Document:

Second Amendment to Revolving Credit Agmt.

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.,  Armstrong 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. 

2

     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, JP Morgan
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: 

	
     
               
(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.

	
     
             
     
(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:

	
     
          
               (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

7

	 	
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 

8

	 	
(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.

9

        
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:

10

	 	   
         
(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;

11

	 	   
         
(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 James N Kirby 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".

12

       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 &
          Gilchrist,  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.

13

	 	
   
             
   (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 James N Kirby 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

14

	 	
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

15

	 	
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

16

	 	
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 

17

	 	
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, 

18

	 	
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 

19

	 	
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. 

20

       
     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 & Gilchrist, 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

21

            
     
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

22>

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: --------------------------------------------------
                          Richard A. Smith, 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: --------------------------------------------------
                               Allen King
                               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: Gregory L. Dryden, 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: ------------------------------------------

25

                         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.
                                       ARMSTRONG 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
      Frigo-Bohn 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

Armstrong Air Conditioning Inc.             100%        Ohio              United States             MR
   Jensen-Klich Supply Co.                  100%        Nebraska          United States              R
   Armstrong 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:

            Bradley Air Conditioning Limited
            Valley Refrigeration Limited
            Dearie Contracting Inc.
            Dearie Martino Contractors Ltd.
            Foster Air Conditioning Limited
            Bryant Heating & Cooling Co. Ltd.
            Byrant 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. Frank Woods 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
   Allbritten Plumbing, Heating and Air Conditioning Service, Inc. – Tennessee
   Alliance Mechanical Heating & Air Conditioning, Inc. – California
   Andros Refrigeration LLC – Arizona
   Andy Lewis Heating & Air Conditioning LLC – North Carolina
   Andy Lewis 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
   Barlow Heating and Air Conditioning LLC – Delaware
   Bartels Heating & Air Conditioning LLC – Colorado
   Becht 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
   C. Iapaluccio Company LLC – Delaware
   C. Woods Company LLC – Delaware
   Calverley Air Conditioning & Heating LLC – Delaware
   Chanin Air LLC – Florida
   Chief/Bauer 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
   Cook Heating & Air Conditioning LLC – Michigan
   Cook Heating and Air Conditioning LLC – Delaware
   Cool Breeze LLC – Ohio

1

                   SERVICE EXPERTS INC. SUBSIDIARIES - CONT'D

   Cool Power LLC – New York
   D.A. Bennett LLC – New York
   Dan Jacobs Heating & Cooling LLC – Pennsylvania
   Davis the Plumber LLC – New Mexico
   Dial One Raymond Plumbing, Heating & Cooling, Inc. – Tennessee
   DiMarco Mechanical LLC – Ohio
   Dodge Heating & Air Conditioning LLC – Georgia
   Doler Plumbing & Heating LLC – Delaware
   Economy Heating & Air Conditioning LLC – Pennsylvania
   Edison Heating and Cooling LLC – New Jersey
   Epperson LLC – South Carolina
   Eveready LLC – Virginia
   Falso Service Experts LLC – New  York
   Fras-Air Contracting LLC – New Jersey
   Freschi 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
   Gordon's Specialty Company LLC – Oklahoma
   Gray Refrigeration LLC – Delaware
   Greenwood Heating & A/C LLC – Washington
   Gregory's Plumbing Co. LLC – Oklahoma
   H.S. Stevenson & Sons LLC – Ohio
   Holmes Sales & Service LLC – Iowa
   Industrial Building Services,  Inc. – Florida
   International Service Leadership Inc. – Delaware
   Jack Nelson Co. LLC – Oklahoma
   Jansen Heating and Air Conditioning LLC – Delaware
   Jebco Heating & Air Conditioning LLC – Colorado
   JM Mechanical LLC – Delaware
   John P. Timmerman Co. LLC – Ohio
   K & S Heating, Air Conditioning & Plumbing LLC – Minnesota
   Kiko Heating & Air Conditioning LLC – Ohio
   Klawinski LLC – Delaware
   Knochelmann Plumbing, Heating & Air LLC – Kentucky
   Kozon LLC – Tennessee
   Kruger's Heating & Air Conditioning LLC – Delaware
   Lake Arbor Heating LLC – Colorado
   Lee Voisard Plumbing & Heating LLC – Ohio
   Local Furnace LLC – Colorado – to become Service Experts of Fort Collins LLC
   Marco Cooling and Refrigeration LLC – Florida
   Mathews Heating & Air Conditioning LLC – Tennessee
   Matz 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
   Neal Harris Heating, Air Conditioning & Plumbing LLC –  Missouri
   Norrell Heating and Air Conditioning LLC – Alabama
   Pardee Refrigeration LLC – South Carolina

2

                   SERVICE EXPERTS INC. SUBSIDIARIES - CONT'D

   Parker-Pearce Service Experts LLC – Maryland
   Parrott Mechanical, Inc. – Idaho
   Peachtree Service Experts LLC – Georgia
   Peitz Heating and Cooling  LLC – South  Dakota
   PTM Enterprises LLC – Georgia
   R&M Climate Control LLC – Tennessee
   Roland J. Down LLC – New York
   Rolf Griffin Heating & Air Conditioning LLC – Delaware
   Russell Mechanical LLC – Delaware
   Ryan Heating LLC – Missouri
   S & W Air Conditioning LLC – Tennessee
   San Antonio Air Conditioning LLC – Delaware
   Sanders 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
   Shumate Mechanical LLC – Georgia
   Steel City Heating & Air LLC – Alabama
   Strand Brothers LLC – Tennessee
   Strogen's HVAC LLC – New Hampshire
   Sunbeam Service Experts LLC – New York
   Sylvester's Corp. – Indiana
   Sylvester's, L.P. – Tennessee
   Teays Valley Heating and Cooling LLC – West Virginia
   The McElroy 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
   Vogt Heating & Air Conditioning LLC – Minnesota
   Wangsgaard A-Plus, Inc. – Utah
   Wesley G. Wood 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

Frigo-Bohn 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                        Holland
   Friga-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
   Friga-Bohn 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

Lennox Janka a.s                     100%        Czech Republic                 Czech Republic
   Friga Coil s.r.o                   50%        Czech Republic                 Czech Republic
   Janka Slovensko, s.r.o            100%        Slovak Republic                Slovak Republic

                                            SCHEDULE 3.05
                                               ANNEX F
                                LGL AUSTRALIA (US) 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
            James N Kirby Pty Ltd*                          100%             Australia               Australia
               Kirby Refrigeration Pty. Ltd
                  (Albury)                                   75%             Australia               Australia
               Kirby Refrigeration Pty. Ltd
                 (Sunshine Coast)                            75%             Australia               Australia
               Kirby Refrigeration Pty. Ltd
                 (Gold Coast)                                75%             Australia               Australia
               Kirby Refrigeration Pty. Ltd
                 (Tasmania)                                  75%             Australia               Australia
               Kirby 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
               Kirby Refrigeration Pty. Ltd.(NT)             75%             Australia               Australia
               Kirby Tubes & Contract Coils Pty Ltd         100%             Australia               Australia
               Kirby Sheet Metal Pty Ltd                    100%             Australia               Australia
               Kirby Central Warehouse Pty. Ltd.            100%             Australia               Australia
               J.N.K. Pty Limited                           100%             Australia               Australia
               P.R.L. Pty Limited                           100%             Australia               Australia
               Kirby 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
               James N. Kirby 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
                             ----------     -----------   ----------  -----------    -------------

Armstrong 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)

A.   LENNOX 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
                              191 Peachtree Street, N.E
                              Mail Code GA 04-23
                              Atlanta, GA  30303

                              DEBTOR: ARMSTRONG AIR CONDITIONING INC
                              --------------------------------------
Ohio Secretary of State       Wachovia Bank, N.A.,                          AP322733            3/27/01
                              as Administrative Agent
                              for the Secured Parties
                              191 Peachtree Street, N.E
                              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
                              191 Peachtree Street, N.E
                              Mail Code GA 04-23
                              Atlanta, GA  30303Senior Promissory Note Amendment

                                                                [Execution Copy]

                               As of June 29, 2001

The Prudential Insurance Company of America
c/o Prudential Capital Group
2200 Ross Avenue, Suite 4200E
Dallas, TX  75201
Attention:  Managing Director

U.S. Private Placement Fund
Prudential Private Placement Investors, Inc.
Four Gateway Center
100 Mulberry Street
Newark, NJ  07102-4069

Teachers Insurance and Annuity
  Association of America
730 Third Avenue
New York, New York 10017
Attention:  Securities Division, Private Placements

CIG & Co.
c/o CIGNA Investments, Inc.
900 Cottage Grove Road
Hartford, Connecticut  06152-2307
Attention:  Private Securities Division - S-307

United of Omaha Life Insurance Company
Mutual of Omaha Insurance Company
Companion Life Insurance Company
United World Life Insurance Company
Mutual of Omaha Plaza
Omaha, NE  68175
Attention: Investment Division

First Colony Life Insurance Company
General Electric Capital Assurance Company
GE Life and Annuity Assurance Company
c/o GE Financial Assurance
Two Union Square
601 Union Street
Seattle, WA 98101-2336

   Re:     Lennox International Inc.
           7.06% Senior Promissory Notes Due 2005; 6.73% Senior Promissory Notes
  Due 2008; 6.56% Senior Notes Due 2005; and 6.75% Senior Notes Due 2008

Ladies and Gentlemen:

Reference is made to:

     (i)  nine  separate  Note Purchase Agreements, dated as of December 1, 1993
(as each has been amended, the “1993 Note Agreements”), between  the Company and
each of The Prudential  Insurance Company of America,  Connecticut  General Life
Insurance Company,  Connecticut General Life Insurance Company, on behalf of One
or More Separate  Accounts,  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)  (collectively,  and together with their respective  successors
and assigns, the “1993 Holders”);

     (ii) the  Note Purchase  Agreement,  dated as of July 6,  1995 (as each has
been  amended,  the “1995 Note  Agreements”),  between the Company and  Teachers
Insurance and Annuity  Association of America  (together with its successors and
assigns, the “1995 Holder”);

     (iii) eight  separate  Note Purchase  Agreements, dated as of April 3, 1998
(as each has been amended, the “1998 Note Agreements”),  between the Company and
each of The Prudential  Insurance  Company of America,  U.S.  Private  Placement
Fund, Teachers Insurance and Annuity Association of America, Connecticut General
Life Insurance Company, Connecticut General Life Insurance Company, on behalf of
One or More Separate  Accounts,  CIGNA Property and Casualty  Insurance Company,
United of Omaha Life  Insurance  Company and Companion  Life  Insurance  Company
(collectively,  and together with their respective  successors and assigns,  the
“1998 Holders”);

     (iv) the letter  agreement  dated   July 29,   1999  (the  “1999  Amendment
Agreement”)  among the Company and the Holders (as defined  below)  amending the
Note Agreements (as defined below) to add the  "Additional  Covenants" set forth
in Schedule A to the 1999 Amendment;

                                       2

     (v)  the  letter  agreement  dated January 23, 2001 among  the  Company and
the Holders amending certain definitions and covenants in the Note Agreements;

     (vi) the  Fourth  Amendment to Revolving  Credit Facility  dated as of June
29, 2001, which amends the Revolving Credit Facility  Agreement dated as of July
29, 1999 (as amended or otherwise modified by the First Amendment  to  Revolving
Credit Facility  Agreement  dated as of August 6, 1999, the Second  Amendment to
Revolving  Credit Facility  Agreement dated as of January 25, 2000 and the Third
Amendment to Revolving  Credit Facility  Agreement dated as of January 23, 2001,
the “1999 Credit Agreement”), entered into among the Company, the lenders listed
in Schedule  2.01 thereto (the “1999  Lenders”),  The Chase  Manhattan  Bank, as
administrative agent, Wachovia Bank, N.A., as syndication agent, and The Bank of
Nova Scotia, as documentation agent;

     (vii) the 364 Day  Revolving  Credit Facility Agreement dated as of January
25,  2000 (as so  amended,  the “364 Day  Facility”),  entered  into  among  the
Company,  Chase Bank of Texas,  National  Association  [now The Chase  Manhattan
Bank], as  administrative  agent, the other agents named therein and the lenders
named  therein (the “2000  Lenders”,  and together  with the 1999  Lenders,  the
“Lenders”),  as the same has been and may  hereafter  be  amended  or  otherwise
modified; and

     (viii the  Letter  Amendment  No. 3 to Master Shelf  Agreement  dated as of
June 29, 2001,  which amends the Master Shelf  Agreement dated as of October 15,
1999 (as so amended,  the “Shelf  Agreement”),  entered into between the Company
and The Prudential Insurance Company of America;

The 1993 Note  Agreements,  1995 Note  Agreement  and 1998 Note  Agreements  are
collectively referred to herein as the “Note Agreements”. The 1993 Holders, 1995
Holder and 1998 Holders are  collectively  referred to herein as the  “Holders”.
The senior notes issued and  outstanding  under each of the Note  Agreements are
collectively  referred to herein as the “Notes”.  Capitalized  terms used herein
and not otherwise defined herein shall have the respective meanings set forth in
the Note Agreements (including Schedule A to the 1999 Amendment Agreement).

The Company has requested the Holders to enter into this letter  agreement (this
“Second 2001 Amendment  Agreement”) to evidence amendment of the Note Agreements
as set forth  herein.  Such  amendment  shall  become  effective as set forth in
Section 3. Therefore, the Holders and the Company hereby agree as follows:

     1.   Amendment to Definitions. Subject to Section 3 hereof, the definitions
in each of the Note Agreements are hereby modified as follows:

                                       3

          “Adjusted  EBITDA”"  Clause (ii) of the definition of the term Adjusted
     EBITDA is hereby amended 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,”

          “Consolidated  Net Income”  Clauses (f) and (g) of the definition
     of the term  “Consolidated  Net Income” are hereby  amended to read as
     follows,  and clause (h) is hereby added to the end of such definition
     to read as follows:

            “(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
          clause  (g)(i)  hereof  for  such  fiscal  quarter  is less  than
          $32,400,000; and (ii) after June 30, 2001, in an aggregate amount
          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 not to exceed  $25,000,000  provided  that cash
          charges included in such  restructuring  charges shall not 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.”

          “EBITDA” The  definition of the term EBITDA is hereby  amended to
     read as follows:

               “EBITDA” means,  for any period,  the total of the following
          calculated  for  the  Company  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

                                       4

          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.

          “Existing  Note  Purchase  Agreements”  The  definition  of  the  term
     Existing Note Purchase Agreements is hereby amended to read as follows:

               “Existing  Note  Purchase  Agreements”  means  (i) the  Note
          Purchase  Agreements  dated as of  December  1, 1993  between the
          Company and the institutional investors parties thereto, (ii) the
          Note  Purchase  Agreement  dated as of July 6, 1995  between  the
          Company and the  institutional  investor  party thereto and (iii)
          the Note  Purchase  Agreements  dated as of April 3, 1998 between
          the Company and the institutional investors parties thereto.

          “Material  Adverse Effect” The definition of the term Material Adverse
     Effect is hereby amended to read as follows:

               “Material  Adverse  Effect”  shall mean a  material  adverse
          effect  on  (a)  the  business,  operations,  affairs,  financial
          condition, assets or properties of the Company and its Restricted
          Subsidiaries  taken as a whole, or (b) the ability of the Company
          to perform its obligations under this Agreement and the Notes 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 Notes,  the Pledge  Agreement  or the  Subsidiary
          Guaranty.

     The following definitions are hereby added to the Note Agreements:

               “1999  Lenders” means the lenders listed in Schedule 2.01 to
          the  Revolving  Credit  Facility  Agreement  dated as of July 29,
          1999, as amended, among the Company, The Chase Manhattan Bank, as
          administrative  agent, Wachovia Bank, N.A., as syndication agent,
          and The Bank of Nova Scotia, as documentation agent.

               “364 Day  Facility”  means that  certain  364 Day  Revolving
          Credit Facility  Agreement dated as of January 25, 2000 among the
          Company, 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.

                                       5

               “Approved  Receivables  Securitization”  means  one or  more
          receivables securitizations or other receivables sale programs 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 holders of the Notes,  the holders of the
          Shelf Notes,  the 1999 Lenders and the lenders  under the 364 Day
          Facility  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.

               “Credit  Agreement” means the Revolving Credit Facility Agreement
          dated as of July 29, 1999, entered into among the Company, the lenders
          listed  in  Schedule  2.01  thereto,  The  Chase  Manhattan  Bank,  as
          administrative  agent,  Wachovia Bank, N.A., as syndication agent, and
          The Bank of Nova Scotia, as documentation  agent, as the same has been
          and may hereafter be amended or otherwise modified.

               “Intercreditor   Agreement”  means  that  certain   Intercreditor
          Agreement  to be executed  pursuant to Section  9.11 hereof  initially
          among the Company,  the Material  Restricted  Subsidiaries,  The Chase
          Manhattan Bank, as collateral  agent  thereunder,  the  administrative
          agent for the 1999 Lenders and the lenders under the 364 Day Facility,
          the  holders of the Notes and the holders of the Shelf  Notes,  as the
          same may be amended or otherwise modified from time to time.

               “Master  Shelf   Agreement”   means  that  certain  Master  Shelf
          Agreement,  dated as of October 15, 1999,  between the Company and The
          Prudential Insurance Company of America, as the same may be amended or
          otherwise modified from time to time.

               “Material  Restricted  Subsidiary”  means Lennox Industries Inc.,
          Armstrong 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 the Company and all  Subsidiaries  as determined as of the last day
          of each fiscal quarter.

               “Material  Transfer”  means,  with  respect to the Company or any
          Restricted   Subsidiary,   any   transaction   or  group  of   related
          transactions having a

                                       6

          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  Company  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.

               “Pledge Agreement” means that certain Pledge Agreement to be
          executed  by the  Company  and in favor of the  Collateral  Agent
          pursuant to Section 9.11 hereof, as the same may be modified from
          time to time.

               “Second 2001 Amendment”  means the letter agreement dated as
          of June 29, 2001,  as the same may be modified from time to time,
          among the Company  and the holders of the Notes to amend  certain
          provisions  and covenants of this Agreement and the Existing Note
          Purchase Agreements.

               “Shelf  Notes”  means the senior  notes  issued from time to
          time pursuant to the Master Shelf Agreement.

               “Subsidiary  Guaranty”  means the  guaranty of the  Material
          Restricted  Subsidiaries in favor of the holders of the Notes and
          the  holders  of the Shelf  Notes,  substantially  in the form of
          Exhibit  A to the  Second  2001  Amendment,  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.

     2.   Amendments to Additional Covenants and Additional Defaults. Subject to
Section 3 hereof,  the 1998 Note Agreements,  Schedule A to the letter agreement
dated April 3, 1998 (the “1998 Schedule A”) and Schedule A to the 1999 Amendment
Agreement (the “1999 Schedule A”) are hereby amended as follows:

     (a)  The  first  paragraph of Section 3(a) of the 1999 Schedule A is hereby
amended to read in its entirety as follows:

          “Coverage  Ratio.  As of the  end of  each  fiscal  quarter,  the
     Company  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

                                       7

     September  30,  2001;  and (iii) 3.00 to 1.00 for all fiscal  quarters
     ending  thereafter.  As used  herein  the  following  terms  have  the
     following meanings:"

     (b)  Section 3(b) of the 1999 Schedule A is  hereby amended  to read in its
entirety as follows:

          “Consolidated Indebtedness to Adjusted EBITDA. As of the last day
     of each fiscal quarter during the periods described below, the Company
     shall not permit the ratio of Consolidated Indebtedness outstanding as
     of such day to the  Adjusted  EBITDA for the four (4) fiscal  quarters
     then ended to exceed:  (i) 3.90 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."

     (c)  Section 7.2(a) of the 1998 Note Agreements and the 1998 Schedule A are
hereby  amended  by  adding  the  phrase  "the then existing Material Restricted
Subsidiaries and" immediately after the phrase "in order to establish".

     (d)  A new Section 9.10 is hereby added to the 1998 Note Agreements and the
1998 Schedule A as follows:

          “9.10.    Interest Rate. Effective as of June 29, 2001, the interest
     rates prior to the occurrence of any Event of Default with respect to all
     Notes shall be immediately and automatically increased by 0.25% per annum
     for so long as any amount shall remain outstanding under such Notes. If
     upon any subsequent delivery of the compliance certificate pursuant to
     Section 7.2(a) of the 1998 Note Agreements and the 1998 Schedule A in
     connection with the financial statements of the Company and its Restricted
     Subsidiaries required to be delivered pursuant to Section 7.1 of such
     Schedule, the Consolidated Indebtedness to Adjusted EBITDA Ratio of the
     Company as set forth in Section 3(b) of the 1999 Schedule A shall be less
     than or equal to 3.00 to 1.00 (the “Reset Event”), then the interest rates
     with respect to such Notes shall be immediately and automatically reduced
     by 0.25% per annum commencing upon the date such compliance certificate is
     delivered, with such interest rates to be subject to increase again by
     0.25% per annum at any time that such ratio exceeds 3.00 to 1.00 (and, if
     so increased then reduced again when such ratio shall be less than or equal
     to 3.00 to 1.00), and with such interest rates never to be less than the
     respective interest rates in effect with respect to the Notes on June 28,
     2001. If an Event of Default occurs prior to any Reset Event, then the
     Default Rate shall also be increased by 0.25% for so long as such Event of
     Default is continuing.

                                       8

     (e)  A new Section 9.11 is hereby added to the 1998 Note Agreements and the
1998 Schedule A as follows:

          “9.11.  Post-Closing Agreements; New Material Restricted Subsidiaries.

          (a)  Items Due by August 15, 2001.  On or before August 15, 2001,  the
     Company shall deliver or cause to be delivered each of the following items,
     each of which must be in form and  substance  satisfactory  to the Required
     Holders:

               (i)  to  the  Holders, the  Intercreditor Agreement executed
          by all the parties thereto,  and the Pledge Agreement executed by
          the Company  pursuant to which the Company  shall have pledged to
          the  Collateral  Agent  all the  capital  stock of each  Material
          Restricted  Subsidiary;  to the  Collateral  Agent,  certificates
          representing  all  shares of 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;  to counsel  for the  Holders,  UCC,  tax and
          judgment Lien search reports  listing all  documentation  on file
          against the Company and each  Material  Restricted  Subsidiary in
          each jurisdiction in which it has its principal place of business
          and jurisdiction of organization;  to the Collateral  Agent, such
          executed documentation as the Collateral Agent may deem necessary
          to  perfect  or protect  the Liens  under the  Pledge  Agreement,
          including, without limitation, financing statements under the UCC
          and  other  applicable   documentation  under  the  laws  of  any
          jurisdiction  with respect to the  perfection of such 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  Company  in   complying   with  the
          requirements  of  this  paragraph,   the  Holders  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
          Company and the Material Restricted Subsidiaries addressed to the
          holders  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 Required Holders may request (and the Company
          hereby  instructs  its  counsel  to deliver  such  opinion to the
          holders for their benefit);

                                       9

               (iii) a  certificate  of  the  Secretary  or   an  Assistant
          Secretary of the Company  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 contemplated thereby, and that such resolutions have
          not been modified, rescinded or amended and are in full force and
          effect; and

               (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  Company  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
     Holders a Subsidiary Joinder Agreement joining it as a guarantor under
     the Subsidiary Guaranty and such other documentation,  including,  but
     not limited to, corporate resolutions,  charter and bylaws of such New
     Material  Subsidiary  and an opinion of counsel for such New  Material
     Subsidiary, as the Required Holders may reasonably request in order 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
     Company 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
     an amendment under the terms of the Pledge Agreement,  the delivery of
     the stock certificates  evidencing the stock to be pledged, along with
     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."

     (f)  A new  Section 9.12 to the 1998 Note Agreements and 1998 Schedule
A is hereby added as follows:

                                       10

          “9.12. Use of Material  Transfer  Proceeds.  Immediately  after giving
     effect to a Transfer  authorized  under Section  10.3(c) that is a Material
     Transfer, 60% of the net, after tax proceeds of such Transfer shall be used
     to reduce the  outstanding  indebtedness  under any Senior  Secured  Credit
     Facility or  Facilities.  The Company shall have the option of  determining
     the Senior  Secured  Credit  Facility or  Facilities to which to apply such
     proceeds.  The term  “Senior  Secured  Credit  Facilities”  means  the Note
     Agreements,  the Master Shelf Agreement,  the Credit Agreement, the 364 Day
     Facility and any other facility providing Indebtedness which refinances any
     of the foregoing or is entitled  under the  Intercreditor  Agreement to the
     benefits of the Liens granted under the Pledge Agreement.”

     (g)  A new Section 9.13 to the 1998 Note  Agreements and 1998 Schedule A is
hereby added as follows:

          “9.13. Subsequent Indebtedness.  If the Company 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
     Company  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  indebtedness  under any
     other Senior Secured  Credit  Facilities in existence on June 29, 2001. The
     Company shall have the option of  determining  which Senior  Secured Credit
     Facility or Facilities to which to apply such proceeds.”

     (h)  The last sentence of Section 10.3 is deleted in its entirety, the
“.” at the end of clause (c) is deleted and replaced  with “; or” and a new
clause (d) is added to the end of Section 10.3, to read as follows:

          “(d)  such  Transfer  is the sale of  receivables,  or  undivided
     interests    therein,    pursuant   to   an    Approved    Receivables
     Securitization.”

     (i)  The last  paragraph  of  Section  10.4 is deleted in its entirety
from the 1998 Note Agreements and the 1998 Schedule A and replaced with the
following:

          “In addition to and not in limitation of the other  provisions of
     this  Section  10.4,  from  June 29,  2001  until  the  date  that the
     Consolidated  Indebtedness  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  7.2(a)  (such  period being the  “Restriction  Period”),  the
     Company shall not permit any  Restricted  Subsidiary  to,  directly or
     indirectly,  create,  incur,  assume,  guarantee,  or otherwise become

                                       11

     directly or indirectly  liable with respect to or otherwise permit any
     Indebtedness,  except  Indebtedness of such Subsidiaries  disclosed on
     Schedule 10.4 and additional  Indebtedness in an aggregate  amount not
     to exceed  $10,000,000  for all  Restricted  Subsidiaries  during  the
     Restriction  Period.  For  purposes  of this  Section  10.4 any Person
     becoming  a  Restricted  Subsidiary  after the date of this  Agreement
     shall  be  deemed  to  have  incurred  all  of  its  then  outstanding
     Indebtedness at the time it becomes a Restricted Subsidiary.”

     (j)  Sections  10.5(f), (g) and (i) are deleted in their entirety from
the 1998 Note  Agreements  and the 1998  Schedule A and  replaced  with the
following:

          “(f) Liens on property  or assets of the Company  (other than the
     capital stock of the Material  Restricted  Subsidiaries) or any of its
     Restricted  Subsidiaries  securing  Indebtedness or other  obligations
     owing to the Company 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 10.5
     and Liens granted to the Collateral Agent under the Pledge Agreement;”

          “(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  Company  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.”

     (k)  Section 10.6 of the 1998 Note  Agreements  and the 1998 Schedule A
is amended to add the following to the end thereof:

          “In addition to the foregoing restrictions, the Company 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;

                                       12

               (c)  the repurchase of up to 577,500 shares of the Company'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 James N Kirby 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  Consolidated  Indebtedness  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 7.2(a) has been delivered.”

     (l)  A new Section 10.12 to  the 1998 Note Agreements and the 1998 Schedule
A is hereby added as follows:

               “10.12.   Restrictions   On    Transfers   to   Unrestricted
          Subsidiaries.  In  addition  to the  other  limitations  of  this
          Agreement,   from  June  29,   2001   until  the  date  that  the
          Consolidated  Indebtedness  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  7.2(a)  (such  period,   herein  the
          “Section 10.12  Restriction  Period”),  the Company 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 James N Kirby 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 10.12 Restriction Period under this clause (c) shall
               not  exceed

                                       13

               $60,000,000.   The  aggregate  amount  of  the  Unrestricted
               Subsidiary Transfers for purposes of determining  compliance
               with this  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 Company
               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 the Company
               or any Restricted Subsidiary or secured by a Lien granted by
               the  Company  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 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  the  Company  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  10.12),  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.”

     (m)  Section  11(c) is  deleted  in its  entirety  from the 1998  Note
Agreements and the 1998 Schedule A and replaced with the following:

          “the Company  defaults in the  performance of or compliance  with
     any term  applicable to the Company and contained in Sections  7.1(d),
     9.6, 9.11,  10.2 through 10.12 or in Sections  3(a),  3(b) or 4 of the
     1999 Schedule A, 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”

     (n)  Section  11(d) is  deleted  in its  entirety  from the 1998  Note
Agreements and the 1998 Schedule A and replaced with the following:

                                       14

          “(i) the Company  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  Section 11) 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 Company  receiving  written notice of such default from any holder
     of a Note (any such written  notice to be  identified  as a “notice of
     default” and to refer  specifically  to this  paragraph (d) of Section
     11)  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  Section 11) 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 Company receiving written
     notice of such  default  from any  holder of a Note (any such  written
     notice  to be  identified  as a  “notice  of  default”  and  to  refer
     specifically to this paragraph (d) of Section 11); or"

     (o)  Section  11(e) is  deleted  in its  entirety  from the 1998  Note
Agreements and the 1998 Schedule A and replaced with the following:

          “(e) any  representation  or  warranty  made in  writing by or on
     behalf of the Company or any Material Restricted  Subsidiary or by any
     officer of the Company or any Material  Restricted  Subsidiary 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”

     (p) A new Section 11(k) is hereby added to the 1998 Note Agreements and the
1998 Schedule A as follows:

          “the  occurrence  of an  Event  of  Default  (as  defined  in the
     Intercreditor Agreement); or”

     (q) A new Section  11(l) is hereby  added to the 1998 Note  Agreements
and the 1998 Schedule A as follows:

          “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
          Company or any Material  Restricted  Subsidiary shall so state in
          writing.”

                                       15

     (r)  A  new  sentence  is  added  to  end of Section  12.2 of the 1998 Note
Agreements and the 1998 Schedule A as follows:

          “In addition to the other rights and remedies that the holders of
     Notes may have upon the occurrence of an Event of Default, the
     Required Holders may direct the Collateral Agent to exercise the
     rights and remedies available to the Collateral Agent under the
     Intercreditor Agreement and the Pledge Agreement.”

     3.   Effectiveness of Amendment Agreement; Counsel Fees and Expenses.  This
Second  2001 Amendment Agreement shall be effective upon the satisfaction of the
following conditions:

          (a)  the Required Holders under each of the 1993 Note Agreements, 1995
     Note Agreement and 1998 Note Agreements at the time outstanding  shall have
     executed a counterpart of this Second 2001 Amendment Agreement;

          (b)  the Company shall have furnished to each of the Holders  evidence
     of the satisfaction of clause (a);

          (c)  the Holders shall have received a Subsidiary Guaranty executed by
     each of the Material Restricted Subsidiaries as of the date hereof;

          (d)  the Holders  shall have  received a  favorable  legal  opinion or
     opinions from Bennack & Lowden L.L.P.,  special  counsel to the Company and
     the Material Restricted Subsidiaries, satisfactory to such Holder;

          (e)  the  Holders  shall  have  received   certified   copies  of  the
     resolutions  of the Board of  Directors  of the  Company  authorizing  this
     Second 2001  Amendment  Agreement,  and of all documents  evidencing  other
     necessary corporate action and governmental approvals, if any, with respect
     to this Second 2001 Amendment Agreement;

          (f)  the  Holders  shall  have  received   certified   copies  of  the
     resolutions  of  the  Board  of  Directors  of  each  Material   Restricted
     Subsidiary  authorizing  the  Subsidiary  Guaranty,  and of  all  documents
     evidencing other necessary corporate action and governmental  approvals, if
     any, with respect to the Subsidiary Guaranty;

          (g)  the Holders shall have received a certificate of the Secretary or
     Assistant Secretary of the Company certifying the names and true signatures
     of the  officers  of the  Company  authorized  to  sign  this  Second  2001
     Amendment  Agreement and the other documents to be delivered by the Company
     hereunder;

          (h)  the  Holders  shall  have  received evidence satisfactory to them
     that the 1999 Credit  Agreement,  the 364 Day Facility and the Master Shelf
     Agreement shall have been

                                       16

     amended in a manner similar to the manner in which the Note  Agreements are
     proposed to be amended as herein  contemplated  and the  amendments  of the
     1999 Credit Agreement, 364 Day Facility and Master Shelf Agreement shall be
     in form and substance satisfactory to the Holders; and

          (i)  the Company shall have paid to each of the  Holders an  amendment
     fee by wire transfer of immediately  available  funds in an amount equal to
     the product of 0.25% and the  aggregate  principal  amount of such Holder's
     outstanding Notes on the date on which this Second 2001 Amendment Agreement
     becomes effective.

     4.   Continued Effectiveness of Second 2001 Amendment Agreement; Release.

          (a)  Except for Sections  9.10, each of the  Additional  Covenants and
     Additional  Defaults  set forth in Section 2 hereof  shall remain in effect
     only as long as the Company is bound by a substantially similar covenant or
     event of default  contained  in the 1999  Credit  Agreement  or the 364 Day
     Facility  or  any  other  agreement  creating  or  evidencing  Indebtedness
     (collectively,  the “Additional Agreements”),  including but not limited to
     any  covenant  or  event  of  default  contained  in  any  amendment  to or
     refinancing  of the 1999  Credit  Agreement,  the 364 Day  Facility  or any
     Additional  Agreement.  If the  Company  ceases  to be  bound  by any  such
     Additional  Covenant or Additional  Default in all  Additional  Agreements,
     this Second 2001 Amendment  Agreement shall,  without further action on the
     part of the Company or any Holder, be deemed to be amended automatically to
     delete such Additional Covenant or Additional Default.

          (b)  The Holders agree that if the Lenders  release the obligations of
     the  guarantors  under their  respective  guaranty  of Material  Restricted
     Subsidiaries and no new guaranties of Material Restricted  Subsidiaries are
     executed in favor of the  Lenders,  then the  Holders  agree to release the
     obligations of the Guarantors under the Subsidiary Guaranty.

          5.   Representations  and  Warranties.  The  Company   represents  and
warrants to the Holders that:

          (a)  The Company has all requisite corporate power to execute, deliver
     and perform its obligations under this Second 2001 Amendment Agreement. The
     Company  has  duly  executed  and  delivered  this  Second  2001  Amendment
     Agreement,  and this Second 2001 Amendment Agreement constitutes the legal,
     valid and  binding  obligation  of the  Company,  enforceable  against  the
     Company in accordance with its terms.

          (b)  Neither the execution  and delivery of this 2001 Second Amendment
     Agreement  by  the  Company,  nor  the  consummation  of  the  transactions
     contemplated  hereby,  nor fulfillment of nor compliance with the terms and
     provisions  hereof or thereof will conflict  with, or result in a breach of
     the terms,  conditions or provisions of, or

                                       17

     constitute a default  under,  or result in any  violation of, or, except as
     contemplated by the Pledge  Agreement or herein,  result in the creation of
     any security interest, lien or other encumbrance upon any of the properties
     or  assets of the  Company  or any of its  Subsidiaries  pursuant  to,  the
     charter or bylaws of the Company or any of its  Subsidiaries,  any award of
     any  arbitrator or any  agreement,  instrument,  order,  judgment,  decree,
     statute,  law,  rule or  regulation  to  which  the  Company  or any of its
     Subsidiaries is subject.

          (c)  Except for notice  given to and consents  required  from the 1999
     Lenders,  the  lenders  under the 364 Day  Facility  and the holders of the
     Shelf Notes,  neither the nature of the business  conducted by the Company,
     nor any of its properties, nor any relationship between the Company and any
     other Person,  nor any  circumstance  in connection  with the  transactions
     contemplated by this Second 2001 Amendment  Agreement is such as to require
     any  authorization,  consent,  approval,  exemption  or other  action by or
     notice to or filing with any court or  administrative  or governmental body
     or any other Person in  connection  with the execution and delivery of this
     Second 2001 Amendment  Agreement or the  fulfillment of or compliance  with
     the terms and provisions hereof.

          (d)  Upon the effectiveness of this Second  2001 Amendment  Agreement,
     no Event of Default or Default shall have occurred and be continuing.

     6. Miscellaneous.

          (a)  Except  as  expressly  amended  by  this  Second  2001  Amendment
     Agreement,  the Note Agreements shall remain in full force and effect. This
     Second  2001  Amendment  Agreement  shall be binding  upon and inure to the
     benefit  of the  Holders  and their  respective  successors  and  permitted
     assigns.

          (b)  Other than as expressly set forth herein, the execution, delivery
     and effectiveness of this Second 2001 Amendment Agreement shall not operate
     as a waiver of any right,  power or remedy of any Holder nor  constitute  a
     waiver  of any  provision  of the Note  Agreements,  the Notes or any other
     document, instrument or agreement executed and delivered in connection with
     this Second 2001 Amendment Agreement.

          (c)  The Company  confirms its agreement, pursuant to each of the Note
     Agreements,  to pay all costs and  expenses of the Holders  related to this
     Second 2001 Amendment Agreement,  the Intercreditor  Agreement,  the Pledge
     Agreement and the Subsidiary Guaranty and all matters  contemplated herein,
     including  without  limitation  the  reasonable  fees and  expenses  of the
     Holders' special counsel.

          (d)  This  Second  2001  Amendment Agreement  shall be  construed  and
     enforced  in  accordance  with,  and the  rights  of the  parties  shall be
     governed  by,  the law of the  State

                                       18

     of New York,  excluding  choice-of-law  principles of the law of such State
     that would require the application of the laws of a jurisdiction other than
     such State.

          (e)  This Second  2001  Amendment  Agreement  may  be  executed in any
     number of  counterparts,  each of which shall be deemed an original and all
     of  which  taken  together  shall  constitute  one and the  same  document.
     Delivery of this Second 2001  Amendment  Agreement may be made by facsimile
     transmission of a duly executed counterpart copy hereof.

                            [signature pages follow]

     If the foregoing  correctly describes our understanding with respect to the
subject  matter of this Second 2001  Amendment  Agreement,  please  execute this
letter in the place indicated below.

                                             Very truly yours,

                                             LENNOX INTERNATIONAL INC.

                                             By:
                                                 -------------------------------
                                             Name: Richard A. Smith
                                             Title: Executive Vice President and
                                                    Chief Financial Officer

ACCEPTED AND AGREED:

THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA

By:
   -----------------------------
Name:   Ric E. Abel
Title:  Vice President

U.S. PRIVATE PLACEMENT FUND
By:  Prudential Private Placement Investors, L.P.,
     Investment Advisor
By:  Prudential Private Placement Investors, Inc.,
     its General Partner

     By:
            --------------------------------------
     Name:  Ric E. Abel
     Title: Vice President

TEACHERS INSURANCE AND ANNUITY
  ASSOCIATION OF AMERICA

By:
  -------------------------------
Name:
      ---------------------------
Title:
      ---------------------------

CIG & CO.

By:
  -------------------------------
Name:
      ---------------------------
Title:
      ---------------------------

UNITED OF OMAHA LIFE INSURANCE COMPANY

By:
  -------------------------------
Name:   Curtis R. Caldwell
Title:  First Vice President

MUTUAL OF OMAHA INSURANCE COMPANY

By:
  -------------------------------
Name:   Curtis R. Caldwell
Title:  First Vice President

COMPANION LIFE INSURANCE COMPANY

By:
  -------------------------------
Name:   Curtis R. Caldwell
Title:  Authorized Signer

UNITED WORLD LIFE INSURANCE COMPANY

By:
  -------------------------------
Name:   Curtis R. Caldwell
Title:  Authorized Signer

FIRST COLONY LIFE INSURANCE COMPANY

By:
  -------------------------------
Name:   Morian C. Mooers
Title:  Assistant Vice President and Investment Officer

GENERAL ELECTRIC CAPITAL ASSURANCE COMPANY

By:
  -------------------------------
Name:   Morian C. Mooers
Title:  Investment Officer

GE LIFE AND ANNUITY ASSURANCE COMPANY

By:
  -------------------------------
Name:   Morian C. Mooers
Title:  Investment Officer

cc:     Companion Life Insurance Company
        Attention:  Financial Division
        401 Theodore Fremd Avenue
        Rye, NY 10580-1493

                                                                       Exhibit A

                           Form of Subsidiary Guaranty

A-1

                                  Schedule 10.4

                            LENNOX INTERNATIONAL INC.
                           AND RESTRICTED SUBSIDIARIES
                               INDEBTEDNESS AS OF
                         May 26, 2001 (except as noted)

A.   LENNOX 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

B.   SERVICE EXPERTS INC.

               Convertible   Notes  and  miscellaneous  debt           9,981,479
               related to original

               acquisitions of centers

     C.   MISCELLANEOUS OTHER DEBT -(estimate)]                          125,000

     TOTAL OUTSTANDING  INDEBTEDNESS OF LENNOX INTERNATIONAL
     INC. AND RESTRICTED SUBSIDIARIES                               $615,347,241

                                             SCHEDULE 10.5

                                             EXISTING LIENS

    Jurisdiction                    Secured Party                         Ucc-1 File No.      Date Filed

                              DEBTOR: LENNOX INDUSTRIES INC.

Texas Secretary of            Wachovia Bank, N.A.,                          00-00521016         6/16/00
State                         as Administrative Agent
                              for the Secured Parties
                              191 Peachtree Street, N.E
                              Mail Code GA 04-23
                              Atlanta, GA  30303

                              DEBTOR: ARMSTRONG AIR CONDITIONING INC

Ohio Secretary of State       Wachovia Bank, N.A.,                          AP322733            3/27/01
                              as Administrative Agent
                              for the Secured Parties
                              191 Peachtree Street, N.E
                              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
                              191 Peachtree Street, N.E
                              Mail Code GA 04-23
                              Atlanta, GA  30303

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