SUBSIDIARY GUARANTY

Exhibit 10.2

SUBSIDIARY GUARANTY

     THIS SUBSIDIARY GUARANTY, dated as of September 22, 2008 (together with all amendments and supplements hereto, this “ Guaranty ”), is made by LENNOX INDUSTRIES INC., an Iowa corporation, ALLIED AIR ENTERPRISES INC., a Delaware corporation, SERVICE EXPERTS LLC, a Delaware limited liability company, LENNOX GLOBAL LTD., a Delaware corporation, and each other Subsidiary of Parent Guarantor which, pursuant to Section 5.3(d)(19) of the Participation Agreement, becomes a “Guarantor” hereunder pursuant to a Subsidiary Joinder Agreement in the form of Exhibit A hereto (a “ Subsidiary Joinder Agreement ”), on a joint and several basis (collectively, together with their respective successors and assigns, “ Guarantors ” and each, individually, a “ Guarantor ”), each having an address at 2140 Lake Park Boulevard., Richardson, TX 75080, in favor of BTMU CAPITAL CORPORATION, a Delaware corporation (together with its successors and assigns, “ Lessor ”), having an address at 111 Huntington Avenue, Suite 400, Boston, MA 02199, and the INDEMNITEES, as such term is defined in the Lease (hereinafter defined) (Lessor and each Indemnitee are each a “ Guaranty Beneficiary ” and, collectively, “ Guaranty Beneficiaries ”). Terms not otherwise defined herein shall have the meanings set forth in Appendix A to the Lease.

Preliminary Statement

     Lessor entered into a Lease Agreement dated as of June 22, 2006 with Lennox Procurement Company Inc., a Delaware corporation, as lessee (together with its successors and assigns, and together with each other Lessee from time to time, collectively, “ Lessee ”) relating to the Leased Property (such Lease Agreement, as supplemented or amended from time to time, together with any Memorandum of Lease related thereto, herein called the “ Lease ”). Pursuant to the terms of the Lease, Lessee has leased the Leased Property from Lessor for a term of years, as more particularly set forth in the Lease. Pursuant to the terms of the Participation Agreement, Lessor acquired the Land and Improvements and leased the same to Lessee, which has leased the same from Lessor and otherwise agreed to perform certain obligations relating thereto, all as more particularly set forth in the Lease and other Operative Documents.

     Lennox International Inc., a Delaware corporation (“ Parent Guarantor ”), is the owner, directly or indirectly, of all of the issued and outstanding stock of Lessee. Parent Guarantor executed and delivered that certain Guaranty dated as of June 22, 2006 (the “ Parent Guaranty ”) in favor of the Guaranty Beneficiaries wherein it agreed to, among other things, unconditionally and irrevocably guaranty the prompt payment and performance of all debts, duties and obligations of Lessee under the Lease, the Participation Agreement and all other Operative Documents. Parent Guarantor is the owner, directly or indirectly, of all of the issued and outstanding stock of each Guarantor and, as a result, the Guarantors and Lessee are under common control.

     Pursuant to that certain Assignment and Assumption Agreement dated as of the date hereof (the “ Assignment Agreement ”), and other instruments, MHCB (USA) Leasing and Finance Corporation (“MHCB”) assigned all of its rights and obligations as Lender and Administrative Agent under the Operative Documents to Compass Bank (“ Lender ”), and Lender assumed such rights and obligations.

     In connection with the Assignment Agreement, the Lessee and Parent Guarantor desire to amend certain terms of the Operative Documents and the parties are simultaneously herewith executing and delivering that certain First Omnibus Amendment to Operative Documents dated as of the date hereof by and among Lessor, Parent Guarantor, Guarantors, Lessee and Lender (the “ Omnibus Amendment ”).

     In order to induce Lessor and Lender to enter into the Omnibus Amendment, and to induce Lender to assume all of the rights and obligations of MHCB under the Operative Documents pursuant to the Assignment Agreement and other instruments, the Guarantors are entering into this Guaranty with respect to the obligations of Lessee under the Lease and the other Operative Documents.

     NOW, THEREFORE, in consideration of the premises, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each Guarantor agrees as follows:

     1. Each Guarantor, jointly with the other Guarantors and severally, unconditionally and irrevocably guaranties, as primary obligor and not merely as surety, to Guaranty Beneficiaries, the prompt payment and performance of all debts, duties, liabilities and obligations of Lessee (pecuniary or otherwise) including, without limitation, all obligations in respect of Rent, Lease Balance, Purchase Amount, End of Term Adjustment, fees, expenses and indemnities, under the Lease, the Participation Agreement and all other Operative Documents (all of the foregoing payment and performance obligations, collectively, the “ Guaranteed Obligations ”) as and when the same shall become due and payable and in the manner required of Lessee. This Guaranty is an irrevocable, absolute, present, primary, continuing, unlimited and unconditional promise with respect to the full and punctual payment and performance by Lessee of each of the Guaranteed Obligations, and is not a promise of collectibility only, and is in no way conditional upon the requirement that any Guaranty Beneficiary first attempt to collect payment or demand performance from Lessee or that any Guaranty Beneficiary resort to any security or other means of obtaining such payment or performance or upon any other contingency. If for any reason (i) any such sums shall not be paid promptly by Lessee when due, or (ii) any such covenant, agreement, term or condition is not performed or observed by Lessee in accordance with the Lease, the Participation Agreement or any other Operative Document, each Guarantor, shall, without notice or demand of any nature, pay the same by wire transfer of immediately available federal funds to the Person or Persons entitled thereto pursuant to the provisions of said instruments and shall perform and observe or cause to be promptly performed and observed every such covenant, agreement, term and condition, in each case regardless of (i) any defenses or rights of set-off or counterclaims which any Guarantor or Lessee may have or assert, other than the defense of payment and performance in full of the Guaranteed Obligations, (ii) whether any Guaranty Beneficiary shall have taken any steps to enforce any rights against Lessee or any other remedy thereunder as a result of the default of Lessee thereunder and (iii) any other event, condition, contingency or circumstance whatsoever. Each Guarantor also agrees to pay to such Persons such further amounts as shall be sufficient to cover the costs and expenses of collecting such sums or any part thereof, or of otherwise enforcing or protecting the rights of such Persons under the Lease, the Participation Agreement, the other Operative Documents and this Guaranty, including reasonable fees and expenses of its attorneys and to Lessor and its attorneys for all services rendered in that connection and in any related proceeding.

Notwithstanding anything herein or in any other Operative Document to the contrary, in any action or proceeding involving any state corporate law, or any state or federal bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if, as a result of applicable law relating to fraudulent conveyance or fraudulent transfer, including Section 548 of the Bankruptcy Code or any applicable provisions of comparable state law (collectively, “ Fraudulent Transfer Laws ”), the obligations of any Guarantor under this Section 1 would otherwise, after giving effect to (a) all other liabilities of such Guarantor, contingent or otherwise, that are relevant under such Fraudulent Transfer Laws and (b) the value as assets of such Guarantor (as determined under the applicable provisions of such Fraudulent Transfer Laws) of any rights of subrogation, contribution, reimbursement, indemnity or similar rights held by such Guarantor pursuant to (i) applicable requirements of law, (ii)  Section 5 hereof or (iii) any other contractual obligations providing for an equitable allocation among such Guarantor and other Affiliates of the Lessee of obligations arising under this Guaranty or other guaranties of the obligations by such parties, be held or determined to be void, invalid or unenforceable, on account of its liability under this Section 1, then the amount of such liability shall, without any further action by such Guarantor, any Guaranty Beneficiary, or any other Person, be automatically limited and reduced to the highest amount that is valid and enforceable as determined in such action or proceeding.

     2. The obligations, covenants, agreements and duties of each Guarantor under this Guaranty shall be absolute and unconditional, shall not be subject to any counterclaim, setoff, deduction, diminution, abatement, recoupment, suspension, deferment, reduction or defense based upon any claim that any Guarantor or any other Person may have against Lessee, any Guaranty Beneficiary or any other Person, and, until the payment or performance in full of the Guaranteed Obligations, shall remain in full force and effect without regard to, and shall not be released, discharged or in any way affected by, any circumstance or condition whatsoever (whether or not any Guaranty Beneficiary, any Guarantor or Lessee shall have any knowledge or notice thereof), including, without limitation, the happening from time to time of any of the following, although without notice to, or the consent of, any Guarantor: