Midland Heating and Air Conditioning LLC – South Carolina
Miller Refrigeration, A/C, & Htg. Co. – North Carolina
National Air Systems, Inc. – California
▇▇▇▇ ▇▇▇▇▇▇ Heating, Air Conditioning & Plumbing LLC – Missouri
▇▇▇▇▇▇▇ Heating and Air Conditioning LLC – Alabama
▇▇▇▇▇▇ Refrigeration LLC – South Carolina
2
SERVICE EXPERTS INC. SUBSIDIARIES - CONT'D
▇▇▇▇▇▇-▇▇▇▇▇▇ Service Experts LLC – Maryland
▇▇▇▇▇▇▇ Mechanical, Inc. – Idaho
Peachtree Service Experts LLC – ▇▇▇▇▇▇▇
▇▇▇▇▇ Heating and Cooling LLC – South Dakota
PTM Enterprises LLC – Georgia
R&M Climate Control LLC – Tennessee
▇▇▇▇▇▇ ▇. Down LLC – New York
▇▇▇▇ ▇▇▇▇▇▇▇ Heating & Air Conditioning LLC – Delaware
▇▇▇▇▇▇▇ Mechanical LLC – Delaware
▇▇▇▇ Heating LLC – Missouri
S & W Air Conditioning LLC – Tennessee
San Antonio Air Conditioning LLC – Delaware
▇▇▇▇▇▇▇ Indoor Comfort LLC – South Carolina
Sanders Service Experts, Inc. – Tennessee
Sedgwick Heating & Air Conditioning LLC – Minnesota
SEI Management Company, LLC – Tennessee
SEIIN GP, Inc. – Indiana
SEITN GP, Inc. – Tennessee
Service Experts DFW LLC – Tennessee
Service Experts LLC – Florida
Service Experts of Arkansas LLC – Arkansas
Service Experts of Clearwater, Inc. – Tennessee
Service Experts of Denver LLC – Colorado
Service Experts of Imperial Valley, Inc. – California
Service Experts of Indiana, L.P. – Tennessee
Service Experts of Indianapolis, Inc. – Indiana
Service Experts of Northeast Louisiana LLC – Louisiana
Service Experts of Northwest Louisiana LLC – Louisiana
Service Experts of Palm Springs, Inc. – California
Service Experts of the Triangle LLC – North Carolina
Service Experts of Salt Lake City LLC – Tennessee
Service Experts of the Bay Area, Inc. – California
Service Experts of Utah LLC – Delaware
Service Experts of Washington LLC – Delaware
Service Experts Services, LLC – Tennessee
Service Now, Inc. – California
▇▇▇▇▇▇▇ Mechanical LLC – Georgia
Steel City Heating & Air LLC – Alabama
Strand Brothers LLC – Tennessee
▇▇▇▇▇▇▇'▇ HVAC LLC – New Hampshire
Sunbeam Service Experts LLC – New York
▇▇▇▇▇▇▇▇▇'▇ Corp. – Indiana
▇▇▇▇▇▇▇▇▇'▇, ▇.▇. – Tennessee
Teays Valley Heating and Cooling LLC – West Virginia
The ▇▇▇▇▇▇▇ Service Company LLC – Nebraska
TML LLC – Idaho
Total Comfort Specialists – California
Triton Mechanical LLC – New York
Valentine Heating & Air Conditioning LLC – Georgia
Venture International, Inc. – Tennessee
▇▇▇▇ Heating & Air Conditioning LLC – Minnesota
▇▇▇▇▇▇▇▇▇▇ A-Plus, Inc. – Utah
▇▇▇▇▇▇ ▇. ▇▇▇▇ LLC – Pennsylvania
3
SCHEDULE 3.05
ANNEX D
LENNOX GLOBAL LTD. SUBSIDIARIES
ALL LENNOX GLOBAL SUBSIDIARIES ARE UNRESTRICTED SUBSIDIARIES
LOCATION OF SUBSTANTIAL
NAME OWNERSHIP JURISDICTION OF INC. OPERATING ASSETS
---- --------- -------------------- ------------------------
LGL Asia-Pacific Pte. Ltd. 100% Rep. of Singapore Singapore
Lennox Global (Wuxi) Co. Ltd. 100% China
LGL Europe Holding Co. 100% Delaware N/A
SEE ATTACHED ANNEX E
UK Industries Inc. 100% Delaware N/A
LGL de Mexico, S.A. de C.V 99% Mexico Mexico
Lennox Participacoes Ltda 99% Brazil Brazil
▇▇▇▇▇-▇▇▇▇ do Brasil Ltda 1% Brazil Brazil
Strong LGL Dominicana, S.A 100% Dominican Republic Dominican Republic
Strong LGL Colombia Ltda 50% Colombia Columbia
LGL Belgium S.P.R.L .4% Belgium Belgium
LGL (Thailand) Ltd. 100% Thailand Thailand
LGL Peru S.A.C 90% Peru Peru
LGL Australia (US) Inc. 100% Delaware Delaware
SEE ATTACHED ANNEX F
Solo
SCHEDULE 3.05
ANNEX E
LGL EUROPE HOLDING CO. SUBSIDIARIES
(ALL UNRESTRICTED SUBSIDIARIES)
LOCATION OF SUBSTANTIAL
NAME OWNERSHIP JURISDICTION OF INC. OPERATING ASSETS
---- --------- -------------------- ------------------------
LGL Holland B.V 100% Holland ▇▇▇▇▇▇▇
▇▇▇▇▇-Coil S.R.O 50% Czech Republic Czech Republic
Ets. Brancher S.A 70% France France
Frinotec S.A 99.68% France France
LGL France S.A 100% France France
Herac Ltd. 100% United Kingdom N/A
SCI Groupe Brancher 100% France France
Hyfra Ind. GmbH 0.1% Germany Germany
LGL Germany GmbH 100% Germany Germany
▇▇▇▇▇-▇▇▇▇ Warmeaustauscher GmbH 100% Germany Germany
Hyfra Ind. GmbH 99.9% Germany Germany
Lennox Deutschland GmbH 100% Germany Germany
Lennox Global Spain S.L 100% Spain Spain
Lennox Refrigeration Spain S A. 90.1% Spain Spain
Aldo Marine 70% Spain Spain
Lennox Espana, S.A 100% Spain Spain
Redi sur Andalucia 70% Spain Spain
LGL Refrigeration Italia s.r.l 80% Italy Italy
LGL Polska Spzoo 100% Poland Poland
LGL Belgium S.P.R.L 99.6% Belgium Belgium
Lennox Benelux B.V 100% Netherlands Netherlands
Lennox Benelux N.V 100% Belgium Belgium
HCF Lennox Limited 100% United Kingdom United Kingdom
Lennox Industries (UK) 100% United Kingdom United Kingdom
Environheat Limited 100% United Kingdom N/A
▇▇▇▇▇▇ ▇▇▇▇▇ a.s 100% Czech Republic Czech Republic
▇▇▇▇▇ Coil s.r.o 50% Czech Republic Czech Republic
Janka ▇▇▇▇▇▇▇▇▇, ▇.▇.▇ ▇▇▇% ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Slovak Republic
SCHEDULE ▇.▇▇
▇▇▇▇▇ ▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ (▇▇) INC. SUBSIDIARIES
(ALL UNRESTRICTED SUBSIDIARIES, EXCEPT AS NOTED)
LOCATION OF
SUBSTANTIAL
NAME OWNERSHIP JURISDICTION OF INC. OPERATING ASSETS
---- --------- -------------------- ----------------
LGL Co Pty Ltd 100% Australia Australia
LGL Australia Investment Pty Ltd 100% Australia Australia
LGL Australia Finance Pty Ltd 10% Australia Australia
LGL Australia Finance Pty Ltd 90% Australia Australia
LGL Australia Holdings Pty Ltd 100% Australia Australia
Lennox Australia Pty. Ltd. 100% Australia Australia
LGL (Australia) Pty Ltd 100% Australia Australia
LGL Refrigeration Pry. Ltd 100% Australia Australia
▇▇▇▇▇ ▇ ▇▇▇▇▇ Pty Ltd* 100% Australia Australia
▇▇▇▇▇ Refrigeration Pty. Ltd
(Albury) 75% Australia Australia
▇▇▇▇▇ Refrigeration Pty. Ltd
(Sunshine Coast) 75% Australia Australia
▇▇▇▇▇ Refrigeration Pty. Ltd
(Gold Coast) 75% Australia Australia
▇▇▇▇▇ Refrigeration Pty. Ltd
(Tasmania) 75% Australia Australia
▇▇▇▇▇ Refrigeration Pty. Ltd
(Hobart) 100% Australia Australia
Refrigeration & Heating Wholesale Pty
Ltd (Vid) 100% Australia Australia
Refrigeration & Heating Wholesale Pty
Ltd (SA) 100% Australia Australia
R&H Wholesale Pty Ltd 100% Australia Australia
▇▇▇▇▇ Refrigeration Pty. Ltd.(NT) 75% Australia Australia
▇▇▇▇▇ Tubes & Contract Coils Pty Ltd 100% Australia Australia
▇▇▇▇▇ Sheet Metal Pty Ltd 100% Australia Australia
▇▇▇▇▇ Central Warehouse Pty. Ltd. 100% Australia Australia
J.N.K. Pty Limited 100% Australia Australia
P.R.L. Pty Limited 100% Australia Australia
▇▇▇▇▇ USA Inc. 100% North Carolina United States**
JNK Draughting Pty Limited 100% Australia Australia
P.R.L Sales Pty Limited 100% Australia Australia
Air Safe Pty Limited 100% Australia Australia
▇▇▇▇▇ ▇. ▇▇▇▇▇ Limited (NZ) 100% New Zealand New Zealand
*Stock is pledged to seller of company to secure a portion of the purchase price and other obligations incurred in
connection with the acquisition
**Restricted
SCHEDULE 3.05A
MATERIAL RESTRICTED SUBSIDIARY CAPITALIZATION
Common Preferred
Stock Par Preferred Stock Par Issued and
Common Stock Value Stock Value Outstanding
Authorized (per share) Authorized (per share) Capital Stock
---------- ----------- ---------- ----------- -------------
▇▇▇▇▇▇▇▇▇ Air 2,000 $1.00 N/A N/A 1,030 shares
Conditioning Inc.
Excel Comfort Systems Inc. 1,000 $1.00 N/A N/A 1,000 shares
Lennox Industries Inc. 1,500,000 $1.00 99,253 $10.00 994,394 shares
of common stock
Service Experts Inc. 1,000 $0.01 N/A N/A 1,000 shares
SCHEDULE 3.06 FINANCIAL STATEMENTS
1. Audited consolidated and consolidating financial statements for the Borrower and its Subsidiaries for the fiscal years ended December 31, 1997 through December 31, 2000.
2. Unaudited quarterly consolidated and consolidating financial statements for the Borrower and its Subsidiaries for the period ended March 31, 2001.
SCHEDULE 3.13
LENNOX INTERNATIONAL INC.
AND RESTRICTED SUBSIDIARIES
INDEBTEDNESS AS OF
May 26, 2001 (except as noted)
▇. ▇▇▇▇▇▇ INTERNATIONAL INC.
(1) Note Purchase Agreement dated as of December 1, 1993 $88,889,000
among Lennox International Inc. and the Noteholders
identified at the end thereof, pursuant to which Lennox
International Inc. delivered its 6.73% Senior
Promissory Notes due 2008
(2) Note Purchase Agreement dated as of July 6, 1995 20,000,000
between Lennox International Inc. and Teachers
Insurance and Annuity Association of America, pursuant
to which Lennox International Inc. delivered its 7.06%
Senior Promissory Notes due 2005.
(3) Guaranty dated September 19, 1995 from Lennox 475,000
International Inc. to First Bank of Natchitoches &
Trust Company and Regions Bank of Louisiana
guaranteeing 50% of debt of Alliance Compressors to
such Banks under a Promissory Note dated September 19,
1995.
(4) Guaranty of 50% of amounts due from Alliance Compressors 176,762
under a master Equipment Lease Agreement dated March
28, 1995 with NationsBanc Leasing Corporation
(5) Note Purchase Agreement dated as of April 3, 1998,
between Lennox International Inc. and the Noteholders
identified therein, pursuant to which Lennox
International Inc. delivered its:
6.56% Senior Notes due April 3, 2005 25,000,000
6.75% Senior Notes due April 3, 2008 50,000,000
(6) Revolving Credit Facility Agreement dated as of July 29, 240,000,000
1999
(7) Revolving Credit Facility Agreement dated as of January 115,700,000
25, 2000
(8) Master Shelf Agreement dated as of October 15, 1999
between Lennox International Inc. and Prudential
Insurance Company of America, pursuant to which Lennox
International Inc. delivered its:
7.75% Senior Notes due August 25, 2005 25,000,000
8.00% Senior Notes due June 1, 2010 35,000,000
(9) Promissory Note dated April 18, 2001 from Lennox
International Inc to Mizuho Financial Group 5,000,000
1
B. SERVICE EXPERTS INC.
Convertible Notes and miscellaneous debt
related to original acquisitions of centers 9,981,479
C. MISCELLANEOUS OTHER DEBT -(estimate)] 125,000
TOTAL OUTSTANDING INDEBTEDNESS OF LENNOX INTERNATIONAL
INC. AND RESTRICTED SUBSIDIARIES $615,347,241
------------
2
SCHEDULE 5.13
EXISTING LIENS
JURISDICTION SECURED PARTY UCC-1 FILE NO. DATE FILED
------------ ------------- -------------- ----------
DEBTOR: LENNOX INDUSTRIES INC.
------------------------------
Texas Secretary of State Wachovia Bank, N.A., 00-00521016 6/16/00
as Administrative Agent
for the Secured Parties
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇
Mail Code GA 04-23
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
DEBTOR: ▇▇▇▇▇▇▇▇▇ AIR CONDITIONING INC
--------------------------------------
Ohio Secretary of State Wachovia Bank, N.A., AP322733 3/27/01
as Administrative Agent
for the Secured Parties
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇
Mail Code GA 04-23
Atlanta, GA 30303
Huron County, Ohio Wachovia Bank, N.A., 000084073 3/27/01
as Administrative Agent
for the Secured Parties
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇
Mail Code GA 04-23
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇