EXHIBIT 4.9
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FORM OF
AMENDED AND RESTATED DECLARATION OF TRUST
OF
LENNOX TRUST [I] [II]
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DATED AS OF ________________, ____
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TABLE OF CONTENTS
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<Caption>
PAGE
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ARTICLE 1 Definitions...................................................................................1
SECTION 1.01 Definitions..................................................................................1
ARTICLE 2 Trust Indenture Act...........................................................................8
SECTION 2.01 Trust Indenture Act; Application.............................................................8
SECTION 2.02 Lists of Holders of Preferred Securities.....................................................9
SECTION 2.03 Reports by the Property Trustee..............................................................9
SECTION 2.04 Periodic Reports to the Property Trustee.....................................................9
SECTION 2.05 Evidence of Compliance with Conditions Precedent............................................10
SECTION 2.06 Events of Default; Waiver...................................................................10
SECTION 2.07 Disclosure of Information...................................................................11
ARTICLE 3 Organization.................................................................................12
SECTION 3.01 Name........................................................................................12
SECTION 3.02 Office......................................................................................12
SECTION 3.03 Issuance of the Securities..................................................................12
SECTION 3.04 Purchase of Debentures......................................................................13
SECTION 3.05 Purpose.....................................................................................13
SECTION 3.06 Authority...................................................................................14
SECTION 3.07 Title to Property of the Trust..............................................................14
SECTION 3.08 Powers and Duties of the Regular Trustees...................................................14
SECTION 3.09 Prohibition of Actions by the Trust and the Trustees........................................16
SECTION 3.10 Powers and Duties of the Property Trustee...................................................18
SECTION 3.11 Delaware Trustee............................................................................21
SECTION 3.12 Certain Rights and Duties of the Property Trustee...........................................21
SECTION 3.13 Registration Statement and Related Matters..................................................24
SECTION 3.14 Filing of Amendments to Certificate of Trust................................................25
SECTION 3.15 Execution of Documents by the Regular Trustees..............................................25
SECTION 3.16 Trustees Not Responsible for Recitals or Issuance of Securities.............................26
SECTION 3.17 Duration of the Trust.......................................................................26
SECTION 3.18 Mergers.....................................................................................26
SECTION 3.19 Property Trustee May File Proofs of Claim...................................................28
ARTICLE 4 Sponsor......................................................................................29
SECTION 4.01 Purchase of Common Securities by the Sponsor................................................29
SECTION 4.02 Expenses....................................................................................29
SECTION 4.03 Holder of the Common Securities.............................................................30
ARTICLE 5 Trustees.....................................................................................30
SECTION 5.01 Number of Trustees; Qualifications..........................................................30
SECTION 5.02 Appointment, Removal and Resignation of the Trustees........................................32
SECTION 5.03 Vacancies among the Trustees................................................................33
</Table>
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<Table>
SECTION 5.04 Effect of Vacancies.........................................................................33
SECTION 5.05 Meetings....................................................................................34
SECTION 5.06 Delegation of Power.........................................................................34
SECTION 5.07 Merger, Conversion, Consolidation or Succession to Business.................................34
ARTICLE 6 Distributions................................................................................35
SECTION 6.01 Distributions...............................................................................35
ARTICLE 7 Issuance of the Securities...................................................................35
SECTION 7.01 General Provisions Regarding the Securities.................................................35
[SECTION 7.02 Conversion Agent............................................................................36
ARTICLE 8 Dissolution of the Trust.....................................................................37
SECTION 8.01 Dissolution of the Trust....................................................................37
ARTICLE 9 Transfer of Interests........................................................................37
SECTION 9.01 Transfer of Securities......................................................................37
SECTION 9.02 Transfer of Certificates....................................................................38
SECTION 9.03 Deemed Security Holders.....................................................................38
SECTION 9.04 Book-Entry Interests........................................................................38
SECTION 9.05 Notices to Holders of Certificates..........................................................39
SECTION 9.06 Appointment of Successor Clearing Agency....................................................39
SECTION 9.07 Definitive Preferred Security Certificates..................................................40
SECTION 9.08 Mutilated, Destroyed, Lost or Stolen Certificates...........................................40
ARTICLE 10 Limitation of Liability; Indemnification.....................................................40
SECTION 10.01 Exculpation.................................................................................40
SECTION 10.02 Indemnification.............................................................................41
SECTION 10.03 Outside Business............................................................................41
ARTICLE 11 Accounting...................................................................................42
SECTION 11.01 Fiscal Year.................................................................................42
SECTION 11.02 Certain Accounting Matters..................................................................42
SECTION 11.03 Banking.....................................................................................43
SECTION 11.04 Withholding.................................................................................43
ARTICLE 12 Amendments and Meetings......................................................................43
SECTION 12.01 Amendments..................................................................................43
SECTION 12.02 Meetings of the Holders of Securities; Action by Written Consent............................44
ARTICLE 13 Representations of the Property Trustee and the Delaware Trustee.............................46
SECTION 13.01 Representations and Warranties of the Property Trustee......................................46
SECTION 13.02 Representations and Warranties of the Delaware Trustee......................................46
ARTICLE 14 Miscellaneous................................................................................47
SECTION 14.01 Notices.....................................................................................47
</Table>
iii
<Table>
SECTION 14.02 Undertaking for Costs....................................................................48
SECTION 14.03 Governing Law............................................................................49
SECTION 14.04 Headings.................................................................................49
SECTION 14.05 Partial Enforceability...................................................................49
SECTION 14.06 Counterparts.............................................................................49
SECTION 14.07 Intention of the Parties.................................................................49
SECTION 14.08 Successors and Assigns...................................................................50
SECTION 14.09 No Recourse..............................................................................50
</Table>
EXHIBIT A: CERTIFICATE OF TRUST
EXHIBIT B: TERMS OF THE PREFERRED SECURITIES
EXHIBIT C: TERMS OF THE COMMON SECURITIES
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AMENDED AND RESTATED DECLARATION OF TRUST
OF
LENNOX TRUST [I] [II]
AMENDED AND RESTATED DECLARATION OF TRUST (this "Declaration")
dated and effective as of ________________, ____ by ____________, an individual,
____________, an individual, and ____________, an individual, as Regular
Trustees, The Bank of New York, a New York banking corporation, as Property
Trustee, The Bank of New York (Delaware), a Delaware banking corporation, as
Delaware Trustee, Lennox International Inc., a Delaware corporation, as trust
sponsor ("Lennox" or the "Sponsor"), and the holders, from time to time, of
undivided beneficial interests in the assets of the Trust (as hereinafter
defined) to be issued pursuant to this Declaration.
WHEREAS, the Sponsor and certain of the Trustees entered into a
Declaration of Trust dated as of January 23, 2003 (the "Original Declaration")
in order to establish Lennox Trust [I] [II], a statutory trust (the "Trust"),
under the Statutory Trust Act (as hereinafter defined);
WHEREAS, the Certificate of Trust of the Trust (the
"Certificate of Trust") was filed with the office of the Secretary of State of
the State of Delaware on January 23, 2003; and
WHEREAS, the Trustees and the Sponsor desire to continue the
Trust pursuant to the Statutory Trust Act for the purpose of, as described more
fully in Sections 3.03, 3.04 and 3.05 hereof, (i) issuing and selling Preferred
Securities (as hereinafter defined) representing preferred undivided beneficial
interests in the assets of the Trust for cash and investing the proceeds thereof
in Debentures (as hereinafter defined) of Lennox issued under the Indenture (as
hereinafter defined) to be held as assets of the Trust and (ii) issuing and
selling Common Securities (as hereinafter defined) representing common undivided
beneficial interests in the assets of the Trust to Lennox in exchange for cash
and investing the proceeds thereof in additional Debentures issued under the
Indenture to be held as assets of the Trust;
NOW, THEREFORE, it being the intention of the parties hereto
that the Trust constitute a statutory trust under the Statutory Trust Act, that
the Original Declaration be amended and restated in its entirety as provided
herein and that this Declaration constitute the governing instrument of such
statutory trust, the Trustees declare that all Debentures referred to in clauses
(i) and (ii) of the previous paragraph purchased by the Trust will be held for
the benefit of the Holders (as hereinafter defined) from time to time, of
Certificates (as hereinafter defined) representing undivided beneficial
interests in the assets of the Trust issued hereunder, subject to the provisions
of this Declaration.
ARTICLE 1
DEFINITIONS
SECTION 1.01 Definitions.
(a) Capitalized terms used in this Declaration but not defined
in the preamble or recitals above have the respective meanings assigned to them
in this Section 1.01.
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(b) A term defined anywhere in this Declaration has the same
meaning throughout.
(c) All references to "the Declaration" or "this Declaration"
are to this Amended and Restated Declaration of Trust (including Exhibits A, B
and C hereto (the "Exhibits")) as modified, supplemented or amended from time to
time.
(d) All references in this Declaration to Articles, Sections
and Exhibits are to Articles and Sections of and Exhibits to this Declaration
unless otherwise specified.
(e) A term defined in the Trust Indenture Act has the same
meaning when used in this Declaration unless otherwise defined in this
Declaration or unless the context otherwise requires.
(f) A reference to the singular includes the plural and vice
versa.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by, or under direct or indirect
common control with, such specified Person. For the purposes of this definition,
"control" of a Person shall mean the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" shall have meanings correlative to the foregoing.
"Book-Entry Interest" means a beneficial interest in a Global
Certificate registered in the name of a Clearing Agency or a nominee thereof,
ownership and transfers of which shall be maintained and made through book
entries by such Clearing Agency as described in Section 9.04.
"Business Day" means any day that is not a Legal Holiday.
"Certificate" means a Common Security Certificate or a
Preferred Security Certificate.
"Certificate of Trust" has the meaning set forth in the
recitals above.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as
depositary for the Preferred Securities and in whose name or in the name of a
nominee of that organization shall be registered a Global Certificate and which
shall undertake to effect book-entry transfers and pledges of the Preferred
Securities.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time the
Clearing Agency effects book-entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Date" means the Closing Date as specified in the
Underwriting Agreement, which date is also the date of execution and delivery of
this Declaration.
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"Code" means the Internal Revenue Code of 1986, as amended from
time to time, or any successor legislation. A reference to a specific section
(Sec.) of the Code refers not only to such specific section but also to any
corresponding provision of any U.S. federal tax statute enacted after the date
of this Declaration, as such specific section or corresponding provision is in
effect on the date of application of the provisions of this Declaration
containing such reference.
"Commission" means the Securities and Exchange Commission.
"Common Securities" has the meaning specified in Section
7.01(b).
"Common Security Certificate" means a definitive certificate in
fully registered form representing a Common Security substantially in the form
of Annex I to Exhibit C.
["Conversion Agent" has the meaning specified in Section 7.02.]
"Covered Person" means (i) any officer, director, shareholder,
partner, member, representative, employee or agent of the Trust or of any of its
Affiliates, (ii) any officer, director, shareholder, employee, representative or
agent of Lennox or of any of its Affiliates and (iii) any Holder from time to
time of the Securities.
"Creditor" has the meaning specified in Section 4.02(c).
"Debenture Trustee" means The Bank of New York, a New York
banking corporation, as trustee under the Indenture until a successor is
appointed thereunder and thereafter means such successor trustee.
"Debentures" means the series of [convertible] unsecured
[senior] [junior] [subordinated] debentures issued to the Property Trustee by
the Sponsor under the Indenture and entitled the "___% [Convertible] [Senior]
[Junior] [Subordinated] Debentures due ____."
"Definitive Preferred Security Certificates" has the meaning
set forth in Section 9.04.
"Delaware Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.01(a)(3).
"Depositary Agreement" means the agreement among the Trust, the
Property Trustee and DTC dated as of the Closing Date, as the same may be
amended or supplemented from time to time.
"Distribution" means a distribution payable to Holders of
Securities in accordance with Section 6.01.
"Dollar" or "$" has the meaning set forth in the Indenture.
"DTC" means The Depository Trust Company, the initial Clearing
Agency.
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"Event of Default" in respect of the Securities means that an
Indenture Event of Default has occurred and is continuing with respect to the
Debentures.
"Exchange" has the meaning specified in Section 3.13.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
"Fiscal Year" has the meaning specified in Section 11.01.
"Foreign Person" means any Person that is not a United States
Person.
"Global Certificate" has the meaning set forth in Section 9.04.
"Holder" means a Person in whose name a Certificate
representing a Security is registered, such Person being a beneficial owner
within the meaning of the Statutory Trust Act.
"Holder Direct Action" has the meaning specified in Section
3.10(e).
"Indemnified Person" means any Trustee, any Affiliate of any
Trustee, [any Conversion Agent,] any Paying Agent, any officer, director,
shareholder, member, partner, employee, representative or agent of any Trustee[,
Conversion Agent] or Paying Agent, or any employee or agent of the Trust or of
any of its Affiliates, including but not limited to any officer or director of
the Sponsor.
"Indenture" means the Indenture, dated as of _____________,
____, between Lennox and the Debenture Trustee, as supplemented by the
Supplemental Indenture.
"Indenture Event of Default" means that an event or condition
defined as an "Event of Default" with respect to the Debentures under Section
6.01 of the Indenture [or Section ___ of the Supplemental Indenture] has
occurred and is continuing.
"Investment Company" means an "investment company" as defined
in the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Legal Action" has the meaning specified in Section 3.08(g).
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in any of The City of New York, New York or Dallas, Texas
are authorized or obligated by law, regulation or executive order to remain
closed.
"Lennox" or "Sponsor" means Lennox International Inc., a
Delaware corporation, or any successor entity resulting from any merger,
consolidation, amalgamation or other business combination, in its capacity as
sponsor of the Trust.
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"Liquidation Distribution" has the meaning set forth in
Exhibits B and C hereto establishing the terms of the Securities.
"List of Holders" has the meaning specified in Section
2.02(a).
"Majority in liquidation amount of the Securities" means,
except as provided in the penultimate paragraph of Section [6](b) of Exhibit B
hereto, Holder(s) of outstanding Securities voting together as a single class
or, as the context may require, Holder(s) of outstanding Preferred Securities or
Common Securities voting separately as a class, who are the record owners of a
relevant class of Securities whose liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus
accumulated and unpaid Distributions to the date upon which the voting
percentages are determined) represents more than 50% of the liquidation amount
of all outstanding Securities of such class.
"nationally recognized statistical rating organization" has
the meaning specified for purposes of Rule 436(g)(2) under the Securities Act.
"1933 Act Registration Statement" has the meaning specified in
Section 3.13.
"1934 Act Registration Statement" has the meaning specified in
Section 3.13.
"Officers' Certificate" means a certificate signed by any two
of the Chairman of the Board, the President, any Vice Chairman of the Board, any
Vice President, the Chief Financial Officer, the Treasurer, any Assistant
Treasurer, the Controller, the Secretary or any Assistant Secretary of the
Sponsor, and delivered to the appropriate Trustee. One of the officers signing
an Officers' Certificate given pursuant to Section 2.04 shall be the principal
executive, financial or accounting officer of the Sponsor. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer making such certificate has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate are based;
(c) a statement that, in the opinion of such officer, he or
she has made such examination or investigation as is necessary to
enable him or her to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(d) a statement as to whether or not, in the opinion of such
officer, such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion from legal
counsel that (i) may be counsel for the Trust, the Property Trustee or the
Sponsor, (ii) may be an employee of the Sponsor but not an employee of the Trust
or the Property Trustee, and (iii) shall be reasonably acceptable to the
Property Trustee. Any Opinion of Counsel pertaining to U.S. federal income
5
tax matters may rely, inter alia, on published rulings or other official
pronouncements of the Internal Revenue Service.
"Original Declaration" has the meaning set forth in the
recitals above.
["Over-allotment Closing Date" means the date determined
pursuant to the Underwriting Agreement for the closing of the Over-allotment
Option.]
["Over-allotment Option" means any over-allotment option
contained in the Underwriting Agreement.]
"Paying Agent" has the meaning specified in Section 3.10(i).
"Payment Amount" has the meaning specified in Section 6.01.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, incorporated or unincorporated
association, joint stock company, trust, unincorporated organization or
government or other agency, instrumentality or political subdivision thereof or
other entity of any kind.
"Preferred Securities" has the meaning specified in Section
7.01(b).
"Preferred Securities Guarantee" means the Guarantee
Agreement, dated as of ___________, ____, between Lennox and The Bank of New
York, a New York banking corporation, as initial guarantee trustee thereunder,
in respect of the Preferred Securities.
"Preferred Security Beneficial Owner" means, with respect to a
Book-Entry Interest, a Person who is the beneficial owner of such Book-Entry
Interest, as reflected on the books of the applicable Clearing Agency, or on the
books of a Person maintaining an account with such Clearing Agency (directly as
a Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Preferred Security Certificate" means a definitive
certificate in fully registered form representing a Preferred Security
substantially in the form of Annex I to Exhibit B.
"Property Account" has the meaning specified in Section
3.10(c)(i).
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.01(c) and having the duties set forth for
the Property Trustee herein.
"Quorum" means a majority of the Regular Trustees or, if there
are only two Regular Trustees, both such Regular Trustees.
"Regular Trustee" means any Trustee other than the Property
Trustee and the Delaware Trustee.
"Resignation Request" has the meaning specified in Section
5.02(c).
6
"Responsible Officer" means, when used with respect to the
Property Trustee, any officer within the corporate trust department of the
Property Trustee, including any vice president, assistant vice president,
assistant secretary, assistant treasurer, trust officer or any other officer of
the Property Trustee who customarily performs functions similar to those
performed by the Persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred because of such Person's
knowledge of and familiarity with the particular subject and who shall have
direct responsibility for the administration of this Declaration.
"Rule 3a-7" means Rule 3a-7 under the Investment Company Act
or any successor rule thereunder.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
["Shares" means the common stock, par value $0.01 per share,
of Lennox, including associated preferred share purchase rights, or any other
class of stock, other securities, cash or other assets into which the Debentures
are then convertible.]
"Special Event" has the meaning set forth in the terms of the
Securities as set forth in Section 4 of Exhibits B and C hereto.
"Statutory Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from time
to time, or any successor legislation.
"Successor Delaware Trustee" has the meaning specified in
Section 5.02(a)(ii).
"Successor Entity" has the meaning specified in Section
3.18(b)(i).
"Successor Property Trustee" has the meaning specified in
Section 5.02(a)(i).
"Successor Securities" has the meaning specified in Section
3.18(b)(i)(B).
"Super Majority" has the meaning specified in Section
2.06(a)(ii).
"Supplemental Indenture" means the _____ Supplemental
Indenture, dated as of ______________, _____, between Lennox and the Debenture
Trustee, or any officers' certificate or other writing under the Indenture, in
each case establishing the form and terms of the Debentures as permitted by
Section 2.01 of the Indenture.
"10% in liquidation amount of the Securities" means, except as
provided in the penultimate paragraph of Section [6](b) of Exhibit B hereto,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holder(s) of outstanding Preferred Securities or Common
Securities, voting separately as a class, who are the record owners of a
relevant class of Securities whose liquidation amount (including the stated
amount
7
that would be paid on redemption, liquidation or otherwise, plus accumulated and
unpaid Distributions to the date upon which the voting percentages are
determined) represents 10% or more of the liquidation amount of all outstanding
Securities of such class.
"Treasury Regulations" means the income tax regulations,
including temporary and proposed regulations, promulgated under the Code by the
United States Treasury, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"Trust" has the meaning set forth in the recitals above.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement
dated _________________, _____ among the Trust, the Sponsor and the underwriters
named therein.
"United States Person" means a United States person for U.S.
federal income tax purposes.
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.01 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this
Declaration limits, qualifies or conflicts with the duties imposed by Sections
310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
(c) The Property Trustee, to the extent permitted by
applicable law and/or the rules and regulations of the Commission, shall be the
only Trustee which is a trustee for the purposes of the Trust Indenture Act.
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
8
SECTION 2.02 Lists of Holders of Preferred Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of
the Trust shall provide the Property Trustee, unless the Property Trustee is
registrar for the Securities, (i) on each regular record date for payment of
Distributions, a list, in such form as the Property Trustee may reasonably
require, of the names and addresses of the Holders ("List of Holders") as of
such record date, and (ii) at any other time, within 30 days of receipt by the
Trust of a written request for a List of Holders, a List of Holders as of a date
no more than 15 days before such List of Holders is given to the Property
Trustee; provided that in each case neither the Sponsor nor the Regular Trustees
on behalf of the Trust shall be obligated to provide such List of Holders at any
time that the List of Holders does not differ from the most recent List of
Holders given to the Property Trustee by the Sponsor and the Regular Trustees on
behalf of the Trust. The Property Trustee shall preserve, in as current a form
as is reasonably practicable, all information contained in the Lists of Holders
given to it or which it receives in the capacity as Paying Agent (if acting in
such capacity); provided that the Property Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations
under Sections 310(b), 311 and 312(b) of the Trust Indenture Act.
SECTION 2.03 Reports by the Property Trustee.
Within 60 days after May 15 of each year, commencing May 15,
____, the Property Trustee shall deliver to the Holders of the Securities such
reports as are required by Section 313 of the Trust Indenture Act, if any, in
the form, in the manner and at the times provided by Section 313 of the Trust
Indenture Act. The Property Trustee shall also comply with the other
requirements of Section 313 of the Trust Indenture Act. A copy of each such
report shall, at the time of such transmission to Holders, be filed by the
Property Trustee with the Sponsor, with each Exchange upon which any Preferred
Securities are listed or traded (if so listed or traded) and also with the
Commission. The Sponsor agrees to notify the Property Trustee when any Preferred
Securities become listed or traded on any Exchange and of any delisting thereof.
SECTION 2.04 Periodic Reports to the Property Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Property Trustee, the Commission and the Holders of
the Securities, as applicable, such documents, reports and information (if any)
as required by Section 314(a)(1)-(3) of the Trust Indenture Act and the
compliance certificates required by Section 314(a)(4) and (c) of the Trust
Indenture Act, any such certificates to be provided in the form, in the manner
and at the times required by Section 314(a)(4) and (c) of the Trust Indenture
Act; provided that any certificate to be provided pursuant to Section 314(a)(4)
of the Trust Indenture Act shall be provided within 120 days of the end of each
Fiscal Year. Delivery of such reports, information and documents to the Property
Trustee is for informational purposes only and the Property Trustee's receipt
thereof shall not constitute constructive notice of any information contained
therein, including the Sponsor's compliance with any of its covenants hereunder
(as to which the Property Trustee is entitled to
9
rely exclusively on Officers' Certificates or on certificates provided pursuant
to this Section 2.04).
SECTION 2.05 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent provided for in this Declaration which relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to Section 314(c) may be
given in the form of an Officers' Certificate.
SECTION 2.06 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of
Preferred Securities may, by vote, on behalf of the Holders of all of the
Preferred Securities, waive any past Event of Default in respect of the
Preferred Securities and its consequences; provided that, if the underlying
Indenture Event of Default:
(i) is not waivable under the Indenture, the Event of Default
under this Declaration shall also not be waivable; or
(ii) requires the consent or vote of the holders of greater
than a majority in aggregate principal amount of the Debentures (a
"Super Majority") to be waived under the Indenture, the Event of
Default under this Declaration may only be waived by the vote of the
Holders of at least the proportion in aggregate liquidation amount of
the Preferred Securities that the relevant Super Majority represents of
the aggregate principal amount of the Debentures outstanding.
The foregoing provisions of this Section 2.06(a) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote or
consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the
Common Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences; provided that, if the underlying Indenture
Event of Default:
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(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived such Event
of Default under this Declaration as provided above in Section 2.06(a)
or below in this Section 2.06(b), the Event of Default under this
Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be
waived, except where the Holders of the Common Securities are deemed to
have waived such Event of Default under this Declaration as provided
above in Section 2.06(a) or below in this Section 2.06(b), the Event of
Default under this Declaration may be waived only by the vote of the
Holders of at least the proportion in aggregate liquidation amount of
the Common Securities that the relevant Super Majority represents of
the aggregate principal amount of the Debentures outstanding;
provided, further, that the Holders of Common Securities will be deemed to have
waived any such Event of Default and all Events of Defaults with respect to the
Common Securities and their consequences until all Events of Default with
respect to the Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be acting solely on
behalf of the Holders of the Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Property Trustee in
accordance with the terms of the Securities. The foregoing provisions of this
Section 2.06(b) shall be in lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of
the Trust Indenture Act and such Sections 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act are hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. In the event that any Event
of Default with respect to the Preferred Securities is waived by the Holders of
Preferred Securities as provided in this Declaration, the Holders of Common
Securities agree that such waiver shall also constitute the waiver of such Event
of Default with respect to the Common Securities for all purposes under this
Declaration without any further act, vote or consent of the Holders of the
Common Securities. Subject to the foregoing provisions of this Section 2.06(b),
upon such waiver, any such default shall cease to exist and any Event of Default
with respect to the Common Securities arising therefrom shall be deemed to have
been cured for every purpose of this Declaration, but no such waiver shall
extend to any subsequent or other default or Event of Default with respect to
the Common Securities or impair any right consequent thereon.
(c) A waiver of an Indenture Event of Default by the Property
Trustee, at the direction of the Holders of Preferred Securities, constitutes a
waiver of the corresponding Event of Default under this Declaration. The
foregoing provisions of this Section 2.06(c) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.
SECTION 2.07 Disclosure of Information.
The disclosure of information as to the names and addresses of
the Holders of the Securities in accordance with Section 312 of the Trust
Indenture Act, regardless of the source from which such information was derived,
shall not be deemed to be a violation of any existing law, or
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any law hereafter enacted which does not specifically refer to Section 312 of
the Trust Indenture Act, nor shall the Property Trustee be held accountable by
reason of mailing any material pursuant to a request made under Section 312(b)
of the Trust Indenture Act.
ARTICLE 3
ORGANIZATION
SECTION 3.01 Name.
The Trust continued by this Declaration is named "Lennox Trust
[I] [II]" as such name may be modified from time to time by the Regular Trustees
following written notice to the Holders of the Securities. The Trust's
activities may be conducted under the name of the Trust or any other name deemed
advisable by the Regular Trustees.
SECTION 3.02 Office.
The address of the principal office of the Trust is c/o Lennox
International Inc., 2140 Lake Park Boulevard, Dallas, Texas 75080. Upon ten
days' written notice to the Holders, the Regular Trustees may change the
location of the Trust's principal office.
SECTION 3.03 Issuance of the Securities.
On ______________, _____, the Sponsor, on behalf of the Trust
and pursuant to the Original Declaration, executed and delivered the
Underwriting Agreement. On the Closing Date and contemporaneously with the
execution and delivery of this Declaration, the Regular Trustees, on behalf of
the Trust, shall execute and deliver (i) one or more Global Certificates,
registered in the name of the nominee of the initial Clearing Agency as
specified in Section 9.04 for the benefit of the underwriters named in the
Underwriting Agreement, in an aggregate amount of ____________ Preferred
Securities having an aggregate liquidation amount of $____________, against
receipt of the aggregate purchase price of such Preferred Securities of
$____________, and (ii) to the Sponsor, one or more Common Security
Certificates, registered in the name of the Sponsor, in an aggregate amount of
_________ Common Securities having an aggregate liquidation amount of
$___________, against receipt of the aggregate purchase price of such Common
Securities of $___________.
[In the event of the exercise of the Over-allotment Option, on
the Over-allotment Closing Date, the Regular Trustees, on behalf of the Trust,
shall execute and deliver (i) one or more Global Certificates, registered in the
name of the nominee of the initial Clearing Agency as specified in Section 9.04
for the benefit of the underwriters named in the Underwriting Agreement, in an
aggregate amount not to exceed _____ Preferred Securities having an aggregate
liquidation amount of not in the excess of $_________, against receipt of the
aggregate purchase price of such Preferred Securities pursuant to the
Underwriting Agreement, and (ii) to the Sponsor, one or more Common Security
Certificates, registered in the name of the Sponsor, in an aggregate amount not
to exceed _____ Common Securities having an aggregate liquidation amount of not
in excess of $________, against receipt of the aggregate purchase price of such
Common Securities pursuant to the Underwriting Agreement.]
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SECTION 3.04 Purchase of Debentures.
On the Closing Date and contemporaneously with the execution
and delivery of this Declaration, the Regular Trustees, on behalf of the Trust,
shall purchase from the Sponsor with the proceeds received by the Trust from the
sale of the Securities on such date pursuant to Section 3.03, at a purchase
price of 100% of the principal amount thereof, Debentures, registered in the
name of the Property Trustee and having an aggregate principal amount equal to
$___________, and, in satisfaction of the purchase price for such Debentures,
the Property Trustee, on behalf of the Trust, shall deliver or cause to be
delivered to the Sponsor the sum of $___________.
[In the event of the exercise of the Over-allotment Option, on
the Over-allotment Closing Date, the Regular Trustees, on behalf of the Trust,
shall purchase from the Sponsor with the proceeds received by the Trust from the
sale of Securities on such date pursuant to Section 3.03, at a purchase price of
100% of the principal amount thereof, Debentures, registered in the name of the
Property Trustee and having an aggregate principal amount not in excess of
$________, in satisfaction of the purchase price for such Debentures, the
Property Trustee, on behalf of the Trust, shall deliver or cause to be delivered
to the Sponsor an amount equal to the aggregate principal amount of the
Debentures being purchased, plus accrued interest to the date of purchase.]
SECTION 3.05 Purpose.
The exclusive purposes and functions of the Trust are: (a)(i)
to issue and sell Preferred Securities for cash and use the proceeds of such
sales to acquire from the Sponsor, and hold and dispose of, in accordance with
this Declaration, Debentures issued under the Indenture having an aggregate
principal amount equal to the aggregate liquidation amount of the Preferred
Securities so issued and sold; (ii) to enter into such agreements and
arrangements as may be necessary in connection with the sale of Preferred
Securities to the initial purchasers thereof (including the Underwriting
Agreement) and to take all action, and exercise such discretion, as may be
necessary or desirable in connection therewith and to file such registration
statements or make such other filings under the Securities Act, the Exchange Act
or state securities or "Blue Sky" laws as may be necessary or desirable in
connection therewith and with the issuance of the Preferred Securities; and
(iii) to issue and sell Common Securities to the Sponsor for cash and use the
proceeds of such sale to purchase from the Sponsor, and hold and dispose of, in
accordance with this Declaration, Debentures issued under the Indenture having
an aggregate principal amount equal to the aggregate liquidation amount of the
Common Securities so issued and sold; and (b) except as otherwise limited
herein, to engage in only those other activities necessary or incidental
thereto, including such other activities specifically authorized in this
Declaration. The Trust shall not borrow money, issue debt or reinvest proceeds
derived from investments, mortgage or pledge any of its assets or at any time
while the Securities are outstanding otherwise undertake (or permit to be
undertaken) any activity that would result in or cause the Trust not to be
classified for U.S. federal income tax purposes as a grantor trust.
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SECTION 3.06 Authority.
Subject to the limitations provided in this Declaration and to
the specific duties of the Property Trustee and the Sponsor, the Regular
Trustees shall have exclusive and complete authority to carry out the purposes
of the Trust. An action taken by the Regular Trustees in accordance with their
powers shall constitute the act of and serve to bind the Trust and an action
taken by the Property Trustee on behalf of the Trust in accordance with its
powers shall constitute the act of and serve to bind the Trust. In dealing with
the Trustees acting on behalf of the Trust, no Person shall be required to
inquire into the authority of the Trustees to bind the Trust. Persons dealing
with the Trust are entitled to rely conclusively on the power and authority of
the Trustees as set forth in this Declaration.
SECTION 3.07 Title to Property of the Trust.
Except as provided in Section 3.10 with respect to the
Debentures and the Property Account or unless otherwise provided in this
Declaration, legal title to all assets of the Trust shall be vested in the
Trust. The Holders shall not have legal title to any part of the assets of the
Trust, but shall have undivided beneficial interests in the assets of the Trust.
SECTION 3.08 Powers and Duties of the Regular Trustees.
Each Regular Trustee shall be a United States Person. The
Regular Trustees shall have the exclusive power, authority and duty to cause the
Trust, and shall cause the Trust, to engage in the following activities:
(a) to issue Preferred Securities and Common Securities, in
each case in accordance with this Declaration; provided, however, that
the Trust may issue no more than one series of Preferred Securities and
no more than one series of Common Securities; provided further, that
there shall be no interests in the Trust other than the Securities and
the issuance of Securities shall be limited to one-time, simultaneous
issuances of both Preferred Securities and Common Securities on the
Closing Date[, subject to the issuance of additional Preferred
Securities and Common Securities pursuant to the exercise of any
Over-allotment Option];
(b) in connection with the issuance of the Preferred
Securities, at the direction of the Sponsor, to effect or cause to be
effected the filings, and to execute or cause to be executed, the
documents, set forth in Section 3.13 and, if directed by the Sponsor,
to execute, deliver and perform the Depositary Agreement on behalf of
the Trust;
(c) to acquire as trust assets Debentures with the proceeds of
the sale of the Preferred Securities and the Common Securities;
provided, however, that the Regular Trustees shall cause legal title to
all of the Debentures to be vested in, and the Debentures to be held of
record in the name of, the Property Trustee for the benefit of the
Holders of the Preferred Securities and the Common Securities;
(d) if and to the extent that the Sponsor on behalf of the
Trust has not already done so, at the direction of the Sponsor, to
cause the Trust to enter into the Underwriting
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Agreement and such other agreements and arrangements as may be
necessary or desirable in connection with the sale of the Preferred
Securities to the initial purchasers thereof and the consummation
thereof, and to take all action, and exercise all discretion, as may be
necessary or desirable in connection with the consummation thereof;
(e) to give the Sponsor and the Property Trustee prompt
written notice of the occurrence of a Special Event;
(f) to establish a record date with respect to all actions to
be taken hereunder that require a record date be established, including
for the purposes of Section 316(c) of the Trust Indenture Act and with
respect to Distributions, voting rights, redemptions and exchanges, and
to issue relevant notices to Holders of the Preferred Securities and
Common Securities as to such actions and applicable record dates;
(g) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action or otherwise adjust claims or demands of or
against the Trust ("Legal Action"), unless pursuant to Section 3.10,
the Property Trustee has the exclusive power to bring such Legal
Action;
(h) to employ or otherwise engage employees and agents (who
may be designated as officers with titles) and managers, contractors,
advisors and consultants and pay reasonable compensation for such
services; provided that any Person so employed or engaged is a United
States Person;
(i) to cause the Trust to comply with the Trust's obligations
under the Trust Indenture Act;
(j) to give the certificate to the Property Trustee required
by Section 314(a)(4) of the Trust Indenture Act, which certificate may
be executed by any Regular Trustee;
(k) to incur expenses which are necessary or incidental to
carrying out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar
and transfer agent for the Securities, the Regular Trustees hereby
initially appointing the Property Trustee for such purposes;
(m) to take all actions and perform such duties as may be
required of the Regular Trustees pursuant to the terms of the
Securities set forth in Exhibits B and C hereto;
(n) to take all actions which may be necessary or appropriate
for the preservation and the continuation of the Trust's valid
existence, rights, franchises and privileges as a statutory trust under
the laws of the State of Delaware and of each other jurisdiction in
which such existence is necessary to protect the limited liability of
the Holders of the Securities or to enable the Trust to effect the
purposes for which the Trust has been created;
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(o) to take all actions, not inconsistent with this
Declaration, the Certificate of Trust or applicable law, which the
Regular Trustees determine in their discretion to be necessary or
desirable in carrying out the purposes of the Trust and the activities
of the Trust as set out in this Section 3.08, including, but not
limited to:
(i) causing the Trust not to be deemed to be an
Investment Company required to be registered under the
Investment Company Act;
(ii) causing the Trust to be classified for U.S.
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Sponsor to ensure that the
Debentures will be treated as indebtedness of the Sponsor for
U.S. federal income tax purposes;
(p) to take all actions necessary to cause all applicable tax
returns and tax information reports and forms that are required to be
filed with respect to the Trust to be duly prepared and filed by the
Regular Trustees, on behalf of the Trust, and to comply with any
applicable requirements imposed by any taxing authority on holders of
instruments treated as indebtedness for U.S. federal income tax
purposes;
(q) subject to the requirements of Rule 3a-7 (if the Trust is
excluded from the definition of an Investment Company solely by reason
of Rule 3a-7) and Section 317(b) of the Trust Indenture Act, to
appoint, in conjunction with the Property Trustee, one or more Paying
Agents in addition to the Property Trustee; and
(r) to execute all documents or instruments, perform all
duties and powers and do all things for and on behalf of the Trust in
all matters necessary or incidental to the foregoing.
The Regular Trustees must exercise the powers set forth in
this Section 3.08 in a manner which is consistent with the purposes and
functions of the Trust set out in Section 3.05, and the Regular Trustees shall
not take any action which is inconsistent with the purposes and functions of the
Trust set forth in Section 3.05.
Except as provided in this Section 3.08, the Regular Trustees
shall have none of the powers or any of the authority of the Property Trustee
set forth in Section 3.10.
The Regular Trustees shall take all actions on behalf of the
Trust that are not specifically required by this Declaration to be taken by any
other Trustee.
Any expenses incurred by the Regular Trustees pursuant to this
Section 3.08 shall be reimbursed by the Sponsor.
SECTION 3.09 Prohibition of Actions by the Trust and the Trustees.
The Trust shall not, and the Trustees (including the Property
Trustee) shall cause the Trust not to, engage in any activity other than in
connection with the purposes of the Trust or
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other than as required or authorized by this Declaration. In particular, the
Trust shall not and the Trustees (including the Property Trustee) shall not
cause the Trust to:
(a) invest any proceeds received by the Trust as a result of
holding the Debentures but the Trust shall promptly distribute from the
Property Account all such proceeds to Holders of Securities pursuant to
the terms of this Declaration and of the Securities;
(b) acquire any assets other than as expressly provided
herein;
(c) possess Trust property for other than a Trust purpose;
(d) make any loans, other than loans represented by the
Debentures;
(e) possess any power or otherwise act in such a way as to
vary the Trust assets or the terms of the Securities in any way
whatsoever, except as otherwise expressly provided herein;
(f) issue any securities or other evidences of beneficial
ownership of, or beneficial interests in, the Trust other than the
Securities;
(g) incur any indebtedness for borrowed money;
(h) (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee or
exercising any trust or power conferred upon the Debenture Trustee with
respect to the Debentures, (ii) waive any past default that is waivable
under Section 6.04 of the Indenture, or (iii) exercise any right to
rescind or annul a declaration of acceleration of the maturity of the
principal of the Debentures, without, in each case, obtaining the prior
approval of the Holders of a Majority in liquidation amount of all
outstanding Securities;
(i) revoke any action previously authorized or approved by a
vote of the Holders of Preferred Securities except by subsequent vote
of such Holders;
(j) consent to any amendment, modification or termination of
the Indenture or the Debentures, where such consent shall be required,
unless in the case of this clause (j) the Property Trustee shall have
received an Opinion of Counsel experienced in such matters to the
effect that such amendment, modification or termination will not cause
more than an insubstantial risk that for U.S. federal income tax
purposes the Trust will not be classified as a grantor trust;
(k) take or consent to any action that would result in the
placement of a lien, pledge, charge, mortgage or other encumbrance on
any of the Trust property;
(l) vary the investment (within the meaning of Treasury
Regulation Section 301.7701-4(c)) of the Trust or of the Holders of
Securities; or
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(m) after the date hereof, enter into any contract or
agreement (other than any depositary agreement or any agreement with
any Exchange) that does not expressly provide that the Holders of
Preferred Securities, in their capacities as such, have limited
liability (in accordance with the provisions of the Statutory Trust
Act) for the liabilities and obligations of the Trust, which express
provision shall be in substantially the following form:
The Holders of the Preferred Securities, in their capacities
as such, shall not be personally liable for any liabilities or
obligations of the Trust arising out of this Agreement, and
the parties hereto hereby agree that the Holders of the
Preferred Securities, in their capacities as such, shall be
entitled to the same limitation of personal liability extended
to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
The failure of the Trust to include such a provision shall not in and
of itself cause the Trust's executing, delivering and performing such
contract or agreement to be ultra vires.
SECTION 3.10 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and
held of record in the name of the Property Trustee in trust for the benefit of
the Holders of the Securities. The right, title and interest of the Property
Trustee to the Debentures shall vest automatically in each Person who may
hereafter be appointed as Property Trustee in accordance with Article 5. Such
vesting and cessation of title shall be effective whether or not conveyancing
documents with regard to the Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title
and interest in the Debentures to the Regular Trustees or, if the Property
Trustee does not also act as the Delaware Trustee, the Delaware Trustee.
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust bank account (the "Property Account") in the name of and under
the exclusive control of the Property Trustee on behalf of the Holders
of the Securities and, on the receipt of payments of funds made in
respect of the Debentures held by the Property Trustee, deposit such
funds into the Property Account and, without any further acts of the
Property Trustee or the Regular Trustees, promptly make payments to the
Holders of the Preferred Securities and Common Securities from the
Property Account in accordance with Section 6.01. Funds in the Property
Account shall be held uninvested, and without liability for interest
thereon, until disbursed in accordance with this Declaration. The
Property Account shall be an account which is maintained with a banking
institution whose long term unsecured indebtedness is rated by a
nationally recognized statistical rating organization at least
investment grade;
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(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect promptly the redemption of the
Preferred Securities and the Common Securities to the extent the
Debentures are redeemed or mature;
(iii) upon notice of distribution issued by the Regular
Trustees in accordance with the terms of the Preferred Securities and
the Common Securities, engage in such ministerial activities as shall
be necessary or appropriate to effect promptly pursuant to terms of the
Securities the distribution of Debentures to Holders of Securities upon
the election of the Holder of Common Securities to distribute the
Debentures to Holders of Securities and dissolve the Trust;
(iv) have the legal power to exercise all of the rights,
powers and privileges of a holder of the Debentures under the Indenture
and, if an Event of Default occurs and is continuing, the Property
Trustee, subject to Section 3.10(e), shall for the benefit of the
Holders of the Securities, enforce its rights as holder of the
Debentures under the Indenture, subject to the rights of the Holders of
the Preferred Securities pursuant to the terms of this Declaration, the
Statutory Trust Act and the Trust Indenture Act; and
(v) be a United States Person.
(d) The Property Trustee shall take all actions and perform
such duties as may be specifically required of the Property Trustee pursuant to
the terms of the Securities set forth in Exhibits B and C hereto.
(e) If an Event of Default has occurred and is continuing,
then the Holders of a Majority in liquidation amount of the Preferred Securities
will have, subject to Section 3.12(c)(iv), the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Property
Trustee or to direct the exercise of any trust or power conferred upon the
Property Trustee under this Declaration, including the right to direct the
Property Trustee to exercise the remedies available to it as a holder of the
Debentures. If the Property Trustee fails to enforce its rights under the
Debentures, a Holder of Preferred Securities may, to the fullest extent
permitted by law, after a period of 30 days has elapsed since such Holder's
written request to the Property Trustee to enforce such rights, institute a
legal proceeding directly against the Sponsor to enforce the Property Trustee's
rights under the Debentures without first instituting any legal proceeding
against the Property Trustee or any other Person; provided that, if an Event of
Default has occurred and is continuing and such event is attributed to the
failure of the Sponsor to pay the principal of, or any premium or interest on,
the Debentures on the date such amounts are otherwise payable (or in the case of
redemption, on the redemption date), then a Holder of Preferred Securities may
directly institute a proceeding for enforcement of payment to such Holder of
such amounts on the Debentures having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such Holder (a "Holder Direct
Action") on or after the respective due date specified in the Debentures. In
connection with such Holder Direct Action, the Sponsor will be subrogated to the
rights of such Holder of Preferred Securities to the extent of any payment made
by the Sponsor to such Holders of Preferred Securities in such Holder Direct
Action. Except as provided in the preceding sentences, the
19
Holders of Preferred Securities will not be able to exercise directly any other
remedy available to the Holders of the Debentures.
(f) All moneys deposited in the Property Account and all
Debentures held by the Property Trustee for the benefit of the Holders of the
Securities will not be subject to any right, charge, security interest, lien or
claim of any kind in favor of, or for the benefit of, the Property Trustee or
its agents or their creditors.
(g) The Property Trustee shall, within 90 days after the
occurrence of a default with respect to the Securities actually known to a
Responsible Officer of the Property Trustee, transmit by mail, first class
postage prepaid, to the holders of the Securities, as their names and addresses
appear upon the register, notice of such default with respect to the Securities
known to the Property Trustee, unless such default shall have been cured before
the giving of such notice (the term "default" for the purposes of this Section
3.10(g) being hereby defined to be an Indenture Event of Default, not including
any periods of grace provided in the Indenture and irrespective of the giving of
any notice provided therein); provided that, except in the case of default in
the payment of the principal of, or any premium or interest on, any of the
Debentures, the Property Trustee shall be protected in withholding such notice
if and so long as a committee of Responsible Officers of the Property Trustee in
good faith determines that the withholding of such notice is in the interests of
the Holders of the Securities. The Property Trustee shall not be deemed to have
knowledge of any default, except (i) a default in the payment of principal of,
or any premium or interest on, the Debentures or (ii) any default as to which
the Property Trustee shall have received written notice or a Responsible Officer
charged with the administration of this Declaration shall have obtained written
notice of such default.
(h) The Property Trustee shall continue to serve as a Trustee
until either:
(i) the Trust has been completely liquidated and the proceeds
thereof distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Property Trustee has been appointed and
accepted that appointment in accordance with Article 5.
(i) The Property Trustee shall act as paying agent in respect
of the Common Securities and, if the Preferred Securities are not in book-entry
only form, the Preferred Securities and, subject to Section 3.08(q), may
authorize one or more Persons (each, a "Paying Agent") to pay Distributions,
redemption payments or liquidation payments on behalf of the Trust with respect
to the Preferred Securities. Any such Paying Agent shall comply with Section
317(b) of the Trust Indenture Act. Any Paying Agent may be removed by the
Property Trustee, after consultation with the Regular Trustees, at any time and
a successor Paying Agent or additional Paying Agents may be appointed at any
time by the Property Trustee, subject to Section 3.08(q).
(j) The Property Trustee shall give prompt written notice to
the Holders of the Securities of any notice received by it from Lennox of its
election to defer payments of interest on the Debentures by extending the
interest payment period with respect thereto.
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(k) Except as provided in this Section 3.10, the Property
Trustee shall have none of the powers or the authority of the Regular Trustees
set forth in Section 3.08.
(l) The Property Trustee shall exercise the powers, duties and
rights set forth in this Section 3.10 and in Section 3.12 in a manner which is
consistent with the purposes and functions of the Trust set out in Section 3.05,
and the Property Trustee shall not take any action which is inconsistent with
the purposes and functions of the Trust set forth in Section 3.05.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration, the
Delaware Trustee shall not be entitled to exercise any powers, nor shall the
Delaware Trustee have any of the duties and responsibilities of the Regular
Trustees or the Property Trustee described in this Declaration. The Delaware
Trustee shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of Section 3807(a) of the Statutory Trust Act. No implied covenants
or obligations shall be read into this Declaration against the Delaware Trustee.
SECTION 3.12 Certain Rights and Duties of the Property Trustee.
(a) The Property Trustee, before the occurrence of an Event of
Default and after the curing or waiving of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Declaration, and no implied covenants shall be read into this
Declaration against the Property Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.06), the
Property Trustee shall exercise such of the rights and powers vested in it by
this Declaration, and use the same degree of care and skill in its exercise
thereof, as a prudent person would exercise or use under the circumstances in
the conduct of his own affairs.
(b) No provision of this Declaration shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Property
Trustee shall be determined solely by the express provisions
of this Declaration, and the Property Trustee shall not be
liable except for the performance of such duties and
obligations as are specifically set forth in this Declaration,
and no implied covenants or obligations shall be read into
this Declaration against the Property Trustee; and
(B) in the absence of bad faith on the part of the
Property Trustee, the Property Trustee may conclusively rely,
as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Property Trustee and conforming to the
requirements of this Declaration; provided, however, that in
the case of any such certificates or
21
opinions that by any provision hereof or the Trust Indenture
Act are specifically required to be furnished to the Property
Trustee, the Property Trustee shall be under a duty to examine
the same to determine whether or not they conform to the
requirements of this Declaration or the Trust Indenture Act,
as the case may be;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts upon which such judgment
was based;
(iii) the Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a Majority in
liquidation amount of the Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the
Property Trustee hereunder or under the Indenture, or exercising any
trust or power conferred upon the Property Trustee under this
Declaration; and
(iv) no provision of this Declaration shall require the
Property Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Declaration or adequate indemnity against such risk or liability is not
reasonably assured to it.
(c) Subject to the provisions of Section 3.12(a) and (b):
(i) whenever in the administration of this Declaration, the
Property Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking, suffering or omitting any action
hereunder, the Property Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of negligence or bad faith
on its part and, if the Trust is excluded from the definition of
Investment Company solely by means of Rule 3a-7, subject to the
requirements of Rule 3a-7, request and conclusively rely upon an
Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Sponsor or the Regular Trustees; and such
Officers' Certificate, in the absence of negligence or bad faith on the
part of the Property Trustee, shall be full warrant to the Property
Trustee for any action taken, suffered or omitted under the provisions
of this Declaration upon the faith thereof;
(ii) the Property Trustee (A) may consult with counsel (which
may be counsel to the Sponsor or any of its Affiliates and may include
any of its employees) selected by it in good faith and with due care
and the advice or opinion of such counsel with respect to legal matters
shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and
in reliance thereon and in accordance with such advice and opinion and
(B) shall have the right at any time to seek instructions concerning
the administration of this Declaration from any court of competent
jurisdiction;
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(iii) the Property Trustee may exercise any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents or attorneys; provided that any such action (other
than any ministerial action) executed or performed by such an agent or
attorney is executed or performed by an agent or attorney that is a
United States Person, and the Property Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed by it in good faith and with due care;
(iv) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration
at the request or direction of any Holder, unless such Holder shall
have offered to the Property Trustee security and indemnity
satisfactory to the Property Trustee against the costs, expenses
(including attorneys' fees and expenses) and liabilities that might be
incurred by it in complying with such request or direction; provided
that nothing contained in this clause (iv) shall relieve the Property
Trustee of the obligation, upon the occurrence of an Event of Default
(which has not been cured or waived) to exercise such of the rights and
powers vested in it by this Declaration, and to use the same degree of
care and skill in this exercise, as a prudent person would exercise or
use under the circumstances in the conduct of such person's own
affairs;
(v) any action taken by the Property Trustee or its agents
hereunder shall bind the Holders of the Securities, and the signature
of the Property Trustee or its agents alone shall be sufficient and
effective to perform any such action; and no third party shall be
required to inquire as to the authority of the Property Trustee to so
act, or as to its compliance with any of the terms and provisions of
this Declaration, both of which shall be conclusively evidenced by the
Property Trustee's or its agent's taking such action; and
(vi) whenever in the administration of this Declaration the
Property Trustee shall deem it necessary or desirable to receive
instructions with respect to enforcing any remedy or right or taking
any other action hereunder, the Property Trustee (A) may request
instructions from the Holders of the Securities, which instructions may
be given only by the Holders of the same proportion in liquidation
amount of the Securities as would be entitled to direct the Property
Trustee under this Declaration in respect of such remedy, right or
action, (B) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received and (C) shall be
protected in conclusively relying on or acting in accordance with such
instructions.
(d) The Property Trustee, in its individual or any other
capacity, may become the owner or pledgee of Preferred Securities and, subject
to the provisions of Section 5.01(c) (in the case of the Property Trustee), may
otherwise deal with the Sponsor with the same rights it would have if it were
not the Property Trustee.
(e) Except as required by Section 3.10(c) hereof, all moneys
received by the Property Trustee shall, until used or applied as herein
provided, be held in trust for the purposes for which they were received, but
need not be segregated from other funds except to the extent
23
required by law. The Property Trustee shall be under no liability for interest
on any moneys received by it hereunder except such as it may agree in writing to
pay thereon.
(f) The Sponsor covenants and agrees to pay to the Property
Trustee from time to time, and the Property Trustee shall be entitled to, such
compensation as the Sponsor and the Property Trustee shall from time to time
agree in writing (which shall not be limited by any provision of law in regard
to the compensation of a Property Trustee of an express trust) for all services
rendered by it in the execution of the trusts hereby created and in the exercise
and performance of any of the powers and duties hereunder of the Property
Trustee, and the Sponsor will pay or reimburse the Property Trustee upon its
request for all reasonable expenses, disbursements and advances incurred or made
by the Property Trustee in accordance with any of the provisions of this
Declaration (including the reasonable compensation and the reasonable expenses
and disbursements of its counsel and of all persons not regularly in its employ)
except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Sponsor also covenants to indemnify each of the
Property Trustee or any predecessor Property Trustee and their officers, agents,
directors and employees for, and to hold them harmless against, any and all
loss, liability, damage, claim or expense, including taxes (other than taxes
based upon, measured by or determined by the income, profit or franchise of or
doing business by the Property Trustee), incurred without negligence or bad
faith on the part of the Property Trustee and arising out of or in connection
with the acceptance or administration of this trust, including the reasonable
costs and expenses of defending itself against any claim (whether asserted by
the Sponsor, any Holder or any other Person) of liability in the premises. The
provisions of this Section 3.12(f) shall survive the termination of this
Declaration and resignation or removal of the Property Trustee. The obligations
of the Sponsor under this Section 3.12(f) to compensate and indemnify the
Property Trustee and to pay or reimburse the Property Trustee for expenses,
disbursements and advances shall constitute additional indebtedness of the
Sponsor.
(g) Whether or not expressly stated, every provision of this
Declaration pertaining to the Property Trustee shall be subject to this Section
3.12.
SECTION 3.13 Registration Statement and Related Matters.
The Sponsor, as the sponsor of the Trust, was and is
authorized (i) to prepare and file with the Commission and execute, in each case
on behalf of the Trust, (a) the Registration Statement on Form S-3 (Registration
Nos. 333-______, 333-______-01, 333-______-02, 333-______-03, 333-______-04,
333-______-05, 333-______-06 and 333-______-07) (the "1933 Act Registration
Statement"), including any pre-effective or post-effective amendments to such
Registration Statement (including any preliminary prospectus, prospectus or
prospectus supplement, and the exhibits thereto), relating to the registration
under the Securities Act of the Preferred Securities and certain other
securities of the Sponsor and (b) if the Sponsor shall deem it desirable, a
Registration Statement on Form 8-A (the "1934 Act Registration Statement"),
including all pre-effective and post-effective amendments thereto, relating to
the registration of the Preferred Securities under Section 12 of the Exchange
Act; (ii) if the Sponsor shall deem it desirable, to prepare and file with the
New York Stock Exchange, Inc. or any other automated quotation system, exchange
or over-the-counter market (each, an "Exchange") and execute on behalf of the
Trust a listing application or applications and all other applications,
statements,
24
certificates, agreements and other instruments as shall be necessary,
appropriate or desirable to cause the Preferred Securities to be listed on any
Exchange; (iii) to prepare and file and execute on behalf of the Trust such
applications, reports, surety bonds, irrevocable consents, appointments of
attorney for service of process and other papers and documents as the Sponsor,
on behalf of the Trust, may deem necessary, appropriate or desirable to register
the Preferred Securities under the securities or "Blue Sky" laws of such
jurisdictions as the Sponsor, on behalf of the Trust, may deem necessary,
appropriate or desirable; (iv) to negotiate the terms of and execute, or to
cause the Regular Trustees to execute, on behalf of the Trust the Underwriting
Agreement; and (v) to execute and deliver, or to cause the Regular Trustees to
execute and deliver, on behalf of the Trust letters or documents to, or
instruments for filing with, the Clearing Agency relating to the Preferred
Securities, including the Depositary Agreement. In the event that any filing
referred to in clauses (i)-(iii) above is required by the rules and regulations
of the Commission, any Exchange, the National Association of Securities Dealers,
Inc. or any state or foreign securities or blue sky laws, to be executed on
behalf of the Trust by the Trustees, the Regular Trustees, in their capacities
as Trustees of the Trust, and the Sponsor are hereby authorized to join in any
such filing and to execute on behalf of the Trust any and all of the foregoing.
In connection with all of the foregoing, the Sponsor and each Regular Trustee,
solely in its capacity as Trustee of the Trust, have constituted and appointed,
and hereby confirm the appointment of, __________, __________ and __________ and
each of them, as his, her or its, as the case may be, true and lawful
attorneys-in-fact, and agents, with full power of substitution and
resubstitution, for the Sponsor or such Trustee or in the Sponsor's or such
Trustee's name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to the 1933 Act Registration
Statement and the 1934 Act Registration Statement and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in connection therewith, as fully to all intents and purposes as the
Sponsor or such Trustee might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
or his or her substitute or substitutes, may lawfully do or cause to be done by
virtue hereof. Notwithstanding anything in this Section 3.13 to the contrary, no
Foreign Person (acting in its capacity as attorney-in-fact or agent of any
Foreign Person) shall be authorized to take or perform any action on behalf of
the Trust pursuant to this Section 3.13 at any time on or after the Closing
Date.
SECTION 3.14 Filing of Amendments to Certificate of Trust.
The Certificate of Trust as filed with the Secretary of State
of the State of Delaware on January 23, 2003 is attached hereto as Exhibit A. On
or after the date of execution of this Declaration, the Regular Trustees shall
cause the filing with the Secretary of State of the State of Delaware of such
amendments and/or restatements, if any, to the Certificate of Trust as the
Regular Trustees shall deem necessary or desirable.
SECTION 3.15 Execution of Documents by the Regular Trustees.
Except as otherwise required by the Statutory Trust Act with
respect to the Certificate of Trust or otherwise and except as provided in
Sections 7.01(c) and 9.08, any
25
Regular Trustee, or if there is only one, such Regular Trustee is authorized to
execute, deliver and file on behalf of the Trust any documents (including
amendments and/or restatements of the Certificate of Trust and the certificate
of cancellation contemplated by Section 8.01) which the Regular Trustees have
the power and authority to execute, deliver or file pursuant to this
Declaration.
SECTION 3.16 Trustees Not Responsible for Recitals or Issuance of
Securities.
The recitals contained in this Declaration and the Securities
shall be taken as the statements of the Sponsor, and the Trustees do not assume
any responsibility for their correctness. The Trustees make no representations
as to the value or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.17 Duration of the Trust.
The Trust, absent dissolution pursuant to the provisions of
Article 8 hereof, shall continue without dissolution until ____________, _____.
SECTION 3.18 Mergers.
(a) The Trust may not merge with or into, convert into,
consolidate, amalgamate, or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to any Person, except as
described in Section 3.18(b) and (c) or Section 8.01(ii) of this Declaration and
Sections 3 and 4 of Exhibits B and C.
(b) The Trust may, at the request of the Sponsor, with the
consent of the Regular Trustees or, if there are more than two, a majority of
the Regular Trustees and without the consent of the Holders, the Delaware
Trustee or the Property Trustee, as permitted by Delaware law, merge with or
into, convert into, consolidate, amalgamate, or be replaced by, or convey,
transfer or lease its properties and assets as an entirety or substantially as
an entirety to, a trust organized as such under the laws of any State; provided
that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the
Trust under the Securities and this Declaration; or
(B) substitutes for the Securities other securities
having substantially the same terms as the Securities (the
"Successor Securities") so long as the Successor Securities
rank the same as the Securities rank with respect to
Distributions and payments upon liquidation, redemption and
otherwise;
(ii) the Sponsor expressly appoints a trustee of the Successor
Entity that possesses the same powers and duties as the Property
Trustee as the holder of the Debentures;
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(iii) the Successor Securities are listed or traded, or any
Successor Securities will be listed or traded upon notification of
issuance, on any Exchange on which the Preferred Securities are then
listed or traded, if any;
(iv) if the Preferred Securities (including any Successor
Securities) are rated by any nationally recognized statistical rating
organization prior to such transaction, such merger, conversion,
consolidation, amalgamation, replacement, conveyance, transfer or lease
does not cause the Preferred Securities (including any Successor
Securities), or if the Debentures are so rated, the Debentures, to be
downgraded by any nationally recognized statistical rating
organization;
(v) such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect
the rights, preferences and privileges of the Holders (including the
holders of any Successor Securities) in any material respect (other
than with respect to any dilution of such Holders' interests in the new
entity);
(vi) such Successor Entity has purposes substantially
identical to those of the Trust;
(vii) prior to such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Sponsor
has received an Opinion of Counsel experienced in such matters that:
(A) such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease does
not adversely affect the rights, preferences and privileges of
the Holders (including the holders of any Successor
Securities) in any material respect (other than with respect
to any dilution of the Holders' interest in the new entity);
(B) following such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease,
neither the Trust nor the Successor Entity will be required to
register as an Investment Company under the Investment Company
Act; and
(C) following such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the
Trust (or the Successor Entity) will continue to be classified
as a grantor trust for U.S. federal income tax purposes;
(viii) the Sponsor or any permitted successor or assignee of
the Sponsor owns all of the common securities of such Successor Entity
and guarantees the obligations of such Successor Entity under the
Successor Securities at least to the extent provided by the Preferred
Securities Guarantee; and
27
(ix) there shall have been furnished to the Property Trustee
an Officers' Certificate and an Opinion of Counsel, each to the effect
that all conditions precedent in this Declaration to such transaction
have been satisfied.
(c) Notwithstanding Section 3.18(b), the Trust shall not,
except with the consent of Holders of 100% in liquidation amount of the
Securities, consolidate, amalgamate, merge with or into, convert into, or be
replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to, any other Person or permit any
other Person to consolidate, amalgamate, merge with or into, or replace it if
such consolidation, amalgamation, merger, conversion, replacement, conveyance,
transfer or lease would cause the Trust or the Successor Entity not to be
classified as a grantor trust for U.S. federal income tax purposes or would
cause the Holders of the Securities not to be treated as owning an undivided
interest in the Debentures.
SECTION 3.19 Property Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other similar judicial proceeding relative to the Trust or any other obligor
upon the Securities or the property of the Trust or of such other obligor or
their creditors, the Property Trustee (irrespective of whether any Distributions
on the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee shall
have made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any
Distributions owing and unpaid in respect of the Securities (or, if the
Securities are original issue discount Securities, such portion of the
liquidation amount as may be specified in the terms of such Securities)
and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Property Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Property Trustee, its agents and
counsel) and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the
Property Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or compensation
affecting the Securities or the rights of any Holder
28
thereof to authorize the Property Trustee to vote in respect of the claim of any
Holder in any such proceeding.
ARTICLE 4
SPONSOR
SECTION 4.01 Purchase of Common Securities by the Sponsor.
On the Closing Date, the Sponsor will purchase all of the
Common Securities issued by the Trust at the same time as the Preferred
Securities to be issued on such date are issued, such purchase to be in an
amount equal to at least 3% of the total capital of the Trust. [In the event of
the exercise of the Over-allotment Option, on the Over-allotment Closing Date,
the Sponsor will purchase all of the Common Securities issued by the Trust at
the same time as the Preferred Securities to be issued on such date are issued,
such purchase to be in an amount equal to at least 3% of the total additional
capital of the Trust.]
SECTION 4.02 Expenses.
(a) In connection with the purchase of the Debentures by the
Trust, the Sponsor, in its capacity as Sponsor, shall be responsible for and
shall pay for all debts and obligations (other than with respect to the
Securities) and all current and future costs and expenses of the Trust
(including, but not limited to, costs and expenses relating to the organization
of the Trust, the issuance of the Preferred Securities to initial purchasers
thereof (including any commissions payable to such purchasers), the fees and
expenses (including reasonable counsel fees and expenses) of the Trustees
(including any amounts payable under Article 10), the costs and expenses
relating to the operation of the Trust, including, without limitation, costs and
expenses of accountants, attorneys, statistical or bookkeeping services,
expenses for printing and engraving and computing or accounting equipment,
paying agent(s), registrar(s), transfer agent(s), duplicating, travel and
telephone and other telecommunications expenses and costs and expenses incurred
in connection with the acquisition and disposition of Trust assets).
(b) In connection with the purchase of the Debentures by the
Trust, the Sponsor, in its capacity as Sponsor, shall pay any and all taxes
(other than United States withholding taxes attributable to the Trust or its
assets) of the Trust and all liabilities, costs and expenses of the Trust with
respect to such taxes.
(c) The Sponsor's obligations under this Section 4.02 shall be
for the benefit of, and shall be enforceable by, any Person to whom any such
debts, obligations, costs, expenses and taxes are owed (a "Creditor") whether or
not such Creditor has received notice hereof. Any such Creditor may enforce the
Sponsor's obligations under this Section 4.02 directly against the Sponsor, and
the Sponsor irrevocably waives any right or remedy to require that any such
Creditor take any action against the Trust or any other Person before proceeding
against the Sponsor.
(d) The Sponsor shall be subrogated to all (if any) rights of
the Trust in respect of any amounts paid to any Creditor by the Sponsor under
this Section 4.02.
29
SECTION 4.03 Holder of the Common Securities.
Each Holder of the Common Securities shall at all times hold
the Common Securities in its individual capacity on its own behalf and shall
not, in its capacity as Holder of the Common Securities, be under (or subject
to) the control or direction of any Foreign Person (pursuant to a contractual
arrangement or otherwise), other than by virtue of such Foreign Person's direct
or indirect stock ownership, if any, of the Holder of the Common Securities.
Notwithstanding anything in this Declaration to the contrary, each Holder of the
Common Securities shall at all times be a United States Person and shall be
authorized to give any direction hereunder with respect to the Trust as shall be
necessary for the Trust not to be considered a foreign trust for U.S. federal
income tax purposes.
ARTICLE 5
TRUSTEES
SECTION 5.01 Number of Trustees; Qualifications.
(a) The number of Trustees initially shall be five (5).
Subject to Section 5.02(a), at any time and without cause (i) before the
issuance of the Securities, the Sponsor may, by written instrument, increase or
decrease the number of, and appoint, remove and replace, the Trustees, and (ii)
after the issuance of the Securities the number of Trustees may be increased or
decreased solely by, and Trustees may be appointed, removed or replaced solely
by, vote of Holders of Common Securities representing a Majority in liquidation
amount of the Common Securities voting as a class; provided that in any case:
(1) the number of Trustees shall be at least five (5) unless
the Trustee that acts as the Property Trustee also acts as the Delaware
Trustee, in which case the number of Trustees shall be at least four
(4);
(2) at least a majority of the Trustees shall at all times be
officers, directors or employees of the Sponsor;
(3) if required by the Statutory Trust Act, one Trustee (the
"Delaware Trustee") shall be either a natural person who is a resident
of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the State of Delaware and
otherwise is permitted to act as a Trustee hereunder under the laws of
the State of Delaware, except that if the Property Trustee has its
principal place of business in the State of Delaware and otherwise is
permitted to act as a Trustee hereunder under the laws of the State of
Delaware, then the Property Trustee shall also be the Delaware Trustee
and Section 3.11 shall have no application;
(4) there shall at all times be a Property Trustee hereunder
which shall satisfy the requirements of Section 5.01(c);
(5) each Trustee shall be a United States Person; and
30
(6) each Trustee shall at all times act as Trustee in its
individual capacity on its own behalf and will not at any time, in its
capacity as Trustee, be under (or subject to) the control or direction
of any Foreign Person (pursuant to a contractual arrangement or
otherwise).
Each Trustee shall be either a natural person at least 21 years of age or a
legal entity which shall act through one or more duly appointed representatives.
(b) The initial Regular Trustees shall be:
__________, __________ and __________
c/o Lennox International Inc.
2140 Lake Park Blvd.
Richardson, Texas 75080
(c) There shall at all times be one Trustee which shall act as
the Property Trustee. In order to act as the Property Trustee hereunder, such
Trustee shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation or national banking association that is
a United States Person organized and doing business under the laws of
the United States of America or any State or Territory thereof or of
the District of Columbia, or a corporation, national banking
association or Person that is a United States Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $50,000,000, and
subject to supervision or examination by U.S. federal, state,
territorial or District of Columbia authority. If such corporation or
national banking association publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then for the purposes of this
Section 5.01(c)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published; and
(iii) if the Trust is excluded from the definition of an
Investment Company solely by reason of Rule 3a-7 and to the extent Rule
3a-7 requires a trustee having certain qualifications to hold title to
the "eligible assets" (as defined in Rule 3a-7) of the Trust, the
Property Trustee shall possess those qualifications.
If at any time the Property Trustee shall cease to satisfy the
requirements of clauses (i)-(iii) above, the Property Trustee shall immediately
resign in the manner and with the effect set out in Section 5.02(c). If the
Property Trustee has or shall acquire any "conflicting interest" within the
meaning of Section 310(b) of the Trust Indenture Act, the Property Trustee and
the Holders of the Common Securities (as if such Holders were the obligor
referred to in Section 310(b) of the Trust Indenture Act) shall in all respects
comply with the provisions of Section 310(b) of the Trust Indenture Act. The
Preferred Securities Guarantee and the Indenture shall be deemed to be
31
specifically described in this Declaration for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
The initial Trustee which shall serve as the Property Trustee
is The Bank of New York, a New York banking corporation, whose address is as set
forth in Section 14.01(b).
(d) The initial Trustee which shall serve as the Delaware
Trustee is The Bank of New York (Delaware), a Delaware banking corporation,
whose address is as set forth in Section 14.01(c).
(e) Any action taken by the Holders of Common Securities
pursuant to this Article 5 shall be taken at a meeting of the Holders of Common
Securities convened for such purpose or by written consent, without a meeting
and without prior notice, as provided in Section 12.02.
(f) No amendment may be made to this Section 5.01 which would
change any rights with respect to the number, existence or appointment and
removal of Trustees, except with the consent of each Holder of Common
Securities.
SECTION 5.02 Appointment, Removal and Resignation of the Trustees.
(a) (i) The Trustee that acts as the Property Trustee shall
not be removed in accordance with Section 5.01(a) until a successor
Trustee possessing the qualifications to act as the Property Trustee
under Section 5.01(c) (a "Successor Property Trustee") has been
appointed and has accepted such appointment by written instrument
executed by such Successor Property Trustee and delivered to the
Regular Trustees, the Sponsor and the Property Trustee being removed;
and
(ii) the Trustee that acts as the Delaware Trustee
shall not be removed in accordance with Section 5.01(a) until a
successor Trustee possessing the qualifications to act as the Delaware
Trustee under Section 5.01(a)(3) (a "Successor Delaware Trustee") has
been appointed and has accepted such appointment by written instrument
executed by such Successor Delaware Trustee and delivered to the
Regular Trustees, the Sponsor and the Delaware Trustee being removed.
(b) A Trustee appointed to office shall hold such office until
his successor shall have been appointed or until his death, removal or
resignation.
(c) Any Trustee may resign from office (without need for prior
or subsequent accounting) by an instrument (a "Resignation Request") in writing
signed by such Trustee and delivered to the Sponsor and the Trust, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that:
32
(i) no such resignation of the Trustee that acts as the
Property Trustee shall be effective until:
(A) a Successor Property Trustee has been appointed
and has accepted such appointment by instrument executed by
such Successor Property Trustee and delivered to the Regular
Trustees, the Sponsor and the resigning Property Trustee; or
(B) if the Trust is excluded from the definition of
an Investment Company solely by reason of Rule 3a-7, until the
assets of the Trust have been completely liquidated and the
proceeds thereof distributed to the Holders of the Securities;
and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor Delaware Trustee
has been appointed and has accepted such appointment by instrument
executed by such Successor Delaware Trustee and delivered to the
Regular Trustees, the Sponsor and the resigning Delaware Trustee.
(d) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in
Section 5.01 and this Section 5.02 within 60 days after delivery of a notice of
removal or a Resignation Request, the Property Trustee or Delaware Trustee being
removed or resigning, as the case may be, may, at the Sponsor's expense,
petition any court of competent jurisdiction for appointment of a Successor
Property Trustee or Successor Delaware Trustee, as the case may be. Such court
may thereupon after prescribing such notice, if any, as it may deem proper and
prescribe, appoint a Successor Property Trustee or Successor Delaware Trustee,
as the case may be.
SECTION 5.03 Vacancies among the Trustees.
If a Trustee ceases to hold office for any reason and the
number of Trustees is not reduced pursuant to Section 5.01 or if the number of
Trustees is increased pursuant to Section 5.01, a vacancy shall occur. A
resolution certifying the existence of such vacancy by a majority of the Regular
Trustees shall be conclusive evidence of the existence of such vacancy. The
vacancy shall be filled with a Trustee appointed in accordance with the
requirements of this Article 5.
SECTION 5.04 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee, or any one of them, shall not operate to dissolve, terminate or annul
the Trust. Whenever a vacancy in the number of Regular Trustees shall occur,
until such vacancy is filled as provided in this Article 5, the Regular Trustees
in office, regardless of their number, shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the Regular
Trustees by this Declaration.
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SECTION 5.05 Meetings.
Meetings of the Regular Trustees shall be held from time to
time upon the call of any Regular Trustee. Regular meetings of the Regular
Trustees may be held at a time and place fixed by resolution of the Regular
Trustees. Notice of any in-person meeting of the Regular Trustees shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a hard
copy by overnight courier) not less than 48 hours before such meeting. Notice of
any telephonic meeting of the Regular Trustees or any committee thereof shall be
hand delivered or otherwise delivered in writing (including by facsimile, with a
hard copy by overnight courier) not less than 24 hours before such meeting.
Notices shall contain a brief statement of the time, place and anticipated
purposes of the meeting. The presence (whether in person or by telephone) of a
Regular Trustee at a meeting shall constitute a waiver of notice of such meeting
except where a Regular Trustee attends a meeting for the express purpose of
objecting to the transaction of any activity on the ground that the meeting has
not been lawfully called or convened. Unless otherwise provided in this
Declaration, any action of the Regular Trustees may be taken at a meeting by
vote of a majority of the Regular Trustees present (whether in person or by
telephone) and eligible to vote with respect to such matter, provided that a
Quorum is present, or without a meeting and without prior notice by the
unanimous written consent of the Regular Trustees.
SECTION 5.06 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21
that is a United States Person his or her power for the purpose of executing any
registration statement or amendment thereto or other document or schedule filed
with the Commission or making any other governmental filing (including, without
limitation, the filings referred to in Section 3.13).
(b) The Regular Trustees shall have power to delegate from
time to time to such of their number or to officers of the Trust the doing of
such things and the execution of such instruments either in the name of the
Trust or the names of the Regular Trustees or otherwise as the Regular Trustees
may deem expedient, to the extent such delegation is not prohibited by
applicable law or contrary to the provisions of the Trust, as set forth in this
Declaration.
SECTION 5.07 Merger, Conversion, Consolidation or Succession to
Business.
Any Person into which the Property Trustee or the Delaware
Trustee or any Regular Trustee that is not a natural person, as the case may be,
may be merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Property
Trustee or the Delaware Trustee or the Regular Trustees, as the case may be,
shall be a party, or any Person succeeding to all or substantially all of the
corporate trust business of the Property Trustee or the Delaware Trustee or any
Regular Trustee, as the case may be, shall be the successor of the Property
Trustee or the Delaware Trustee or that Regular Trustee, as the case may be,
hereunder; provided that such Person shall be otherwise qualified and eligible
under this Article, without the execution or filing of any paper or any further
act on the part of any of the parties hereto.
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ARTICLE 6
DISTRIBUTIONS
SECTION 6.01 Distributions.
Holders shall receive periodic distributions, redemption
payments and liquidation distributions and other payments in accordance with the
applicable terms of the relevant Holder's Securities as set forth in Exhibits B
and C hereto ("Distributions"). If and to the extent that Lennox makes a payment
of principal of or any premium or interest on the Debentures held by the
Property Trustee (the amount of any such payment being a "Payment Amount"), the
Property Trustee shall and is directed, to the extent funds are available for
that purpose, promptly to make a Distribution of the Payment Amount to Holders
in accordance with the terms of the Securities as set forth in Exhibits B and C
hereto. The record dates and payment dates for Distributions shall be the same
as the record dates and payment dates for the Debentures held by the Property
Trustee.
ARTICLE 7
ISSUANCE OF THE SECURITIES
SECTION 7.01 General Provisions Regarding the Securities.
(a) The Regular Trustees shall issue the Securities on behalf
of the Trust in fully registered form representing undivided beneficial
interests in the assets of the Trust in accordance with Section 7.01(b) and for
the consideration specified in Section 3.03.
(b) The Regular Trustees shall issue on behalf of the Trust
(i) one class of preferred securities representing preferred undivided
beneficial interests in the assets of the Trust having such terms as are set
forth in Exhibit B hereto (the "Preferred Securities"), which terms are
incorporated by reference in, and made a part of, this Declaration as if
specifically set forth herein, and (ii) one class of common securities
representing common undivided beneficial interests in the assets of the Trust
having such terms as are set forth in Exhibit C hereto (the "Common
Securities"), which terms are incorporated by reference in, and made a part of,
this Declaration as if specifically set forth herein. The Trust shall have no
securities or other interests in the assets of the Trust other than the
Preferred Securities and the Common Securities.
(c) The Certificates shall be signed on behalf of the Trust by
the Regular Trustees (or if there are more than two Regular Trustees by any two
of the Regular Trustees). Such signatures may be the manual or facsimile
signatures of the present or any future Regular Trustee. Typographical and other
minor errors or defects in any such reproduction of any such signature shall not
affect the validity of any Certificate. In case any Regular Trustee who shall
have signed any of the Certificates shall cease to be such Regular Trustee
before the Certificate so signed shall be delivered by the Trust, such
Certificate nevertheless may be delivered as though the person who signed such
Certificate had not ceased to be such Regular Trustee; and any Certificate may
be signed on behalf of the Trust by such persons as, at the actual date of the
execution of such Certificate, shall be the Regular Trustees, although at the
date of the execution and delivery of this Declaration any such person was not a
Regular Trustee. Certificates shall be typewritten, printed, lithographed or
engraved or may be produced in any other manner as is
35
reasonably acceptable to the Regular Trustees, as evidenced by their execution
thereof, and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements as the Regular Trustees may deem
appropriate, or as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or regulation of any
Exchange on which Securities may be listed or traded, or with any rule or
regulation of the Clearing Agency, or to conform to usage. Pending the
preparation of definitive Certificates, the Regular Trustees on behalf of the
Trust may execute temporary Certificates (printed, lithographed or typewritten),
in substantially the form of the definitive Certificates in lieu of which they
are issued, but with such omissions, insertions and variations as may be
appropriate for temporary Certificates, all as may be determined by the Regular
Trustees. Each temporary Certificate shall be executed by the Regular Trustees
(or, if there are more than two Regular Trustees, by any two of the Regular
Trustees) on behalf of the Trust upon the same conditions and in substantially
the same manner, and with like effect, as definitive Certificates. Without
unnecessary delay, the Regular Trustees on behalf of the Trust will execute and
furnish definitive Certificates and thereupon any or all temporary Certificates
may be surrendered to the transfer agent and registrar in exchange therefor
(without charge to the Holders). Each Preferred Security Certificate whether in
temporary or definitive form shall be countersigned, upon receipt of a written
order of the Trust signed by one Regular Trustee, by the manual signature of an
authorized signatory of the Person acting as registrar and transfer agent for
the Preferred Securities, which shall initially be the Property Trustee.
(d) The consideration received by the Trust for the issuance
of the Securities shall constitute a contribution to the capital of the Trust
and shall not constitute a loan to the Trust.
(e) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and non-assessable.
(f) Every Person, by virtue of having become a Holder or a
Preferred Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Declaration.
(g) Upon issuance of the Securities as provided in this
Declaration, the Regular Trustees on behalf of the Trust shall return to Lennox
the $10 constituting initial trust assets as set forth in the Original
Declaration.
[SECTION 7.02 Conversion Agent
The Trust shall maintain an office or agency where Preferred
Securities may be presented for conversion pursuant to the terms thereof set
forth in Exhibit B hereto ("Conversion Agent"). The Trust may appoint the
Conversion Agent and may appoint one or more additional Conversion Agents in
such other locations as it may determine. The term "Conversion Agent" includes
any additional Conversion Agent. The Trust may change any Conversion Agent
without prior notice to any Holders. If the Trust fails to appoint or maintain
another entity as Conversion Agent, the Property Trustee will act as such. The
Trust or any of its Affiliates may
36
act as Conversion Agent. The Conversion Agent shall be entitled to the rights
and protections extended to the Property Trustee when acting in such capacity.
The Property Trustee is hereby initially appointed as the
Conversion Agent for the Preferred Securities.]
ARTICLE 8
DISSOLUTION OF THE TRUST
SECTION 8.01 Dissolution of the Trust.
The Trust shall dissolve:
(i) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders of the Securities in accordance with the terms
of the Securities; or
(ii) when all of the Debentures shall have been distributed to
the Holders of the Securities in exchange for all of the Securities in
accordance with the terms of the Securities; or
(iii) upon the expiration of the term of the Trust as set
forth in Section 3.17; [or]
(iv) upon a decree of judicial dissolution of the Trust[; or
(v) upon the distribution of Shares to all Holders upon
conversion of all outstanding Securities].
Upon dissolution and the completion of the winding up of the
affairs of the Trust, the Trust and this Declaration shall terminate when a
certificate of cancellation is filed by the Regular Trustees (without the need
for execution thereof by any other Trustee) with the Secretary of State of the
State of Delaware. The Regular Trustees shall so file such a certificate as soon
as practicable after the occurrence of an event referred to in this Section
8.01.
The provisions of Sections 3.12 and 4.02 and Article 10 shall
survive the dissolution and termination of the Trust and this Declaration.
ARTICLE 9
TRANSFER OF INTERESTS
SECTION 9.01 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part,
in accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. To the fullest extent permitted by applicable law,
any transfer or purported transfer of any Security not made in accordance with
this Declaration shall be null and void.
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(b) Subject to this Article 9, Preferred Securities shall be
freely transferable.
(c) The Holder of the Common Securities may not transfer the
Common Securities except (a) in connection with transactions permitted under
Section 5.01 of the Indenture, or (b) to the Sponsor or an Affiliate thereof in
compliance with applicable law (including the Securities Act and applicable
state securities and blue sky laws); provided, however, that the Holder of the
Common Securities shall at all times be a United States Person. To the fullest
extent permitted by applicable law, any attempted transfer of the Common
Securities other than as set forth in this Section 9.01(c) shall be null and
void.
SECTION 9.02 Transfer of Certificates.
The Regular Trustees shall provide for the registration of
Certificates and of any transfer of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees and
the transfer agent and registrar may require) in respect of any tax or other
government charges which may be imposed in relation to such transfer. Upon
surrender for registration of transfer of any Certificate, the Regular Trustees
shall cause one or more new Certificates to be issued therefor. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees and
the transfer agent and registrar duly executed by the Holder or such Holder's
attorney duly authorized in writing. Each Certificate surrendered for
registration of transfer shall be canceled or caused to be canceled by the
Regular Trustees. A transferee of a Certificate shall be entitled to the rights
and subject to the obligations of a Holder hereunder upon the receipt by such
transferee of a Certificate. By acceptance of a Certificate, each transferee
shall be deemed to have agreed to be bound by this Declaration.
SECTION 9.03 Deemed Security Holders.
The Trustees may treat the Person in whose name any
Certificate shall be registered on the books and records of the Trust as the
sole holder of such Certificate and of the Securities represented by such
Certificate for purposes of receiving Distributions and for all other purposes
whatsoever and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such Certificate or in the Securities represented
by such Certificate on the part of any Person, whether or not the Trustees shall
have actual or other notice thereof.
SECTION 9.04 Book-Entry Interests.
Unless otherwise specified in the terms of the Preferred
Securities, the Preferred Security Certificates, on original issuance
[(including Preferred Securities, if any, issued pursuant to the exercise of any
Over-allotment Option)], will be issued in the form of one or more, fully
registered, global Preferred Security Certificates (each a "Global
Certificate"), to be delivered to DTC, the initial Clearing Agency, by, or on
behalf of, the Trust. Such Global Certificates shall initially be registered on
the books and records of the Trust in the name of Cede & Co., the nominee of
DTC, and no Preferred Security Beneficial Owner will receive a definitive
Preferred Security Certificate representing such Preferred Security Beneficial
Owner's interests in such Global Certificates, except as provided in Section
9.07. Unless and until definitive, fully
38
registered Preferred Security Certificates (the "Definitive Preferred Security
Certificates") have been issued to the Preferred Security Beneficial Owners
pursuant to Section 9.07:
(a) the provisions of this Section 9.04 shall be in full force
and effect;
(b) the Trust and the Trustees shall be entitled to deal with
the Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of the Preferred
Securities and the sole holder of the Global Certificates and, except
as set forth herein in Section 9.07 or in Rule 3a-7 (if the Trust is
excluded from the definition of an Investment Company solely by reason
of Rule 3a-7) with respect to the Property Trustee, shall have no
obligation to the Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.04
conflict with any other provisions of this Declaration, the provisions
of this Section 9.04 shall control; and
(d) the rights of the Preferred Security Beneficial Owners
shall be exercised only through the Clearing Agency and shall be
limited to those established by applicable law and agreements between
such Preferred Security Beneficial Owners and the Clearing Agency
and/or the Clearing Agency Participants. DTC will make book-entry
transfers among the Clearing Agency Participants and receive and
transmit payments of Distributions on the Global Certificates to such
Clearing Agency Participants; provided that, solely for the purposes of
determining whether the Holders of the requisite amount of Preferred
Securities have voted on any matter provided for in this Declaration,
so long as definitive Preferred Security Certificates have not been
issued (pursuant to Section 9.07 hereof), the Trustees may conclusively
rely on, and shall be protected in relying on, any written instrument
(including a proxy) delivered to the Trustees by the Clearing Agency
setting forth the Preferred Security Beneficial Owners' votes or
assigning the right to vote on any matter to any other Persons either
in whole or in part.
SECTION 9.05 Notices to Holders of Certificates.
Whenever a notice or other communication to the Holders is
required to be given under this Declaration, unless and until Definitive
Preferred Security Certificates shall have been issued pursuant to Section 9.07,
the relevant Trustees shall give all such notices and communications, specified
herein to be given to Holders of Preferred Securities, to the Clearing Agency
and, with respect to any Preferred Security Certificate registered in the name
of a Clearing Agency or the nominee of a Clearing Agency, the Trustees shall
have no notice obligations to the Preferred Security Beneficial Owners.
SECTION 9.06 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to the Preferred Securities.
39
SECTION 9.07 Definitive Preferred Security Certificates.
If (i) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities and a successor
Clearing Agency is not appointed within 90 days after such discontinuance
pursuant to Section 9.06, (ii) an Event of Default has occurred with respect to
the Preferred Securities and is continuing, and the Property Trustee has
received a request from the Clearing Agency to issue Definitive Preferred
Security Certificates in lieu of all or a portion of the Global Certificates (in
which case the Regular Trustees shall deliver such Definitive Preferred Security
Certificates within 30 days of such request) or (iii) the Regular Trustees elect
after consultation with the Sponsor to terminate the book-entry system through
the Clearing Agency with respect to the Preferred Securities, then (x)
Definitive Preferred Security Certificates shall be prepared by the Regular
Trustees on behalf of the Trust with respect to such Preferred Securities in
accordance with Section 7.01(c) and (y) upon surrender of the Global
Certificates by the Clearing Agency, accompanied by registration instructions,
the Regular Trustees shall cause Definitive Preferred Security Certificates to
be delivered to Preferred Security Beneficial Owners in accordance with the
instructions of the Clearing Agency. Upon such event, the Regular Trustees shall
give notice thereof to the Debenture Trustee. Neither the Trustees nor the Trust
shall be liable for any delay in delivery of such instructions and each of them
may conclusively rely on, and shall be protected in relying on, such
instructions.
SECTION 9.08 Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificates should be surrendered to the
Regular Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and (b) there
shall be delivered to the Regular Trustees such security or indemnity as may be
required by them to keep each of them and the Trust harmless, then in the
absence of notice that such Certificate shall have been acquired by a protected
purchaser, the Regular Trustees (or if there are more than two Regular Trustees
by any two of the Regular Trustees) on behalf of the Trust shall execute and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like denomination. In connection with
the issuance of any new Certificate under this Section 9.08, the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section 9.08 shall constitute conclusive
evidence of an ownership interest in the relevant Securities, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be found
at any time.
ARTICLE 10
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 10.01 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within
40
the scope of the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's gross
negligence (or, in the case of the Property Trustee, negligence) or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value or amount of the assets, liabilities, profits, losses
or any other facts pertinent to the existence and amount of assets from which
Distributions to Holders of Securities might properly be paid.
(c) Pursuant to Section 3803(a) of the Statutory Trust Act,
the Holders of Securities, in their capacities as Holders, shall be entitled to
the same limitation of liability that is extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware.
SECTION 10.02 Indemnification.
(a) To the fullest extent permitted by applicable law, the
Sponsor shall indemnify and hold harmless each Indemnified Person from and
against any loss, liability, expense, damage or claim incurred by such
Indemnified Person arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder or by reason of any act or
omission performed or omitted by such Indemnified Person in good faith on behalf
of the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of authority conferred on such Indemnified Person by this
Declaration, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, liability, expense, damage or claim incurred
by such Indemnified Person by reason of gross negligence (or, in the case of the
Property Trustee, negligence) or willful misconduct with respect to such acts or
omissions.
(b) The provisions of this Section 10.02 shall survive the
termination of this Declaration or the resignation or removal of any Trustee.
SECTION 10.03 Outside Business.
The Sponsor and any Trustee (in the case of the Property
Trustee, subject to Section 5.01(c)) may engage in or possess an interest in
other business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Trust, and the Trust and
the Holders of Securities shall have no rights by virtue of this Declaration in
and to such independent ventures or the income or profits derived therefrom, and
the pursuit of any such venture, even if competitive with the business of the
Trust, shall not be deemed wrongful or improper. Neither the Sponsor nor any
Trustee shall be obligated to present any particular investment or other
opportunity to the Trust even if such opportunity is of a character that, if
presented to the Trust, could be taken by the Trust, and the Sponsor or any
Trustee shall have the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to
41
others any such particular investment or other opportunity. Any Trustee may
engage or be interested in any financial or other transaction with the Sponsor
or any Affiliate of the Sponsor or may act as depositary for, trustee or agent
for, or act on any committee or body of holders of, securities or other
obligations of the Sponsor or any of its Affiliates.
ARTICLE 11
ACCOUNTING
SECTION 11.01 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
SECTION 11.02 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Regular Trustees shall keep, or cause to be kept, full books of account, records
and supporting documents, which shall reflect in reasonable detail each
transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted accounting
principles in the United States of America, consistently applied. The Trust
shall use the accrual method of accounting for U.S. federal income tax purposes.
(b) If required by applicable law, the Regular Trustees shall,
as soon as available after the end of each Fiscal Year of the Trust, cause to be
prepared and mailed to each Holder of Securities unaudited financial statements
of the Trust for such Fiscal Year, prepared in accordance with generally
accepted accounting principles in the United States of America; provided that if
the Trust is required to comply with the periodic reporting requirements of
Section 13(a) or 15(d) of the Exchange Act, such financial statements for such
Fiscal Year shall be examined and reported on by a firm of independent certified
public accountants selected by the Regular Trustees (which firm may be the same
firm used by the Sponsor as its firm of independent certified public
accountants).
(c) The Regular Trustees shall cause to be duly prepared and
mailed to each Holder of Securities any U.S. federal income tax information
statement or form required by any applicable provisions of the Code or the
Treasury Regulations, containing such information with regard to the Securities
held by each Holder as is required by any applicable provisions of the Code and
the Treasury Regulations. Notwithstanding any right under the Code to deliver
any such statement at a later date, the Regular Trustees shall endeavor to
deliver all such statements or forms within 30 days after the end of each Fiscal
Year of the Trust.
(d) The Regular Trustees shall cause to be properly prepared
and filed on a timely basis with the appropriate taxing authority any U.S.
federal income tax return or form as is required by any applicable provisions of
the Code or the Treasury Regulations, and any other tax returns or forms
required to be filed by or on behalf of the Trust with any state, local or other
taxing authority.
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SECTION 11.03 Banking.
The Trust shall maintain one or more non-interest bearing bank
accounts in the name and for the sole benefit of the Trust; provided, however,
that all payments of funds in respect of the Debentures held by the Property
Trustee shall be made directly to the Property Account and no other funds from
the Trust shall be deposited in the Property Account. The sole signatories for
such accounts shall be designated by the Regular Trustees; provided, however,
that the Property Trustee shall designate the sole signatories for the Property
Account.
SECTION 11.04 Withholding.
The Trust and the Trustees shall comply with all withholding
requirements under applicable law. The Regular Trustees shall request, and the
Holders shall provide to the Trust, such forms or certificates as are necessary
to establish an available exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Regular Trustees to assist them in determining the extent of, and in
fulfilling, the Trust's withholding obligations. The Regular Trustees on behalf
of the Trust shall file required forms with applicable jurisdictions and, unless
an exemption from withholding is properly established by a Holder, shall remit
amounts withheld with respect to the Holder to applicable jurisdictions. To the
extent that the Trust is required to withhold and pay over any amounts to any
authority with respect to Distributions or allocations to any Holder, the
Regular Trustees shall so notify the Property Trustee and shall provide such
information as is reasonably requested by the Property Trustee to enable the
Property Trustee to effect such withholding, and the amount withheld shall be
deemed to be a Distribution in the amount of the withholding to the Holder. In
the event of any claimed overwithholding, Holders shall be limited to an action
against the applicable jurisdiction. If the amount required to be withheld was
not withheld from a Distribution to a Holder, the Trust may reduce subsequent
Distributions to such Holder (or its successor) by the amount of such under
withholding.
ARTICLE 12
AMENDMENTS AND MEETINGS
SECTION 12.01 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may be amended by, and only
by, a written instrument executed by a majority of the Regular Trustees;
provided, however, that (i) no amendment or modification to this Declaration
shall be made, and any such purported amendment shall be void and ineffective:
(A) unless the Trustees shall have first received: (x) an Officers' Certificate
that such amendment is permitted by, and conforms to, the terms of this
Declaration; and (y) an Opinion of Counsel that such amendment is permitted by,
and conforms to, the terms of this Declaration and that all conditions
precedent, if any, in this Declaration to the execution and delivery of such
amendment have been satisfied; and (B) to the extent the result of such
amendment would be to: (x) cause the Trust to fail to continue to be classified
for purposes of U.S. federal income taxation as a grantor trust; (y) reduce or
otherwise adversely affect the rights or powers of the Property Trustee in
contravention of the Trust Indenture Act; or (z) cause the
43
Trust to be deemed to be an Investment Company required to be registered under
the Investment Company Act; (ii) at such time after the Trust has issued any
Securities which remain outstanding, any amendment which would adversely affect
the rights, privileges or preferences of any Holder of Securities in any
material respect may be effected only with such additional requirements as may
be set forth in the terms of such Securities; (iii) Section 4.02, Section
9.01(c), Section 10.01(c) and this Section 12.01 shall not be amended without
the consent of all of the Holders of the Securities; (iv) no amendment which
adversely affects the rights, powers and privileges of the Property Trustee or
the Delaware Trustee shall be made without the consent of the Property Trustee
or the Delaware Trustee, respectively; (v) Article 4 shall not be amended
without the consent of the Sponsor; and (vi) the rights of the Holders of Common
Securities under Article 5 to increase or decrease the number of, and to
appoint, replace or remove, Trustees shall not be amended without the consent of
each Holder of Common Securities.
(b) Notwithstanding Section 12.02(a), this Declaration may be
amended by a written instrument executed by a majority of the Regular Trustees
without the consent of the Holders of the Securities to (i) cure any ambiguity,
(ii) correct or supplement any provision in this Declaration that may be
defective or inconsistent with any other provision of this Declaration, (iii)
with the consent of the Sponsor, add to the covenants, restrictions or
obligations of the Sponsor, (iv) conform to any changes in Rule 3a-7 (if the
Trust is excluded from the definition of an Investment Company solely by reason
of Rule 3a-7) or any change in interpretation or application of Rule 3a-7 (if
the Trust is excluded from the definition of an Investment Company solely by
reason of Rule 3a-7) by the Commission, (v) amend any other provisions with
respect to matters or questions arising under this Declaration which shall not
be inconsistent with the other provisions of this Declaration, (vi) modify,
eliminate or add to any provisions of this Declaration to such extent as shall
be necessary to ensure that the Trust will be classified for U.S. federal income
tax purposes as a grantor trust at all times that any Securities are outstanding
or to ensure that the Trust will not be required to register as an Investment
Company under the Investment Company Act, (vii) pursuant to Section 5.01,
evidence the acceptance of the appointment of a successor Trustee or fill a
vacancy created by an increase in the number of Regular Trustees and (viii) to
change or eliminate any provision of this Declaration or the Securities;
provided that, in the case of this clause (viii), any such change or amendment
does not adversely affect in any material respect the rights, preferences or
privileges of the Holders.
SECTION 12.02 Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of Preferred Securities and/or
Common Securities may be called at any time by the Regular Trustees (or as
provided in the terms of the Securities) to consider and act on any matter on
which the Holders of such class of Securities are entitled to act under the
terms of this Declaration, the terms of the Securities or the rules of any
Exchange on which the Preferred Securities are then listed or traded. The
Regular Trustees shall call a meeting of the Holders of Preferred Securities or
Common Securities, if directed to do so by Holders of at least 25% in
liquidation amount of such class of Securities. Such direction shall be given by
delivering to the Regular Trustees one or more notices in writing stating that
the signing Holders of Securities wish to call a meeting and indicating the
general or specific purpose for which the meeting is to be called. Any Holders
of Securities calling a meeting shall specify in
44
writing the Certificates held by the Holders of Securities exercising the right
to call a meeting and only those specified Certificates shall be counted for
purposes of determining whether the required percentage set forth in the second
sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of
the Securities, the following provision shall apply to meetings of the Holders
of Securities:
(i) Notice of any such meeting shall be given by mail to all
the Holders of Securities having a right to vote thereat not less than
seven (7) days nor more than sixty (60) days prior to the date of such
meeting. Whenever a vote, consent or approval of the Holders of
Securities is permitted or required under this Declaration or the rules
of any Exchange on which the Preferred Securities are then listed or
traded, such vote, consent or approval may be given at a meeting of the
Holders of Securities. Any action that may be taken at a meeting of the
Holders of Securities may be taken without a meeting and without prior
notice if a consent in writing setting forth the action so taken is
signed by Holders of Securities owning not less than the minimum
aggregate liquidation amount of Securities that would be necessary to
authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting.
Prompt notice of the taking of action without a meeting shall be given
to the Holders of Securities entitled to vote who have not consented in
writing. The Regular Trustees may specify that any written ballot
submitted to the Holders of Securities for the purpose of taking any
action without a meeting shall be returned to the Trust within the time
specified by the Regular Trustees.
(ii) Each Holder of a Security may authorize any Person to act
for it by proxy on all matters in which a Holder of a Security is
entitled to participate, including waiving notice of any meeting, or
voting or participating at a meeting. No proxy shall be valid after the
expiration of 11 months from the date thereof unless otherwise provided
in the proxy. Every proxy shall be revocable at the pleasure of the
Holder of the Security executing it. Except as otherwise provided
herein or in the terms of the Securities, all matters relating to the
giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and
judicial interpretations thereunder, as if the Trust were a Delaware
corporation and the Holders of the Securities were stockholders of a
Delaware corporation.
(iii) Each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the
Regular Trustees may designate.
(iv) Unless otherwise provided in the Statutory Trust Act,
this Declaration or the rules of any Exchange on which the Preferred
Securities are then listed or traded, the Regular Trustees, in their
sole discretion, shall establish all other provisions relating to
meetings of Holders of Securities, including notice of the time, place
or purpose of any meeting at which any matter is to be voted on by any
Holders of Securities, waiver of any such notice, action by consent
without a meeting, the establishment of a record date, quorum
requirements, voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
45
ARTICLE 13
REPRESENTATIONS OF THE PROPERTY TRUSTEE AND THE DELAWARE TRUSTEE
SECTION 13.01 Representations and Warranties of the Property Trustee.
The Trustee which acts as the initial Property Trustee
represents and warrants to the Trust and to the Sponsor at the date of this
Declaration, and each Successor Property Trustee represents and warrants to the
Trust and the Sponsor at the time of the Successor Property Trustee's acceptance
of its appointment as the Property Trustee that:
(a) The Property Trustee is a national banking association or
a banking corporation with trust powers, duly organized, validly
existing and in good standing under the laws of the United States or
the laws of the state of its incorporation, with trust power and
authority to execute and deliver, and to carry out and perform its
obligations under the terms of, this Declaration.
(b) The execution, delivery and performance by the Property
Trustee of this Declaration have been duly authorized by all necessary
corporate action on the part of the Property Trustee. This Declaration
has been duly executed and delivered by the Property Trustee, and
constitutes a legal, valid and binding obligation of the Property
Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insolvency and
other similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding
in equity or at law).
(c) The execution, delivery and performance of this
Declaration by the Property Trustee does not conflict with or
constitute a breach of (i) the charter or by-laws of the Property
Trustee, (ii) any applicable law, rule or regulation to which the
Property Trustee is subject or (iii) any agreement or instrument to
which the Property Trustee is a party or is otherwise bound.
(d) No consent, approval or authorization of, or registration
with or notice to, any banking authority which supervises or regulates
the Property Trustee is required for the execution, delivery or
performance by the Property Trustee of this Declaration.
(e) The Property Trustee satisfies the qualifications set
forth in Section 5.01(c).
SECTION 13.02 Representations and Warranties of the Delaware Trustee.
The Trustee which acts as the initial Delaware Trustee
represents and warrants to the Trust and the Sponsor at the date of this
Declaration, and each Successor Delaware Trustee represents and warrants to the
Trust and the Sponsor at the time of the Successor Delaware Trustee's acceptance
of its appointment as the Delaware Trustee, that:
46
(a) The Delaware Trustee is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware, with corporate power and authority to execute and deliver,
and to carry out and perform its obligations under the terms of, this
Declaration.
(b) The execution, delivery and performance by the Delaware
Trustee of this Declaration have been duly authorized by all necessary
corporate action on the part of the Delaware Trustee. This Declaration
has been duly executed and delivered by the Delaware Trustee and
constitutes a legal, valid and binding obligation of the Delaware
Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insolvency and
other similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding
in equity or at law).
(c) The execution, delivery and performance of this
Declaration by the Delaware Trustee does not conflict with or
constitute a breach of (i) the charter or by-laws of the Delaware
Trustee, (ii) any applicable law, rule or regulation to which the
Delaware Trustee is subject or (iii) any agreement or instrument to
which the Delaware Trustee is a party or is otherwise bound.
(d) The Delaware Trustee is a natural person who is a resident
of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the State of Delaware and is a
Person that satisfies for the Trust Section 3807(a) of the Statutory
Trust Act.
ARTICLE 14
MISCELLANEOUS
SECTION 14.01 Notices.
All notices provided for in this Declaration shall be in
writing, duly signed by the party giving such notice, and delivered, telecopied
or mailed by first class mail as follows:
(a) if given to the Trust, in care of the Regular Trustees at
the Trust's mailing address set forth below (or such other address as
the Regular Trustees on behalf of the Trust may give notice of to the
Holders of the Securities and the Sponsor):
Lennox Trust [I] [II]
c/o Lennox International Inc.
2140 Lake Park Blvd.
Richardson, Texas 75080
Attention: General Counsel
Telephone: (972) 497-5000
Telecopy: (972) 497-6660
47
(b) if given to the Property Trustee, at the mailing address
of the Property Trustee set forth below (or such other address as the
Property Trustee may give notice of to the Holders of the Securities
and the Sponsor):
The Bank of New York
101 Barclay Street, Floor 8W
New York, New York 10286
Attention: Corporate Trust Administration
Telephone: (212) 815-5498
Telecopy: (212) 815-5707
(c) if given to the Delaware Trustee, at the mailing address
of the Delaware Trustee set forth below (or such other address as the
Delaware Trustee may give notice of to the Holders of the Securities
and the Sponsor):
The Bank of New York (Delaware)
700 White Clay Center, Route 273
Newark, Delaware 19711
Attention: Corporate Administration & Compliance
Telecopy: (302) 283-8279
(d) if given to the Holder of the Common Securities or the
Sponsor, at the mailing address of the Sponsor set forth below (or such
other address as the Holder of the Common Securities or the Sponsor may
give notice of to the Trust):
Lennox International Inc.
2140 Lake Park Blvd.
Richardson, Texas 75080
Attention: General Counsel
Telephone: (972) 497-5000
Telecopy: (972) 497-6660
(e) if given to any other Holder, at the address set forth on
the books and records of the Trust.
A copy of any notice to the Property Trustee or the Delaware
Trustee shall also be sent to the Trust. All notices shall be deemed to have
been given when (i) received in person, (ii) telecopied with receipt confirmed
or (iii) received if mailed by first class mail, postage prepaid, except that if
a notice or other document is refused delivery or cannot be delivered because of
a changed address of which no notice was given, such notice or other document
shall be deemed to have been delivered on the date of such refusal or inability
to deliver.
SECTION 14.02 Undertaking for Costs.
All parties to this Declaration agree, and each Holder of any
Securities by his or her acceptance thereof shall be deemed to have agreed, that
any court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Declaration, or in any
48
suit against the Property Trustee for any action taken or omitted by it as
Property Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant;
provided, however, that the provisions of this Section 14.02 shall not apply to
any suit instituted by the Property Trustee, to any suit instituted by any
Holder of Preferred Securities, or group of Holders of Preferred Securities,
holding more than 25% in aggregate liquidation amount of the outstanding
Preferred Securities, or to any suit instituted by any Holder of Preferred
Securities for the enforcement of the payment of the principal of, any premium
or interest on the Debentures, on or after the respective due dates expressed in
such Debentures.
SECTION 14.03 Governing Law.
This Declaration, the Securities and the rights of the parties
hereunder shall be governed by and interpreted in accordance with the laws of
the State of Delaware and all rights and remedies shall be governed by such laws
without regard to any principles of conflict of laws thereof that would result
in the application of the laws of any other jurisdiction.
SECTION 14.04 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 14.05 Partial Enforceability.
If any provision of this Declaration, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to Persons
or circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.06 Counterparts.
This Declaration may contain more than one counterpart of the
signature pages and this Declaration may be executed by the affixing of the
signature of the Sponsor and each of the Trustees to one of such counterpart
signature pages. All of such counterpart signature pages shall be read as though
one, and they shall have the same force and effect as though all of the signers
had signed a single signature page.
SECTION 14.07 Intention of the Parties.
It is the intention of the parties hereto that the Trust not
be classified for U.S. federal income tax purposes as an association taxable as
a corporation or partnership but that the Trust be treated as a grantor trust
for U.S. federal income tax purposes. The provisions of this Declaration shall
be interpreted to further this intention of the parties.
49
SECTION 14.08 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party shall be deemed
to be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 14.09 No Recourse.
The Trust's obligations hereunder are intended to be the
obligations of the Trust and no recourse for the payment of Distributions, or
for any claim upon the Securities or otherwise in respect thereof, shall be had
against any Holder of Securities or any Affiliate of a Holder of Securities,
solely by reason of such Person's being a Holder of Securities or an Affiliate
of a Holder of Securities, it being understood that the Holder of Securities,
solely by reason of being a Holder of Securities, has limited liability (in
accordance with the provisions of the Statutory Trust Act) for the liabilities
and obligations of the Trust. Nothing contained in this Section 14.09 shall be
construed to limit the exercise or enforcement, in accordance with the terms of
this Declaration, the Preferred Securities Guarantee and the Indenture, of the
rights and remedies against the Trust or the Sponsor.
50
IN WITNESS WHEREOF, the undersigned has caused these presents
to be executed as of the day and year first above written.
LENNOX INTERNATIONAL INC.,
as Sponsor
By:
------------------------------------------------
Name:
Title:
,
--------------------------------------------------
as Regular Trustee
,
--------------------------------------------------
as Regular Trustee
,
--------------------------------------------------
as Regular Trustee
THE BANK OF NEW YORK,
as Property Trustee
By:
------------------------------------------------
Name:
Title:
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By:
------------------------------------------------
Name:
Title:
51
EXHIBIT A
CERTIFICATE OF TRUST
OF
LENNOX TRUST [I] [II]
THIS CERTIFICATE OF TRUST of Lennox Trust [I] [II] (the
"Trust"), dated as of January 23, 2003, is being duly executed and filed by the
undersigned, as trustees, with the Secretary of State of the State of Delaware
to form a statutory trust under the Delaware Statutory Trust Act (12 Del. Code
Section 3801 et seq.) (the "Act").
1. Name. The name of the statutory trust being formed hereby
is "Lennox Trust [I] [II]."
2. Delaware Trustee. The name and business address of the
trustee of the Trust with a principal place of business in the State of Delaware
are The Bank of New York (Delaware), 700 White Clay Center, Route 273, Newark,
Delaware 19711.
3. Effective Date. This Certificate of Trust shall be
effective at the time of its filing with the Secretary of State of the State of
Delaware.
4. Counterparts. This Certificate of Trust may be executed in
one or more counterparts.
A-1
IN WITNESS WHEREOF, the undersigned, being all of the trustees
of the Trust at the time of filing this Certificate of Trust, have executed this
Certificate of Trust as of the date first above written pursuant to Section
3811(a) of the Act.
THE BANK OF NEW YORK (DELAWARE),
not in its individual capacity,
but solely as Delaware Trustee
By:
---------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
not in its individual capacity,
but solely as Property Trustee
By:
---------------------------------------
Name:
Title:
RICHARD A. SMITH,
not in his individual capacity,
but solely as Regular Trustee
--------------------------------------------
A-2
EXHIBIT B
TERMS OF
PREFERRED SECURITIES
Pursuant to Section 7.01(b) of the Amended and Restated
Declaration of Trust of Lennox Trust [I] [II] dated as of ______________, _____
(as amended from time to time, the "Declaration"), the designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Preferred Securities are set forth below (each capitalized term used but not
defined herein having the meaning set forth in the Declaration):
1. DESIGNATION AND NUMBER. _____________ (____________)
Preferred Securities of the Trust with an aggregate liquidation amount at any
time outstanding with respect to the assets of the Trust of
____________________________ Dollars ($____________) [(including up to
____________ (__________) Preferred Securities of the Trust with an aggregate
liquidation amount with respect to the assets of the Trust of _______________
($_________) issuable upon exercise of the Over-allotment Option)], and each
with a liquidation amount with respect to the assets of the Trust of $___ per
Preferred Security, are hereby designated as "__% [[Convertible] Trust Preferred
Securities]." The Preferred Security Certificates evidencing the Preferred
Securities shall be substantially in the form attached hereto as Annex I, with
such changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice, or to conform to the rules of any Exchange
on which the Preferred Securities are then listed or traded. In connection with
the issuance and sale of the Preferred Securities and the Common Securities, the
Trust will purchase as trust assets Debentures of Lennox having an aggregate
principal amount equal to the aggregate liquidation amount of the Preferred
Securities and the Common Securities so issued, and bearing interest at an
annual rate equal to the annual Distribution rate on the Preferred Securities
and the Common Securities and having payment and redemption provisions which
correspond to the payment and redemption provisions of the Preferred Securities
and the Common Securities.
2. DISTRIBUTIONS. (a) Distributions payable on each Preferred
Security will be fixed at a rate per annum of ____% (the "Coupon Rate") of the
stated liquidation amount of $___ per Preferred Security, such rate being the
rate of interest payable on the Debentures to be held by the Property Trustee.
Distributions in arrears for more than one calendar quarter will accumulate
additional distributions thereon at the Coupon Rate per annum (to the extent
permitted by applicable law), compounded [quarterly] [semi-annually]. The term
"Distributions" as used herein means such periodic cash distributions and any
such additional distributions payable unless otherwise stated. A Distribution
will be made by the Property Trustee only to the extent that interest payments
are made in respect of the Debentures held by the Property Trustee and to the
extent the Trust has funds on hand legally available therefor. The amount of
Distributions payable for any period will be computed for any full [quarterly]
[semi-annual] Distribution period on the basis of a 360-day year of twelve
30-day months, and for any period shorter than a full [quarterly] [semi-annual]
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per [90-day quarter]
[180-day semi-annual period].
B-1
(b) Distributions on the Preferred Securities will accumulate
from ______________, ____ and will be payable [quarterly] [semi-annually] in
arrears, on [_____________, ____________,] _____________ and _____________ of
each year, commencing on _____________, ____, except as otherwise described
below, but only if and to the extent that interest payments are made in respect
of the Debentures held by the Property Trustee. So long as no Indenture Event of
Default has occurred and is continuing with respect to the Debentures, Lennox
has the right under the Indenture for the Debentures to defer payments of
interest on the Debentures by extending the interest payment period of the
Debentures at any time and from time to time for a period not exceeding [20]
[10] consecutive [quarterly] [semi-annual] interest periods (each, an "Extension
Period"), during which Extension Period no interest shall be due and payable on
the Debentures. As a consequence of such deferral, Distributions shall also be
deferred. Despite such deferral, Distributions will continue to accumulate on
the Preferred Securities with additional distributions thereon (to the extent
permitted by applicable law but not at a rate greater than the rate at which
interest is then accruing on the Debentures) at the Coupon Rate compounded
[quarterly] [semi-annually] during any such Extension Period. No Extension
Period shall extend beyond the stated maturity of the Debentures. Prior to the
termination of any such Extension Period, Lennox may further extend such
Extension Period; provided that such Extension Period together with all such
previous and further extensions thereof may not exceed [20] [10] consecutive
[quarterly] [semi-annual] interest periods or extend beyond the stated maturity
of the Debentures. Upon the termination of any Extension Period and the payment
of all amounts then due, Lennox may commence a new Extension Period, subject to
the foregoing provisions. On the first Distribution payment date following the
end of an Extension Period, payments of accumulated Distributions will be
payable to Holders of Preferred Securities as they appear on the books and
records of the Trust (regardless of who the Holders may have been on other dates
during the Extension Period) on the record date for such Distribution payment
date.
(c) Distributions on the Preferred Securities will be payable
promptly by the Property Trustee (or other Paying Agent) upon receipt of
immediately available funds to the Holders thereof as they appear on the books
and records of the Trust on the relevant record dates. While the Preferred
Securities remain in book-entry only form, the relevant record dates shall be
the Business Day next preceding the relevant Distribution payment date, and if
the Preferred Securities are no longer in book-entry only form, the relevant
record dates will be the close of business on the [_________, _________,]
_________, and _________ next preceding the relevant Distribution payment date,
which record and payment dates correspond to the record and interest payment
dates on the Debentures. Distributions payable on any Preferred Securities that
are not punctually paid on any Distribution payment date as a result of Lennox's
having failed to make the corresponding payment on the Debentures will forthwith
cease to be payable to the person in whose name such Preferred Security is
registered on the relevant record date, and such defaulted payment will instead
be payable to the person in whose name such Preferred Security is registered on
the special record date established by the Regular Trustees, which record date
shall correspond to the special record date or other specified date determined
in accordance with the Indenture; provided, however, that Distributions shall
not be considered payable on any Distribution payment date falling within an
Extension Period unless Lennox has elected to make a full or partial payment of
accrued interest on the Debentures on such Distribution payment date. Subject to
any applicable laws and regulations and the provisions of
B-2
the Declaration, each payment in respect of the Preferred Securities will be
made as described in Section [9] hereof. If any date on which Distributions are
payable on the Preferred Securities is not a Business Day, then payment of the
Distribution payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on the date such payment was
originally payable. Notwithstanding anything herein to the contrary, the record
dates and payment dates for Distributions shall be the same as the record dates
and payment dates for the Debentures.
(d) All Distributions paid with respect to the Preferred
Securities and the Common Securities will be paid Pro Rata (as defined below) to
the Holders thereof entitled thereto. If an Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to such payments.
(e) In the event that there is any money or other property
held by or for the Trust that is not accounted for under the Declaration, such
money or property shall be distributed Pro Rata among the Holders of the
Preferred Securities and the Common Securities.
[(f) In the event of an election by the Holder to convert its
Preferred Securities through the Conversion Agent into Shares pursuant to the
terms of the Preferred Securities as set forth herein, no payment, allowance or
adjustment shall be made with respect to accumulated and unpaid Distributions on
such Preferred Securities, or be required to be made; provided, however, that if
a Preferred Security is surrendered for conversion after the close of business
on any regular record date for payment of a Distribution and before the opening
of business on the corresponding Distribution payment date, then,
notwithstanding such conversion, the Distribution payable on such Distribution
payment date will be paid in cash to the person in whose name the Preferred
Security is registered at the close of business on such record date, and (other
than a Preferred Security or a portion of a Preferred Security called for
redemption on a redemption date occurring after such record date and on or prior
to such Distribution payment date) when so surrendered for conversion, the
Preferred Security must be accompanied by payment of an amount equal to the
Distribution payable on such Distribution payment date.]
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION. (a) In the event of any
voluntary or involuntary dissolution of the Trust other than as contemplated by
Section 8.01(i) [or (v)] of the Declaration, the Trust shall be wound-up and
liquidated by the Property Trustee as expeditiously as the Property Trustee
determines to be possible by distributing, after satisfaction of liabilities to
the creditors of the Trust, Pro Rata to the Holders of the Preferred Securities
and the Common Securities Debentures in an aggregate principal amount equal to
the aggregate stated liquidation amount of the Preferred Securities and the
Common Securities and bearing accrued and unpaid interest in an amount equal to
the accumulated and unpaid Distributions on, the Preferred Securities and the
Common Securities; provided, however, if distribution of Debentures is not
practical whether because of a decree of judicial dissolution or otherwise, the
Holders of the Preferred Securities and the Common Securities will be entitled
to receive Pro Rata solely out of the assets of the Trust legally available for
distribution to Holders of Preferred Securities and Common Securities after
satisfaction of liabilities to the creditors of the Trust, an amount equal
B-3
to the aggregate of the stated liquidation amount of $___ per Preferred Security
and Common Security plus accumulated and unpaid Distributions thereon to the
date of payment (such amount being the "Liquidation Distribution").
If, upon any such dissolution, the Liquidation Distribution
can be paid only in part because the Trust has insufficient assets on hand
legally available to pay in full the aggregate Liquidation Distribution, then
the amounts payable directly by the Trust on the Preferred Securities and the
Common Securities shall be paid, subject to the next paragraph, on a Pro Rata
basis.
Holders of Common Securities will be entitled to receive
Liquidation Distributions upon any such dissolution Pro Rata with Holders of
Preferred Securities, except that if an Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to such Liquidation Distribution.
(b) The Holder of the Common Securities shall have the right
to direct the Property Trustee in writing at any time to dissolve the Trust and,
after satisfaction of liabilities to creditors of the Trust, to distribute
Debentures to Holders in exchange for Securities (which direction is optional
and wholly within the discretion of the Holder of the Common Securities). Upon
the receipt of any such written direction, the Property Trustee shall promptly,
after satisfaction of liabilities to creditors of the Trust, (i) dissolve the
Trust and (ii) distribute Debentures in an aggregate principal amount equal to
the aggregate stated liquidation amount of the Preferred Securities and the
Common Securities held by each Holder, which Debentures bear accrued and unpaid
interest in an amount equal to the accumulated and unpaid Distributions on the
Preferred Securities and the Common Securities of such Holder, in exchange for
the Preferred Securities and Common Securities of such Holder.
(c) On the date fixed for any distribution of Debentures, upon
dissolution of the Trust, (i) the Preferred Securities will no longer be deemed
to be outstanding and may be canceled by the Regular Trustees, and (ii)
Certificates representing Preferred Securities will be deemed to represent
beneficial interests in the Debentures having an aggregate principal amount
equal to the stated liquidation amount of, and bearing accrued and unpaid
interest equal to accumulated and unpaid Distributions to, but excluding, the
date fixed for such distribution on, such Preferred Securities until such
Certificates are presented to Lennox or its agent for transfer or reissuance.
(d) If Debentures are distributed to Holders of the Preferred
Securities, Lennox, pursuant to the terms of the Indenture, will use its
reasonable best efforts to have the Debentures listed on the New York Stock
Exchange or on such other Exchange as the Preferred Securities were listed or
traded immediately prior to the distribution of the Debentures.
4. REDEMPTION OF DEBENTURES. The Preferred Securities may be redeemed
only if Debentures having an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Securities and the Common Securities are
repaid or redeemed as set forth below:
(a) Upon the repayment of the Debentures, in whole or in part,
whether at maturity, upon redemption at any time or from time to time
[on or after _________,
B-4
____], the proceeds of such repayment will be promptly applied to
redeem Pro Rata Preferred Securities and Common Securities having an
aggregate liquidation amount equal to the aggregate principal amount of
the Debentures so repaid or redeemed, upon not less than 30 nor more
than 60 days' notice, at a redemption price [of $______ per Preferred
Security and Common Security] [equal to the greater of (i) the
liquidation amount of the Preferred Securities and Common Securities to
be redeemed and (ii) the Make-Whole Amount, in each case] plus an
amount equal to accumulated and unpaid Distributions thereon to, but
excluding, the date of redemption, payable in cash (the "Redemption
Price"). The date of any such repayment or redemption of Preferred
Securities and Common Securities shall be established to coincide with
the repayment or redemption date of the Debentures.
["Make-Whole Amount" shall be equal to, as determined by the
Quotation Agent, the sum of the present values, calculated as of the
redemption date, of (i) each interest payment that would have been
payable on the Debentures or portions thereof being redeemed, if such
Debentures or portions thereof were not redeemed, on each scheduled
interest payment date occurring after the redemption date (excluding
any accrued interest for the period prior to the redemption date) and
(ii) the principal amount of such Debentures or portions thereof that
would have been payable, if such Debentures or portions thereof were
not redeemed, at the scheduled maturity of such Debentures or portions
thereof being redeemed (the "Remaining Life"), in each case discounted
to the redemption date on a semiannual basis (assuming a 360-day year
consisting of 30-day months) at the Adjusted Treasury Rate plus ___
basis points for the purpose of calculating the Redemption Price.
"Adjusted Treasury Rate" means, with respect to any redemption
date, the rate per annum equal to (i) the yield, under the heading
which represents the average for the immediately preceding week,
appearing in the most recently published statistical release designated
"H.15 (519)" or any successor publication which is published weekly by
the Board of Governors of the Federal Reserve System and which
establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant
Maturities," for the maturity corresponding to the Remaining Life;
provided that if no maturity is within three months before or after the
Remaining Life, yields for the two published maturities most closely
corresponding to the Remaining Life will be determined and the Treasury
Rate will be interpolated or extrapolated from such yields on a
straight-line basis rounding to the nearest month; or (ii) if such
release (or any successor release) is not published during the week
preceding such calculation date or does not contain such yields, the
rate per annum equal to the semiannual equivalent yield to maturity of
the Comparable Treasury Issue, calculated using a price for the
Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for such redemption
date. The Treasury Rate shall be calculated on the third Business Day
preceding such redemption date.
"Comparable Treasury Issue" means the United States Treasury
security selected by the Quotation Agent as having a maturity date
comparable to the Remaining Life that would be utilized, at the time of
selection and in accordance with customary financial
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practice, in pricing new issues of corporate debt securities of
comparable maturity to the Remaining Life. If no United States Treasury
security has a maturity date which is within a period from three months
before to three months after the Remaining Life, the two most closely
corresponding United States Treasury securities shall be used as the
Comparable Treasury Issue, and the Adjusted Treasury Rate shall be
interpolated or extrapolated on a straight-line basis, rounding to the
nearest month using such securities.
"Quotation Agent" means ________________ and its successors;
provided, however, that if the foregoing shall cease to be a primary
U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), Lennox shall substitute therefor another Primary Treasury
Dealer.
"Reference Treasury Dealer" means: (i) the Quotation Agent and
(ii) any other Primary Treasury Dealer selected by the Debenture
Trustee after consultation with Lennox.
"Comparable Treasury Price" means, with respect to any
redemption date, (i) the average of five Reference Treasury Dealer
Quotations for such redemption date, after excluding the highest and
lowest of such Reference Treasury Dealer Quotations, or (ii) if the
Debenture Trustee obtains fewer than five such Reference Treasury
Dealer Quotations, the average of all such quotations.
"Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and any redemption date, the average, as
determined by the Debenture Trustee, of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage
of its principal amount) quoted in writing to the Debenture Trustee by
such Reference Treasury Dealer as of 3:30 p.m., New York time, on the
third Business Day preceding such redemption date.]
(b) If fewer than all the outstanding Preferred Securities and
Common Securities are to be so redeemed, the Preferred Securities and
the Common Securities will be redeemed Pro Rata and the Preferred
Securities will be redeemed as described in Section 4(e)(ii) below,
except that if an Event of Default has occurred and is continuing, the
Preferred Securities will have a priority over the Common Securities
with respect to payment of the Redemption Price. If a partial
redemption would result in the delisting of the Preferred Securities by
any Exchange on which the Preferred Securities are then listed or
traded, Lennox pursuant to the Indenture will redeem Debentures only in
whole and, as a result, the Trust may redeem the Preferred Securities
only in whole.
(c) If, at any time, a Tax Event or an Investment Company
Event (each as hereinafter defined and each a "Special Event") shall
occur and be continuing, Lennox shall have the right at any time [prior
to __________, ____], upon not less than 30 nor more than 60 days'
notice, to redeem the Debentures in whole [or] [but not] in part for
cash at the Redemption Price within 90 days following the occurrence of
such Special Event, and promptly following such redemption, Preferred
Securities and Common Securities with an aggregate liquidation amount
equal to the aggregate principal amount
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of the Debentures so redeemed will be redeemed by the Trust at the
Redemption Price on a Pro Rata basis. The Common Securities will be
redeemed Pro Rata with the Preferred Securities, except that if an
Event of Default has occurred and is continuing, the Preferred
Securities will have a priority over the Common Securities with respect
to payment of the Redemption Price.
"Tax Event" means that the Sponsor and the Regular Trustees
shall have received an Opinion of Counsel experienced in such matters
to the effect that as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any rules
or regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, (b) any amendment
to, or change in, an interpretation or application of any such laws,
rules or regulations by any legislative body, court, governmental
agency or regulatory authority (including the enactment of any
legislation or the publication of any judicial decision or regulatory
determination), (c) any interpretation or pronouncement by any
legislative body, court, governmental agency or regulatory authority
that provides for a position with respect to such laws, rules or
regulations that differs from its previous position or a commonly
accepted position or (d) any action taken by any governmental agency or
regulatory authority, which amendment or change is enacted,
promulgated, issued or announced or which interpretation or
pronouncement is issued or announced or which action is taken, in each
case on or after ______________, _____, there is more than an
insubstantial risk that (i) the Trust is, or will be within 90 days of
the date thereof, subject to U.S. federal income tax with respect to
income accrued or received on the Debentures, (ii) the Trust is, or
will be within 90 days of the date thereof, subject to more than a de
minimis amount of taxes, duties or other governmental charges or (iii)
interest payable by Lennox to the Trust on the Debentures is not, or
within 90 days of the date thereof will not be, deductible by Lennox
for U.S. federal income tax purposes.
"Investment Company Event" means that the Sponsor and the
Regular Trustees shall have received an Opinion of Counsel experienced
in practice under the Investment Company Act that, as a result of the
occurrence of a change in law or regulation or a change in
interpretation or application of law or regulation by any legislative
body, court, governmental agency or regulatory authority (a "Change in
Investment Company Act Law"), there is more than an insubstantial risk
that the Trust is or will be considered an Investment Company which is
required to be registered under the Investment Company Act, which
Change in Investment Company Act Law becomes effective on or after
______________, _____.
(d) The Trust may not redeem fewer than all the outstanding
Preferred Securities unless all accumulated and unpaid Distributions
have been paid on all Preferred Securities for all [quarterly]
[semi-annual] Distribution periods terminating on or prior to the date
of redemption.
(e) (i) Notice of any redemption of, or notice of distribution
of Debentures in exchange for, the Preferred Securities and the Common
Securities (a "Redemption/Distribution Notice") will be given by the
Regular Trustees on behalf of the
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Trust by mail to each Holder of Preferred Securities and Common
Securities to be redeemed or exchanged not less than 30 nor more than
60 days prior to the date fixed for redemption or exchange thereof. For
purposes of the calculation of the date of redemption or exchange and
the dates on which notices are given pursuant to this Section 4(e)(i),
a Redemption/Distribution Notice shall be deemed to be given on the day
such notice is first mailed by first-class mail, postage prepaid, to
Holders of Preferred Securities and Common Securities. Each
Redemption/Distribution Notice shall be addressed to the Holders of
Preferred Securities and Common Securities at the address of each such
Holder appearing in the books and records of the Trust. No defect in
the Redemption/Distribution Notice or in the mailing of either thereof
with respect to any Holder shall affect the validity of the redemption
or exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding
Preferred Securities are to be redeemed, the Preferred Securities to be
redeemed will be redeemed Pro Rata from each Holder of Preferred
Securities, it being understood that, in respect of Preferred
Securities registered in the name of and held of record by DTC (or
successor Clearing Agency) or its nominee, the Preferred Securities
will be redeemed from, and the distribution of the proceeds of such
redemption will be made to, DTC (or successor Clearing Agency) or its
nominee.
(iii) Subject to Section [9] hereof, if the Trust gives a
Redemption/Distribution Notice in respect of a redemption of Preferred
Securities as provided in this Section 4, then (A) while the Preferred
Securities are in book-entry only form, with respect to the Preferred
Securities, by 12:00 noon, New York City time, on the redemption date;
provided that Lennox has paid the Property Trustee, in immediately
available funds, a sufficient amount of cash in connection with the
related redemption or maturity of the Debentures, the Property Trustee
will deposit irrevocably with DTC (or successor Clearing Agency) funds
sufficient to pay the applicable Redemption Price with respect to the
Preferred Securities and will give DTC (or successor Clearing Agency)
irrevocable instructions and authority to pay the Redemption Price to
the Holders of the Preferred Securities and (B) if the Preferred
Securities are issued in definitive form, with respect to the Preferred
Securities and provided that Lennox has paid the Property Trustee, in
immediately available funds, a sufficient amount of cash in connection
with the related redemption or maturity of the Debentures, the Property
Trustee will pay the relevant Redemption Price to the Holders of such
Preferred Securities by check mailed to the address of the relevant
Holder appearing on the books and records of the Trust on the
redemption date or by wire transfer of immediately available funds to
an account designated by such Holder. If a Redemption/Distribution
Notice shall have been given and funds deposited as required, if
applicable, then immediately prior to the close of business on the
redemption date, Distributions will cease to accumulate on the
Preferred Securities called for redemption, such Preferred Securities
will no longer be deemed to be outstanding and all rights of Holders of
such Preferred Securities so called for redemption will cease, except
the right of the Holders of such Preferred Securities to receive the
Redemption Price, but without interest on such Redemption Price.
Neither the Trustees nor the Trust shall be required to register or
cause to be registered the transfer of any
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Preferred Securities which have been so called for redemption. If any
date fixed for redemption of Preferred Securities is not a Business
Day, then payment of the Redemption Price payable on such date will be
made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if
such Business Day falls in the next calendar year, such payment will be
made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date fixed for redemption. If
payment of the Redemption Price in respect of Preferred Securities is
improperly withheld or refused and not paid either by the Property
Trustee or by Lennox pursuant to the Preferred Securities Guarantee,
Distributions on such Preferred Securities will continue to accumulate,
from the original redemption date to the date of payment, in which case
the actual payment date will be considered the date fixed for
redemption for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to DTC or its nominee (or any
successor Clearing Agency or its nominee) if the Global Certificates
have been issued or, if Definitive Preferred Security Certificates have
been issued, to the Holders of the Preferred Securities.
(v) Subject to the foregoing and applicable law (including,
without limitation, U.S. federal securities laws), Lennox or any of its
Affiliates may at any time and from time to time purchase outstanding
Preferred Securities by tender, in the open market or by private
agreement.
5. [CONVERSION RIGHTS. The Holders of Preferred Securities shall have
the right at any time prior to the close of business on ___________, ____ or, in
the case of Preferred Securities called for redemption, prior to the close of
business on the Business Day prior to the redemption date, at their option, to
cause the Conversion Agent to convert Preferred Securities, on behalf of the
converting Holders, into Shares in the manner described herein on and subject to
the following terms and conditions:
(a) The Preferred Securities will be convertible at the office
of the Conversion Agent maintained for such purpose in the Borough of
Manhattan, The City of New York, into fully paid and nonassessable
Shares pursuant to the Holder's direction to the Conversion Agent to
exchange such Preferred Securities for a portion of the Debentures
theretofore held by the Trust on the basis of one Preferred Security
per $______ principal amount of Debentures, and immediately convert
such amount of Debentures into fully paid and nonassessable Shares at
an initial rate of __ Shares per $_______ principal amount of
Debentures (which is equivalent to a conversion price of $___ per
Share, subject to certain adjustments set forth in the Supplemental
Indenture (as so adjusted, the "Conversion Price")).
(b) In order to convert Preferred Securities into Shares, the
Holder shall submit to the Conversion Agent at the office referred to
above an irrevocable request to convert Preferred Securities on behalf
of such Holder (the "Conversion Request"), together, if the Preferred
Securities are in certificated form, with such Preferred Security
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Certificates. The Conversion Request shall (i) set forth the number of
Preferred Securities to be converted and the name or names, if other
than the Holder, in which the Shares should be issued and (ii) direct
the Conversion Agent (a) to exchange such Preferred Securities for a
portion of the Debentures held by the Trust (at the rate of exchange
specified in the preceding paragraph) and (b) to immediately convert
such Debentures on behalf of such Holder into Shares, subject to
certain adjustments set forth in the Supplemental Indenture (at the
conversion rate specified in the preceding paragraph). The Conversion
Agent shall notify the Trust of the Holder's election to exchange
Preferred Securities for a portion of the Debentures held by the Trust
and the Trust shall, upon receipt of such notice, deliver to the
Conversion Agent the appropriate principal amount of Debentures for
exchange in accordance with this Section. The Conversion Agent shall
thereupon notify the Sponsor of the Holder's election to convert such
Debentures into Shares. If a Preferred Security is surrendered for
conversion after the close of business on any regular record date for
payment of a Distribution and before the opening of business on the
corresponding Distribution payment date, then, notwithstanding such
conversion, the Distribution payable on such Distribution payment date
will be paid in cash to the Person in whose name the Preferred Security
is registered at the close of business on such record date, and (other
than a Preferred Security or a portion of a Preferred Security called
for redemption on a redemption date occurring after such record date
and on or prior to such Distribution payment date) when so surrendered
for conversion, the Preferred Security must be accompanied by payment
of an amount equal to the Distribution payable on such Distribution
payment date. Except as provided above, neither the Trust nor the
Sponsor will make, or be required to make, any payment, allowance or
adjustment upon any conversion on account of any accumulated and unpaid
Distributions accumulated on the Preferred Securities surrendered for
conversion, or on account of any accumulated and unpaid dividends on
the Shares issued upon such conversion, and the delivery of Shares upon
conversion of the Preferred Securities shall be deemed to constitute
full payment for all accumulated and unpaid Distributions on the
Preferred Securities. Preferred Securities shall be deemed to have been
converted immediately prior to the close of business on the day on
which a Conversion Request relating to such Preferred Securities is
received by the Trust in accordance with the foregoing provision (the
"Conversion Date"). The Person or Persons entitled to receive Shares
issuable upon conversion of the Debentures shall be treated for all
purposes as the record holder or holders of such Shares at such time.
As promptly as practicable on or after the Conversion Date, the Sponsor
shall issue the number of full Shares issuable upon such conversion to,
and shall deliver at the office of the Conversion Agent the cash
payment, if any, in lieu of any fraction of any Share for the account
of, the Person or Persons entitled to receive the same, unless
otherwise directed by the Holder in the Conversion Request. The
Conversion Agent shall distribute such cash payment, if any, to such
Person or Persons.
(c) Each Holder of a Preferred Security by his acceptance
thereof appoints ________________________ as the "Conversion Agent" for
the purpose of effecting the conversion of Preferred Securities in
accordance with this Section. In effecting the conversion and
transactions described in this Section, the Conversion Agent shall be
acting as agent of the Holders of Preferred Securities directing it to
effect such
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conversion transactions. The Conversion Agent is hereby authorized (i)
to exchange Preferred Securities from time to time for Debentures held
by the Trust in connection with the conversion of such Preferred
Securities in accordance with this Section and (ii) to convert all or a
portion of the Debentures into Shares and thereupon to deliver such
Shares in accordance with the provisions of this Section and to deliver
to the Trust a new Debenture or Debentures for any resulting
unconverted principal amount.
(d) No fractional Shares will be issued as a result of
conversion, but in lieu thereof, such fractional interest will be paid
by the Sponsor in cash (based upon the Closing Price (as defined in the
Indenture) of Shares on the date such Preferred Securities are
surrendered for conversion to the Trust) to the Conversion Agent, which
in turn will make such payment to the Holder or Holders of Preferred
Securities so converted, or, if such day is not a Trading Day (as
defined in the Indenture), on the next Trading Day.
(e) The Sponsor shall at all times reserve and keep available
out of its authorized and unissued common stock, par value $.01 per
share ("Common Stock"), solely for issuance upon the conversion of the
Debentures, such number of Shares as shall from time to time be
issuable upon the conversion of all the Debentures then outstanding.
Notwithstanding the foregoing, the Sponsor shall be entitled to deliver
upon conversion of Debentures Shares reacquired and held in the
treasury of the Sponsor (in lieu of the issuance of authorized and
unissued Shares), so long as any such treasury shares are free and
clear of all liens, charges, security interests or encumbrances. Any
Shares issued upon conversion of the Debentures shall be duly
authorized, validly issued, fully paid and nonassessable. The
Conversion Agent shall deliver the Shares received upon conversion of
the Debentures to the converting Holder of Preferred Securities free
and clear of all liens, charges, security interests and encumbrances,
except for United States withholding taxes. Whenever the Sponsor issues
Shares upon conversion of Debentures and the Sponsor has in effect at
such time a share purchase rights agreement under which holders of its
Common Stock are issued rights ("Rights") entitling the holders under
certain circumstances to purchase an additional share or Shares or
other capital stock of the Sponsor, the Sponsor will issue, together
with each such share of Common Stock, such number of Rights (which
number may be a fraction) as shall at that time be issuable with a
share of Common Stock pursuant to such share purchase rights agreement.
Each of the Sponsor and the Trust shall prepare and shall use its best
efforts to obtain and keep in force such governmental or regulatory
permits or other authorizations as may be required by law, and shall
comply with all applicable requirements as to registration or
qualification of Shares (and all requirements to list Shares issuable
upon conversion of Debentures that are at the time applicable), in
order to enable the Sponsor to lawfully issue Shares to the Trust upon
conversion of the Debentures and the Trust to lawfully deliver Shares
to each Holder of Preferred Securities upon conversion of the Preferred
Securities.
(f) Except as otherwise provided in Section 5(e), the Sponsor
will pay any and all taxes that may be payable in respect of the issue
or delivery of Shares on conversion of Debentures and the delivery of
the Shares by the Trust upon conversion of the Preferred Securities.
The Sponsor shall not, however, be required to pay any tax
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which may be payable in respect of any transfer involved in the issue
and delivery of Shares in a name other than that in which the Preferred
Securities so converted were registered, and no such issue or delivery
shall be made unless and until the Person requesting such issue has
paid to the Conversion Agent on behalf of the Trust the amount of any
such tax, or has established to the satisfaction of the Trust that such
tax has been paid.
(g) Nothing in the preceding Section 5(f) shall limit the
requirement of the Trust to withhold taxes pursuant to the terms of the
Preferred Securities or set forth in this Exhibit B to the Declaration
or to the Declaration itself or otherwise require the Property Trustee
or the Trust to pay any amounts on account of such withholdings.]
6. VOTING RIGHTS. (a) Except as provided under Section [6](b) below and
as otherwise required by law and the Declaration, the Holders of the Preferred
Securities will have no voting rights.
(b) If any proposed amendment to the Declaration provides for,
or the Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the rights, privileges or preferences of the Securities in any
material respect, whether by way of amendment to the Declaration, other than as
described in Section 12.01(b) of the Declaration, or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.01 of the Declaration, then the Holders of outstanding Securities will
be entitled to vote on such amendment or proposal as a single class and such
amendment or proposal shall not be effective except with the approval of the
Holders of Securities of at least a Majority in liquidation amount of the
Securities, voting together as a single class; provided, however, that (A) if
any amendment or proposal referred to in clause (i) above would adversely affect
only the Preferred Securities or the Common Securities in any material respect,
then only the affected class of Securities will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of at least a Majority in liquidation amount of such
class of Securities and (B) amendments to the Declaration shall be subject to
such further requirements as are set forth in Sections 12.01 and 12.02 of the
Declaration.
In the event the consent of the Property Trustee, as the holder
of the Debentures, is required under the Indenture with respect to any
amendment, modification or termination of the Indenture or the Debentures, the
Property Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination. The
Property Trustee shall vote with respect to such amendment, modification or
termination as directed by a Majority in liquidation amount of the Securities
voting together as a single class; provided, however, that where such amendment,
modification or termination of the Indenture requires the consent or vote of (1)
holders of Debentures representing a specified percentage greater than a
majority in principal amount of the Debentures or (2) each holder of Debentures,
the Property Trustee may only vote with respect to that amendment, modification
or termination as directed by, in the case of clause (1) above, the vote of
Holders of Securities representing such specified percentage of the aggregate
liquidation amount of the Securities, or, in the case of clause (2) above, each
Holder of Securities; and provided, further, that the Property Trustee shall be
under no obligation to take any action in accordance with the directions of the
Holders of
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Securities unless the Property Trustee shall have received, at the expense of
the Sponsor, an Opinion of Counsel experienced in such matters to the effect
that the Trust will not be classified for U.S. federal income tax purposes as
other than a grantor trust on account of such action.
So long as any Debentures are held by the Property Trustee,
the Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or exercising any
trust or power conferred on the Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under Section 6.04 of
the Indenture or (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Debentures, without, in
each case, obtaining the prior approval of the Holders of a Majority in
liquidation amount of the Securities. The Trustees shall not revoke any action
previously authorized or approved by a vote of the Holders of the Preferred
Securities except by subsequent vote of such Holders. The Property Trustee shall
notify each Holder of Preferred Securities of any notice of default with respect
to the Debentures, unless the default has been cured before the giving of such
notice or the Property Trustee in good faith determines that the withholding of
such notice is in the interests of the Holders of the Securities in accordance
with Section 3.10(g) of the Declaration.
If an Event of Default has occurred and is continuing, then
the Holders of a Majority in liquidation amount of the Preferred Securities will
have the right, subject to Section 3.12(c)(iv) of the Declaration, to direct the
time, method and place of conducting any proceeding for any remedy available to
the Property Trustee or to direct the exercise of any trust or power conferred
upon the Property Trustee under the Declaration, including the right to direct
the Property Trustee to exercise the remedies available to it as a holder of the
Debentures. If the Property Trustee fails to enforce its rights under the
Debentures, a Holder of Preferred Securities may, to the extent permitted by
law, after a period of 30 days has elapsed since such Holder's written request
to the Property Trustee to enforce such rights, institute a legal proceeding
directly against the Sponsor to enforce the Property Trustee's rights under the
Debentures without first instituting any legal proceeding against the Property
Trustee or any other Person; provided that, if an Event of Default has occurred
and is continuing and such event is attributed to the failure of the Sponsor to
pay principal of or any premium or interest on the Debentures on the date such
amounts are otherwise payable (or in the case of redemption, on the redemption
date), then a Holder of Preferred Securities may directly institute a proceeding
for enforcement of payment to such Holder of such amounts on the Debentures
having a principal amount equal to the aggregate liquidation amount of the
Preferred Securities of such Holder (a "Holder Direct Action") on or after the
respective due date specified in the Debentures. In connection with such Holder
Direct Action, the Sponsor will be subrogated to the rights of such Holder of
Preferred Securities to the extent of any payment made by the Sponsor to such
Holders of Preferred Securities in such Holder Direct Action. Except as provided
in the preceding sentences, the Holders of Preferred Securities will not be able
to exercise directly any other remedy available to the Holders of the
Debentures.
A waiver of an Indenture Event of Default by the Property
Trustee at the direction of the Holders of the Preferred Securities will
constitute a waiver of the corresponding Event of Default under the Declaration
in respect of the Securities.
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Any required approval or direction of Holders of Preferred
Securities may be given at a separate meeting of Holders of Preferred Securities
convened for such purpose, at a meeting of all of the Holders of Securities or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote to be
mailed to each Holder of record of Preferred Securities. Each such notice will
include a statement setting forth (i) the date of such meeting, (ii) a
description of any resolution proposed for adoption at such meeting on which
such Holders are entitled to vote and (iii) instructions for the delivery of
proxies. Any action that may be taken at a meeting of the Holders of Preferred
Securities may be taken without a meeting and without prior notice if a consent
or consents in writing setting forth the action so taken is signed by Holders of
Preferred Securities owning not less than the minimum aggregate liquidation
amount of Preferred Securities that would be necessary to authorize or take such
action at a meeting at which all Holders of Preferred Securities having a right
to vote thereon were present and voting.
No vote or consent of the Holders of Preferred Securities will
be required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with the Declaration or Section 3 of
this Exhibit B.
Notwithstanding that Holders of Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Preferred Securities at such time that are owned by Lennox or by any
Affiliate of Lennox shall not be entitled to vote or consent and shall, for
purposes of such vote or consent, be treated as if they were not outstanding.
Holders of the Preferred Securities have no rights to increase
or decrease the number of Trustees or to appoint, remove or replace a Trustee,
which voting rights are vested exclusively in the Holders of the Common
Securities.
7. PRO RATA TREATMENT. A reference in these terms of the Preferred
Securities to any payment, Distribution or treatment as being "Pro Rata" shall
mean pro rata to each Holder of Securities according to the aggregate
liquidation amount of the Securities held by the relevant Holder in relation to
the aggregate liquidation amount of all Securities outstanding unless, in
relation to a payment, an Event of Default has occurred and is continuing, in
which case any funds available to make such payment shall be paid first to each
Holder of the Preferred Securities pro rata according to the aggregate
liquidation amount of Preferred Securities held by the relevant Holder relative
to the aggregate liquidation amount of all Preferred Securities outstanding, and
only after satisfaction of all amounts owed to the Holders of the Preferred
Securities, to each Holder of Common Securities pro rata according to the
aggregate liquidation amount of Common Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Common Securities
outstanding.
8. RANKING. The Preferred Securities rank pari passu and payment
thereon will be made Pro Rata with the Common Securities, except that when an
Event of Default occurs and is continuing, the rights of Holders of Preferred
Securities to payment in respect of Distributions and payments upon liquidation,
redemption or otherwise rank in priority to the rights of Holders of the Common
Securities.
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9. TRANSFER, EXCHANGE, METHOD OF PAYMENTS. Payment of Distributions and
payments on redemption of the Preferred Securities will be payable, the transfer
of the Preferred Securities will be registrable, and Preferred Securities will
be exchangeable for Preferred Securities of other denominations of a like
aggregate liquidation amount, at the corporate trust office of the Property
Trustee in The City of New York; provided that payment of Distributions may be
made at the option of the Regular Trustees on behalf of the Trust by check
mailed to the address of the persons entitled thereto or by wire transfer of
immediately available funds to an account designated by such Holder and that the
payment on redemption of any Preferred Security will be made only upon surrender
of such Preferred Security to the Property Trustee.
10. ACCEPTANCE OF INDENTURE AND PREFERRED SECURITIES GUARANTEE. Each
Holder of Preferred Securities, by the acceptance thereof, agrees to the
provisions of (i) the Preferred Securities Guarantee, including the
subordination provisions therein, and (ii) the Indenture and the Debentures,
including the subordination provisions of the Indenture.
11. NO PREEMPTIVE RIGHTS. The Holders of Preferred Securities shall
have no preemptive or similar rights to subscribe to any additional Preferred
Securities or any Common Securities.
12. MISCELLANEOUS. These Terms shall constitute a part of the
Declaration. The Trust will provide a copy of the Declaration and the Indenture
to a Holder of Preferred Securities without charge on written request to the
Trust at its principal place of business.
13. GOVERNING LAW. The Preferred Securities shall be governed by and
interpreted in accordance with the laws of the State of Delaware and all rights
and remedies shall be governed by such laws without regard to any principles of
conflict of laws thereof that would result in the application of the laws of any
other jurisdiction.
B-15
Annex I
FORM OF PREFERRED SECURITY CERTIFICATE
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE
INSERT - THIS PREFERRED SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF
THE DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY ("DTC") OR A NOMINEE OF DTC. THIS PREFERRED SECURITY IS
EXCHANGEABLE FOR PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
DECLARATION AND NO TRANSFER OF THIS PREFERRED SECURITY (OTHER THAN A TRANSFER OF
THIS PREFERRED SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF
DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.
UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (55 WATER STREET, NEW YORK, NEW YORK) TO LENNOX TRUST [I]
[II] OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC AND ANY PAYMENT HEREON
IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.]
<Table>
Certificate Number Number of Preferred Securities:
------------
Aggregate Liquidation Amount: $
------------
CUSIP NO.
------------
</Table>
Certificate Evidencing Preferred Securities
of
Lennox Trust [I] [II]
____% [[Convertible] Trust Preferred Securities]
(liquidation amount $___ per Preferred Security)
B-16
Lennox Trust [I] [II], a statutory trust created under the
laws of the State of Delaware (the "Trust"), hereby certifies that _________
(the "Holder") is the registered owner of _____ (______) preferred securities of
the Trust representing preferred undivided beneficial interests in the assets of
the Trust and designated the ___% [[Convertible] Trust Preferred Securities]
(liquidation amount $____ per preferred security) (the "Preferred Securities").
The Preferred Securities are transferable on the books and records of the Trust,
in person or by a duly authorized attorney, upon surrender of this Certificate
duly endorsed and in proper form for transfer. The designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Preferred Securities are set forth in, and this Certificate and the Preferred
Securities represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Declaration of Trust of
the Trust dated as of ______________, _____, as the same may be amended from
time to time (the "Declaration"), including the designation of the terms of
Preferred Securities as set forth in Exhibit B thereto. The Preferred Securities
and the Common Securities issued by the Trust pursuant to the Declaration
represent undivided beneficial interests in the assets of the Trust, including
the Debentures (as defined in the Declaration) issued by Lennox International
Inc., a Delaware corporation ("Lennox"), to the Trust pursuant to the Indenture
referred to in the Declaration. The Holder is entitled to the benefits of the
Guarantee Agreement of Lennox dated as of ______________, _____, as the same may
be amended from time to time (the "Guarantee") to the extent provided therein.
The Trust will furnish a copy of the Declaration, the Guarantee and the
Indenture to the Holder without charge upon written request to the Trust at its
principal place of business.
The Holder of this Certificate, by accepting this Certificate,
is deemed to have (i) agreed to the terms of the Indenture and the Debentures,
including that the Debentures are subordinate and junior in right of payment to
all Senior Debt (as defined in the Indenture) as and to the extent provided in
the Indenture, and (ii) agreed to the terms of the Guarantee, including that the
Guarantee is (A) subordinate and junior in right of payment to [all other
liabilities of Lennox, including the Debentures, except those made pari passu or
subordinate by their terms], and (B) senior to [all capital stock now or
hereafter issued by Lennox and to any guarantee now or hereafter entered into by
Lennox in respect of any of its capital stock].
Upon receipt of this Certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
This Certificate shall be governed by and interpreted in
accordance with the laws of the State of Delaware without regard to any
principles of conflict of laws thereof that would result in the application of
the laws of any other jurisdiction.
B-17
IN WITNESS WHEREOF, the undersigned Regular Trustees of the
Trust have executed this Certificate on behalf of the Trust.
LENNOX TRUST [I] [II]
By: , as Regular Trustee
-------------------------
Name:
Title: Regular Trustee
By: , as Regular Trustee
-------------------------
Name:
Title: Regular Trustee
Dated:
Countersigned and Registered:
THE BANK OF NEW YORK,
as Transfer Agent and Registrar
By:
---------------------------
Authorized Signatory
B-18
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed
at a rate per annum of ____% (the "Coupon Rate") of the stated liquidation
amount of $___ per Preferred Security, such rate being the rate of interest
payable on the Debentures to be held by the Property Trustee. Distributions in
arrears for more than one calendar quarter will accumulate additional
distributions thereon at the Coupon Rate per annum (to the extent permitted by
applicable law), compounded [quarterly] [semi-annually]. The term
"Distributions" as used herein means such periodic cash distributions and any
such additional distributions payable unless otherwise stated. A Distribution
will be made by the Property Trustee only to the extent that interest payments
are made in respect of the Debentures held by the Property Trustee and to the
extent the Trust has funds on hand legally available therefor. The amount of
Distributions payable for any period will be computed for any full [quarterly]
[semi-annual] Distribution period on the basis of a 360-day year of twelve
30-day months, and for any period shorter than a full [quarterly] [semi-annual]
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per [90-day quarter]
[180-day semi-annual period].
Distributions on the Preferred Securities will accumulate from
______________, ____ and will be payable [quarterly] [semi-annually] in arrears,
on [_____________, ____________,] _____________ and _____________ of each year,
commencing on _____________, ____, except as otherwise described below, but only
if and to the extent that interest payments are made in respect of the
Debentures held by the Property Trustee. So long as no Indenture Event of
Default has occurred and is continuing with respect to the Debentures, Lennox
has the right under the Indenture for the Debentures to defer payments of
interest on the Debentures by extending the interest payment period of the
Debentures at any time and from time to time for a period not exceeding [20]
[10] consecutive [quarterly] [semi-annual] interest periods (each, an "Extension
Period"), during which Extension Period no interest shall be due and payable on
the Debentures. As a consequence of such deferral, Distributions shall also be
deferred. Despite such deferral, Distributions will continue to accumulate on
the Preferred Securities with additional distributions thereon (to the extent
permitted by applicable law but not at a rate greater than the rate at which
interest is then accruing on the Debentures) at the Coupon Rate compounded
[quarterly] [semi-annually] during any such Extension Period. No Extension
Period shall extend beyond the stated maturity of the Debentures. Prior to the
termination of any such Extension Period, Lennox may further extend such
Extension Period; provided that such Extension Period together with all such
previous and further extensions thereof may not exceed [20] [10] consecutive
[quarterly] [semi-annual] interest periods or extend beyond the stated maturity
of the Debentures. Upon the termination of any Extension Period and the payment
of all amounts then due, Lennox may commence a new Extension Period, subject to
the foregoing provisions. On the first Distribution payment date following the
end of an Extension Period, payments of accumulated Distributions will be
payable to Holders of Preferred Securities as they appear on the books and
records of the Trust (regardless of who the Holders may have been on other dates
during the Extension Period) on the record date for such Distribution payment
date.
The Preferred Securities shall be redeemable as provided in
the Declaration. [The Preferred Securities shall be convertible into Shares (as
defined in the Declaration), through (i)
B-19
the exchange of Preferred Securities for a portion of the Debentures and (ii)
the immediate conversion of such Debentures into Shares, in the manner and
according to the terms set forth in the Declaration.]
B-20
[CONVERSION REQUEST
To: _____________________, as Conversion Agent
for Lennox Trust [I] [II]
The undersigned owner of these Preferred Securities hereby
irrevocably exercises the option to convert these Preferred Securities, or the
portion below designated, into Shares (as that term is defined in the Amended
and Restated Declaration of Trust, dated as of ______, ____ (as amended from
time to time, the "Declaration"), by _________, ________ and __________ as
Regular Trustees, The Bank of New York (Delaware), as the Delaware Trustee, The
Bank of New York, as the Property Trustee, Lennox International Inc., as
Sponsor, and the Holders, from time to time, of undivided beneficial interests
in the assets of the Trust to be issued pursuant to the Declaration) in
accordance with and subject to the terms and conditions of the Declaration.
Pursuant to the aforementioned exercise of the option to convert these Preferred
Securities, the undersigned hereby directs the Conversion Agent (as that term is
defined in the Declaration) to (i) exchange such Preferred Securities for a
portion of the Debentures (as that term is defined in the Declaration) held by
Lennox Trust [I] [II] (at the rate of exchange specified in the terms of the
Preferred Securities set forth as Exhibit B to the Declaration) and (ii)
immediately convert such Debentures on behalf of the undersigned into Shares (at
the conversion rate specified in the terms of the Preferred Securities set forth
as Exhibit B to the Declaration, subject to certain adjustments set forth in the
Supplemental Indenture (as that term is defined in the Declaration)).
The undersigned does also hereby direct the Conversion Agent
that the Shares issuable and deliverable upon conversion, together with any
check in payment for fractional shares, be issued in the name of and delivered
to the undersigned, unless a different name has been indicated in the assignment
below. If Shares are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto.
B-21
Date: _______________, _____
<Table>
in whole ____ in part ____
Number of Preferred Securities to be converted:
-----------------------
If a name or names other than the undersigned,
please indicate in the spaces below the name or
names in which the Shares are to be issued, along
with the address or addresses of such person or
persons:
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
Signature (for conversion only)
Please print or type name and address, including zip
code, and social security or other identifying number
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
Signature Guarantee:*
---------------------------------------
</Table>
- ----------
* (Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Conversion Agent, which requirements include
membership or participation in the Securities Transfer Agents Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Conversion Agent in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)]
B-22
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security Certificate to:
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
(Insert assignee's social security or tax identification number)
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
----------------------------------------------------------------
----------------------------------------------------------------
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
-------------------------------
Signature:
-------------------------
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND
WITH THE NAME(S) AS WRITTEN UPON THE FACE OF THIS PREFERRED SECURITY CERTIFICATE
IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER.
B-23
EXHIBIT C
TERMS OF
COMMON SECURITIES
Pursuant to Section 7.01(b) of the Amended and Restated
Declaration of Trust of Lennox Trust [I] [II] dated as of ______________, 200___
(as amended from time to time, the "Declaration"), the designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Common Securities are set forth below (each capitalized term used but not
defined herein having the meaning set forth in the Declaration):
1. DESIGNATION AND NUMBER. _____________ (____________) Common
Securities of the Trust with an aggregate liquidation amount at any time
outstanding with respect to the assets of the Trust of
____________________________ Dollars ($____________) [(including up to
____________ (__________) Common Securities of the Trust with an aggregate
liquidation amount with respect to the assets of the Trust of _______________
($_________) issuable upon exercise of the Over-allotment Option)], and each
with a liquidation amount with respect to the assets of the Trust of $___ per
Common Security, are hereby designated as "__% [[Convertible] Trust Common
Securities]." The Common Security Certificates evidencing the Common Securities
shall be substantially in the form attached hereto as Annex I, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice. In connection with the issuance and sale of the
Preferred Securities and the Common Securities, the Trust will purchase as trust
assets Debentures of Lennox having an aggregate principal amount equal to the
aggregate liquidation amount of the Preferred Securities and the Common
Securities so issued, and bearing interest at an annual rate equal to the annual
Distribution rate on the Preferred Securities and the Common Securities and
having payment and redemption provisions which correspond to the payment and
redemption provisions of the Preferred Securities and the Common Securities.
2. DISTRIBUTIONS. (a) Distributions payable on each Common Security
will be fixed at a rate per annum of ____% (the "Coupon Rate") of the stated
liquidation amount of $___ per Common Security, such rate being the rate of
interest payable on the Debentures to be held by the Property Trustee.
Distributions in arrears for more than one calendar quarter will accumulate
additional distributions thereon at the Coupon Rate per annum (to the extent
permitted by applicable law), compounded [quarterly] [semi-annually]. The term
"Distributions" as used herein means such periodic cash distributions and any
such additional distributions payable unless otherwise stated. A Distribution
will be made by the Property Trustee only to the extent that interest payments
are made in respect of the Debentures held by the Property Trustee and to the
extent the Trust has funds on hand legally available therefor. The amount of
Distributions payable for any period will be computed for any full [quarterly]
[semi-annual] Distribution period on the basis of a 360-day year of twelve
30-day months, and for any period shorter than a full [quarterly] [semi-annual]
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per [90-day quarter]
[180-day semi-annual period].
C-1
(b) Distributions on the Common Securities will accumulate
from ______________, ____ and will be payable [quarterly] [semi-annually] in
arrears, on [_____________, ____________,] _____________ and _____________ of
each year, commencing on _____________, ____, except as otherwise described
below, but only if and to the extent that interest payments are made in respect
of the Debentures held by the Property Trustee. So long as no Indenture Event of
Default has occurred and is continuing with respect to the Debentures, Lennox
has the right under the Indenture for the Debentures to defer payments of
interest on the Debentures by extending the interest payment period of the
Debentures at any time and from time to time for a period not exceeding [20]
[10] consecutive [quarterly] [semi-annual] interest periods (each, an "Extension
Period"), during which Extension Period no interest shall be due and payable on
the Debentures. As a consequence of such deferral, Distributions shall also be
deferred. Despite such deferral, Distributions will continue to accumulate on
the Common Securities with additional distributions thereon (to the extent
permitted by applicable law but not at a rate greater than the rate at which
interest is then accruing on the Debentures) at the Coupon Rate compounded
[quarterly] [semi-annually] during any such Extension Period. No Extension
Period shall extend beyond the stated maturity of the Debentures. Prior to the
termination of any such Extension Period, Lennox may further extend such
Extension Period; provided that such Extension Period together with all such
previous and further extensions thereof may not exceed [20] [10] consecutive
[quarterly] [semi-annual] interest periods or extend beyond the stated maturity
of the Debentures. Upon the termination of any Extension Period and the payment
of all amounts then due, Lennox may commence a new Extension Period, subject to
the foregoing provisions. On the first Distribution payment date following the
end of an Extension Period, payments of accumulated Distributions will be
payable to Holders of Common Securities as they appear on the books and records
of the Trust (regardless of who the Holders may have been on other dates during
the Extension Period) on the record date for such Distribution payment date.
(c) Distributions on the Common Securities will be payable
promptly by the Property Trustee (or other Paying Agent) upon receipt of
immediately available funds to the Holders thereof as they appear on the books
and records of the Trust on the relevant record dates. While the Preferred
Securities remain in book-entry only form, the relevant record dates for the
Common Securities shall be the Business Day next preceding the relevant
Distribution payment date, and if the Preferred Securities are no longer in
book-entry only form, the relevant record dates for the Common Securities will
be the close of business on the [_________, _________,] _________, and _________
next preceding the relevant Distribution payment date, which record and payment
dates correspond to the record and interest payment dates on the Debentures.
Distributions payable on any Common Securities that are not punctually paid on
any Distribution payment date as a result of Lennox's having failed to make the
corresponding payment on the Debentures will forthwith cease to be payable to
the person in whose name such Common Security is registered on the relevant
record date, and such defaulted payment will instead be payable to the person in
whose name such Common Security is registered on the special record date
established by the Regular Trustees, which record date shall correspond to the
special record date or other specified date determined in accordance with the
Indenture; provided, however, that Distributions shall not be considered payable
on any Distribution payment date falling within an Extension Period unless
Lennox has elected to make a full or partial payment of accrued interest on the
Debentures on such Distribution payment date. Subject to any applicable laws and
C-2
regulations and the provisions of the Declaration, each payment in respect of
the Common Securities will be made as described in Section [9] hereof. If any
date on which Distributions are payable on the Common Securities is not a
Business Day, then payment of the Distribution payable on such date will be made
on the next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay) except that, if such Business Day is
in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on the date such payment was originally payable. Notwithstanding
anything herein to the contrary, the record dates and payment dates for
Distributions shall be the same as the record dates and payment dates for the
Debentures.
(d) All Distributions paid with respect to the Preferred
Securities and the Common Securities will be paid Pro Rata (as defined below) to
the Holders thereof entitled thereto. If an Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to such payments.
(e) In the event that there is any money or other property
held by or for the Trust that is not accounted for under the Declaration, such
money or property shall be distributed Pro Rata among the Holders of the
Preferred Securities and the Common Securities.
[(f) In the event of an election by the Holder to convert its
Common Securities through the Conversion Agent into Shares pursuant to the terms
of the Common Securities as set forth herein, no payment, allowance or
adjustment shall be made with respect to accumulated and unpaid Distributions on
such Common Securities, or be required to be made; provided, however, that if a
Common Security is surrendered for conversion after the close of business on any
regular record date for payment of a Distribution and before the opening of
business on the corresponding Distribution payment date, then, notwithstanding
such conversion, the Distribution payable on such Distribution payment date will
be paid in cash to the person in whose name the Common Security is registered at
the close of business on such record date, and (other than a Common Security or
a portion of a Common Security called for redemption on a redemption date
occurring after such record date and on or prior to such Distribution payment
date) when so surrendered for conversion, the Common Security must be
accompanied by payment of an amount equal to the Distribution payable on such
Distribution payment date.]
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION. (a) In the event of any
voluntary or involuntary dissolution of the Trust other than as contemplated by
Section 8.01(i) [or (v)] of the Declaration, the Trust shall be wound-up and
liquidated by the Property Trustee as expeditiously as the Property Trustee
determines to be possible by distributing, after satisfaction of liabilities to
the creditors of the Trust, Pro Rata to the Holders of the Preferred Securities
and the Common Securities Debentures in an aggregate principal amount equal to
the aggregate stated liquidation amount of the Preferred Securities and the
Common Securities and bearing accrued and unpaid interest in an amount equal to
the accumulated and unpaid Distributions on, the Preferred Securities and the
Common Securities; provided, however, if distribution of Debentures is not
practical whether because of a decree of judicial dissolution or otherwise, the
Holders of the Preferred Securities and the Common Securities will be entitled
to receive Pro Rata solely out of the assets of the Trust legally available for
distribution to Holders of Preferred Securities and
C-3
Common Securities after satisfaction of liabilities to the creditors of the
Trust, an amount equal to the aggregate of the stated liquidation amount of $___
per Preferred Security and Common Security plus accumulated and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution").
If, upon any such dissolution, the Liquidation Distribution
can be paid only in part because the Trust has insufficient assets on hand
legally available to pay in full the aggregate Liquidation Distribution, then
the amounts payable directly by the Trust on the Preferred Securities and the
Common Securities shall be paid, subject to the next paragraph, on a Pro Rata
basis.
Holders of Common Securities will be entitled to receive
Liquidation Distributions upon any such dissolution Pro Rata with Holders of
Preferred Securities, except that if an Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to such Liquidation Distribution.
(b) The Holder of the Common Securities shall have the right
to direct the Property Trustee in writing at any time to dissolve the Trust and,
after satisfaction of liabilities to creditors of the Trust, to distribute
Debentures to Holders in exchange for Securities (which direction is optional
and wholly within the discretion of the Holder of the Common Securities). Upon
the receipt of any such written direction, the Property Trustee shall promptly,
after satisfaction of liabilities to creditors of the Trust, (i) dissolve the
Trust and (ii) distribute Debentures in an aggregate principal amount equal to
the aggregate stated liquidation amount of the Preferred Securities and the
Common Securities held by each Holder, which Debentures bear accrued and unpaid
interest in an amount equal to the accumulated and unpaid Distributions on the
Preferred Securities and the Common Securities of such Holder, in exchange for
the Preferred Securities and Common Securities of such Holder.
(c) On the date fixed for any distribution of Debentures, upon
dissolution of the Trust, (i) the Common Securities will no longer be deemed to
be outstanding and may be canceled by the Regular Trustees, and (ii)
Certificates representing Common Securities will be deemed to represent
beneficial interests in the Debentures having an aggregate principal amount
equal to the stated liquidation amount of, and bearing accrued and unpaid
interest equal to accumulated and unpaid Distributions to, but excluding, the
date fixed for such distribution on, such Common Securities until such
Certificates are presented to Lennox or its agent for transfer or reissuance.
4. REDEMPTION OF DEBENTURES. The Common Securities may be redeemed only
if Debentures having an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Securities and the Common Securities are
repaid or redeemed as set forth below:
(a) Upon the repayment of the Debentures, in whole or in part,
whether at maturity, upon redemption at any time or from time to time
[on or after _________, ____], the proceeds of such repayment will be
promptly applied to redeem Pro Rata Preferred Securities and Common
Securities having an aggregate liquidation amount equal to the
aggregate principal amount of the Debentures so repaid or redeemed,
upon
C-4
not less than 30 nor more than 60 days' notice, at a redemption price
[of $______ per Preferred Security and Common Security] [equal to the
greater of (i) the liquidation amount of the Preferred Securities and
Common Securities to be redeemed and (ii) the Make-Whole Amount, in
each case] plus an amount equal to accumulated and unpaid Distributions
thereon to, but excluding, the date of redemption, payable in cash (the
"Redemption Price"). The date of any such repayment or redemption of
Preferred Securities and Common Securities shall be established to
coincide with the repayment or redemption date of the Debentures.
["Make-Whole Amount" shall be equal to, as determined by the
Quotation Agent, the sum of the present values, calculated as of the
redemption date, of (i) each interest payment that would have been
payable on the Debentures or portions thereof being redeemed, if such
Debentures or portions thereof were not redeemed, on each scheduled
interest payment date occurring after the redemption date (excluding
any accrued interest for the period prior to the redemption date) and
(ii) the principal amount of such Debentures or portions thereof that
would have been payable, if such Debentures or portions thereof were
not redeemed, at the scheduled maturity of such Debentures or portions
thereof being redeemed (the "Remaining Life"), in each case discounted
to the redemption date on a semiannual basis (assuming a 360-day year
consisting of 30-day months) at the Adjusted Treasury Rate plus ___
basis points for the purpose of calculating the Redemption Price.
"Adjusted Treasury Rate" means, with respect to any redemption
date, the rate per annum equal to (i) the yield, under the heading
which represents the average for the immediately preceding week,
appearing in the most recently published statistical release designated
"H.15 (519)" or any successor publication which is published weekly by
the Board of Governors of the Federal Reserve System and which
establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant
Maturities," for the maturity corresponding to the Remaining Life;
provided that if no maturity is within three months before or after the
Remaining Life, yields for the two published maturities most closely
corresponding to the Remaining Life will be determined and the Treasury
Rate will be interpolated or extrapolated from such yields on a
straight-line basis rounding to the nearest month; or (ii) if such
release (or any successor release) is not published during the week
preceding such calculation date or does not contain such yields, the
rate per annum equal to the semiannual equivalent yield to maturity of
the Comparable Treasury Issue, calculated using a price for the
Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for such redemption
date. The Treasury Rate shall be calculated on the third Business Day
preceding such redemption date.
"Comparable Treasury Issue" means the United States Treasury
security selected by the Quotation Agent as having a maturity date
comparable to the Remaining Life that would be utilized, at the time of
selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity
to the Remaining Life. If no United States Treasury security has a
maturity date which is within a period from three months before to
three months after the Remaining Life, the two most
C-5
closely corresponding United States Treasury securities shall be used
as the Comparable Treasury Issue, and the Adjusted Treasury Rate shall
be interpolated or extrapolated on a straight-line basis, rounding to
the nearest month using such securities.
"Quotation Agent" means ________________ and its successors;
provided, however, that if the foregoing shall cease to be a primary
U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), Lennox shall substitute therefor another Primary Treasury
Dealer.
"Reference Treasury Dealer" means: (i) the Quotation Agent and
(ii) any other Primary Treasury Dealer selected by the Debenture
Trustee after consultation with Lennox.
"Comparable Treasury Price" means, with respect to any
redemption date, (i) the average of five Reference Treasury Dealer
Quotations for such redemption date, after excluding the highest and
lowest of such Reference Treasury Dealer Quotations, or (ii) if the
Debenture Trustee obtains fewer than five such Reference Treasury
Dealer Quotations, the average of all such quotations.
"Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and any redemption date, the average, as
determined by the Debenture Trustee, of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage
of its principal amount) quoted in writing to the Debenture Trustee by
such Reference Treasury Dealer as of 3:30 p.m., New York time, on the
third Business Day preceding such redemption date.]
(b) If fewer than all the outstanding Preferred Securities and
Common Securities are to be so redeemed, the Preferred Securities and
the Common Securities will be redeemed Pro Rata and the Common
Securities will be redeemed as described in Section 4(e)(ii) below,
except that if an Event of Default has occurred and is continuing, the
Preferred Securities will have a priority over the Common Securities
with respect to payment of the Redemption Price. If a partial
redemption would result in the delisting of the Preferred Securities by
any Exchange on which the Preferred Securities are then listed or
traded, Lennox pursuant to the Indenture will redeem Debentures only in
whole and, as a result, the Trust may redeem the Common Securities only
in whole.
(c) If, at any time, a Tax Event or an Investment Company
Event (each as hereinafter defined and each a "Special Event") shall
occur and be continuing, Lennox shall have the right at any time [prior
to __________, ____], upon not less than 30 nor more than 60 days'
notice, to redeem the Debentures in whole [or] [but not] in part for
cash at the Redemption Price within 90 days following the occurrence of
such Special Event, and promptly following such redemption, Preferred
Securities and Common Securities with an aggregate liquidation amount
equal to the aggregate principal amount of the Debentures so redeemed
will be redeemed by the Trust at the Redemption Price on a Pro Rata
basis. The Common Securities will be redeemed Pro Rata with the
Preferred Securities, except that if an Event of Default has occurred
and is continuing, the Preferred
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Securities will have a priority over the Common Securities with respect
to payment of the Redemption Price.
"Tax Event" means that the Sponsor and the Regular Trustees
shall have received an Opinion of Counsel experienced in such matters
to the effect that as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any rules
or regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, (b) any amendment
to, or change in, an interpretation or application of any such laws,
rules or regulations by any legislative body, court, governmental
agency or regulatory authority (including the enactment of any
legislation or the publication of any judicial decision or regulatory
determination), (c) any interpretation or pronouncement by any
legislative body, court, governmental agency or regulatory authority
that provides for a position with respect to such laws, rules or
regulations that differs from its previous position or a commonly
accepted position or (d) any action taken by any governmental agency or
regulatory authority, which amendment or change is enacted,
promulgated, issued or announced or which interpretation or
pronouncement is issued or announced or which action is taken, in each
case on or after ______________, _____, there is more than an
insubstantial risk that (i) the Trust is, or will be within 90 days of
the date thereof, subject to U.S. federal income tax with respect to
income accrued or received on the Debentures, (ii) the Trust is, or
will be within 90 days of the date thereof, subject to more than a de
minimis amount of taxes, duties or other governmental charges or (iii)
interest payable by Lennox to the Trust on the Debentures is not, or
within 90 days of the date thereof will not be, deductible by Lennox
for U.S. federal income tax purposes.
"Investment Company Event" means that the Sponsor and the
Regular Trustees shall have received an Opinion of Counsel experienced
in practice under the Investment Company Act that, as a result of the
occurrence of a change in law or regulation or a change in
interpretation or application of law or regulation by any legislative
body, court, governmental agency or regulatory authority (a "Change in
Investment Company Act Law"), there is more than an insubstantial risk
that the Trust is or will be considered an Investment Company which is
required to be registered under the Investment Company Act, which
Change in Investment Company Act Law becomes effective on or after
______________, _____.
(d) The Trust may not redeem fewer than all the outstanding
Common Securities unless all accumulated and unpaid Distributions have
been paid on all Common Securities for all [quarterly] [semi-annual]
Distribution periods terminating on or prior to the date of redemption.
(e) (i) Notice of any redemption of, or notice of distribution
of Debentures in exchange for, the Preferred Securities and the Common
Securities (a "Redemption/Distribution Notice") will be given by the
Regular Trustees on behalf of the Trust by mail to each Holder of
Preferred Securities and Common Securities to be redeemed or exchanged
not less than 30 nor more than 60 days prior to the date fixed for
redemption or exchange thereof. For purposes of the calculation of the
date of
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redemption or exchange and the dates on which notices are given
pursuant to this Section 4(e)(i), a Redemption/Distribution Notice
shall be deemed to be given on the day such notice is first mailed by
first-class mail, postage prepaid, to Holders of Preferred Securities
and Common Securities. Each Redemption/Distribution Notice shall be
addressed to the Holders of Preferred Securities and Common Securities
at the address of each such Holder appearing in the books and records
of the Trust. No defect in the Redemption/Distribution Notice or in the
mailing of either thereof with respect to any Holder shall affect the
validity of the redemption or exchange proceedings with respect to any
other Holder.
(ii) In the event that fewer than all the outstanding Common
Securities are to be redeemed, the Common Securities to be redeemed
will be redeemed Pro Rata from each Holder of Common Securities
(subject to adjustment to eliminate fractional Common Securities).
(iii) If the Trust gives a Redemption/Distribution Notice in
respect of a redemption of Common Securities as provided in this
Section 4, then immediately prior to the close of business on the
redemption date; provided that Lennox has paid the Property Trustee, in
immediately available funds, a sufficient amount of cash in connection
with the related redemption or maturity of the Debentures,
Distributions will cease to accumulate on the Common Securities called
for redemption, such Common Securities will no longer be deemed to be
outstanding and all rights of Holders of such Common Securities so
called for redemption will cease, except the right of the Holders of
such Common Securities to receive the Redemption Price, but without
interest on such Redemption Price. Neither the Trustees nor the Trust
shall be required to register or cause to be registered the transfer of
any Common Securities which have been so called for redemption. If any
date fixed for redemption of Common Securities is not a Business Day,
then payment of the Redemption Price payable on such date will be made
on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if
such Business Day falls in the next calendar year, such payment will be
made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date fixed for redemption. If
payment of the Redemption Price in respect of Common Securities is
improperly withheld or refused and not paid by the Property Trustee,
Distributions on such Common Securities will continue to accumulate,
from the original redemption date to the date of payment, in which case
the actual payment date will be considered the date fixed for
redemption for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to the Holders of the Common
Securities.
5. [CONVERSION RIGHTS. The Holders of Common Securities shall have the
right at any time prior to the close of business on ___________, ____ or, in the
case of Common Securities called for redemption, prior to the close of business
on the Business Day prior to the redemption date, at their option, to cause the
Conversion Agent to convert Common Securities,
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on behalf of the converting Holders, into Shares in the manner described herein
on and subject to the following terms and conditions:
(a) The Common Securities will be convertible at the office of
the Conversion Agent into fully paid and nonassessable Shares pursuant
to the Holder's direction to the Conversion Agent to exchange such
Common Securities for a portion of the Debentures theretofore held by
the Trust on the basis of one Common Security per $______ principal
amount of Debentures, and immediately convert such amount of Debentures
into fully paid and nonassessable Shares at an initial rate of __
Shares per $_______ principal amount of Debentures (which is equivalent
to a conversion price of $___ per Share, subject to certain adjustments
set forth in the Supplemental Indenture (as so adjusted, the
"Conversion Price")).
(b) In order to convert Common Securities into Shares, the
Holder shall submit to the Conversion Agent at the office referred to
above an irrevocable request to convert Common Securities on behalf of
such Holder (the "Conversion Request"), together, if the Common
Securities are in certificated form, with such Common Security
Certificates. The Conversion Request shall (i) set forth the number of
Common Securities to be converted and the name or names, if other than
the Holder, in which the Shares should be issued and (ii) direct the
Conversion Agent (a) to exchange such Common Securities for a portion
of the Debentures held by the Trust (at the rate of exchange specified
in the preceding paragraph) and (b) to immediately convert such
Debentures on behalf of such Holder into Shares, subject to certain
adjustments set forth in the Supplemental Indenture (at the conversion
rate specified in the preceding paragraph). The Conversion Agent shall
notify the Trust of the Holder's election to exchange Common Securities
for a portion of the Debentures held by the Trust and the Trust shall,
upon receipt of such notice, deliver to the Conversion Agent the
appropriate principal amount of Debentures for exchange in accordance
with this Section. The Conversion Agent shall thereupon notify the
Sponsor of the Holder's election to convert such Debentures into
Shares. If a Common Security is surrendered for conversion after the
close of business on any regular record date for payment of a
Distribution and before the opening of business on the corresponding
Distribution payment date, then, notwithstanding such conversion, the
Distribution payable on such Distribution payment date will be paid in
cash to the Person in whose name the Common Security is registered at
the close of business on such record date, and (other than a Common
Security or a portion of a Common Security called for redemption on a
redemption date occurring after such record date and on or prior to
such Distribution payment date) when so surrendered for conversion, the
Common Security must be accompanied by payment of an amount equal to
the Distribution payable on such Distribution payment date. Except as
provided above, neither the Trust nor the Sponsor will make, or be
required to make, any payment, allowance or adjustment upon any
conversion on account of any accumulated and unpaid Distributions
accumulated on the Common Securities surrendered for conversion, or on
account of any accumulated and unpaid dividends on the Shares issued
upon such conversion, and the delivery of Shares upon conversion of the
Common Securities shall be deemed to constitute full payment for all
accumulated and unpaid Distributions on the Common Securities. Common
Securities shall be deemed to have been converted
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immediately prior to the close of business on the day on which a
Conversion Request relating to such Common Securities is received by
the Trust in accordance with the foregoing provision (the "Conversion
Date"). The Person or Persons entitled to receive Shares issuable upon
conversion of the Debentures shall be treated for all purposes as the
record holder or holders of such Shares at such time. As promptly as
practicable on or after the Conversion Date, the Sponsor shall issue
the number of full Shares issuable upon such conversion to, and shall
deliver at the office of the Conversion Agent the cash payment, if any,
in lieu of any fraction of any Share for the account of, the Person or
Persons entitled to receive the same, unless otherwise directed by the
Holder in the Conversion Request. The Conversion Agent shall distribute
such cash payment, if any, to such Person or Persons.
(c) Each Holder of a Common Security by his acceptance thereof
appoints _____________________ as the "Conversion Agent" for the
purpose of effecting the conversion of Common Securities in accordance
with this Section. In effecting the conversion and transactions
described in this Section, the Conversion Agent shall be acting as
agent of the Holders of Common Securities directing it to effect such
conversion transactions. The Conversion Agent is hereby authorized (i)
to exchange Common Securities from time to time for Debentures held by
the Trust in connection with the conversion of such Common Securities
in accordance with this Section and (ii) to convert all or a portion of
the Debentures into Shares and thereupon to deliver such Shares in
accordance with the provisions of this Section and to deliver to the
Trust a new Debenture or Debentures for any resulting unconverted
principal amount.
(d) No fractional Shares will be issued as a result of
conversion, but in lieu thereof, such fractional interest will be paid
by the Sponsor in cash (based upon the Closing Price (as defined in the
Indenture) of Shares on the date such Common Securities are surrendered
for conversion to the Trust) to the Conversion Agent, which in turn
will make such payment to the Holder or Holders of Common Securities so
converted, or, if such day is not a Trading Day (as defined in the
Indenture), on the next Trading Day.
(e) The Sponsor shall at all times reserve and keep available
out of its authorized and unissued common stock, par value $.01 per
share ("Common Stock"), solely for issuance upon the conversion of the
Debentures, such number of Shares as shall from time to time be
issuable upon the conversion of all the Debentures then outstanding.
Notwithstanding the foregoing, the Sponsor shall be entitled to deliver
upon conversion of Debentures Shares reacquired and held in the
treasury of the Sponsor (in lieu of the issuance of authorized and
unissued Shares), so long as any such treasury shares are free and
clear of all liens, charges, security interests or encumbrances. Any
Shares issued upon conversion of the Debentures shall be duly
authorized, validly issued, fully paid and nonassessable. The
Conversion Agent shall deliver the Shares received upon conversion of
the Debentures to the converting Holder of Common Securities free and
clear of all liens, charges, security interests and encumbrances,
except for United States withholding taxes. Whenever the Sponsor issues
Shares upon conversion of Debentures and the Sponsor has in effect at
such time a share purchase rights agreement under which holders of its
Common Stock are issued rights ("Rights") entitling the
C-10
holders under certain circumstances to purchase an additional share or
Shares or other capital stock of the Sponsor, the Sponsor will issue,
together with each such share of Common Stock, such number of Rights
(which number may be a fraction) as shall at that time be issuable with
a share of Common Stock pursuant to such share purchase rights
agreement. Each of the Sponsor and the Trust shall prepare and shall
use its best efforts to obtain and keep in force such governmental or
regulatory permits or other authorizations as may be required by law,
and shall comply with all applicable requirements as to registration or
qualification of Shares (and all requirements to list Shares issuable
upon conversion of Debentures that are at the time applicable), in
order to enable the Sponsor to lawfully issue Shares to the Trust upon
conversion of the Debentures and the Trust to lawfully deliver Shares
to each Holder of Common Securities upon conversion of the Common
Securities.
(f) Except as otherwise provided in Section 5(e), the Sponsor
will pay any and all taxes that may be payable in respect of the issue
or delivery of Shares on conversion of Debentures and the delivery of
the Shares by the Trust upon conversion of the Common Securities. The
Sponsor shall not, however, be required to pay any tax which may be
payable in respect of any transfer involved in the issue and delivery
of Shares in a name other than that in which the Common Securities so
converted were registered, and no such issue or delivery shall be made
unless and until the Person requesting such issue has paid to the
Conversion Agent on behalf of the Trust the amount of any such tax, or
has established to the satisfaction of the Trust that such tax has been
paid.
(g) Nothing in the preceding Section 5(f) shall limit the
requirement of the Trust to withhold taxes pursuant to the terms of the
Common Securities or set forth in this Exhibit C to the Declaration or
to the Declaration itself or otherwise require the Property Trustee or
the Trust to pay any amounts on account of such withholdings.]
6. VOTING RIGHTS. (a) Except as provided under Section [6](b) below and
as otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) Holders of Common Securities have the sole right under the
Declaration to increase or decrease the number of Trustees, and to appoint,
remove or replace a Trustee, any such increase, decrease, appointment, removal
or replacement to be approved by Holders of Common Securities representing a
Majority in liquidation amount of the Common Securities.
If any proposed amendment to the Declaration provides for, or
the Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the rights, privileges or preferences of the Securities in any
material respect, whether by way of amendment to the Declaration, other than as
described in Section 12.01(b) of the Declaration, or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.01 of the Declaration or Section 3 of this Exhibit C, then the Holders
of outstanding Securities will be entitled to vote on such amendment or proposal
as a single class and such amendment or proposal shall not be effective except
with the approval of the Holders of Securities of at least a
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Majority in liquidation amount of the Securities, voting together as a single
class; provided, however, that (A) if any amendment or proposal referred to in
clause (i) above would adversely affect only the Preferred Securities or the
Common Securities in any material respect, then only the affected class of
Securities will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of at
least a Majority in liquidation amount of such class of Securities, (B) the
rights of Holders of Common Securities under Sections 5.01 and 5.02 of the
Declaration to increase or decrease the number of, and to appoint, replace or
remove, Trustees shall not be amended without the consent of each Holder of
Common Securities, and (C) amendments to the Declaration shall be subject to
such further requirements as are set forth in Sections 12.01 and 12.02 of the
Declaration.
In the event the consent of the Property Trustee, as the holder
of the Debentures, is required under the Indenture with respect to any
amendment, modification or termination of the Indenture or the Debentures, the
Property Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination. The
Property Trustee shall vote with respect to such amendment, modification or
termination as directed by a Majority in liquidation amount of the Securities
voting together as a single class; provided, however, that where such amendment,
modification or termination of the Indenture requires the consent or vote of (1)
holders of Debentures representing a specified percentage greater than a
majority in principal amount of the Debentures or (2) each holder of Debentures,
the Property Trustee may only vote with respect to that amendment, modification
or termination as directed by, in the case of clause (1) above, the vote of
Holders of Securities representing such specified percentage of the aggregate
liquidation amount of the Securities, or, in the case of clause (2) above, each
Holder of Securities; and provided, further, that the Property Trustee shall be
under no obligation to take any action in accordance with the directions of the
Holders of Securities unless the Property Trustee shall have received, at the
expense of the Sponsor, an Opinion of Counsel experienced in such matters to the
effect that the Trust will not be classified for U.S. federal income tax
purposes as other than a grantor trust on account of such action.
So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or exercising any
trust or power conferred on such Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under Section 6.04 of
the Indenture or (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Debentures, without, in
each case, obtaining the prior approval of the Holders of a Majority in
liquidation amount of the Securities. The Trustees shall not revoke any action
previously authorized or approved by a vote of the Holders of the Common
Securities except by subsequent vote of such Holders. The Property Trustee shall
notify each Holder of Common Securities of any notice of default with respect to
the Debentures.
Notwithstanding any other provision of these terms, each Holder
of Common Securities will be deemed to have waived any Event of Default with
respect to the Common Securities and its consequences until all Events of
Default with respect to the Preferred Securities have been cured, waived by the
Holders of Preferred Securities as provided in the Declaration or otherwise
eliminated, and until all Events of Default with respect to the Preferred
Securities have been so cured, waived by the Holders of Preferred Securities or
otherwise eliminated, the
C-12
Property Trustee will be deemed to be acting solely on behalf of the Holders of
Preferred Securities and only the Holders of the Preferred Securities will have
the right to direct the Property Trustee in accordance with the terms of the
Declaration or of the Securities. In the event that any Event of Default with
respect to the Preferred Securities is waived by the Holders of Preferred
Securities as provided in the Declaration, the Holders of Common Securities
agree that such waiver shall also constitute the waiver of such Event of Default
with respect to the Common Securities for all purposes under the Declaration
without any further act, vote or consent of the Holders of the Common
Securities.
A waiver of an Indenture Event of Default by the Property
Trustee at the direction of the Holders of the Preferred Securities will
constitute a waiver of the corresponding Event of Default under the Declaration
in respect of the Securities.
Any required approval or direction of Holders of Common
Securities may be given at a separate meeting of Holders of Common Securities
convened for such purpose, at a meeting of all of the Holders of Securities or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote to be mailed
to each Holder of record of Common Securities. Each such notice will include a
statement setting forth (i) the date of such meeting, (ii) a description of any
resolution proposed for adoption at such meeting on which such Holders are
entitled to vote and (iii) instructions for the delivery of proxies. Any action
that may be taken at a meeting of the Holders of Common Securities may be taken
without a meeting and without prior notice if a consent or consents in writing
setting forth the action so taken is signed by Holders of Common Securities
owning not less than the minimum aggregate liquidation amount of Common
Securities that would be necessary to authorize or take such action at a meeting
at which all Holders of Common Securities having a right to vote thereon were
present and voting.
No vote or consent of the Holders of Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Debentures in accordance with the Declaration or Section 3 of this Exhibit
C.
7. PRO RATA TREATMENT. A reference in these terms of the Common
Securities to any payment, Distribution or treatment as being "Pro Rata" shall
mean pro rata to each Holder of Securities according to the aggregate
liquidation amount of the Securities held by the relevant Holder in relation to
the aggregate liquidation amount of all Securities outstanding unless, in
relation to a payment, an Event of Default has occurred and is continuing, in
which case any funds available to make such payment shall be paid first to each
Holder of the Preferred Securities pro rata according to the aggregate
liquidation amount of Preferred Securities held by the relevant Holder relative
to the aggregate liquidation amount of all Preferred Securities outstanding, and
only after satisfaction of all amounts owed to the Holders of the Preferred
Securities, to each Holder of Common Securities pro rata according to the
aggregate liquidation amount of Common Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Common Securities
outstanding.
8. RANKING. The Common Securities rank pari passu and payment thereon
will be made Pro Rata with the Preferred Securities, except that when an Event
of Default occurs and is
C-13
continuing, the rights of Holders of Common Securities to payment in respect of
Distributions and payments upon liquidation, redemption or otherwise are
subordinate to the rights of Holders of the Preferred Securities.
9. TRANSFER, EXCHANGE, METHOD OF PAYMENTS. Payment of Distributions and
payments on redemption of the Common Securities will be payable, the transfer of
the Common Securities will be registrable, and Common Securities will be
exchangeable for Common Securities of other denominations of a like aggregate
liquidation amount, at the corporate trust office of the Property Trustee in The
City of New York; provided that payment of Distributions may be made at the
option of the Regular Trustees on behalf of the Trust by check mailed to the
address of the persons entitled thereto and that the payment on redemption of
any Common Security will be made only upon surrender of such Common Security to
the Property Trustee. Notwithstanding the foregoing, transfers of Common
Securities are subject to conditions set forth in Section 9.01(c) of the
Declaration.
10. ACCEPTANCE OF INDENTURE. Each Holder of Common Securities, by the
acceptance thereof, agrees to the provisions of the Indenture and the
Debentures, including the subordination provisions of the Indenture.
11. NO PREEMPTIVE RIGHTS. The Holders of Common Securities shall have
no preemptive or similar rights to subscribe to any additional Common Securities
or any Preferred Securities.
12. MISCELLANEOUS. These Terms shall constitute a part of the
Declaration. The Trust will provide a copy of the Declaration and the Indenture
to a Holder of Common Securities without charge on written request to the Trust
at its principal place of business.
13. GOVERNING LAW. The Common Securities shall be governed by and
interpreted in accordance with the laws of the State of Delaware and all rights
and remedies shall be governed by such laws without regard to any principles of
conflict of laws thereof that would result in the application of the laws of any
other jurisdiction.
C-14
Annex I
FORM OF COMMON SECURITY CERTIFICATE
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SET FORTH IN THE DECLARATION
REFERRED TO BELOW
<Table>
Certificate Number Number of Preferred Securities:
------------
Aggregate Liquidation Amount: $
------------
CUSIP NO.
------------
</Table>
Certificate Evidencing Common Securities
of
Lennox Trust [I] [II]
____% [[Convertible] Trust Common Securities]
(liquidation amount $___ per Common Security)
Lennox Trust [I] [II], a statutory trust created under the
laws of the State of Delaware (the "Trust"), hereby certifies that
______________ (the "Holder") is the registered owner of
____________________________ (_________) common securities of the Trust
representing common undivided beneficial interests in the assets of the Trust
and designated the ____% [[Convertible] Trust Common Securities] (liquidation
amount $___ per common security) (the "Common Securities"). The Common
Securities are transferable on the books and records of the Trust, in person or
by a duly authorized attorney, upon surrender of this Certificate duly endorsed
and in proper form for transfer and satisfaction of the other conditions set
forth in the Declaration (as defined below) including, without limitation,
Section 9.01(c) thereof. The designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities are set
forth in, and this Certificate and the Common Securities represented hereby are
issued and shall in all respects be subject to the terms and provisions of, the
Amended and Restated Declaration of Trust of the Trust dated as of
______________, ____, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of Common Securities as
set forth in Exhibit C thereto. The Common Securities and the Preferred
Securities issued by the Trust pursuant to the Declaration represent undivided
beneficial interests in the assets of the Trust, including the Debentures (as
defined in the Declaration) issued by Lennox International Inc., a Delaware
corporation ("Lennox"), to the Trust pursuant to the Indenture referred to in
the Declaration. The Trust will furnish a copy of the Declaration and the
Indenture to the Holder without charge upon written request to the Trust at its
principal place of business or registered office.
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The Holder of this Certificate, by accepting this Certificate,
is deemed to have agreed to the terms of the Indenture and the Debentures,
including that the Debentures are subordinate and junior in right of payment to
all Senior Debt (as defined in the Indenture) as and to the extent provided in
the Indenture.
Upon receipt of this Certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
This Certificate shall be governed and interpreted in
accordance with the laws of the State of Delaware without regard to any
principles of conflicts of laws thereof that would result in the application of
the laws of any other jurisdiction.
IN WITNESS WHEREOF, the undersigned Regular Trustees of the
Trust have executed this Certificate on behalf of the Trust this ___ day of
_____________, ____.
LENNOX TRUST [I] [II]
By: , as Regular Trustee
------------------------
Name:
Title: Regular Trustee
By: , as Regular Trustee
------------------------
Name:
Title: Regular Trustee
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[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at
a rate per annum of ____% (the "Coupon Rate") of the stated liquidation amount
of $___ per Common Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one calendar quarter will accumulate additional distributions thereon at
the Coupon Rate per annum (to the extent permitted by applicable law),
compounded [quarterly] [semi-annually]. The term "Distributions" as used herein
means such periodic cash distributions and any such additional distributions
payable unless otherwise stated. A Distribution will be made by the Property
Trustee only to the extent that interest payments are made in respect of the
Debentures held by the Property Trustee and to the extent the Trust has funds on
hand legally available therefor. The amount of Distributions payable for any
period will be computed for any full [quarterly] [semi-annual] Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full [quarterly] [semi-annual] Distribution period for
which Distributions are computed, Distributions will be computed on the basis of
the actual number of days elapsed per [90-day quarter] [180-day semi-annual
period].
Distributions on the Common Securities will accumulate from
______________, ____ and will be payable [quarterly] [semi-annually] in arrears,
on [_____________, ____________,] _____________ and _____________ of each year,
commencing on _____________, ____, except as otherwise described below, but only
if and to the extent that interest payments are made in respect of the
Debentures held by the Property Trustee. So long as no Indenture Event of
Default has occurred and is continuing with respect to the Debentures, Lennox
has the right under the Indenture for the Debentures to defer payments of
interest on the Debentures by extending the interest payment period of the
Debentures at any time and from time to time for a period not exceeding [20]
[10] consecutive [quarterly] [semi-annual] interest periods (each, an "Extension
Period"), during which Extension Period no interest shall be due and payable on
the Debentures. As a consequence of such deferral, Distributions shall also be
deferred. Despite such deferral, Distributions will continue to accumulate on
the Common Securities with additional distributions thereon (to the extent
permitted by applicable law but not at a rate greater than the rate at which
interest is then accruing on the Debentures) at the Coupon Rate compounded
[quarterly] [semi-annually] during any such Extension Period. No Extension
Period shall extend beyond the stated maturity of the Debentures. Prior to the
termination of any such Extension Period, Lennox may further extend such
Extension Period; provided that such Extension Period together with all such
previous and further extensions thereof may not exceed [20] [10] consecutive
[quarterly] [semi-annual] interest periods or extend beyond the stated maturity
of the Debentures. Upon the termination of any Extension Period and the payment
of all amounts then due, Lennox may commence a new Extension Period, subject to
the foregoing provisions. On the first Distribution payment date following the
end of an Extension Period, payments of accumulated Distributions will be
payable to Holders of Common Securities as they appear on the books and records
of the Trust (regardless of who the Holders may have been on other dates during
the Extension Period) on the record date for such Distribution payment date.
The Common Securities shall be redeemable as provided in the
Declaration. [The Common Securities shall be convertible into Shares (as defined
in the Declaration), through (i)
C-17
the exchange of Common Securities for a portion of the Debentures and (ii) the
immediate conversion of such Debentures into Shares, in the manner and according
to the terms set forth in the Declaration.]
C-18
[CONVERSION REQUEST
To: _________________, as Conversion Agent
for Lennox Trust [I] [II]
The undersigned owner of these Common Securities hereby
irrevocably exercises the option to convert these Common Securities, or the
portion below designated, into Shares (as that term is defined in the Amended
and Restated Declaration of Trust, dated as of ______, ____ (as amended from
time to time, the "Declaration"), by _________, ________ and __________ as
Regular Trustees, The Bank of New York (Delaware), as the Delaware Trustee, The
Bank of New York, as the Property Trustee, Lennox International Inc., as
Sponsor, and the Holders, from time to time, of undivided beneficial interests
in the assets of the Trust to be issued pursuant to the Declaration) in
accordance with and subject to the terms and conditions of the Declaration.
Pursuant to the aforementioned exercise of the option to convert these Common
Securities, the undersigned hereby directs the Conversion Agent (as that term is
defined in the Declaration) to (i) exchange such Common Securities for a portion
of the Debentures (as that term is defined in the Declaration) held by Lennox
Trust [I] [II] (at the rate of exchange specified in the terms of the Common
Securities set forth as Exhibit C to the Declaration) and (ii) immediately
convert such Debentures on behalf of the undersigned into Shares (at the
conversion rate specified in the terms of the Common Securities set forth as
Exhibit C to the Declaration, subject to certain adjustments set forth in the
Supplemental Indenture (as that term is defined in the Declaration)).
The undersigned does also hereby direct the Conversion Agent
that the Shares issuable and deliverable upon conversion, together with any
check in payment for fractional shares, be issued in the name of and delivered
to the undersigned, unless a different name has been indicated in the assignment
below. If Shares are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto.
C-19
Date: _______________, _____
<Table>
in whole ____ in part ____
Number of Common Securities to be converted:
-----------------------
If a name or names other than the undersigned,
please indicate in the spaces below the name or
names in which the Shares are to be issued, along
with the address or addresses of such person or
persons:
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
Signature (for conversion only)
Please print or type name and address, including zip
code, and social security or other identifying number
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
</Table>
C-20
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Common Security Certificate to:
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(Insert assignee's social security or tax identification number)
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(Insert address and zip code of assignee)
and irrevocably appoints
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agent to transfer this Common Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
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Signature:
-------------------------
(Sign exactly as your name appears on the other side of this
Common Security Certificate)
C-21