Document:

exv4w11

Exhibit 4.11

 

FIRST SUPPLEMENTAL INDENTURE

among

LENNOX INTERNATIONAL INC.,

as Issuer

EACH OF THE GUARANTORS PARTY HERETO,

as Guarantors

and

U.S. BANK NATIONAL ASSOCIATION,

as Trustee

 

Dated as of                     , 20___

 

Supplemental to Indenture for Senior Debt Securities

Dated as of May 3, 2010

___% Notes due 20___

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE 1
	 	 	 	 
	SCOPE OF SUPPLEMENTAL INDENTURE; GENERAL
	 	 	 	 
	 
	 	 	 	 
	Section 1.01. Scope of Supplemental Indenture; General 
	 	 	1	 
	Section 1.02. Terms of Notes 
	 	 	2	 
	 
	 	 	 	 
	ARTICLE 2
	 	 	 	 
	CERTAIN DEFINITIONS
	 	 	 	 
	 
	 	 	 	 
	Section 2.01. Certain Definitions 
	 	 	3	 
	Section 2.02. Rules of Construction 
	 	 	11	 
	 
	 	 	 	 
	ARTICLE 3
	 	 	 	 
	COVENANTS
	 	 	 	 
	 
	 	 	 	 
	Section 3.01. Change of Control Triggering Event
	 	 	11	 
	Section 3.02. Limitations on Liens
	 	 	12	 
	Section 3.03. Limitations on Sale and Leaseback Transactions 
	 	 	13	 
	Section 3.04. Limitations on Transfer of Principal Properties to Specified Subsidiaries 
	 	 	13	 
	Section 3.05. Future Guarantors 
	 	 	14	 
	Section 3.06. Applicability of Covenants Contained in the Base Indenture 
	 	 	14	 
	 
	 	 	 	 
	ARTICLE 4
	 	 	 	 
	THE NOTES
	 	 	 	 
	 
	 	 	 	 
	Section 4.01. Form of Notes 
	 	 	14	 
	Section 4.02. Depositary 
	 	 	14	 
	 
	 	 	 	 
	ARTICLE 5
	 	 	 	 
	EVENTS OF DEFAULT
	 	 	 	 
	 
	 	 	 	 
	Section 5.01. Events of Default
	 	 	15	 
	 
	 	 	 	 
	ARTICLE 6
	 	 	 	 
	REDEMPTION
	 	 	 	 
	 
	 	 	 	 
	Section 6.01. Optional Redemption 
	 	 	16	 
	Section 6.02. Applicability of Sections of the Base Indenture 
	 	 	16	 
	 
	 	 	 	 
	ARTICLE 7
	 	 	 	 
	DEFEASANCE
	 	 	 	 
	 
	 	 	 	 
	Section 7.01. Defeasance
	 	 	16	 

i

 

	 	 	 	 	 

	ARTICLE 8
	 	 	 	 
	SUBSIDIARY GUARANTEES
	 	 	 	 
	 
	 	 	 	 
	Section 8.01. Guarantees
	 	 	17	 
	Section 8.02. Continuing Guarantee
	 	 	17	 
	Section 8.03. Release of Guarantee 
	 	 	18	 
	Section 8.04. Notation Not Required 
	 	 	18	 
	Section 8.05. Waiver of Subrogation 
	 	 	18	 
	Section 8.06. Execution and Delivery of Guarantees 
	 	 	19	 
	Section 8.07. Notices 
	 	 	19	 
	 
	 	 	 	 
	ARTICLE 9
	 	 	 	 
	MISCELLANEOUS
	 	 	 	 
	 
	 	 	 	 
	Section 9.01. Ratification of Base Indenture 
	 	 	19	 
	Section 9.02. Trustee Not Responsible for Recitals 
	 	 	19	 
	Section 9.03. New York Law to Govern 
	 	 	19	 
	Section 9.04. Counterparts 
	 	 	20	 
	Section 9.05. Effect of Headings 
	 	 	20	 
	 
	 	 	 	 
	EXHIBIT A. Form of Note
	 	 	 	 
	EXHIBIT B. Form of Supplemental Indenture in Respect of Guarantees
	 	 	 	 

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     FIRST SUPPLEMENTAL INDENTURE, dated as of
                     ,
 20___ (this “First Supplemental
Indenture”), by and among LENNOX INTERNATIONAL INC., a Delaware corporation (the “Company”), the
GUARANTORS (as defined herein) and U.S. BANK NATIONAL ASSOCIATION, as trustee (as defined in the
Indenture, the “Trustee”), to the Indenture, dated as of May 3, 2010 (the “Base Indenture” and,
as supplemented by this First Supplemental Indenture, the “Indenture”), by and between the Company
and the Trustee.

RECITALS:

     WHEREAS, the Company has duly authorized the execution and delivery of the Base Indenture to
provide for the issuance from time to time of the Company’s unsecured debentures, notes, or other
evidences of indebtedness (as defined in the Indenture, the “Securities”), to be issued in one or
more series;

     WHEREAS, Section 8.01 of the Base Indenture permits the Company and the Trustee to enter into
indentures supplemental to the Base Indenture to establish the form and terms of any series of
Securities as provided by Sections 2.01 and 2.03 of the Base Indenture;

     WHEREAS, the Company desires and has requested the Trustee to join them in the execution and
delivery of this First Supplemental Indenture in order to establish and provide for the issuance by
the Company of a new series of Securities designated as its ___% Notes due 20___(the “Notes”), on
the terms set forth herein;

     WHEREAS, the Company now wishes to issue Notes in an initial aggregate principal amount of
$                    ;

     WHEREAS, the conditions set forth in the Indenture for the execution and delivery of this
First Supplemental Indenture have been complied with; and

     WHEREAS, all things necessary to make this First Supplemental Indenture a valid agreement of
the Company and the Trustee, in accordance with its terms, and a valid supplement to the Base
Indenture have been done;

     NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:

     In consideration of the purchase and acceptance of the Notes by the Holders thereof, the
Company mutually covenants and agrees with the Trustee, for the equal and ratable benefit of the
Holders of the Notes, as follows:

ARTICLE 1

SCOPE OF SUPPLEMENTAL INDENTURE; GENERAL

     Section 1.01 . Scope of Supplemental Indenture; General. This First Supplemental Indenture
supplements and, to the extent inconsistent therewith, replaces the provisions of the Base
Indenture, to which provisions reference is hereby made.

 

 

     The changes, modifications and supplements to the Base Indenture effected by this First
Supplemental Indenture shall be applicable only with respect to, and govern the terms of, the Notes
(which shall be initially in the aggregate principal amount of $                    ) and shall not apply to
any other Securities that have been or may be issued under the Indenture unless a supplemental
indenture with respect to such other Securities specifically incorporates such changes,
modifications and supplements. Pursuant to this First Supplemental Indenture, there is hereby
created and designated a series of Securities under the Indenture
entitled “___% Notes due 20____.”
The Notes shall be in the form of Exhibit A hereto, the terms of which are incorporated
herein by reference.

     All Notes issued under this First Supplemental Indenture shall vote and consent together on
all matters as one class, including without limitation on waivers and amendments, and no Holder of
Notes shall have the right to vote or consent as a separate class from other Holders on any matter
except matters which affect such Holder only.

          Section 1.02. Terms of Notes. The information applicable to the Notes required pursuant to
Section 2.03 of the Base Indenture is as follows:

     (a) the title of the Notes shall be “___% Notes due 20___”;

     (b) not applicable;

     (c) the initial aggregate principal amount of the Notes shall be $                    ;

     (d) the Notes shall be issuable in Dollars;

     (e) principal shall be payable as set forth in the form of Note;

     (f) the rate at which the Notes shall bear interest and interest payment and record dates
shall be as set forth in the form of Note;

     (g) the place where the principal of and any interest on the Notes shall be payable shall be
as set forth in the Base Indenture;

     (h) the Notes shall be subject to optional redemption as set forth in Article 6 below;

     (i) not applicable;

     (j) the Notes shall be issuable in minimum denominations of $2,000 and integral multiples of
$1,000 above that amount;

     (k) not applicable;

     (l) payment of the principal and interest on the Notes shall be made in Dollars;

     (m) not applicable;

     (n) not applicable;

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     (o) the Notes may be defeased as set forth in Article 7 below;

     (p) not applicable;

     (q) the Notes shall be issuable as Global Securities;

     (r) U.S. Bank National Association initially shall serve as the trustee, paying agent,
registrar and custodian with respect to the Notes;

     (s) the events of default set forth in Article 5 below and the covenants set forth in Article
3 below shall be applicable to the Notes;

     (t) not applicable; and

     (u) not applicable.

ARTICLE 2

CERTAIN DEFINITIONS

          Section 2.01. Certain Definitions. The following definitions shall apply to the Notes.
Capitalized terms used but not defined herein have the meanings ascribed to such terms in the Base
Indenture.

     “Attributable Debt” with regard to a sale and leaseback transaction with respect to any
Principal Property means, at the time of determination, the present value of the total net amount
of rent required to be paid under the lease during the remaining term thereof (including any period
for which the lease has been extended), discounted at the rate of interest set forth or implicit in
the terms of the lease (or, if not practicable to determine the rate, the weighted average interest
rate per annum borne by the Notes then outstanding) compounded semi-annually. In the case of any
lease that is terminable by the lessee upon the payment of a penalty, the net amount of rent shall
be the lesser of (x) the net amount determined assuming termination upon the first date the lease
may be terminated (in which case the net amount shall also include the amount of the penalty, but
shall not include any rent that would be required to be paid under the lease subsequent to the
first date upon which it may be so terminated) or (y) the net amount determined assuming no such
termination.

     “Capital Lease” means a lease with respect to which the lessee is required concurrently to
recognize the acquisition of an asset and the incurrence of a liability in accordance with GAAP.

     “Change of Control” means the occurrence of any of the following after the Issue Date:

     (a) the direct or indirect sale, lease, transfer, conveyance or other disposition (other than
by way of merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its subsidiaries taken as a whole to any
“person” or “group” (as those terms are used in Section 13(d)(3) of the Exchange Act) other than to
the Company or one of its subsidiaries;

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     (b) the consummation of any transaction (including, without limitation, any merger or
consolidation) that results in any “person” or “group” (as those terms are used in Section 13(d)(3)
of the Exchange Act, provided that an employee of the Company or any of the Company’s subsidiaries
for whom shares are held under an employee stock ownership, employee retirement, employee savings
or similar plan and whose shares are voted in accordance with the instructions of such employee is
not a member of a “group” solely because such employee’s shares are held by a trustee under said
plan) becoming the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act),
directly or indirectly, of Voting Stock representing more than 50% of the voting power of the
Company’s outstanding Voting Stock or of the Voting Stock of any of the Company’s direct or
indirect parent companies;

     (c) the Company consolidates with, or merges with or into, any Person, or any Person
consolidates with, or merges with or into, the Company, in any such event pursuant to a transaction
in which any of the Company’s outstanding Voting Stock or the Voting Stock of such other Person is
converted into or exchanged for cash, securities or other property, other than any such transaction
in which the Company’s Voting Stock outstanding immediately prior to such transaction constitutes,
or is converted into or exchanged for, Voting Stock representing more than 50% of the voting power
of the Voting Stock of the surviving Person immediately after giving effect to such transaction;

     (d) the first day on which a majority of the members of the Company’s board of directors or
the board of directors of any of the Company’s direct or indirect parent companies are not
Continuing Directors; or

     (e) the adoption of a plan relating to the Company’s liquidation or dissolution.

     Notwithstanding the foregoing, a transaction shall not be deemed to involve a Change of
Control solely because the Company becomes a direct or indirect wholly-owned subsidiary of a
holding company if the direct or indirect holders of the Voting Stock of such holding company
immediately following that transaction are substantially the same as the holders of the Company’s
Voting Stock immediately prior to that transaction.

     “Change of Control Offer” has the meaning ascribed to such term in Section 3.01 of this First
Supplemental Indenture.

     “Change of Control Payment” has the meaning ascribed to such term in Section 3.01 of this
First Supplemental Indenture.

     “Change of Control Payment Date” has the meaning ascribed to such term in Section 3.01 of this
First Supplemental Indenture.

     “Change of Control Triggering Event” means, with respect to the Notes, (1) the rating of the
Notes is lowered by any of the Rating Agencies on any date during the period (the “Trigger Period”)
commencing on the earlier of (a) the occurrence of a Change of Control and (b) the first public
announcement by the Company of any Change of Control (or pending Change of Control), and ending 60
days following consummation of such Change of Control (which Trigger Period shall be extended
following consummation of a Change of Control for so long as

4

 

any of the Rating Agencies has
publicly announced that it is considering a possible ratings
change), and (2) the Notes are rated below Investment Grade by each of the Rating Agencies on
any day during the Trigger Period; provided that a Change of Control Trigger Event shall not be
deemed to have occurred in respect of a particular Change of Control if the Rating Agency making
the reduction in rating does not publicly announce or confirm or inform the Trustee at the
Company’s request that the reduction was the result, in whole or in part, of any event or
circumstance comprised of or arising as a result of, or in respect of, the Change of Control.

     Notwithstanding the foregoing, no Change of Control Triggering Event shall be deemed to have
occurred in connection with any particular Change of Control unless and until such Change of
Control has actually been consummated.

     “Comparable Treasury Issue” means the United States Treasury security selected by an
Independent Investment Banker that would be utilized, at the time of selection and in accordance
with customary financial practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the Notes.

     “Comparable Treasury Price” means, with respect to any redemption date, (1) the average of the
Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and
lowest of such Reference Treasury Dealer Quotations, or (2) if the Company obtains fewer than six
such Reference Treasury Dealer Quotations, the average of all Quotations obtained.

     “Consolidated Net Tangible Assets” means the aggregate amount of assets (less applicable
reserves and other properly deductible items) after deducting therefrom (a) all current liabilities
(excluding any indebtedness for money borrowed having a maturity of less than 12 months from the
date of the Company’s most recent consolidated balance sheet but which by its terms is renewable or
extendable beyond 12 months from such date at the Company’s option) and (b) all goodwill, trade
names, patents, unamortized debt discount and expense and any other like intangibles, all as set
forth on the Company’s most recent consolidated balance sheet and determined in accordance with
GAAP.

     “Continuing Director” means, as of any date of determination, any member of the applicable
board of directors who: (1) was a member of the Company’s board of directors on the Issue Date or
(2) was nominated for election, elected or appointed to such board of directors with the approval
of a majority of the Continuing Directors who were members of such board of directors at the time
of such nomination, election or appointment (either by a specific vote or by approval of a proxy
statement in which such member was named as a nominee for election as a director).

     “Credit Agreement” means the Third Amended and Restated Credit Agreement, dated October 12,
2007, among the Company, Bank of America, N.A., as administrative agent, swingline lender and
issuing bank, JPMorgan Chase Bank, N.A. and Wells Fargo Bank, N.A. (as successor to Wachovia Bank,
National Association), as co-syndication agents, and the lenders party thereto, as it may be
amended, supplemented or otherwise modified from time to time.

5

 

     “EBITDA” means, for any period, the total of the following calculated for the Company and its
subsidiaries without duplication on a consolidated basis in accordance with GAAP: (a)
the Company’s consolidated net income (or net loss) for such period, determined in accordance
with GAAP, plus (b) any deduction for (or less any gain from) income or franchise taxes included in
determining such consolidated net income; plus (c) interest expenses deducted in determining such
consolidated net income; plus (d) amortization and depreciation expense deducted in determining
such 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 in determining such consolidated net income; plus (f) any non-cash
expenses that arose in connection with the grant of stock options to the Company’s and its
subsidiaries’ officers, directors and employees and were deducted in determining such consolidated
net income.

     “ERISA” means the Employment Retirement Income Security Act of 1974, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time in effect.

     “DTC” has the meaning ascribed to such term in Section 4.02 of this First Supplemental
Indenture.

     “Event of Default” means any event specified as such in Section 5.01 of this First
Supplemental Indenture.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “GAAP” means generally accepted accounting principles as in effect from time to time in the
United States.

     “Global Note” has the meaning ascribed to such term in Section 4.01 of this First Supplemental
Indenture.

     “Global Note Holder” has the meaning ascribed to such term in Section 4.02 of this First
Supplemental Indenture.

     “Guarantee” has the meaning ascribed to such term in Section 8.01 of this First Supplemental
Indenture.

     “Guarantors” means, initially, Lennox Industries Inc., an Iowa corporation, Allied Air
Enterprises Inc., a Delaware corporation, Service Experts LLC, a Delaware limited liability
company, and Lennox Global Ltd., a Delaware corporation.

     “Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the
Company.

     “Investment Grade” means a rating of Baa3 or better by Moody’s (or its equivalent under any
successor rating category of Moody’s) or a rating of BBB- or better by S&P (or its equivalent under
any successor rating category of S&P), and the equivalent investment grade

6

 

credit rating from any
replacement rating agency or rating agencies selected by the Company under the circumstances
permitting the Company to select a replacement agency and in the
manner for selecting a replacement agency, in each case as set forth in the definition of
“Rating Agency.”

     “Issue Date” means

                    ,
20___.

     “Lake Park Insurance, Ltd.” is a Bermuda corporation and a subsidiary of the Company.

     “Liens” means, with respect to any Person, any mortgage, lien, pledge, charge, security
interest or other encumbrance, or any interest or title of any vendor, lessor, lender or other
secured party to or of such Person under any conditional sale or other title retention agreement or
Capital Lease, upon or with respect to any property or asset of such Person.

     “Material Subsidiary” means each Guarantor and any other subsidiary of the Company (except
LPAC Corp., LPAC Corp. II and Lake Park Insurance Ltd.) the book value (determined in accordance
with GAAP) of whose total assets equals or exceeds ten percent (10%) of the book value of the
Company’s consolidated total assets as determined as of the last day of the Company’s most recent
fiscal quarter.

     “Moody’s” means Moody’s Investors Service, Inc., a subsidiary of Moody’s Corporation, and its
successors.

     “Notes” has the meaning ascribed to it in the preamble of this First Supplemental Indenture.

     “Permitted Credit Agreement Liens” means:

     (a) any Liens that secure payment of the Company’s borrowings or any other obligations of the
Company or its subsidiaries under the Credit Agreement, including any renewal, extension,
replacement or amendment of the Credit Agreement; provided however that the Company make effective
provision for securing the Notes equally and ratably with the indebtedness under the Credit
Agreement, including any such renewal, extension, replacement or amendment of the Credit Agreement;

     (b) any Liens for taxes not yet due or that are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect to such Liens are
maintained in accordance with GAAP;

     (c) any statutory Liens of landlords and Liens of carriers, warehousemen, mechanics,
materialmen and other similar Liens, in each case, incurred in the ordinary course of business for
sums not yet due, and any such Liens which are being contested in good faith and by appropriate
proceedings diligently conducted, if adequate reserves with respect to such Liens are maintained in
accordance with GAAP;

7

 

     (d) any Liens (other than any Lien imposed by ERISA) incurred or deposits made in the
ordinary course of business (i) in connection with workers’ compensation, unemployment insurance
and other types of social security or retirement benefits, or (ii) to secure (or to obtain letters
of credit that secure) the performance of tenders, statutory obligations, surety bonds, appeal
bonds, bids, leases (other than Capital Leases), performance bonds, purchase, construction or sales
contracts and other similar obligations, in each case not incurred or made in connection with the
borrowing of money, the obtaining of advances or credit or the payment of the deferred purchase
price of property;

     (e) any Liens securing judgments for the payment of money; provided, however, that such
judgments that are final judgments (excluding judgments that, within 60 days after entry thereof,
are bonded, discharged or stayed pending appeal, or are discharged within 60 days after the
expiration of such stay) rendered against one or more of the Company and its subsidiaries may not
aggregate in excess of $40,000,000 to the extent not covered by independent third party insurance
as to which the insurer does not dispute coverage;

     (f) any (i) leases or subleases granted in the ordinary course of business and covering only
the assets so leased and (ii) easements, rights-of-way, restrictions and other similar charges or
encumbrances that do not, in the aggregate, materially detract from the value of the subject
property or materially interfere with the ordinary conduct of the Company’s and its subsidiaries’
business;

     (g) Liens in favor of the Company, any Material Subsidiary, or Lake Park Insurance Ltd.;

     (h) any Liens on property of any subsidiary that is not a Material Subsidiary securing
indebtedness owed to any other subsidiary that is not a Material Subsidiary;

     (i) any Liens (i) contemplated by financing statements filed in respect of operating leases or
(ii) securing the obligations of Lennox Procurement Company Inc. under the lease agreement, dated
as of June 22, 2006, by and between Lennox Procurement Company Inc. and BTMU Capital Corporation,
regarding the lease of an office building, including the Company’s corporate headquarters in
Richardson, Texas, and land and related improvements;

     (j) Liens granted in connection with a Receivable Securitization on the receivables sold
pursuant thereto (together with all collections and other proceeds thereof and any collateral
securing the payment thereof), all right title and interest in and to the lockboxes and other
collection accounts in which proceeds of such receivables are deposited, the rights under the
documents executed in connection with such Receivable Securitization and in the equity interests
issued by any special purpose entity organized to purchase the receivables thereunder;

     (k) any Liens (i) on property of any Person existing at the time the Person is merged or
consolidated with or into, or otherwise acquired by, the Company or one of its subsidiaries or (ii)
existing on any asset prior to the acquisition thereof by the Company or one of its subsidiaries;
and

8

 

     (l) any Liens securing indebtedness of any foreign subsidiary, indebtedness in respect of
Capital Leases, or purchase money indebtedness for fixed or capital assets.

     “Permitted Credit Agreement Transfers” means:

     (a) transfers in the ordinary course of business of inventory held for sale or property no
longer used, useful or required in the operation of the Company’s or the transferring subsidiary’s
business or that is obsolete;

     (b) transfers (i) by any domestic subsidiary to the Company or another wholly-owned domestic
subsidiary of the Company, (ii) by a foreign subsidiary to the Company or another wholly-owned
subsidiary of the Company, (iii) by the Company to a Material Subsidiary that is a wholly-owned
domestic subsidiary of the Company, and (iv) by any subsidiary that is not a Material Subsidiary to
another subsidiary that is not a Material Subsidiary;

     (c) transfers that constitute the sale of receivables, or undivided interests therein,
together with all collections and other proceeds thereof and any collateral securing the payment
thereof, pursuant to a Receivable Securitization;

     (d) transfers by a subsidiary of all or substantially all of its assets (upon voluntary
liquidation or otherwise), provided, however, that if such transferor is a Guarantor, the
transferee must be the Company or another Guarantor;

     (e) the sale of all or a portion of any business segment other than the domestic heating (with
the exception of the hearth products division and the advanced distributor products division) and
cooling manufacturing segment and the domestic refrigeration segment, provided, however, that (1)
the aggregate book value of all business segments or portions thereof transferred in reliance on
this clause in any fiscal year may not exceed 10% of the Company’s consolidated total assets as
determined as of the last day of the Company’s most recent fiscal year and (2) all business
segments or portions thereof transferred in reliance on this clause in any fiscal year, in the
aggregate, may not have contributed more than 5% of the Company’s EBITDA for the immediately
preceding fiscal year; and

     (f) any other sale, provided that (1) the aggregate book value of all property transferred in
reliance on this clause in any fiscal year may not exceed 5% of the Company’s consolidated total
assets as determined as of the last day of the Company’s most recent fiscal year, and (2) all
property transferred in reliance on this clause in any fiscal year, in the aggregate, may not have
contributed more than 5% of the Company’s EBITDA for the immediately preceding fiscal year.

     “Person” means any individual, corporation, partnership, limited liability company, business
trust, association, joint-stock company, joint venture, trust, incorporated or unincorporated
organization or government or any agency or political subdivision thereof.

     “Primary Treasury Dealer” means a primary U.S. government securities dealer in the United
States.

9

 

     “Principal Property” means any manufacturing plant, warehouse, office building or parcel of
real property, including fixtures but excluding leases and other contract rights which might
otherwise be deemed real property, owned by the Company or any of the Company’s Material
Subsidiaries, whether owned on the date hereof or hereafter acquired, that has a book value
(determined in accordance with GAAP) in excess of 2% of the Consolidated Net Tangible Assets of the
Company and its consolidated subsidiaries. Any plant, warehouse, office building or parcel of real
property or portion thereof which the Company’s board of directors determines is not of material
importance to the business conducted by the Company and its subsidiaries taken as a whole shall not
be a Principal Property.

     “Rating Agency” means each of Moody’s and S&P; provided, that if any of Moody’s or S&P ceases
to provide rating services to issuers or investors, the Company may appoint another “nationally
recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under
the Exchange Act as a replacement for such Rating Agency.

     “Receivable Securitization” means, with respect to a Person, a transaction or group of
transactions typically referred to as a securitization in which the Person sells its accounts
receivable in a transaction accounted for as a true sale to a special purpose bankruptcy remote
entity that obtains debt financing to finance the purchase price.

     “Reference Treasury Dealer” means each of J.P. Morgan Securities Inc., a Primary Treasury
Dealer selected by Wells Fargo Securities, LLC and their respective successors and two other
nationally recognized investment banking firms that are Primary Treasury Dealers specified from
time to time by the Company, except that if any of the foregoing ceases to be a Primary Treasury
Dealer, the Company shall substitute another nationally recognized investment banking firm that is
a Primary Treasury Dealer.

     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any redemption date, the average, as determined by the Company, of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Company by such Reference Treasury Dealer as of 3:30 p.m., New York City
time, on the third business day preceding such redemption date.

     “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.,
and its successors.

     “Subsidiary” means any corporation, partnership or other legal entity (a) the accounts of
which are consolidated with the Company’s in accordance with GAAP and (b) of which, in the case of
a corporation, more than 50% of the outstanding voting stock is owned, directly or indirectly, by
the Company or by one or more other subsidiaries, or by the Company and one or more other
subsidiaries or, in the case of any partnership or other legal entity, more than 50% of the
ordinary equity capital interests is, at the time, directly or indirectly owned or controlled by
the Company or by one or more of the subsidiaries or by the Company and one or more of the
subsidiaries.

     “Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the
semi-annual equivalent yield to maturity (computed as of the third business day

10

 

immediately preceding such redemption date) of the Comparable Treasury Issue, assuming a price
for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date.

     “Voting Stock” of any specified Person as of any date means the capital stock of such Person
that is at the time entitled to vote generally in the election of the board of directors of such
Person.

          Section 2.02. Rules of Construction. Unless the context otherwise requires or except as
otherwise expressly provided, the term “interest” in this Indenture shall be construed to include
additional interest, if any.

ARTICLE 3

COVENANTS

     The following covenants shall apply in addition to the covenants set forth in the Indenture:

          Section 3.01. Change of Control Triggering Event.

     (a) Upon the occurrence of a Change of Control Triggering Event with respect to the Notes,
unless the Company has exercised its right to redeem the Notes pursuant to Section 6.01 of this
First Supplemental Indenture by giving irrevocable notice to the Trustee in accordance with the
Indenture, each Holder of Notes shall have the right to require the Company to purchase all or a
portion of such Holder’s Notes pursuant to the offer described in this Section 3.01 (the “Change of
Control Offer”), at a purchase price equal to 101% of the principal amount thereof plus accrued and
unpaid interest, if any, to the date of purchase (the “Change of Control Payment”), subject to the
rights of Holders of Notes on the relevant record date to receive interest due on the relevant
interest payment date.

     (b) Unless the Company has exercised its right to redeem the Notes, within 30 days following
the date upon which the Change of Control Triggering Event occurs with respect to the Notes, or at
the Company’s option, prior to any Change of Control but after the public announcement of the
pending Change of Control, the Company shall be required to send, by first class mail, a notice to
each Holder of Notes, with a copy to the Trustee, which notice shall govern the terms of the Change
of Control Offer. Such notice shall state, among other things, the purchase date, which must be no
earlier than 30 days nor later than 60 days from the date such notice is mailed, other than as may
be required by law (the “Change of Control Payment Date”). The notice, if mailed prior to the date
of consummation of the Change of Control, shall state that the Change of Control Offer is
conditioned on the Change of Control being consummated on or prior to the Change of Control Payment
Date.

     (c) On the Change of Control Payment Date, the Company shall, to the extent lawful:

     (i) accept or cause a third party to accept for payment all Notes or portions of Notes
properly tendered pursuant to the Change of Control Offer;

11

 

     (ii) deposit or cause a third party to deposit with the paying agent an amount equal to
the Change of Control Payment in respect of all Notes or portions of Notes properly
tendered; and

     (iii) deliver or cause to be delivered to the Trustee the Notes properly accepted
together with an Officer’s Certificate stating the aggregate principal amount of Notes or
portions of Notes being repurchased and that all conditions precedent to the Change of
Control Offer and to the repurchase by the Company of Notes pursuant to the Change of
Control Offer have been complied with.

     (d) The Company shall not be required to make a Change of Control Offer with respect to the
Notes if a third party makes such an offer in the manner, at the times and otherwise in compliance
with the requirements for such an offer made by the Company and such third party purchases all the
Notes properly tendered and not withdrawn under its offer.

     (e) The Company shall comply in all material respects with the requirements of Rule 14e-1
under the Exchange Act, and any other securities laws and regulations thereunder to the extent
those laws and regulations are applicable in connection with the repurchase of the Notes as a
result of a Change of Control Triggering Event. To the extent that the provisions of any such
securities laws or regulations conflict with the provisions of this Section 3.01, the Company shall
comply with those securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 3.01 by virtue of any such conflict.

          Section 3.02. Limitations on Liens.

     (a) The Company shall not, and shall not permit any Material Subsidiary to, create, assume or
guarantee any indebtedness for money borrowed that is secured by Liens on any Principal Property
without making effective provision for securing the Notes equally and ratably with such
indebtedness.

     (b) The restrictions set forth in paragraph (a) in this Section 3.02 shall not apply to:

     (i) Liens on Principal Property existing at the time the Company or a Material
Subsidiary acquired or leased the Principal Property, including Principal Property owned by
the Company or a Material Subsidiary through a merger or similar transaction;

     (ii) Liens on any Principal Property acquired, constructed or improved by the Company
or any Material Subsidiary after the date of the Indenture, which Liens are created or
assumed contemporaneously with, or within 180 days of, such acquisition, construction or
improvement and which are created to secure, or provide for the payment of, all or any part
of the cost of such acquisition, construction or improvement;

     (iii) Liens on property of any Person existing at the time such Person becomes a
Material Subsidiary;

     (iv) Any Permitted Credit Agreement Lien;

12

 

     (v) any Lien renewing, extending or replacing any Lien referred to in clauses (i)
through (iv) above; or

     (vi) any other Liens on any of the Company’s or its subsidiaries’ assets or properties
that secure indebtedness, liabilities and obligations of the Company or its subsidiaries in
an aggregate amount of up to 15% of the Company’s Consolidated Net Tangible Assets.

          Section 3.03. Limitations on Sale and Leaseback Transactions.

     (a) The Company shall not, and shall not permit any Material Subsidiary to, enter into any
sale and leaseback transaction covering any Principal Property.

     (b) The restrictions set forth in paragraph (a) in this Section 3.03 shall not apply if:

     (i) the transaction is permitted pursuant to Section 3.02(b)(vi) of this First
Supplemental Indenture;

     (ii) the transaction is a Permitted Credit Agreement Transfer;

     (iii) an amount equal to the greater of (1) the net proceeds of the sale or transfer
and (2) the Attributable Debt of the Principal Property sold (as determined by the Company)
is applied within 180 days to the voluntary retirement of Notes or other indebtedness of the
Company (other than indebtedness subordinated to the Notes) or a Material Subsidiary, for
money borrowed, maturing more than 12 months after the voluntary retirement;

     (iv) the lease is for a period not exceeding three years and by the end of which it is
intended that the use of such Principal Property by the lessee shall be discontinued; or

     (v) the lease is with the Company or another Material Subsidiary.

     Section 3.04. Limitations on Transfer of Principal Properties to Specified Subsidiaries.

     (a) The Company shall not, and shall not permit any Material Subsidiary to, transfer any
Principal Property.

     (b) The restrictions set forth in paragraph (a) in this Section 3.04 shall not apply if:

     (i) the transfer is a Permitted Credit Agreement Transfer; or

     (ii) within one year after the effective date of the transfer, the subsidiary applies
or commits to apply an amount equal to the fair value of the Principal Property at the time
of the transfer:

13

 

     (A) to the acquisition, construction, development or improvement of
properties, facilities or equipment that are, or upon the acquisition,
construction, development or improvement shall be, a Principal Property or a part
thereof;

     (B) to the redemption of Notes;

     (C) to the repayment of indebtedness for money borrowed having a maturity of
more than 12 months from the date of the Company’s most recent consolidated balance
sheet, other than any indebtedness owed to the Company or any Material Subsidiary;
or

     (D) in part to an acquisition, construction, development or improvement and in
part to redemption and/or repayment, in each case as described above.

     (c) The fair value of any Principal Property for purposes of this Section 3.04 shall be as
determined by the Company’s board of directors.

          Section 3.05. Future Guarantors. From and after the Issue Date, the Company shall cause any
subsidiary that guarantees payment of more than $50,000,000 of the Company’s indebtedness for money
borrowed or more than $50,000,000 of indebtedness for money borrowed of the Company’s other
subsidiaries to execute and deliver to the Trustee a supplemental indenture pursuant to which such
subsidiary shall guarantee payment of the Notes, whereupon such subsidiary shall become a Guarantor
for all purposes under the Indenture.

          Section 3.06. Applicability of Covenants Contained in the Base Indenture. Each of the
agreements and covenants of the Company contained in Article 3 of the Base Indenture shall apply to
the Notes.

ARTICLE 4

THE NOTES

          Section 4.01. Form of Notes. The Notes shall initially be issued in the form of one or more
Global Securities substantially in the form of Exhibit A attached hereto (the “Global
Note”).

          Section 4.02. Depositary. The Depositary for the Global Note shall initially be The
Depositary Trust Company (“DTC”) and the Global Note shall be deposited with, or on behalf of, the
Trustee as custodian for DTC and registered in the name of DTC or a nominee of DTC (such nominee
being referred to herein as the “Global Note Holder”).

14

 

ARTICLE 5

EVENTS OF DEFAULT

          Section 5.01. Events of Default. The following Events of Default shall apply to the Notes:

     (a) default in the payment of principal or premium on the Notes when due and payable whether
at maturity, upon acceleration, redemption, or otherwise;

     (b) default in the payment of interest on the Notes when due and payable, if that default
continues for a period of 30 days;

     (c) default in the performance of or breach of any of the Company’s other covenants or
agreements in the Indenture, if that default or breach continues for a period of 90 consecutive
days after the Company receives written notice from the Trustee or from the Holders of 25% or more
in aggregate principal amount of the Notes;

     (d) any Guarantee by a Material Subsidiary ceases for any reason to be, or is asserted in
writing by the Company or such Material Subsidiary not to be, in full force and effect and
enforceable in accordance with its terms except to the extent contemplated by the Indenture and any
such Guarantee;

     (e) an event of default, as defined in the indenture or instrument under which the Company or
any Material Subsidiary has outstanding at least $75 million aggregate principal amount of
indebtedness for money borrowed, occurs and is continuing and such indebtedness, as a result
thereof, is accelerated so that the same is or becomes due and payable prior to the date on which
the same would otherwise have become due and payable, and such acceleration is not rescinded or
annulled within 30 days after notice thereof has been given, by registered or certified mail, to
the Company by the Trustee, or to the Company and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Notes at the time outstanding;

     (f) a court having jurisdiction enters a decree or order for:

     (i) relief in respect of the Company or a Material Subsidiary in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect;

     (ii) appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator
or similar official of the Company or a Material Subsidiary or for all or substantially all
of the Company’s or a Material Subsidiary’s property and assets; or

     (iii) the winding up or liquidation of the Company’s or a Material Subsidiary’s affairs
and such decree or order remains unstayed and in effect for a period of 60 consecutive days;
or

     (g) the Company or a Material Subsidiary:

15

 

     (i) commences a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consents to the entry of an order for relief in
an involuntary case under any such law;

     (ii) consents to the appointment of or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of all or substantially all
of the Company’s or a Material Subsidiary’s property and assets; or

     (iii) effects any general assignment for the benefit of creditors.

ARTICLE 6

REDEMPTION

     Section 6.01. Optional Redemption. The Notes shall be redeemable, at the option of the
Company, at any time and from time to time, in whole or in part, on not less than 30 nor more than
60 days’ prior notice mailed to the Holders of the Notes, with a copy provided to the Trustee. The
Notes shall be redeemable at a redemption price, to be calculated by the Company, equal to the
greater of:

     (a) 100% of the principal amount of the Notes to be redeemed; and

     (b) the sum of the present values of the remaining scheduled payments of principal and
interest on the Notes to be redeemed (not including interest accrued to the date of redemption),
discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate plus ____ basis points;

plus, in each case, accrued and unpaid interest on the Notes to be redeemed to the date of
redemption.

          Section 6.02. Applicability of Sections of the Base Indenture. The provisions of Article 11
of the Base Indenture in respect of the Notes shall apply to any optional redemption of the Notes
except when such provisions conflict with the foregoing.

ARTICLE 7

DEFEASANCE

          Section 7.01. Defeasance. If the Company shall effect a defeasance of the Notes pursuant to
Article 10 of the Base Indenture, the Company shall cease to have any obligation to comply with the
covenants set forth in Article 3 hereof.

16

 

ARTICLE 8

SUBSIDIARY GUARANTEES

          Section 8.01. Guarantees.

     (a) Each of the Guarantors, as primary obligor and not merely as surety, hereby jointly and
severally, irrevocably and fully and unconditionally guarantees to each Holder and to
the Trustee and its successor and assigns (each, a “Guarantee”), on a senior unsecured basis
and equal in right of payment to all existing and future senior indebtedness of such Guarantors,
the punctual payment when due of all monetary obligations of the Company under the Indenture and
the Notes, whether for principal of or interest on the Notes.

     (b) The obligations of each Guarantor shall be limited to the maximum amount as shall, after
giving effect to all other contingent and fixed liabilities of such Guarantor and after giving
effect to any collections from or payments made by or on behalf of any other Guarantor in respect
of the obligations of such other Guarantor under its Guarantee, result in the obligations of such
Guarantor under the Guarantee not constituting a fraudulent conveyance or fraudulent transfer under
applicable law, or being void or unenforceable under any law relating to insolvency of debtors.

     (c) Each Guarantor further agrees that (to the fullest extent permitted by law) its
obligations hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Indenture, the Notes or the obligations of the Company or any other Guarantor
hereunder or thereunder, the absence of any action to enforce the same, any waiver or consent by
any Holder with respect to any provisions hereof or thereof, any release of any other Guarantor,
the recovery of any judgment against the Company, any action to enforce the same, or any other
circumstance that might otherwise constitute a legal or equitable discharge or defense of a
Guarantor.

     (d) Each Guarantor hereby waives (to the fullest extent permitted by law) the benefit of
diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency
or bankruptcy of the Company, any right to require a proceeding first against the Company, protest,
notice and all demands whatsoever and covenants that (except as otherwise provided in Section 8.03
of this First Supplemental Indenture) its Guarantee shall not be discharged except by complete
performance of the obligations contained in the Notes, the Indenture and the Guarantee. Such
Guarantee is a guarantee of payment and not of collection.

          Section 8.02. Continuing Guarantee.

     (a) Each Guarantee shall be a continuing Guarantee and shall, (i) subject to Section 8.03 of
this First Supplemental Indenture, remain in full force and effect until payment in full of the
principal amount of all outstanding Notes (whether by payment at maturity, purchase, redemption,
defeasance, retirement or other acquisition), (ii) be binding upon such Guarantor and (iii) inure
to the benefit of and be enforceable by the Trustee, the Holders and their permitted successors,
transferees and assigns.

17

 

     (b) The obligations of each Guarantor hereunder shall continue to be effective or shall be
reinstated, as the case may be, if at any time any payment which would otherwise have reduced or
terminated the obligations of any Guarantor hereunder and under its Guarantee (whether such payment
shall have been made by or on behalf of the Company or by or on behalf of a Guarantor) is rescinded
or reclaimed from any of the Holders upon the insolvency, bankruptcy, liquidation or reorganization
of the Company or any Guarantor or otherwise, all as though such payment had not been made.

          Section 8.03. Release of Guarantee. Notwithstanding the provisions of Section 8.02 of this
First Supplemental Indenture, a Guarantor shall be automatically and unconditionally released from
its obligations under the indenture upon:

     (a) the sale or other disposition of such Guarantor;

     (b) the sale or disposition of all or substantially all of the assets of such Guarantor;

     (c) the Company’s exercise of its legal defeasance option or its covenant defeasance option as
described in Article 10 of the Base Indenture or if the Company’s obligations under the Indenture
are discharged in accordance with the terms of the Indenture; or

     (d) delivery of an Officer’s Certificate to the Trustee that such Guarantor does not guarantee
the obligations of the Company under any indebtedness for money borrowed of the Company and that
any other guarantees of such Guarantor have been released other than through discharges as a result
of payment by such Guarantor on such guarantees,

provided, however, that in the case of clauses (a) and (b) above, (1) such sale or other
disposition is made to a Person other than the Company or one of its subsidiaries and (2) such sale
or disposition is otherwise permitted by the Indenture. Upon any such occurrence specified in this
Section 8.03, at the Company’s request, and upon delivery to the Trustee of an Officer’s
Certificate and an Opinion of Counsel, each stating that all conditions precedent under the
Indenture relating to such release have been complied with, the Trustee shall execute any documents
reasonably requested by the Company evidencing such release.

          Section 8.04. Notation Not Required. Neither the Company nor any Guarantor shall be required
to make a notation on the Notes to reflect any Guarantee or any release thereof.

          Section 8.05. Waiver of Subrogation. Each Guarantor hereby irrevocably waives any claim or
other rights which it may now or hereafter acquire against the Company that arise from the
existence, payment, performance or enforcement of such Guarantor’s obligations under its Guarantee
and the Indenture, including, without limitation, any right of subrogation, reimbursement,
exoneration, indemnification, and any right to participate in any claim or remedy of any Holder of
Notes against the Company, whether or not such claim, remedy or right arises in equity, or under
contract, statute or common law, including, without limitation, the right to take or receive from
the Company, directly or indirectly, in cash or other property or by set-off or in any other
manner, payment or security on account of such claim or other rights. If any amount shall be paid
to any Guarantor in violation of the preceding sentence and the Notes shall not have been paid in
full, such amount shall have been deemed to have been paid to such 

18

 

Guarantor for the benefit of,
and held in trust for the benefit of, the Holders, and shall forthwith be paid to the Trustee for
the benefit of such Holders to be credited and applied upon the Notes, whether matured or
unmatured, in accordance with the terms of the Indenture. Each Guarantor acknowledges that it will
receive direct and indirect benefits from the financing arrangements contemplated by this Indenture
and that the waiver set forth in this Section 8.05 is knowingly made in contemplation of such
benefits.

          Section 8.06. Execution and Delivery of Guarantees. The Company shall cause each subsidiary
that is required to become a Guarantor pursuant to Section 3.05 of this First
Supplemental Indenture to promptly execute and deliver to the Trustee a Supplemental Indenture
substantially in the form set forth in Exhibit B to this First Supplemental Indenture, or
otherwise in form and substance reasonably satisfactory to the Trustee, evidencing its Guarantee on
substantially the terms set forth in this Article 8. Concurrently therewith, the Company shall
deliver to the Trustee an Opinion of Counsel in form and substance reasonably satisfactory to the
Trustee to the effect that such Supplemental Indenture has been duly authorized, executed and
delivered by such subsidiary and that, subject to applicable bankruptcy, insolvency, fraudulent
transfer, fraudulent conveyance, reorganization, moratorium and other laws now or hereafter in
effect affecting creditors’ rights or remedies generally and to general principles of equity
(including standards of materiality, good faith, fair dealing and reasonableness), whether
considered in a proceeding at law or at equity, such Supplemental Indenture is a valid and binding
agreement of such subsidiary, enforceable against such subsidiary in accordance with its terms.

     Section 8.07. Notices. Notice to any Guarantor shall be sufficient if addressed to such
Guarantor care of the Company at the address, place and manner provided in Section 11.04 of the
Base Indenture.

ARTICLE 9

MISCELLANEOUS

          Section 9.01. Ratification of Base Indenture. The Base Indenture, as supplemented by this
First Supplemental Indenture, is in all respects ratified and confirmed, and this First
Supplemental Indenture shall be deemed part of the Base Indenture in the manner and to the extent
herein and therein provided.

          Section 9.02. Trustee Not Responsible for Recitals. The recitals contained herein shall be
taken as the statements of the Company, and the Trustee assumes no responsibility for the
correctness of the same.

          Section 9.03. New York Law to Govern. This Indenture and the Notes shall be deemed to be a
contract under the laws of the State of New York, and for all purposes shall be construed in
accordance with the laws of such State, except as may otherwise be required by mandatory provisions
of law.

19

 

          Section 9.04. Counterparts. This First Supplemental Indenture may be executed in any number
of counterparts, each of which shall be an original; but such counterparts shall together
constitute but one and the same instrument.

          Section 9.05. Effect of Headings. The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.

[Signature Page Follows]

20

 

     IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be
duly executed as of the date first above written.

	 	 	 	 	 
	 	LENNOX INTERNATIONAL INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	LENNOX INDUSTRIES INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	ALLIED AIR ENTERPRISES INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	SERVICE EXPERTS LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	LENNOX GLOBAL LTD.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

21

 

	 	 	 	 	 

	 	 	 	 	 
	U.S. BANK NATIONAL ASSOCIATION, as Trustee

 	 
	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 

22

 

EXHIBIT A

[FORM OF FACE OF NOTE]

THIS CERTIFICATE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF THE DEPOSITORY OR A NOMINEE THEREOF. EXCEPT AS OTHERWISE PROVIDED
IN THE INDENTURE, THIS CERTIFICATE MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO ANOTHER
NOMINEE OF THE DEPOSITORY OR TO A SUCCESSOR DEPOSITORY OR TO A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC” OR THE “DEPOSITORY”), TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INSOMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

LENNOX INTERNATIONAL INC.

[       ]% Note due [       ]

	 	 	 

	No.: [   ]

	 	CUSIP No.: [       ]

	 

	 	$[            ]

     LENNOX INTERNATIONAL INC., a Delaware corporation (the “Company”, which term includes any
successor corporation), for value received promises to pay to CEDE & CO., or registered assigns,
the principal sum of $                     on                     20___, unless earlier redeemed as herein provided.

     Interest Payment Dates:                     and                      (each, an “Interest Payment Date”),
commencing on                     .

     Interest Record Dates:                      and                      (each, an “Interest Record Date”).

     Payment of the principal of and interest on this Note shall be made at the office or agency of
the Trustee maintained for that purpose in St. Paul, Minnesota, in such currency of the United States of
America as at the time of payment is legal tender for payment of public and private debts;
provided, however, for so long as the Notes are represented in global form by one or more Global
Securities, all payments of principal of and interest shall be made by wire transfer of immediately
available funds to the Depository or its nominee, as the case may be, as the registered owner of
the Global Security representing such Notes.

     Reference is made to the further provisions of this Note set forth on the reverse hereof,
which will for all purposes have the same effect as if set forth at this place.

A-1

 

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

	 	 	 	 	 
	 	LENNOX INTERNATIONAL INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	Attest:

 	 
	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 

This is one of the Notes of the series designated herein and referred to in the within-mentioned
Indenture.

	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION, as Trustee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Dated:                                         , 20___

A-2

 

EXHIBIT A

[FORM OF REVERSE OF NOTE]

     This Note is one of the duly authorized securities of the Company (herein called the “Notes”)
issued and to be issued in one or more series under an Indenture dated as of May 3, 2010 (the “Base
Indenture”), as amended by a First Supplemental Indenture
dated as of
                    , 20___ (the “First
Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), between the
Company, the guarantors party thereto (the “Guarantors”) and U.S. Bank National Association, as
trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture
with respect to the series of Notes represented hereby), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Guarantors, the Trustee and the
Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and
delivered. This Note is a Global Note representing the Company’s ___% Notes due 20___in the
aggregate principal amount of $                    .

     The amount of interest payable on any interest payment date shall be computed on the basis of
a 360-day year consisting of twelve 30-day months. In the event that any date on which interest is
payable on this Note is not a Business Day, then payment of interest payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay) with the same force and effect as if made on such interest payment
date.

     The Notes of this series are issuable only in fully registered form without coupons in minimum
denominations of $2,000 and integral multiples of $1,000 above that amount.

     The Notes shall be redeemable, at the option of the Company, at any time and from time to
time, in whole or in part, on not less than 30 nor more than 60 days’ prior notice mailed to the
Holders of the Notes, with a copy provided to the Trustee. The Notes shall be redeemable at a
redemption price, to be calculated by the Company, equal to the greater of (i) 100% of the
principal amount of such Notes to be redeemed and (ii) the sum of the present values of the
remaining scheduled payments of principal and interest on the Notes to be redeemed (not including
interest accrued to the date of redemption), discounted to the redemption date on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus
___basis points, plus, in each case, accrued and unpaid interest on the Notes to be redeemed to
the date of redemption.

     “Comparable Treasury Issue” means the United States Treasury security selected by an
Independent Investment Banker that would be utilized, at the time of selection and in accordance
with customary financial practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the Notes.

     “Comparable Treasury Price” means, with respect to any redemption date, (1) the average of the
Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and
lowest of such Reference Treasury Dealer Quotations, or (2) if the Company obtains fewer than six
such Reference Treasury Dealer Quotations, the average of all Quotations obtained.

A-3

 

     “Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the
Company.

     “Primary Treasury Dealer” means a primary U.S. government securities dealer in the United
States.

     “Reference Treasury Dealer” means each of J.P. Morgan Securities Inc., a Primary Treasury
Dealer selected by Wells Fargo Securities, LLC and their respective successors and two other
nationally recognized investment banking firms that are Primary Treasury Dealers specified from
time to time by the Company, except that if any of the foregoing ceases to be a Primary Treasury
Dealer, the Company shall substitute another nationally recognized investment banking firm that is
a Primary Treasury Dealer.

     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any redemption date, the average, as determined by the Company, of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Company by such Reference Treasury Dealer as of 3:30 p.m., New York City
time, on the third business day preceding such redemption date.

     “Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the
semi-annual equivalent yield to maturity (computed as of the third business day immediately
preceding such redemption date) of the Comparable Treasury Issue, assuming a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date.

     On or before the redemption date, the Company shall deposit with the Trustee or with one or
more paying agents an amount of money sufficient to redeem on the redemption date all of the Notes
so called for redemption at the appropriate redemption price, together with accrued interest to the
date fixed for redemption. If the Company is redeeming less than all of the Notes, the Trustee
shall select, in such manner as it shall deem appropriate and fair, the Notes to be redeemed in
whole or in part.

     Upon the occurrence of a Change of Control Triggering Event with respect to the Notes, unless
the Company has exercised its right to redeem the Notes as described above by giving irrevocable
notice to the Trustee in accordance with the Indenture, each Holder of Notes shall have the right
to require the Company to purchase all or a portion of such Holder’s Notes pursuant to the offer
described below (the “Change of Control Offer”), at a purchase price equal to 101% of the principal
amount thereof plus accrued and unpaid interest, if any, to the date of purchase (the “Change of
Control Payment”), subject to the rights of Holders of Notes on the relevant record date to receive
interest due on the relevant interest payment date.

     Unless the Company has exercised its right to redeem the Notes, within 30 days following the
date upon which the Change of Control Triggering Event occurs with respect to the Notes or at the
Company’s option, prior to any Change of Control but after the public announcement of the pending
Change of Control, the Company shall be required to send, by first class mail, a notice to each
Holder of Notes, with a copy to the Trustee, which notice shall govern the terms of the Change of
Control Offer. Such notice shall state, among other things, the

A-4

 

purchase date, which must be no earlier than 30 days nor later than 60 days from the date such
notice is mailed, other than as may be required by law (the “Change of Control Payment Date”). The
notice, if mailed prior to the date of consummation of the Change of Control, shall state that the
Change of Control Offer is conditioned on the Change of Control being consummated on or prior to
the Change of Control Payment Date.

     On the Change of Control Payment Date, the Company shall, to the extent lawful: (i) accept or
cause a third party to accept for payment all Notes or portions of Notes properly tendered pursuant
to the Change of Control Offer; (ii) deposit or cause a third party to deposit with the paying
agent an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes
properly tendered; and (iii) deliver or cause to be delivered to the Trustee the Notes properly
accepted together with an Officer’s Certificate stating the aggregate principal amount of Notes or
portions of Notes being repurchased and that all conditions precedent to the Change of Control
Offer and to the repurchase by the Company of Notes pursuant to the Change of Control Offer have
been complied with.

     The Company shall not be required to make a Change of Control Offer with respect to the notes
if a third party makes such an offer in the manner, at the times and otherwise in compliance with
the requirements for such an offer made by the Company and such third party purchases all Notes
properly tendered and not withdrawn under its offer.

     The Company shall comply in all material respects with the requirements of Rule 14e-1 under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and any other securities laws
and regulations thereunder to the extent those laws and regulations are applicable in connection
with the purchase of the Notes as a result of a Change of Control Triggering Event. To the extent
that the provisions of any such securities laws or regulations conflict with the Change of Control
Offer provisions of the Notes, the Company shall comply with those securities laws and regulations
and shall not be deemed to have breached its obligations under the Change of Control Offer
provisions of the Notes by virtue of such conflict.

     “Change of Control” means the occurrence of any of the following after the Issue Date:

     (a) the direct or indirect sale, lease, transfer, conveyance or other disposition (other than
by way of merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its subsidiaries taken as a whole to any
“person” or “group” (as those terms are used in Section 13(d)(3) of the Exchange Act) other than to
the Company or one of its subsidiaries;

     (b) the consummation of any transaction (including, without limitation, any merger or
consolidation) that results in any “person” or “group” (as those terms are used in Section 13(d)(3)
of the Exchange Act, provided that an employee of the Company or any of the Company’s subsidiaries
for whom shares are held under an employee stock ownership, employee retirement, employee savings
or similar plan and whose shares are voted in accordance with the instructions of such employee is
not a member of a “group” solely because such employee’s shares are held by a trustee under said
plan) becoming the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act),
directly or indirectly, of Voting Stock

A-5

 

representing more than 50% of the voting power of the Company’s outstanding Voting Stock or of
the Voting Stock of any of the Company’s direct or indirect parent companies;

     (c) the Company consolidates with, or merges with or into, any Person, or any Person
consolidates with, or merges with or into, the Company, in any such event pursuant to a transaction
in which any of the Company’s outstanding Voting Stock or the Voting Stock of such other Person is
converted into or exchanged for cash, securities or other property, other than any such transaction
in which the Company’s Voting Stock outstanding immediately prior to such transaction constitutes,
or is converted into or exchanged for, Voting Stock representing more than 50% of the voting power
of the Voting Stock of the surviving Person immediately after giving effect to such transaction;

     (d) the first day on which a majority of the members of the Company’s board of directors or
the board of directors of any of the Company’s direct or indirect parent companies are not
Continuing Directors; or

     (e) the adoption of a plan relating to the Company’s liquidation or dissolution.

     Notwithstanding the foregoing, a transaction shall not be deemed to involve a Change of
Control solely because the Company becomes a direct or indirect wholly-owned subsidiary of a
holding company if the direct or indirect holders of the Voting Stock of such holding company
immediately following that transaction are substantially the same as the holders of the Company’s
Voting Stock immediately prior to that transaction.

     “Change of Control Triggering Event” means, with respect to the Notes, (1) the rating of the
Notes is lowered by any of the Rating Agencies on any date during the period (the “Trigger Period”)
commencing on the earlier of (a) the occurrence of a Change of Control and (b) the first public
announcement by the Company of any Change of Control (or pending Change of Control), and ending 60
days following consummation of such Change of Control (which Trigger Period shall be extended
following consummation of a Change of Control for so long as any of the Rating Agencies has
publicly announced that it is considering a possible ratings change), and (2) the Notes are rated
below Investment Grade by each of the Rating Agencies on any day during the Trigger Period;
provided that a Change of Control Trigger Event shall not be deemed to have occurred in respect of
a particular Change of Control if the Rating Agency making the reduction in rating does not
publicly announce or confirm or inform the Trustee at the Company’s request that the reduction was
the result, in whole or in part, of any event or circumstance comprised of or arising as a result
of, or in respect of, the Change of Control.

     Notwithstanding the foregoing, no Change of Control Triggering Event shall be deemed to have
occurred in connection with any particular Change of Control unless and until such Change of
Control has actually been consummated.

     “Continuing Director” means, as of any date of determination, any member of the applicable
board of directors who: (1) was a member of the Company’s board of directors on the Issue Date or
(2) was nominated for election, elected or appointed to such board of directors with the approval
of a majority of the Continuing Directors who were members of such board of directors at the time
of such nomination, election or appointment (either by a specific vote or by

A-6

 

approval of a proxy statement in which such member was named as a nominee for election as a
director).

     “Investment Grade” means a rating of Baa3 or better by Moody’s (or its equivalent under any
successor rating category of Moody’s) or a rating of BBB- or better by S&P (or its equivalent under
any successor rating category of S&P), and the equivalent investment grade credit rating from any
replacement rating agency or rating agencies selected by the Company under the circumstances
permitting the Company to select a replacement agency and in the manner for selecting a replacement
agency, in each case as set forth in the definition of “Rating Agency.”

     “Moody’s” means Moody’s Investors Service, Inc., a subsidiary of Moody’s Corporation, and its
successors.

     “Person” means any individual, corporation, partnership, limited liability company, business
trust, association, joint-stock company, joint venture, trust, incorporated or unincorporated
organization or government or any agency or political subdivision thereof.

     “Rating Agency” means each of Moody’s and S&P; provided, that if any of Moody’s or S&P ceases
to provide rating services to issuers or investors, the Company may appoint another “nationally
recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under
the Exchange Act as a replacement for such Rating Agency.

     “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.,
and its successors.

     “Voting Stock” of any specified Person as of any date means the capital stock of such Person
that is at the time entitled to vote generally in the election of the board of directors of such
Person.

     The indebtedness evidenced by this Note is, to the extent provided in the Indenture, the
senior and unsecured obligation of the Company and will rank equally in right of payment to all of
the Company’s existing and future senior unsecured and unsubordinated indebtedness. This Note
will, to the extent provided in the Indenture, be guaranteed, jointly and severally, by each of the
Guarantors party to the Indenture on a senior unsecured basis. This Note may hereafter be entitled
to certain other Guarantees made for the benefit of the Holders. Reference is made to Article 8 of
the First Supplemental Indenture for terms relating to such Guarantees, including the release,
termination and discharge thereof. Neither the Company nor any Guarantor shall be required to make
any notation on this Note to reflect any Guarantee or any such release, termination or discharge.

     The Notes are initially limited to $                     aggregate principal amount. The Company may
from time to time, without notice to or the consent of the Holders of the Notes, create and issue
additional Notes ranking equally and ratably with the Notes of this series in all respects (other
than the issue price, the date of the issuance, the payment of interest accruing prior to the issue
date of such additional Notes and the first payment of interest following the issue date of such
additional Notes), provided that such Notes must be part of the same issue as the Notes initially
issued for U.S. federal income tax purposes. Any such additional Notes shall

A-7

 

be consolidated and form a single series with the Notes initially issued, including for purposes of
voting and redemptions.

     The Notes are not entitled to the benefit of any sinking fund.

     The Indenture imposes certain limitations on the ability of the Company to, among other
things, merge or consolidate with any other Person, and requires that the Company comply with
certain further covenants, such as Limitations on Liens, Limitations on Sale and Leaseback
Transactions and Limitations on Transfer of Principal Properties to Specified Subsidiaries as
further described in the Indenture, all of which are applicable to this Note. All such covenants
and limitations are subject to a number of important qualifications and exceptions.

     The Indenture contains provisions for the defeasance at any time of (a) the entire
indebtedness of the Company on this Note and (b) certain restrictive covenants and the related
defaults and Events of Default, upon compliance by the Company with certain conditions set forth
therein, which provisions apply to this Note.

     If an Event of Default with respect to Notes of this series shall occur and be continuing, the
principal of the Notes of this series may (subject to the conditions set forth in the Indenture) be
declared due and payable in the manner and with the effect provided in the Indenture.

     The Indenture contains provisions permitting, with certain exceptions therein provided, the
Company and the Trustee, without the consent of any of the Holders of the outstanding Notes, to
modify and amend the Indenture for the purpose of, among other things, curing any ambiguity, defect
or inconsistency.

     The Indenture also contains provisions permitting the Holders of a majority in aggregate
principal amount of the outstanding Notes, on behalf of the Holders of all Notes, to waive any past
default or Event of Default with respect to the Notes and its consequences, except a default in the
payment of the principal of or interest on any of the Notes or in respect of a covenant or other
provision which, under the terms of the Indenture, cannot be modified or amended without the
consent of the Holder of each outstanding Note.

     No reference herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of the Company, which is absolute and unconditional, to pay the
principal of and interest on this Note at the times, place and rate, and in the currency, herein
prescribed.

     No director, officer, employee, incorporator or stockholder, as such, of the Company, any
Guarantor or any other obligor in respect of any Note or any Subsidiary of any thereof shall have
any liability for any obligation of the Company, any Guarantor or any other obligor in respect of
any Note under the Indenture, the Notes or any Guarantee, or for any claim based on, in respect of,
or by reason of, any such obligation or its creation. Each Holder, by accepting this Note, hereby
waives and releases all such liability. The waiver and release are part of the consideration for
issuance of the Notes.

A-8

 

     This Note shall be governed by and construed in accordance with the law of the State of New
York.

     All terms used in this Note which are defined in the Indenture shall have the meanings
assigned to them in the Indenture.

A-9

 

EXHIBIT B

[Form of Supplemental Indenture in Respect of Subsidiary Guarantees]

     SUPPLEMENTAL INDENTURE, dated as of

                    , 20___ (this “Supplemental Indenture”), among
[name of Guarantor(s)] (the “Guarantor(s)”), Lennox International Inc., a Delaware corporation (the
“Company”), and each other then existing Guarantor under the Indenture referred to below (the
“Existing Guarantors”), and [name of trustee], as Trustee under the Indenture referred to below.

RECITALS

     WHEREAS, the Company, any Existing Guarantors and the Trustee have heretofore become parties
to an Indenture, dated as of May 3, 2010 (the “Base Indenture” and, as supplemented by the First
Supplemental Indenture (the “First Supplemental Indenture”), dated as of _________, 20___, the
“Indenture”), providing for the issuance of
___% Notes due 20___ of the Company (the “Notes”);

     WHEREAS, Section 8.06 of the First Supplemental Indenture provides that the Company is
required to cause the Guarantors to execute and deliver to the Trustee a supplemental indenture
evidencing its guarantee of the punctual payment when due of all monetary obligations of the
Company under the Indenture and the Notes on the terms and conditions set forth herein and in
Article 8 of the First Supplemental Indenture;

     WHEREAS, each Guarantor desires to enter into such supplemental indenture for good and
valuable consideration, including substantial economic benefit in that the financial performance
and condition of such Guarantor is dependent on the financial performance and condition of the
Company, the obligations hereunder of which such Guarantor has guaranteed; and

     WHEREAS, pursuant to Section 8.01 of the Base Indenture, the parties hereto are authorized to
execute and deliver this Supplemental Indenture to amend the Indenture, without the consent of any
Holder;

     NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Guarantors, the Company, the
Existing Guarantors and the Trustee mutually covenant and agree for the benefit of the Holders of
the Notes as follows:

     1. Defined Terms. As used in this Supplemental Indenture, terms defined in the Indenture or
in the preamble or recital hereto are used herein as therein defined. The words “herein,” “hereof”
and “hereby” and other words of similar import used in this Supplemental Indenture refer to this
Supplemental Indenture as a whole and not to any particular section hereof.

     2. Agreement to Guarantee. [The] [Each] Guarantor, as primary obligor and not merely as
surety, hereby jointly and severally, irrevocably and fully and unconditionally guarantees to each
Holder and to the Trustee and its successor and assigns ([the] [each, a] “Guarantee”), on a senior
unsecured basis and equal in right of payment to all existing and

B-1

 

future senior indebtedness of such Guarantor(s), the punctual payment when due of all monetary
obligations of the Company under the Indenture and the Notes, whether for principal of or interest
on the Notes, on the terms and subject to the conditions set forth in Article 8 of the First
Supplemental Indenture and agrees to be bound by (and shall be entitled to the benefits of) all
other applicable provisions of the Indenture as a Guarantor.

     3. Termination, Release and Discharge. [The] [Each] Guarantor’s Guarantee shall terminate and
be of no further force or effect, and [the] [each] Guarantor shall be released and discharged from
all obligations in respect of such Guarantee, as and when provided in Section 8.03 of the First
Supplemental Indenture.

     4. Parties. Nothing in this Supplemental Indenture is intended or shall be construed to give
any Person, other than the Holders and the Trustee, any legal or equitable right, remedy or claim
under or in respect of [the] [each] Guarantor’s Guarantee or any provision contained herein or in
Article 8 of the First Supplemental Indenture.

     5. Governing Law. This Supplemental Indenture and the Notes shall be deemed to be a contract
under the laws of the State of New York, and for all purposes shall be construed in accordance with
the laws of such State, except as may otherwise be required by mandatory provisions of law.

     6. Ratification of Indenture; Supplemental Indentures Part of Indenture. The Indenture, as
supplemented by this Supplemental Indenture, is in all respects ratified and confirmed, and this
Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein
and therein provided. The recitals contained herein shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for the correctness of the same.

     7. Counterparts. This Supplemental Indenture may be executed in any number of counterparts,
each of which shall be an original; but such counterparts shall together constitute but one and the
same instrument.

     8. Headings. The section headings herein are for convenience only and shall not affect the
construction hereof.

B-2

 

     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed as of the date first above written.

	 	 	 	 	 
	 	[NAME OF GUARANTOR(S)]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 
	 	LENNOX INTERNATIONAL INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	[NAME OF TRUSTEE], as Trustee

 	 
	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 

B-3exv10w1

Exhibit 10.1

CERTAIN
CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION
OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES
EXCHANGE ACT OF 1934.

Amendment #1 to

Manufacturing Services Agreement

Between Patheon Inc. and Avanir Pharmaceuticals, Inc.

     WHEREAS Patheon Inc. (“Patheon”) and Avanir Pharmaceuticals , a California corporation,
entered into a Manufacturing Services Agreement (the “MSA”) effective as of January 4, 2006;

     WHEREAS, in March 2009, Avanir Pharmaceuticals reincorporated as Avanir Pharmaceuticals, Inc.,
a corporation existing under the laws of Delaware (“Avanir”);

     AND WHEREAS Patheon and Avanir wish to amend the MSA as set forth in this Amendment #1;

     NOW THEREFORE in consideration of the premises hereof and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledges by the parties, the
parties hereby agree that the MSA is amended as follows:

	1.	 	Amendments to MSA

The parties agree to the following amendments:

	 	(i)	 	All references to “Avanir Pharmaceuticals, a corporation existing under the
laws of California” shall be replaced by “Avanir Pharmaceuticals Inc., a corporation
existing under the laws of Delaware.”
	 
	 	(ii)	 	All references in the MSA to “Neurodex” shall be deleted and replaced with
“Zenvia.” For clarity, the definition of “Product” in Section 1.1 shall not be
amended.
	 
	 	(iii)	 	In Section 1.1, the definition “Manufacturing Site” shall be deleted and
replaced with the following:
	 
	 	 	 	“Manufacturing Site” means the facility owned and operated by Patheon that is
located at [***].
	 
	 	(iv)	 	In Section 13.11, the addresses for the parties shall be amended as follows:

	 	 	 	 	 	 	 

	 

	 	Avanir Pharmaceuticals, Inc.
	 	 	 	Patheon Inc.
	 

	 	101 Enterprise Ct, Suite 300
	 	 	 	2100 Syntex Court
	 

	 	Aliso Viejo, CA 92656
	 	 	 	Mississauga, Ontario L5N 7K9
	 
	 	 	 	 	 	 
	 

	 	Attention:
	 	 	 	Attention: Legal Department
	 

	 	Fax No:
	 	 	 	Fax No: 905 812-6613

	 	(v)	 	Schedule B shall be deleted in its entirety and replaced with the Schedule B
attached hereto.
	 
	 	(vi)	 	Schedule G (the Form of Quality Agreement) shall be deleted in its entirety and
replaced with the Quality Agreement attached hereto, which has been revised and
executed effective as of January 19, 2010.

 

 

	 	(vii)	 	Schedule I shall be deleted in its entirety and replaced with the Schedule I
attached hereto.

	2.	 	Conflicts, Use of Terms. In the event of conflict between the terms and conditions of the
MSA and the terms and conditions of this Amendment # 1, the terms of conditions of this
Amendment # 1 shall control. Terms not otherwise defined herein shall have the meanings set
forth in the MSA.
	 
	3.	 	No Other Modifications. Except as provided above, the terms and conditions of the MSA remain
unchanged.
	 
	4.	 	Execution in Counterparts. This Amendment #1 may be executed in two counterparts, by
original or facsimile signature, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
	 
	5.	 	Governing Law. This Amendment #1 shall be construed and enforced in accordance with the laws
of the State of New York. The parties expressly agree that the UN Convention of Contracts for
the International Sale of Goods shall not apply to this Amendment #1.

     IN WITNESS WHEREOF, the parties have caused this Amendment # 1 to be duly executed, effective
as of the 19th day of January, 2010.

ACCEPTED AND ACKNOWLEDGED

	 	 	 	 	 	 	 	 	 	 	 

	AVANIR PHARMACEUTICALS, INC.	 	 	 	PATHEON INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Per:

	 	/s/
Christine G. Ocampo 	 	 	 	Per:	 	/s/
Deborah Rak	 	 
	 

	 	Name: Christine G. Ocampo
	 	 	 	 	 	Name: Deborah Rak	 	
	 

	 	Title: Vice President, Finance
	 	 	 	 	 	Title: Vice President, Toronto Regional
Operations	 	 

 

 

Schedule B

to the Manufacturing Services Agreement

between Patheon Inc. and Avanir Pharmaceuticals, Inc.

Annual Volume, Run Quantity and Fees

Bulk packaged Capsules

[***]

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Scenario	 	1	 	2
	Year	 	1	 	2	 	3	 	1	 	2	 	3
	Annual Qty ([***] capsules)	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	Run Qty ([***] capsules)

	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	Run Qty (batches)

	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	Price per [***] Bulk capsules (USD)

	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]
	 	[***]

[***] Strength

	 	 	 	 	 	 	 
	Scenario	 	2
	Year	 	1	 	2	 	3
	Annual Qty ([***] capsules)	 	[***]	 	[***]	 	[***]
	Run Qty ([***]capsules)

	 	[***]
	 	[***]
	 	[***]
	Run Qty (batches)

	 	[***]
	 	[***]
	 	[***]
	Price per [***] Bulk
capsules (USD)

	 	[***]
	 	[***]
	 	[***]

 

 

Schedule G

to the Manufacturing Services Agreement

between Patheon Inc. and Avanir Pharmaceuticals, Inc.

SCHEDULE G

QUALITY AGREEMENT

 

 

Schedule I

to the Manufacturing Services Agreement

between Patheon Inc. and Avanir Pharmaceuticals, Inc.

SCHEDULE I

ACTIVE MATERIAL REIMBURSEMENT VALUE

For the purposes of the Agreement, the parties agree that the Active Material Reimbursement Value
shall be as follows:

	 	 	 	 	 	 	 	 	 
	PRODUCT 	 	ACTIVE MATERIAL 	 	 	ACTIVE MATERIAL	 
	 	 	 	 	 	REIMBURSEMENT VALUE 

($USD)*	 
	 	 	 	 	 	 	 
	[***] Bulk [***]
	 	Dextromethorphan 

Hydrobromide	 	$[***] per kilogram
	 	 	 	 	 	 	 	 	 
	 
	 	Quinidine Sulfate	 	$[***] per kilogram

 

			
	*	 	These prices are subject to change. The parties shall amend this Schedule I to reflect any
change in the price of the Active Materials charged by Avanir’s suppliers, provided satisfactory
documentation of such change is provided to and accepted by Patheon.

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