EX 10.1




SHARE
PURCHASE AGREEMENT



          
     
     THIS SHARE
PURCHASE AGREEMENT (“Agreement”) is made as
of July 18, 2002, by and among OUTOKUMPU COPPER PRODUCTS OY, a Finnish company
(“OCP”), OUTOKUMPU COPPER HOLDINGS, INC., a Delaware corporation
 (“Buyer”), and LENNOX
INTERNATIONAL, INC., a Delaware corporation (“Seller”).


RECITALS



          
     
     Seller desires to sell, and Buyer desires to purchase, membership interests of HEATCRAFT
HEAT TRANSFER LLC (to be renamed OUTOKUMPU
HEATCRAFT USA LLC), a Delaware limited liability company (the "Company") as hereinafter
provided, for the consideration and on the terms and conditions set forth in
this Agreement.  Buyer is a wholly-owned subsidiary of OCP.


AGREEMENT



          
     
     
Buyer, OCP and Seller, intending to be legally bound, agree as follows:


1.     
DEFINITIONS.



          
     
     
For purposes of this Agreement, the following terms have the meanings specified
or referred to in this Section 1:



          
     
     
“Acquired Companies” -- the Company and the Heat Transfer
Subsidiaries, collectively.



          
     
     “Applicable Contract” -- any Contract
(a) under which any Acquired Company has or may acquire any rights, (b) under which any Acquired
Company has or may become subject to any obligation or liability, or (c) by which any Acquired
Company or any of the assets owned or used by it is or may become
bound.



          
     
     “Balance Sheet”
 -- as defined in Section 3.4.



          
     
     “Balance Sheet Net Assets” -- the combined
net assets ((i) total assets minus (ii) total liabilities other than any Indebtedness) of the
Acquired Companies shown on the Base Balance Sheet calculated in accordance with GAAP.



          
     
     “Base Balance Sheet” --
 means the unaudited balance sheet for the Acquired
Companies attached hereto as Schedule 1-A.



          
     
     “Base Business Plan” --
means the initial base business plan of the Company set forth as Attachment A
to the Members' Agreement.










          
     
     “Best Efforts” -- the efforts that a prudent Person desirous of achieving a result would use in similar circumstances to ensure that such
result with due consideration for timing where appropriate; provided, however, that an obligation to use Best Efforts under this Agreement does not require the
Person subject to that obligation to take actions that would result in a materially adverse change in the benefits to such Person of this Agreement and the
Contemplated Transactions.



          
     
     
“Breach”  -- a "Breach" of a representation, warranty, covenant, obligation or other provision of this Agreement or any instrument delivered
pursuant to this Agreement will be deemed to have occurred if there is or has been any inaccuracy in or breach of, or any failure to perform or comply with, such
representation, warranty, covenant, obligation or other provision, and the term "Breach" means any such inaccuracy, breach, failure, claim, occurrence or
circumstance. 



          
     
     “Business” -- consists of:



          
     
     (a)     
Subject to clause (b)
below, Seller’s heat transfer business in North America, which includes its
original equipment manufacturing (“OEM”) heat
transfer division located in Grenada, Mississippi, its commercial coil heat
transfer operation located in Grenada, Mississippi and its Livernois operations
in Dearborn, Michigan and its operations in Juarez, Mexico. The Business
includes all plant, property, equipment and working capital presently used or
useable in the designated facilities; those licenses, patent rights, trademarks
and trade names used in the Business (including Heatcraft), know-how, and other
commercial or proprietary information associated and/or necessary to conduct the
Business as presently conducted and foreseen, including all agreements with
trade representatives, agents, distributors engaged in marketing activities
related to the Business, with products currently manufactured by the Business;
and the real estate (including all rights to leaseholds) wherein the Business
conducts its manufacturing, distribution or administrative functions in the
designated facilities (collectively “Assets”). 



          
     
     (b)     "Business" does not
include (i) the heat transfer operations of Seller which are integrated into Seller's other
businesses, including its HVAC/R
operations in the United States consisting of the following companies: Lennox Industries Inc.;
Armstrong Air Conditioning Inc.; Advanced Distributor Products LLC;
Excel Comfort Systems Inc.; Allied Air Enterprises Inc. and Heatcraft Refrigeration Products
or (ii) Seller's interest in Frigus-Bohn S.A. de C.V. or, for
clarification purposes, Seller's interest in its joint venture company in Brazil,
Heatcraft do Brasil Ltda.



          
     
     “Business Day” --
means a day (other than a Saturday or Sunday) on which banks in both New York, New York (USA) and Helsinki, Finland are
open for general business.



          
     
     “Buyer” --
as defined in the first
paragraph of this Agreement.



          
     
     “Buyer's Accountants” --
PricewaterhouseCoopers LLP.



          
     
     “Closing” -- as defined in Section 2.3.



          
     
     “Closing Date” -- the date and time as of
which the Closing actually takes place.




2





          
     
     “Closing Date Net Assets” -- the
combined net assets (total assets minus (ii) total liabilities other than any Indebtedness) of the Acquired
Companies as of the Closing Date calculated in accordance with GAAP.



          
     
     “Company” -- as defined in
the Recitals of this Agreement.



          
     
     “Competition Law” -- Any Legal Requirement
intended to prohibit or regulate mergers, restraints of trade or monopolization of trade,
including the HSR Act and Council Regulation (EEC) No. 4064/89 or similar laws
within Finland or other applicable jurisdictions including France, Italy and the
Czech Republic.



          
     
     “Consent” -- any approval, consent, ratification,
 waiver, or other authorization (including any Governmental Authorization).



          
     
     “Contemplated Transactions” -- all of the
transactions contemplated by this Agreement, including:



          
     
     (c)     the sale of
the Shares by Seller to Buyer;



          
     
     (d)     
the JV Transactions;



          
     
     (e)     the performance
by Buyer and Seller of their respective covenants and obligations under this Agreement; and



          
     
     
(f)     The Company’s
exercise of 100% control over the Heat Transfer Subsidiaries including the
transactions provided for in Section 6.1. 



          
     
     “Contract” -- any agreement,
contract, obligation, promise or undertaking (whether written or oral and
whether express or implied) that is
legally binding.



          
     
     “Damages” -- as defined in Section 10.1.



          
     
     “Effective Time” --
11:59:59 p.m. on the Closing Date.



          
     
     
“Encumbrance” --
any charge, claim, community
property interest, condition, equitable interest, lien, option, pledge, security interest,
right of first refusal or any restriction on use, voting, transfer, receipt of
income or exercise of any other attribute of ownership.



          
     
     “Environment” -- soil, land surface or
subsurface strata, surface waters (including navigable waters, ocean waters,
streams, ponds, drainage
basins and wetlands), groundwaters, drinking water supply, stream sediments,
ambient air (including indoor air), plant and animal life and any other environmental
medium or natural resource.



          
     
     “Environmental, Health and
Safety Liabilities”
-- any cost, damages, expense, liability, obligation or other responsibility
arising 




3




from the requirements for
compliance with or arising from the violation of  any applicable
Environmental Law or Occupational Safety and Health Law and consisting of or
relating to: 



          
     
     (a)     any actions required to
be taken to comply with applicable law or regulation relating to environmental,
health or safety matters or conditions (including on-site or off-site
contamination, occupational safety and health and regulation of chemical
substances or products);



          
     
     (b)     fines, penalties,
judgments, awards, settlements, legal or administrative proceedings, damages,
losses, claims, demands and response, investigative, remedial or inspection
costs and expenses resulting from any requirements under Environmental Law or
Occupational Safety and Health Law; 



          
     
     (c)     financial
responsibility under Environmental Law or Occupational Safety and Health Law for
cleanup costs or corrective action, including any investigation, cleanup,
removal, containment or other remediation or response actions
(“Cleanup”) required by applicable Environmental
Law or Occupational Safety and Health Law (whether or not such Cleanup has been
required or requested by any Governmental Body or any other Person) with
authority to require such Cleanup; or 



          
     
     (d)     any other compliance, corrective, investigative or remedial measures required under the applicable Environmental Law or Occupational Safety and Health
Law.



          
     
     The terms “removal,” “remedial”
and “response action,” include the types of activities
covered by the United States Comprehensive
Environmental Response, Compensation, and Liability Act, 42 U.S.C.ss.9601
et seq., as amended ("CERCLA").



          
     
     “Environmental Law” -- any
Legal Requirement that requires:



          
     
     (a)
     advising appropriate
authorities, employees and the public of intended or actual releases of
pollutants or hazardous substances or materials, violations of discharge limits
or other prohibitions and of the commencements of activities, such as resource
extraction or construction, that could have significant impact on the
Environment; 



          
     
     (b)     preventing or reducing
to acceptable
levels the release of pollutants or hazardous substances or materials into
the Environment;



          
     
     (c)     reducing the
quantities, preventing the release or minimizing the hazardous characteristics
of wastes that are generated;



          
     
     (d)     assuring that products
are designed, formulated, packaged and used so that they do not present unreasonable
risks to human health or the Environment
when used or disposed of;



          
     
     (e)     protecting resources,
 species or ecological amenities;



4





          
     
     (f)     reducing
to acceptable levels the risks
inherent in the transportation of hazardous substances, pollutants,
oil or other potentially harmful substances;



          
     
     (g)     cleaning
up pollutants that have been
released, preventing the threat of release, or paying the costs of such
clean up or prevention; or 



          
     
     
(h)     making responsible
parties pay private parties, or groups of them, for damages done to their health
or the Environment, or permitting self-appointed representatives of the public
interest to recover for injuries done to public assets. 



          
     
     “ERISA” -- the Employee Retirement
Income Security Act of 1974 or any successor law, and regulations and rules
issued pursuant to that Act or any successor law.



          
     
     “European Share Purchase Agreement”
 --
the Share Purchase Agreement to be entered into as of the Closing Date by and between LGL Holland
B.V. and OCP with respect to the purchase by OCP (or its Related Person) of 55%
of the shares or other equity interests of Outokumpu Heatcraft
B.V. (“EU JVCo”).



          
     
     “Facilities” -- any real property,
leaseholds or other interests currently or formerly owned or operated by Seller
or any Related Person
thereof and any buildings, structures or equipment (including motor
vehicles, tank cars and rolling stock) currently or formerly owned or operated by Seller or any
Related Person thereof for which Buyer or any of the Acquired Companies could
have any legal liability under Environmental Law.



          
     
     “GAAP” -- generally accepted United States
accounting principles, applied on a basis consistent with the basis on which the Balance Sheet
and the other financial statements referred to in Section 3.4 were prepared.



          
     
     “Governmental Authorization”
 -- any approval,
consent, license, permit, waiver or other authorization issued, granted, given
or otherwise made available by or under the authority of any Governmental Body
or pursuant to any Legal Requirement.



          
     
     “Governmental Body”
-- any:



          
     
     (a)     nation, state, county, city, town,
village, district or other jurisdiction of any nature;



          
     
     (b)     federal, state, local, municipal,
foreign or other government;



          
     
     (c)     governmental or
quasi-governmental
authority of any nature (including any governmental agency, branch, department,
official or entity and any court or
other tribunal);



          
     
     (d)     multi-national
organization or body; or




5





          
     
     (e)     body exercising,
or entitled to exercise, any administrative, executive, judicial, legislative,
police, regulatory or taxing authority or power of any nature.



          
     
     “Grenada Real Property”
-- all real
property owned or leased by Heatcraft Inc. or any Related Persons in the State
of Mississippi used for the activities of the Business.



          
     
     "Hazardous Activity" -- the distribution,
generation, handling, importing, management, manufacturing, processing, production,
refinement,
Release, storage, transfer, transportation, treatment or use (including any
withdrawal or other use of groundwater) of Hazardous Materials in, on, under, about or
from the Facilities or any part thereof, and any other act, business, operation
or thing that increases the danger, or risk of danger, or poses an unreasonable risk
of harm to persons or property or the Environment on or off the Facilities.



          
     
     “Hazardous Materials”
-- any waste or
other substance that is listed, defined, designated or classified as, or otherwise
determined to be,
hazardous, radioactive or toxic or a pollutant or a contaminant under or pursuant
to any Environmental Law, including any admixture or solution thereof, and
specifically including petroleum and all derivatives thereof or synthetic substitutes
therefore and asbestos or asbestos-containing materials.



          
     
     “Heat Transfer Existing Subsidiaries”
 - the
direct and indirect, wholly or partially owned, subsidiaries of Seller in existence as of
December 31, 2001 and through which the Business has been operated.



          
     
     “Heat
Transfer Subsidiaries” - the Persons formed or to be formed
that, in addition to the Company, are listed on Schedule 3.1(a).



          
     
     “HSR Act” --
the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 or any successor law, and regulations and rules issued
pursuant to that Act or any successor law.



          
     
     “Indebtedness”--
without duplication with respect to any Person, (a) all indebtedness of such
Person for borrowed money (including all
accrued interest and accumulated amortization),
(b) all obligations of such Person for the deferred purchase price of property or services (other than trade
payables created in the Ordinary Course of Business),
(c) all indebtedness created or arising under any conditional sale or
other title retention agreement with
respect to property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (d) all obligations of such Person as lessee
under leases that have been, in accordance with GAAP, recorded as capital
leases, (e) all obligations, contingent or otherwise, of such Person under acceptance,
letter of credit or similar facilities that have been, in accordance with
GAAP, recorded as indebtedness, and (f) Indebtedness of others referred to in clauses
(a) through (e) above guaranteed in any manner by such Person, or in effect
guaranteed by such Person under or pursuant to one or more Contracts.



          
     
     “Independent Accountants”
-- Ernst & Young, LLP.




          
     
     “Intellectual Property Assets”  --
as defined in Section 3.22.



6





          
     
     
“Interim Closing Period” -- the period beginning as of the Effective
Time and continuing through and ending on the Closing Date.



          
     
     
“IRC” -- the Internal Revenue Code of 1986 or any successor law, and regulations issued by the IRS pursuant to the Internal Revenue Code or
any successor law.




          
     
     
“IRS” -- the United States Internal Revenue Service or any successor agency, and, to the extent relevant, the United States Department of
the Treasury.




          
     
     
“JV Closings” -- the completion
and consummation of the JV Transactions as provided for in the
Members' Agreement.



          
     
     
“JV Transactions” -- the Contracts and
actions provided for, and as defined, in the Members' Agreement.



          
     
     
“Key Executives”
-- the individuals listed on Schedule 1-B.



          
     
     
“Knowledge”
-- an individual will be deemed to have “Knowledge” of a particular fact
or other matter if:



          
     
     
(a)     such individual is
actually aware of such fact or other matter; or



          
     
     
(b)     a prudent individual
could be expected to discover or otherwise become aware of such fact or other
matter in the course of conducting a reasonably comprehensive investigation
concerning the existence of such fact or other matter. 



A Person (other than an
individual) will be deemed to have “Knowledge” of a particular fact or
other matter if any individual who is serving, or who has at any time served, as
a director, officer, partner, or manager (as it might relate to an LLC) of such
Person or any subsidiary thereof (or in any similar capacity) has, or at any
time had, Knowledge of such fact or other matter. Notwithstanding the foregoing,
“Knowledge” of Seller means the knowledge of the officers and
directors of Seller, the Acquired Companies and the Heat Transfer Existing
Subsidiaries; the management team members of Seller in Dallas, Texas listed on
Schedule 1- C and of Heatcraft Inc. in Grenada, Mississippi and
Livernois Engineering Inc. in Dearborn Michigan listed on Schedule 1-D;
and the management team members for Seller’s heat transfer operations in
Europe, and the directors of such subsidiaries listed on Schedule 1-E. 



          
     
     
“LLC Agreement”
-- the Restated Limited Liability Company Agreement of the Company, the form of which is attached to the Members' Agreement
as Attachment G.




          
     
     
“Legal Requirement” -- any federal, state, local, municipal, foreign, international, multinational or other administrative order,
constitution, law, ordinance, principle of common law, regulation, statute or treaty.





7





          
     
     
“Members’ Agreement” -- the
Joint Venture and Members' Agreement among Buyer, OCP, Seller and the
Company, dated July 18, 2002.



          
     
     
“Membership Interests” --
as defined in the LLC Agreement.



          
     
     
“Net Assets Adjustment” --
the amount by which (a)
the Closing Date Net Assets are greater (the "Positive Net Assets Adjustment")
or less
(the "Negative Net Assets Adjustment") than (b) the Balance Sheet Net Assets.




          
     
     
“OCP”-- as defined in the
first paragraph of this Agreement.



          
     
     
“Occupational Safety and Health Law”
-- any Legal Requirement designed to provide safe and healthful working conditions and to reduce
occupational safety and health hazards.



          
     
     
“Order” -- any award, decision, injunction, judgment, order, ruling, subpoena or verdict entered, issued, made or rendered by any court,
administrative agency or other Governmental Body or by any arbitrator.




          
     
     
“Ordinary Course of Business” -- an action taken by a Person will be deemed to have been taken in the "Ordinary Course of Business" if such
action is consistent with the past practices of such Person and is taken in the ordinary course of the normal day-to-day operations of such Person.




          
     
     
“Organizational Documents” --
(a) the articles or certificate of incorporation and the bylaws of a corporation,
(b) the partnership
agreement and any statement
of partnership of a general partnership, (c) the limited partnership
agreement and the certificate of limited partnership of a limited partnership,
(d) the certificate of formation and limited liability company agreement,
memorandum of association, or operating agreement of a limited liability
company, (e) any charter or similar document adopted or filed in connection
with the creation, formation or organization of a Person, and (f) any
amendment to or restatement of any of the foregoing. 



          
     
     
“Permitted Indebtedness” -
any Indebtedness of the Acquired Companies incurred after the Effective Time which has been approved in writing
by Buyer.



          
     
     
“Person” -- any individual,
corporation (including any non-profit corporation), general or limited
partnership, limited liability company,
joint venture, estate, trust, association, organization, labor union or
other entity or Governmental Body.



          
     
     
“Plan” -- as defined in
Section 3.13.



          
     
     
“Proceeding” -- any action,
arbitration, audit, hearing, investigation, litigation or suit (whether civil,
criminal, administrative,
investigative or informal) commenced, brought, conducted or heard by or before,
or otherwise involving, any Governmental Body or arbitrator.



          
     
     
“Related Person” -- with respect
to a particular individual:




8





          
     
     
(a)     each other
member of such individual's immediately family (including
spouse, parents and children, natural or adopted) (the “Family”);




          
     
     
(b)     any Person that is
directly or indirectly
controlled by such individual or one or more members of such individual's Family.




With respect to a specified Person other than an individual:



          
     
     
(c)     any Person
that directly or indirectly controls, is directly or indirectly controlled by, or is directly or indirectly under common control with such
specified Person;




          
     
     
(d)     any Person that
 holds a Material Interest in such specified Person; and



          
     
     
(e)
     any Person with respect
to which such specified Person serves as a general partner or a trustee (or in a
similar capacity). 



          
     
     
“Release” -- any spilling, leaking, emitting, discharging, depositing, escaping, leaching, dumping or other releasing into the Environment,
whether intentional or unintentional.




          
     
     
“Representative” --
with respect to a particular Person, any director, officer, employee, agent,
consultant, advisor or other representative
of such Person, including legal counsel, accountants and financial advisors
which has been designated by a Person and acknowledged by the other Party which are
limited in number to those reasonably necessary to accomplish the required
activities under this Agreement.



          
     
     
“Search Expenses” -- the
fees and expenses incurred by Buyer or its Related Person in connection with
environmental searches and investigations reasonably incurred by or on behalf of
Buyer (but excluding the fees of Buyer's attorneys).



          
     
     
“Securities Act” -- the
Securities Act of 1933 or any successor law, and regulations and rules issued
pursuant to that Act or any successor law.



          
     
     
“Seller” --
as defined in the first paragraph of this Agreement.



          
     
     
“Seller’s Accountants” --
KPMG LLP.



          
     
     
“Seller's Release” -- as
defined in Section 2.4.



          
     
     
“Shared Services Agreement” -- an agreement between the
Company, EU JVCo and Seller in the form attached to the Members’ Agreement as
Attachment I pursuant to which (a) Seller and/or its Related Persons shall
provide certain transition services to the Company, EU JVCo and the other Acquired
Companies and (b) the Company will provide certain services to Advanced
Distributor Products LLC, an affiliate of Seller.




          
     
     
“Shares” -- 55% of the
Membership Interests in the Company.




9





          
     
     
“Subsidiary” -- with respect to any Person (the "Owner"),
any corporation or other Person of which securities or other interests having the
power to elect a majority of that corporation's or other Person's board of
directors or similar governing body are held by the Owner or one or more of its
Subsidiaries; when used without reference to a particular Person, “Subsidiary”
means a Subsidiary of the Company.



          
     
     
“Tax” and “Taxes” --
any federal, state, local or foreign income, gross receipts, license, payroll,
employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under Code
Section 59A), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, transfer pricing, registration, value added,
alternative or add-on minimum, estimated or other tax of any kind whatsoever,
including any interest, penalty or addition thereto, whether disputed or not.




          
     
     
“Tax Return” -- any return (including any information return),
report, statement, schedule, notice, form or other document or information
required to be filed with or submitted to, any Governmental Body in connection
with the determination, assessment, collection or payment of any Tax or in connection
with the administration, implementation or enforcement of or compliance with any
Legal Requirement relating to any Tax.



          
     
     
“Threat of Release” -- a substantial likelihood of a
Release that may require action in order to prevent or mitigate damage to the
Environment that may result from such Release.



          
     
     
“Threatened” -- a claim, Proceeding, dispute, action
or other matter will be deemed to have been "Threatened" if any demand or
statement has
been made (orally or in writing) or any notice has been given (orally or in writing),
or if any other event has occurred or any other circumstances exist, that
would lead a prudent Person with adequate Knowledge of all of the relevant facts
to conclude that such a claim, Proceeding, dispute, action or other matter is
likely to be asserted, commenced, taken or otherwise pursued in the future.



          
     
     
“Transaction Expenses” -- all fees, costs, expenses and
disbursements, incurred by Seller and the Acquired Companies, in connection with the
Contemplated Transactions and the transactions provided for in the European Share
Purchase Agreement, including: (a) the fees and expenses of any counsel retained
by Seller, (b) the fees and expenses of any investment or financial advisors retained
by Seller or any Acquired Company, (c) the fees and expenses of Seller’s
Accountants, (d) any amounts payable in accordance with Section 10.4.3, (e) any
incentive bonuses payable to the management, and any severance or similar payments
payable to any employee, of any of the Acquired Companies in connection with the
transactions contemplated hereby and in the European Share Purchase Agreement, (f)
Seller’s share of the fees and expenses of the Independent Accounting Firm, if any,
(g) any fees and expenses of any other counsel, accountants or other similar
professionals with respect to services rendered to Seller or the Acquired Companies
 in connection with the transactions contemplated by this Agreement and the
European Share Purchase Agreement and (h) one–half of Buyer’s Search Expenses.




10





2.          SALE AND
TRANSFER OF SHARES; CLOSING.



     
     2.1     SHARES.
Subject to the terms and
conditions of this Agreement, at the Closing Seller will sell and transfer the
Shares to Buyer, and Buyer will purchase the Shares from Seller.



          
2.2     CONSIDERATION.



          
     
     (a)     The total consideration
payable by Buyer for the purchase of the Shares (the “Purchase
Price”) shall be (i) $45,320,000 minus (ii) any
Indebtedness other than Permitted Indebtedness of the Acquired Companies that
Seller shall not have repaid in full pursuant to Section 6.3(b) that is
outstanding as of the Closing Date (including the unpaid principal, accrued and
unpaid interest, any premium (including any prepayment penalties or other
charges payable by reason of the prepayment of such Indebtedness on the Closing
Date) and other charges payable in connection therewith) and (iii) either (A)
plus 55% of the Positive Net Assets Adjustment or (B) minus 55% of
the Negative Net Assets Adjustment. 



          
     
     (b)     At least three (3)
Business Days prior to the Closing Date, the chief financial officer of Seller
shall certify in writing to Buyer the estimated amount of the Indebtedness,
Permitted Indebtedness, Closing Date Net Assets and, based thereon, a
preliminary calculation of the Net Assets Adjustment and the adjustment for
Indebtedness. As soon as practicable prior to the Closing Date and based on the
certification referred to above, Buyer and Seller shall jointly calculate the
amount of the Purchase Price to be paid at Closing subject to adjustment as
provided for in Section 2.2(c) (the “Preliminary Purchase
Price”). The Closing shall occur and the payments to be made
at Closing as provided for in Section 2.4 shall be based upon the notice
provided for herein, and upon such joint calculations. 



          
          
(c)     As promptly as possible
and in any event, not later than 30 days after the Closing, the Company, under
the direction of Buyer after consultation with Seller, shall prepare and deliver
initially to Buyer and Buyer’s Accountants (i) financial statements of
the Company including a consolidated balance sheet (the “Closing
Balance Sheet”) and an income statement with consolidating
schedule of the Acquired Companies as of the Closing Date in accordance with
GAAP which shall be subject to an audit or review by Buyer’s Accountants
and (ii) a supplemental report setting forth the Indebtedness, the
Permitted Indebtedness, Closing Date Net Assets and, based thereon, the Net
Assets Adjustment (identified as either the Positive Net Assets Adjustment or
the Negative Net Assets Adjustment), and the adjustment for Indebtedness (the
“Closing Adjustments”), each of which shall be
reported on by Buyer’s Accountants (the “Closing Date Financial
Report”). The Closing Date Financial Report shall reflect a
physical inventory conducted in accordance with subsection (e) of this Section
2.2 with any necessary adjustments required to reflect any changes from the date
of the inventory and the Closing Date. Any third-party expenses or fees incurred
by Company in preparing or in connection with the Closing Date Financial Report
and the Closing Adjustment (including the fees of Buyer’s Accountants)
shall be borne by the Company. The Company and Buyer’s Accountants shall
make available any work papers or other information relating to the Closing Date
Financial Report then or thereafter requested by Seller. Any expenses incurred
by Seller’s Accountants in reviewing the Closing Date Financial Report,
such work papers and other information and in providing




11




Seller with its report
thereon shall be borne by the Company. If Seller does not object, or otherwise
fails to respond, to the Closing Date Financial Report within 30 days after
delivery to Seller, such Closing Date Financial Report shall automatically
become final and conclusive. In the event that Seller objects to the Closing
Date Financial Report within such 30 day review period, Seller and Buyer shall
promptly meet and endeavor to reach agreement as to the content of the Closing
Date Financial Report. If Seller and Buyer agree on the content of the Closing
Date Financial Report, such Closing Date Financial Report shall become final and
conclusive. If Seller and Buyer are unable to reach agreement within 30 days
after the end of Seller’s 30 day review period, then the Independent
Accountants shall promptly be retained to undertake a determination of the
Closing Date Financial Report, which determination shall be made as quickly as
possible (it being understood that the parties shall direct the Independent
Accountants to complete their work within 30 days). Only disputed items shall be
submitted to the Independent Accountants for review. In resolving any disputed
item, the Independent Accountants may not assign a value to such item greater
than the greatest value for such item claimed by either party or less than the
lowest value for such item claimed by either party, in each case as presented to
the Independent Accountants. Such determination of the Independent Accountants
shall be final and binding on Seller and Buyer, and all expenses of the
Independent Accountants shall be borne equally by Seller and Buyer. The Purchase
Price and the payments required to be made after the Closing Date pursuant to
Section 2.2(d) shall be finally determined on the basis of the Closing Date
Financial Report and the Closing Adjustment. 



          
     
     
(d)     Within five (5)
Business Days after the final determination of the Closing Adjustments, Buyer or
Seller, as the case may be, shall pay to the other the amount by which the
Purchase Price, as adjusted by the Closing Adjustments, is greater or less than
the Preliminary Purchase Price (such difference being the “Closing
Purchase Price Reconciliation”). If the Closing Purchase
Price Reconciliation is positive, Buyer shall pay such difference to Seller. If
the Closing Purchase Price Reconciliation is negative, Seller shall pay such
difference to Buyer. If (i) Buyer fails to pay any amount owing to Seller
pursuant to this subsection (d) or (ii) Seller fails to pay any amount owing to
Buyer pursuant to this subsection (d), within the specified five (5) Business
Day period, then the amount so owing shall be payable on demand and interest
shall accrue on the unpaid amount at the rate of 18% per annum. 



          
     
     (e)     The target date for the
physical inventory referred to in subsection (c) above is August 24, 2002,
except for Italy, which is on or about August 10, 2002. Buyer agrees to notify
Seller by August 2, 2002 if it appears that the approval of the European
Commission will not be received by August 22, 2002, in which case the date of
the physical inventory will be postponed by mutual agreement of the parties to a
date that is closer to the Closing Date but in no event earlier than 35 days
prior to a new target Closing Date. The physical inventory will be taken
as by the employees of the Acquired Companies under the direction of
Buyer, after consultation with Seller who shall have the right to be present
thereat. 



          
     
     (f)    
 (i)     Subject to clause
(ii) of this Section 2.2(f), if any Accounts Receivable that are included in the
Closing Balance Sheet and taken into account in calculating the Net Assets
Adjustment are not collected in full within later of 180 days after the
Closing or 90 days after the due date (the aggregate amount of any such
uncollected Accounts Receivable less any reserve for doubtful 




12




accounts being
herein referred to as the “Shortfall Amount”),
Buyer shall promptly notify Seller in writing as to the Shortfall Amount. Within
five (5) Business Days after delivery of such notice, unless Seller disputes the
amount thereof, Seller shall pay Buyer by wire transfer of immediately available
funds an amount equal to the Shortfall Amount. The receivables in question will
then be transferred to Seller and Buyer agrees to provide any reasonable
assistance requested by Seller to collect said receivables. For purposes hereof,
it is understood that the Accounts Receivable included in the current assets to
be set forth on the Closing Balance Sheet will be net of any reserve for
doubtful accounts. Any disputes as to the Shortfall Amount shall be submitted to
and resolved by the Independent Accountants in the same manner as provided for
in Section 2.2(c). 



          
          
          
(ii)    
 Buyer acknowledges Seller's disclosure that the aggregate amount of the
Accounts Receivable on the Balance Sheet includes two
Accounts Receivable (the
“Showa A/R’s”) the sum of which is, on the date hereof,
approximately $1,265,000, which arise out of a Contract that Livernois (one of
the Heat Transfer Existing Subsidiaries) has performed (the “Showa
Contract”). Seller agrees that, notwithstanding clause (i) of this Section
2.2(f), if the Showa A/R’s are not collected in full prior to the Closing,
(A) the amount of any shortfall in collecting the Showa A/R’s shall not be
included as a current asset on the Closing Balance Sheet used in the
determination of the Closing Date Net Assets and (B) the Company shall cause
Livernois to assign its rights to collect the Showa A/R’s or the shortfall
to Seller. Buyer agrees to provide Buyer any reasonable assistance requested by
Seller to collect the Showa A/R’s or any shortfall amount thereunder. 



          
2.3     
CLOSING. The purchase and sale (the
“Closing”) provided for in this Agreement will take
place at the offices of Seller in Dallas, Texas, at 10:00 a.m. (local time) as
soon as all of the conditions to Closing set forth in Articles 7 and 8 have been
or can be satisfied, on a date that, subject to the foregoing, will be
reasonably specified by Buyer by written notice to Seller at least five (5)
Business Days in advance or at such other time and place as the parties may
agree. Subject to the provisions of Section 9, failure to consummate the
purchase and sale provided for in this Agreement on the date and time and at the
place determined pursuant to this Section 2.3 will not result in the termination
of this Agreement and will not relieve any party of any obligation under this
Agreement. 



          
2.4     CLOSING
 OBLIGATIONS.  At or prior to the Closing:



          
     
     (a)    
 Seller will deliver, or cause a Related Person to deliver, to Buyer:




          
     
          
     
(i)     
an assignment executed by Seller of the Shares to Buyer, in a form
reasonably acceptable to Buyer;



          
     
          
      (ii)     
a certificate executed by Seller representing and warranting to Buyer that each
of Seller’s representations and warranties in this Agreement was accurate
in all respects as of the date of this Agreement and is accurate in all respects
as of the Closing Date as if made on the Closing Date (giving full effect to any
supplements to and schedules or exhibits attached hereto that were delivered by
Seller to Buyer prior to the Closing Date in accordance with Section 5.5); and




13





          
     
          
     
(iii)     
resignations, effective as of the Closing, of such directors and officers of the
Acquired Companies as may be designated by the Board of the Company prior to
Closing.



          
     
     
(b)     
Buyer will deliver, or cause a Related Person to deliver:



          
     
          
     
(i)     
the Preliminary Purchase Price by wire transfer to Seller, to an account to be
specified by Seller;



          
     
          
      (ii)     
a certificate executed by Buyer to the effect that, except as otherwise stated
in such certificate, each of Buyer’s representations and warranties in this
Agreement was accurate in all respects as of the date of this Agreement and is
accurate in all respects as of the Closing Date as if made on the Closing
Date. 



          
2.5     ALLOCATION OF PURCHASE PRICE.



          
     
     
(a)     Not later than ninety
(90) days after the Closing Date, (i) Buyer shall prepare and deliver to Seller
a proposed allocation of the Purchase Price among the Company’s assets
other than those owned by Livernois and (ii) Seller shall prepare and deliver to
Buyer a proposed allocation of the Purchase Price among the assets owned by
Livernois. Buyer and Seller each agrees to keep the other party informed with
respect to the identity and credentials of any appraiser retained for purposes
of such allocation and to provide the other party with such information related
thereto as the other party may reasonably request. Unless either party objects
to a proposed allocation within thirty (30) days after receipt of such proposed
allocation from the party responsible for preparing it hereunder, that
allocation will be considered to be final (each, a “Final
Allocation”). If a party objects to a proposed allocation,
the parties shall negotiate in good faith to reach agreement upon a Final
Allocation. If the parties do not agree upon a Final Allocation, the parties
shall submit the matter to the Independent Accountants for determination of the
Final Allocation. The determination of any Final Allocation by the Independent
Accountants will be final and binding upon the parties. Neither Seller nor Buyer
shall take any position on any Tax Return or other filing with a Governmental
Body that is inconsistent with any Final Allocation. Buyer and Seller shall duly
prepare and timely file such reports and information returns as may be
prescribed or appropriate under Code Section 1060 and any regulations thereunder
and any corresponding provisions of applicable state income Tax laws to report
the allocation of the Purchase Price in accordance with the Final Allocation.
Any adjustments to the Purchase Price after the Closing will be allocated among
the Company’s assets in a manner consistent with the foregoing. 



3.     REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller represents and warrants to Buyer as follows:


     
     3.1.     
ORGANIZATION AND GOOD STANDING.



          
     
     (a)     Schedule 3.1(a)
contains a complete and accurate list for each Acquired Company of its name, its
jurisdiction of incorporation or formation, other jurisdictions in which it is
authorized to do business, and its capitalization (including the identity of
each shareholder and the number of shares or other ownership interests held by
each). Each Acquired Company is duly 



14





organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation or formation, with
full power and authority to conduct its business as it is now being conducted,
to own or use the properties and assets that it purports to own or use and to
perform all its obligations under Applicable Contracts. Each Acquired Company is
duly qualified to do business as a foreign corporation or other entity and is in
good standing under the laws of each other jurisdiction in which either the
ownership or use of the properties owned or used by it, or the nature of the
activities conducted by it, requires such qualification where the lack of such
qualification would have a material adverse effect on the Business. 



          
     
     (b)     The Company is, and at
all times since its formation has been, a limited liability company with only a
single member. 



          
     
     
(c)     
Seller has delivered to Buyer copies of the Organizational Documents of each
Acquired Company, as currently in effect.



          
3.2     
AUTHORITY; NO CONFLICT.



          
     
     (a)     
This Agreement
constitutes the legal, valid, and binding obligation of Seller, enforceable
against Seller in accordance with its terms. Upon the execution and delivery by
Seller of the LLC Agreement and the Members’ Agreement (collectively, the
“Seller’s Closing Documents”), the Seller’s
Closing Documents will constitute the legal, valid and binding obligations of
Seller, enforceable against Seller in accordance with their respective terms.
Seller has all the necessary right, power, authority and capacity to execute and
deliver this Agreement and the Seller’s Closing Documents and to perform
its obligations under this Agreement and the Seller’s Closing Documents. 



          
     
     (b)     
Except as set forth in
Schedule 3.2(b), neither the execution and delivery of this
Agreement nor the consummation or performance of any of the Contemplated
Transactions will, directly or indirectly (with or without notice or lapse of
time): 



          
          
          
(i)     contravene, conflict with or result in a violation of (A) any provision of
the Organizational Documents of Seller or of the Acquired Companies, or
(B) any resolution adopted by the board of directors or the shareholders of
Seller or of any Acquired Company;



          
          
          
(ii)     contravene, conflict with or result in a violation of, or give any Governmental
Body or other Person the right to exercise any remedy or obtain any relief
under, any Legal Requirement or any Order to which any Acquired Company or
Seller, or any of the assets owned or used by any Acquired Company or otherwise
in connection with the Business, may be subject;



          
          
          
(iii)     contravene, conflict with or result in a violation of any of the terms or
requirements of, any Governmental Authorization that is held by any Acquired
Company or that otherwise relates to the Business or the business of, or any of
the assets owned or used by, any Acquired Company;




15





          
          
          
(iv)     cause any Acquired Company to become subject to, or to become liable for the
payment of, any Tax;



          
          
          
(v)     contravene or result in a violation or breach of any provision of, or give any
Person the right to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel, terminate or modify,
any Applicable Contract; or



          
          
          
(vi)     result in the imposition or creation of any Encumbrance
upon or with respect to
any of the assets owned or used by any Acquired Company or otherwise in
connection with the Business.




Except as set forth in
Schedule 3.2(b), neither Seller nor any Acquired Company is or will
be required to give any notice to or obtain any Consent from any Person in
connection with the execution and delivery of this Agreement or the consummation
or performance of any of the Contemplated Transactions. 



          
3.3     
CAPITALIZATION.


      
              
(a)     All of the Membership
Interests have been validly authorized and issued in compliance with all Legal
Requirements. Seller is and will be on the Closing Date the record and
beneficial owners and holders of the Shares, free and clear of all Encumbrances. 


      
              
(b)     With the exception of
the Shares (which are owned by Seller), all of the outstanding equity securities
and other securities of each Acquired Company are owned of record and
beneficially by one or more of the Acquired Companies, free and clear of all
Encumbrances except where the ownership of shares is required under the Legal
Requirements of the jurisdiction of organization to be vested in those Persons
serving on the Board of Directors of an Acquired Company. No legend or other
reference to any purported Encumbrance appears upon any certificate representing
equity securities of any Acquired Company. All of the outstanding equity
securities of each Acquired Company have been duly authorized and validly issued
and are fully paid and non-assessable. Except as set forth on
Schedule 3.3(b), there are no Contracts relating to the issuance,
sale, or transfer of any equity securities or other securities of any Acquired
Company. Seller is not a party to any option, warrant, purchase right or other
contract or commitment that could require Seller to sell, transfer, or otherwise
dispose of any equity securities of the Acquired Companies. There are no voting
trust, proxy or other agreement with respect to the voting of any Shares of the
Acquired Companies. None of the outstanding equity securities or other
securities of any Acquired Company was issued in violation of any Legal
Requirement. 


     
               
(c)     Except as set forth on
Schedule 3.3(c), no Acquired Company owns, or has any Contract to
acquire, any equity securities or other securities of any Person (other than
Acquired Companies) or any direct or indirect equity or ownership interest in
any other business. 



          3.4
     
FINANCIAL STATEMENTS.     Seller has delivered to Buyer: (i) all available
audited financial statements of the Acquired Companies and the Business as of
December 31 for each of the years 



16





2000 and 2001, (ii) unaudited financial
statements for the Heat Transfer Existing Subsidiaries for each of the years
2000 and 2001 and (iii) a proforma unaudited consolidated balance sheet of the
Acquired Companies and the Business as at the Effective Time (the “Balance
Sheet”) all of which are attached hereto as Schedule 3-4. Buyer
acknowledges that the audited financial statements, if any, may be audited
according to local accounting principles or according to GAAP, and nothing in
this section requires Seller to restate these financial statements. The Balance
Sheet is true and correct and fairly presents the financial condition of the
Acquired Companies and the Business in all material respects and reflects the
consistent application of accounting principles. 


     
3.5     
BOOKS AND RECORDS.     The books of account, minute books, stock record books,
and other records of the Acquired Companies for the period of time as the
Acquired Companies have been owned by the Seller, all of which have been made
available to Buyer, are complete and correct and have been maintained in
accordance with reasonable business practices of the Seller, including the
maintenance of an adequate system of internal controls. For such time as the
Acquired Companies have been owned by the Seller, such minute books contain
records of all meetings held of, and corporate action taken by, the
stockholders, the Boards of Directors, and committees of the Boards of Directors
of the applicable Persons, which are accurate and complete in all material
respects and, to Seller’s Knowledge, no meeting of any such stockholders,
Board of Directors, or committee has been held for which minutes have not been
prepared and are not contained in such minute books, where the absence of such
record would have a material adverse effect on the Acquired Companies. At the
Closing, all of those books and records will be in the possession of the
Acquired Companies. 



          
3.6     
TITLE TO PROPERTIES; ENCUMBRANCES.     Schedule 3.6
contains a
complete and accurate list of all real property, leaseholds or other interests
therein used in connection with the Business. Seller has delivered or made
available to Buyer copies of the deeds and other instruments (as recorded) by
which Seller or one of the Acquired Companies acquired such real property and/or
interests, and copies of all title insurance policies, opinions, abstracts and
surveys that, to Seller’s Knowledge, are in the possession of Seller or the
Acquired Companies and relating to such property or interests. The Acquired
Companies own, or will as of the Closing Date own, (with good and marketable
title in the case of owned real property, subject only to the matters permitted
by the following sentence) all the properties and assets (whether real, personal
or mixed and whether tangible or intangible) that are used in connection with
the Business, or reflected as owned in the books and records of the Acquired
Companies or the Business, including all of the properties and assets reflected
in the Balance Sheet (except for assets held under capitalized leases or
operating leases disclosed or not required to be disclosed in Schedule
3.6 and personal property sold since the date of the Balance Sheet in the
Ordinary Course of Business), and all of the properties and assets purchased or
otherwise acquired to be owned by the Acquired Companies or otherwise in
connection with the Business since the date of the Balance Sheet (except for
personal property acquired and sold since the date of the Balance Sheet in the
Ordinary Course of Business and consistent with past practice). All material
properties and assets reflected in the Balance Sheet are free and clear of all
Encumbrances and are not, in the case of real property, subject to any rights of
way, building use restrictions, exceptions, variances, reservations or
limitations of any material nature except, with respect to all such properties
and assets, (a) mortgages or security interests shown on the Balance Sheet
as securing specified liabilities or obligations, with respect to which no
default (or event that, with notice or lapse of time or 



17





both, would constitute a default) exists, (b) mortgages or security interests
incurred in connection
with the purchase of property or assets after the date of the Balance Sheet
(such mortgages and security interests being limited to the property or assets
so acquired), with respect to which no material default (or event that, with
notice or lapse of time or both, would constitute a default) exists,
(c) liens for current taxes not yet due, and (d) with respect to real
property, any restrictions which have not been identified in documents of
ownership or title insurance. All buildings, plants and structures owned by the
Acquired Companies or otherwise used in connection with the Business lie wholly
within the boundaries of the real property owned by the Acquired Companies and
to Seller’s Knowledge, do not encroach upon the property of, or otherwise
conflict with the property rights of, any other Person. 



          3.7     
CONDITION
AND SUFFICIENCY OF ASSETS.     The buildings, structures and
equipment used in the Business are structurally sound, are in good operating
condition and repair and are adequate for the uses to which they are being put,
and none of such buildings, structures or equipment is in need of maintenance or
repairs except for ordinary, routine maintenance and repairs that are not
material in nature or cost or other repairs included in the Base Business Plan.
The buildings, structures and equipment of the Acquired Companies are sufficient
for the continued conduct of the Business after the Closing in substantially the
same manner as conducted prior to the Closing. One or more of the Acquired
Companies is, or will be as of the Closing Date, the owner of all right, title
and interest in and to all of the assets that have been used in connection with
the operation of the Business by Seller or the Heat Transfer Existing
Subsidiaries (including all material Applicable Contracts, Intellectual Property
Assets, inventory, insurance, Governmental Authorizations, licenses and
permits), whether tangible or intangible, free and clear of all Encumbrances,
and such assets are sufficient for the continued conduct of the Business after
the Closing in substantially the same manner as conducted prior to the Closing. 



          
3.8     ACCOUNTS
RECEIVABLE.  All trade accounts receivable of the Business that
are reflected on the Balance Sheet (whether or not they were factored as of the
date of the Balance Sheet) and all accounts receivable of the Business that will
be reflected on the accounting records of the Acquired Companies as of the
Closing Date (collectively, the “Accounts
Receivable”) represent or will represent valid obligations
arising from sales actually made or services actually performed in the Ordinary
Course of Business, and the respective reserves shown on the Balance Sheet or on
the accounting records of the Company as of the Closing Date are calculated
consistent with GAAP and, in the case of the reserve as of the Closing Date,
will be so calculated. There is no contest, claim or right of set-off which has
been asserted by any account debtor, other than those incurred in the Ordinary
Course of Business, under any Contract with any obligor of an Accounts
Receivable relating to the amount or validity of such Accounts Receivable. 



          3.9
     INVENTORY.  All inventory of the Business, whether or not
reflected in the Balance Sheet, is owned by the Acquired Companies and to
Seller’s Knowledge, consists of a quality and quantity usable and salable
in the Ordinary Course of Business, except for obsolete items and items of
below-standard quality, all of which have been written off or written down to
net realizable value in the Balance Sheet or on the accounting records of the
Acquired Companies as of the Closing Date, as the case may be.  All
inventories not written off have been priced at the lower of cost or net
realizable value. 



18





The quantities of each item of inventory (whether raw
materials, work-in-process or finished goods) are not excessive, but are
reasonable in the present circumstances of the Acquired Companies. 



          3.10     
     NO
UNDISCLOSED LIABILITIES. Except as set forth in Schedule
3.10 or Schedule 3.19, to Seller’s Knowledge, the Business, the
Acquired Companies have no material liabilities or obligations whether absolute,
accrued, contingent or otherwise) except for liabilities or obligations
reflected or reserved against in the Balance Sheet and such trade payables and
short term trade indebtedness relating to the Business as may have been incurred
in the Ordinary Course of Business since the date thereof. 



          3.11
     TAXES.



          
          (a)     To Seller’s
Knowledge, Seller and the Acquired Companies have filed or caused to be filed
all Tax Returns that are or were required to be filed by or with respect to the
Business or any of them, either separately or as a member of a group of
corporations, pursuant to applicable Legal Requirements where the failure to
file such Tax Return would have a material adverse effect on the Business or the
Acquired Companies. Seller will make available to Buyer or its Representatives,
at its request, copies of, and Schedule 3.11 contains a complete and
accurate list of, all such Tax Returns since January 1, 1998. To Seller’s
Knowledge, Seller and the Acquired Companies have paid, or made provision for
the payment of, all material Taxes that have or may have become due pursuant to
those Tax Returns or otherwise, or pursuant to any assessment received with
respect to the Business or by Seller or any Acquired Company, except such Taxes,
if any, as are listed in Schedule 3.11 and are being contested in
good faith and as to which adequate reserves (determined in accordance with
GAAP) have been provided in the Balance Sheet. 



          
          (b)     
The U.S. Federal income
Tax Returns of Seller and each Acquired Company subject to such Taxes have been
audited by the IRS or other Governmental Body or are closed by the applicable
statute of limitations for all taxable years through 1997. To Seller’s
Knowledge, all deficiencies proposed as a result of such audits have been paid,
reserved against, settled, or, as described in Schedule 3.11, are
being contested in good faith by appropriate proceedings. Except as described in
Schedule 3.11, neither Seller nor any Acquired Company has given or
been requested to give waivers or extensions (or is or would be subject to a
waiver or extension given by any other Person) of any statute of limitations
relating to the payment of Taxes of Seller or any Acquired Company or for which
Seller or any Acquired Company may be liable. 



          
          (c)     
To Seller’s
Knowledge, the charges, accruals and reserves with respect to Taxes on the
respective books of Seller and each Acquired Company are adequate (determined in
accordance with GAAP) and are at least equal to Seller’s and that Acquired
Company’s expected liability for Taxes. There exists no proposed tax
assessment against Seller, any Acquired Company or the Business except as
disclosed in the Balance Sheet or in Schedule 3.11. To Seller’s
Knowledge, all material Taxes that Seller or any Acquired Company is or was
required by Legal Requirements to withhold or collect have been duly withheld or
collected and, to the extent required, have been paid to the proper Governmental
Body or other Person. 




19





          
          (d)     
All Tax Returns filed
with respect to the Business or by (or that include on a consolidated basis)
Seller or any Acquired Company, to the Knowledge of the Seller, are true,
correct and complete in all material respects. There is no tax sharing agreement
that will require any payment by Seller or any Acquired Company after the date
of this Agreement. Neither Seller nor any Acquired Company is, or within the
five-year period preceding the Closing Date has been, an “S”
corporation. 



          3.12     
NO MATERIAL ADVERSE CHANGE.  Except as disclosed on Schedule
3.12, since December 31, 2001, there has not been any material adverse
change in the business, operations, properties, prospects, assets or condition
of the Business or any Acquired Company, and no event has occurred or
circumstance exists that may result in such a material adverse change. 



          
3.13     
EMPLOYEE BENEFITS.



          
          
        (a)     As used in this Section 3.13,
        the following terms have the meanings set forth below:


     
               
“
  Company Other Benefit Obligation” means an Other Benefit Obligation owed,
        adopted or followed by an Acquired Company.


     
               
“Company Plan” means all Plans of which an Acquired Company or its predecessor is or was a Plan Sponsor, or to which an Acquired Company or
its predecessor otherwise contributes or has contributed, or in which an Acquired Company or its predecessor otherwise participates or has participated.  All
references to Plans are to Company Plans unless the context requires otherwise.


     
               
        “Company VEBA” means a VEBA whose members include employees of
        any Acquired Company.


     
               
        “ERISA Affiliate” means, with respect to an Acquired Company,
        any other person that, together with the Company, would be treated as a
        single employer under IRC § 414.


     
               
        “MultiEmployer Plan” has the meaning given in ERISA §
3(37)(A).


     
               
        “Other Benefit Obligations” means all obligations, arrangements or customary practices,
        whether or not legally enforceable, to provide bonus
        or other payments or benefits, other than salary, as compensation for
        services rendered or in connection with the Contemplated Transactions,
        to present or former directors, employees or agents, other than obligations,
        arrangements, and practices that are Plans.  Other Benefit Obligations include
        consulting agreements under which the compensation paid does not depend upon
        the amount of service rendered, sabbatical policies, severance payment policies
        and fringe benefits within the meaning of IRC § 132.


     
               
        “PBGC” means the Pension Benefit Guaranty Corporation,
        or any successor thereto.


     
               
        “Pension Plan” has the meaning given in ERISA §
3(2)(A).




20




     
               
        “Plan” has the meaning given in ERISA §3(3).


     
               
        “Plan Sponsor” has the meaning given in ERISA §3(16)(B).


     
               
        “Qualified Plan” means any Plan that meets or purports to meet
the requirements of IRC § 401(a).


     
               
        “Title IV Plans” means all Pension Plans that are
        subject to Title IV of ERISA, 29 U.S.C. § 1301 et seq., other than MultiEmployer
        Plans.


     
               
        “VEBA” means a voluntary employees' beneficiary
        association under IRC § 501(c)(9).


     
               
        “Welfare Plan” has the meaning given in ERISA § 3(1).



     
               
(b)     Schedule 3.13(b)
contains a complete and accurate list of all Company Plans, Company Other
Benefit Obligations and Company VEBAs, and identifies as such all Company Plans
that are (i) defined benefit Pension Plans, (ii) Qualified Plans or (iii) Title
IV Plans. 


     
               
         
(i)     Schedule 3.13(b)(i) sets forth a calculation of the liability, if any, of
the Acquired Companies for post-retirement benefits other than pensions, made in
accordance with Financial Accounting Statement 106 of the Financial Accounting
Standards Board, regardless of whether any Acquired Company is required by this
Statement to disclose such information.


     
               
          (ii)
Schedule 3.13(b)(ii) sets forth the material financial cost of all
obligations owed under any Company Plan or Company Other Benefit Obligation that
is not subject to the disclosure and reporting requirements of ERISA.


     
               
(c)     
Seller has delivered to Buyer:



     
               
         
(i)     
its most recent documents that set forth the terms of each Company Plan, Company
Other Benefit Obligation or Company VEBA and of any related trust, including (A)
all plan descriptions and summary plan descriptions of Company Plans for which
Seller or the Acquired Companies are required to prepare, file and distribute
plan descriptions and summary plan descriptions, and (B) its most recent
summaries and descriptions, to the extent prepared and furnished to participants
and beneficiaries regarding Company Plans, Company Other Benefit Obligations and
Company VEBAs for which a plan description or summary plan description is not
required;



     
               
          (ii)
     all recent personnel, payroll and employment
manuals and policies;


     
               
          (iii)    
all recent collective bargaining agreements pursuant to which contributions have
been made or obligations incurred (including both pension and welfare benefits)
by the Acquired Companies, and all collective bargaining agreements pursuant to
which contributions are being made or obligations are owed by such entities; 



21




     
               
         (iv)
     any recent  written description of any Company
Plan or Company Other Benefit Obligation that is not otherwise in writing;


     
               
         (v)
     all current registration statements filed with respect
to any Company Plan;


     
               
         (vi)
     all current insurance policies purchased by or to provide
benefits under any Company Plan;


     
               
         (vii)
     all current contracts with third party administrators, actuaries, investment
managers, consultants and other independent contractors that relate to any
Company Plan, Company Other Benefit Obligation or Company VEBA; 


     
               
         (viii)
     all reports submitted within the two (2) years preceding the date of this
Agreement by third party administrators, actuaries, investment managers,
consultants or other independent contractors with respect to any Company Plan,
Company Other Benefit Obligation or Company VEBA;


     
               
           (ix)
     all current notifications to employees of their
 rights under ERISA § 601 et seq. and IRC § 4980B;


     
               
           (x)
      the Form 5500 filed in each of the most recent three (3) plan years with respect
to each Company Plan, including all schedules thereto and the opinions of
independent accountants; 


     
               
           (xi)
     all notices that were given by any Acquired Company or any Company Plan to the
IRS, the PBGC or any participant or beneficiary, pursuant to statute, within the
two (2) years preceding the date of this Agreement, including notices that are
expressly mentioned elsewhere in this Section 3.13;


     
               
          (xii)
     all notices that were given by the IRS, the PBGC or the Department of Labor to
any Acquired Company or any Company Plan within the two (2) years preceding the
date of this Agreement; 


     
               
         (xiii)
     with respect to Qualified Plans, the most recent IRS determination letter for
each Plan of the Acquired Companies and, with respect to VEBAs, the most recent
IRS determination letter that the trust is exempt from income taxes; and


     
               
         (xiv)
     with respect to Title IV Plans, the Form PBGC-1
 filed for each of the two (2) most recent plan years.


     
               
(d)     Except as set forth in Schedule 3.13(d):



     
               
           (i)
     The Acquired
Companies have performed all of
their respective material obligations under all Company Plans, Company Other Benefit
Obligations and Company
VEBAs.




22





The Acquired Companies have made appropriate entries in their financial
records and statements for all obligations and liabilities under such Plans, VEBAs and Other
Benefit Obligations that have accrued but are not
due.



     
               
           (ii)
     No material statement, either written or oral, has been made by any Acquired
Company to any Person with entitlements with regard to any Plan or Other Benefit
Obligation that was not in accordance with the Plan or Other Benefit Obligation
and that could have a material adverse economic consequence to any Acquired
Company or to Buyer.



     
               
           (iii)
     The Acquired Companies, with respect to all Company Plans, Company Other
Benefits Obligations and Company VEBAs, are, and each Company Plan, Company
Other Benefit Obligation and Company VEBA is, in compliance with ERISA, the IRC
and other applicable Laws in all material respects including the provisions of
such Laws expressly mentioned in this Section 3.13, and with any applicable
collective bargaining agreement.



           
           
           
         
(A)     No material transaction
prohibited by ERISA § 406 and no “prohibited transaction” under
IRC § 4975(c) have occurred with respect to any Company Plan. 



           
           
           
         
(B)     Neither Seller nor any Acquired Company has any
material liability to the IRS with respect to any Plan, including any liability imposed by IRC Chapter
43.



           
           
           
         
(C)     Neither Seller nor any Acquired Company has any
material liability to the PBGC with respect to any Plan other than premiums as and when due or has any
liability under ERISA § 502 or § 4071.



           
           
           
         
(D)     All material filings required by ERISA and the
IRC as to each Plan have been timely filed, and all material notices and disclosures to participants
required by either ERISA or the IRC have been timely provided.



           
           
           
         
(E)     All material
contributions and payments made or accrued with respect to all Company Plans,
Company Other Benefit Obligations and Company VEBAs are deductible under IRC
§ 162 or § 404. No material amount, or any asset of any Company Plan
or Company VEBA, is subject to Tax as unrelated business taxable income. 



     
               
           (iv)     
Each Company Plan can be terminated within thirty (30) days, without payment of
any additional contribution or amount and without the vesting or acceleration of
any benefits promised by such Plan. 



     
               
           (v)
      
Since January 1,
2001, there has been no establishment or amendment of any Company Plan, Company
VEBA or Company Other Benefit Obligation. 



     
               
           (vi)
     To the Knowledge of Seller, no event has occurred or circumstance exists that
could result in a material increase in premium costs of Company Plans and
Company Other Benefit Obligations that are insured, or a material increase in
benefit costs of such Plans and Obligations that are self-insured.




23





     
               
         
(vii)     
Other than claims for benefits submitted by participants or beneficiaries, no
claim against, or legal proceeding involving, any Company Plan, Company Other
Benefit Obligation or Company VEBA is pending or, to Seller’s Knowledge, is
Threatened.



     
               
          
(viii)   
No Company Plan is a stock bonus or employee stock ownership plan within the meaning
of IRC § 401(a).



     
               
           (ix)
    
Each Qualified Plan of each Acquired Company is qualified in form and operation
under IRC § 401(a); each trust for each such Plan is exempt from federal
income tax under IRC § 501(a). Each Company VEBA is exempt from federal
income tax.  No event has occurred or circumstance exists that will or
could give rise to disqualification or loss of tax-exempt status of any such
Plan or trust.



     
               
           (x)
    
Each Acquired Company has met or is expected to meet the minimum funding
standard, and has made all contributions required, under ERISA § 302 and
IRC § 402. 



     
               
          
(xi)     No Company Plan is subject to Title IV of ERISA.



     
               
         
(xii)     The Acquired Companies have paid all amounts
due to the PBGC pursuant to ERISA § 4007.



     
               
           (xiii)
  
No Acquired Company has ceased operations at any facility or has withdrawn from
any Title IV Plan in a manner that would subject to any entity or Seller to
liability under ERISA § 4062(e), § 4063 or § 4064.



     
               
           (xiv)
  
No Acquired Company has filed a notice of intent to terminate any Plan or has
adopted any amendment to treat a Plan as terminated. The PBGC has not instituted
proceedings to treat any Company Plan as terminated. No event has occurred or
circumstance exists that may constitute grounds under ERISA § 4042 for the
termination of, or the appointment of a trustee to administer, any Company Plan.



     
               
           (xv)
   No amendment has been
made to any Plan that has required or could require the provision of security
under ERISA § 307 or IRC § 401(a)(29). 



     
               
         
(xvi)     No accumulated funding deficiency, whether or not
waived, exists with respect to
any Company Plan, and no event has occurred or circumstance exists that may
result in an accumulated funding deficiency as of the last day of the current
plan year of any such Plan.



     
               
         
(xvii)   
The actuarial report for each Pension Plan of each Acquired Company fairly
presents the financial condition and the results of operations of each such Plan
in accordance with GAAP. 



     
               
         
(xviii)  
Since the last valuation date for each Pension Plan of each Acquired Company, no
event has occurred or circumstance exists (excluding the accrual of additional
service by active employees) that would materially increase the amount of
benefits under any such Plan or 



24





that would cause the excess of Plan assets over
benefit liabilities (as defined in ERISA § 4001) to materially decrease, or
the amount by which benefit liabilities exceed assets to materially increase.



     
               
           (xix)
     No reportable event (as defined in ERISA §
4043 and in
regulations issued thereunder) has occurred.



     
               
           (xx)
     
Neither Seller nor any Acquired Company has Knowledge of any facts or
circumstances that may give rise to any liability of any Seller, any Acquired
Company or the Company to the PBGC under Title IV of ERISA. 



     
               
           (xxi)  
  
No Acquired Company or its predecessor has ever established, maintained, or
contributed to or otherwise participated in, or had an obligation to maintain,
contribute to or otherwise participate in, any MultiEmployer Plan.



     
               
           (xxii)
   
Except to the extent required under ERISA § 601 et seq. and IRC §
4980B, no Acquired Company provides health or welfare benefits for any retired
or former employee or is obligated to provide health or welfare benefits to any
active employee following such employee’s retirement or other termination
of service.



     
               
           (xxiii)
   
Each Acquired Company has the right to modify and terminate benefits to retirees
(other than pensions) without incurring any liability for future benefits with
respect to both retired and active employees. 



     
               
           (xxiv)
   Seller and all Acquired Companies have complied with the
 provisions of ERISA § 601 et seq. and IRC § 4980B.



     
               
           
(xxv)   
No payment that is owed or may become due to any director, officer, employee or
agent of any Acquired Company will be non-deductible to the Acquired Companies
or subject to tax under IRC § 280G or § 4999; nor will any Acquired
Company be required to “gross up” or otherwise compensate any such
person because of the imposition of any excise tax on a payment to such person.



     
               
           (xxvi)
  
The consummation of the Contemplated Transactions will not result in the
payment, vesting or acceleration of any benefit unless otherwise provided in
this Agreement. 


     
3.14       
COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS.



          
          
(a)      
Except as set forth in Schedule 3.14 or Schedule 3.19:



     
               
           
(i)       
each Acquired Company is, and at all times since January 1, 1998 has been,
and the Business has been conducted at all times since January 1, 1998, in full
compliance with each Legal Requirement that is or was applicable to it or to the
conduct or operation of its business or the ownership or use of any of its
assets except for any such failure that would not result in a material adverse
effect.




25





     
               
           
(ii)     
no event has occurred or circumstance exists that (with or without notice or
lapse of time) (A) may constitute or result in a violation by the Business or
any Acquired Company of, or a failure on the part of the Business or any
Acquired Company to comply with, any Legal Requirement, or (B) may give rise to
any obligation on the part of the Company, Seller, any Acquired Company or Buyer
to undertake, or to bear all or any portion of the cost of, any remedial action
of any nature; and



     
               
           
(iii)     
neither Seller nor any Acquired Company has received at any time since
January 1, 1998 any notice or other communication (whether oral or written)
from any Governmental Body or any other Person regarding (A) any actual,
alleged, possible or potential violation of, or failure to comply with, any
Legal Requirement which would have a material effect on the Business or any
Acquired Company, or (B) any actual, alleged or potential obligation on the part
of Seller, the Business or any Acquired Company arising under any applicable
Legal Requirement to undertake, or to bear any material portion of the cost of,
any remedial action of any material nature.


          
          
(b)      Schedule 3.14
contains a complete and accurate list of each material Governmental
Authorization that is required to be held by the Business for its operation or
that is otherwise required for the Business or any Acquired Company to own or
use any of its assets. Each Governmental Authorization listed or required to be
listed in Schedule 3.14 is valid and in full force and effect. Except as
set forth in Schedule 3.14 or Schedule 3.19: 


     
               
           
(i)      
all of the material terms and requirements of each Governmental Authorization
identified or required to be identified in Schedule 3.14 have been at all
required times complied with by the Business and, to the extent applicable, by
each Acquired Company in all material respects;


     
               
           
(ii)     
no event has occurred or circumstance exists that may (with or without notice or
lapse of time) (A) constitute or result in a violation of or a failure to comply
with any material term or requirement of any Governmental Authorization listed
or required to be listed in Schedule 3.14, or (B) result in the
revocation, withdrawal, suspension, cancellation or termination of, or any
material modification to, any Governmental Authorization listed or required to
be listed in Schedule 3.14;



     
               
        
(iii)     
neither Seller nor any Acquired Company has received, at any time since
January 1, 1998, any notice or other communication (whether oral or
written) from any Governmental Body or any other Person regarding (A) any
actual, alleged or potential violation of, or failure to comply with, any
material term or requirement of any Governmental Authorization, or (B) any
actual, proposed or potential revocation, withdrawal, suspension, cancellation,
termination of or material modification to any Governmental Authorization; and



     
               
        
(iv)     
all material applications required to have been filed for the renewal of the
Governmental Authorizations listed or required to be listed in Schedule
3.14 or which are required by or in connection with the Contemplated
Transactions have been duly filed on a timely basis with the appropriate
Governmental Bodies, and all other material filings required to have been




26




made
with respect to such Governmental Authorizations have been duly made on a timely
basis with the appropriate Governmental Bodies.


The Governmental
Authorizations listed in Schedule 3.14 collectively constitute all of the
Governmental Authorizations necessary to permit the Business to be lawfully
conducted in the manner it is currently conducted in all material respects and
to permit the Acquired Companies to own and use their assets in the manner in
which they currently own and use such assets in all material respects. 



     3.15       
 LEGAL PROCEEDINGS; ORDERS.



          
          
(a)     Except as set forth in Schedule 3.15
 or Schedule 3.19, to the Knowledge of Seller, there is no
 pending Proceeding:



          
          
         
(i)      
that has been commenced by or against any Acquired Company or may affect the
Business or the business of, or any of the assets owned or used by, any
Acquired Company in any material respect; or



          
          
         
(ii)     
that challenges, or that may have the effect of preventing, delaying, making
illegal or otherwise interfering with in any material way, any of the
Contemplated Transactions. 


To Seller’s Knowledge,
no such Proceeding has been Threatened. Seller has delivered to Buyer copies of
all pleadings, correspondence and other documents relating to each Proceeding
listed in Schedule 3.15 requested by Buyer. The Proceedings listed in
Schedule 3.15 will not have a material adverse effect on the Business or
the business, operations, assets, condition or prospects of any Acquired
Company. 



          
          
(b)     Except as set forth in Schedule 3.15:



          
          
         
(i)      
there is no material Order to which the Business or any of the Acquired
Companies, or any of the assets owned or used by any Acquired Company or
otherwise in connection with the Business, is subject; 



          
          
         
(ii)      
Seller is not subject to any material Order that relates to the Business or the
business of, or any of the assets owned or used by, any Acquired
Company; and



          
          
         
(iii)     
no officer, director, agent or employee of any Acquired Company is subject to
any Order that prohibits such officer, director, agent or employee from engaging
in or continuing any conduct, activity or practice relating to the Business or
the business of any Acquired Company which would have a material adverse effect
on the Business or the business of any Acquired Company.



          
          
(c)     Except as set forth in Schedule 3.15:



27





          
          
         
(i)     
the Seller and each Acquired Company are in full compliance with all of the
terms and requirements of each material Order to which the Business or they, or
any of the assets owned or used by it, is or has been subject;



          
          
         
(ii)     
no event has occurred or circumstance exists that may constitute or result in
(with or without notice or lapse of time) a material violation of or failure to
comply with any term or requirement of any Order to which Seller, the Business
or any Acquired Company, or any of the assets owned or used by any Acquired
Company is subject; and



          
          
         
(iii)     
neither Seller nor any Acquired Company has received any notice or other
communication (whether oral or written) from any Governmental Body or any other
Person regarding any actual, alleged potential violation of, or failure to
comply with, any material term or requirement of any Order to which the Seller,
the Business or any Acquired Company, or any of the assets owned or used by any
Acquired Company or otherwise in connection with the Business, is or has been
subject.


     
3.16       ABSENCE OF CERTAIN CHANGES AND EVENTS
.     Except as set forth in Schedule
3.16, since December 31, 2001 and for clauses (f), (g), and (i) of this Section
3.16, since December 31, 2000, the Business has been conducted by the Seller and
its Related Persons only in the Ordinary Course of Business and there has not
been, with respect to or relating to the Business, any: 



          
          
(a)     issuance of any
membership interests in or shares of capital stock of any Acquired Company
except as necessary to provide for the creation of the Acquired Companies and
consistent with Section 3.3; grant of any stock option or right to purchase
membership interests in or shares of capital stock of any Acquired Company;
issuance of any security convertible into such capital stock; grant of any
registration rights; purchase, redemption, retirement or other acquisition by
any Acquired Company of any membership interests in or shares of any such
capital stock; or declaration or payment of any dividend or other distribution
or payment in respect of shares of capital stock; 



          
          
(b)     amendment to the Organizational Documents of any
of the Heat Transfer Existing Subsidiaries or any Acquired Company except as
may be necessary to
provide for the creation of the Acquired Companies;



          
          
(c)     except in the Ordinary
Course of Business, payment or increase by any Acquired Company of any
management fee or any bonuses, salaries, or other compensation to any
stockholder, director, officer or employee or entry into any employment,
severance or similar Contract with any director, officer or employee; 



          
          
(d)     except in the Ordinary
Course of Business, adoption of, or increase in the payments to or benefits
under, any profit sharing, bonus, deferred compensation, savings, insurance,
pension, retirement or other employee benefit plan for or with any employees of
any Acquired Company; 




28





          
          
(e)     damage to or
destruction or loss of any asset or property of any Acquired Company, whether or
not covered by insurance, materially and adversely affecting the properties,
assets, business, financial condition or prospects of the Business or the
Acquired Companies, taken as a whole; 



          
          
(f)     entry into, termination
of or receipt of notice of termination of (i) any license, distributorship,
dealer, sales representative, joint venture, credit or similar agreement which
would have a material impact on the Business, or (ii) any Contract or
transaction involving a total remaining commitment by or to any Acquired Company
of at least $100,000; 



          
          
(g)     except in the Ordinary
Course of Business, sale, lease or other disposition of any asset or property of
any Acquired Company or mortgage, pledge or imposition of any lien or other
encumbrance on any material asset or property of any Acquired Company or
otherwise relating to the Business, including the sale, lease or other
disposition of any of the Intellectual Property Assets; 



          
          
(h)     cancellation or waiver of any claims or
rights with a value to any Acquired Company in excess of $25,000;



          
          
(i)     material change in the accounting methods used
by any Acquired Company; or



          
          
(j)     agreement, whether oral or written, by Seller or
any Acquired Company to do any of the foregoing.


     
3.17     CONTRACTS; NO DEFAULTS.



          
          
(a)     Schedule 3.17(a) contains a complete and
accurate list, and
Seller has delivered to Buyer true and complete copies, of:



          
          
         
(i)     
each Applicable Contract that involves performance of services or delivery of
goods or materials by one or more Acquired Companies or otherwise in connection
with the Business of an amount or value in excess of $100,000;



          
          
         (ii)     
each Applicable Contract that involves performance of services or delivery of
goods or materials to one or more Acquired Companies or otherwise in connection
with the Business of an amount or value in excess of $100,000;



          
          
         
(iii)     
each Applicable Contract that was not entered into in the Ordinary Course of
Business and that involves expenditures or receipts of one or more Acquired
Companies or otherwise in connection with the Business in excess of $25,000;



          
          
         
(iv)     
each lease, rental or occupancy agreement, license, installment and conditional
sale agreement, and other Applicable Contract affecting the ownership of,
leasing of, title to, use of or any leasehold or other interest in, any real or
personal property (except personal property leases and installment and
conditional sales agreements having a value per item or aggregate payments of
less than $25,000 and with terms of less than one year);




29





          
          
         
(v)     
each licensing agreement or other Applicable Contract with respect to patents,
trademarks, copyrights or other intellectual property, including agreements with
current or former employees which are still in effect, consultants or
contractors regarding the appropriation or the non-disclosure of any of the
Intellectual Property Assets other than those agreements with employees entered
into in the normal course of business;



          
          
         (vi)
     each collective bargaining agreement and other
Applicable Contract to
or with any labor union or other employee representative of a group of employees;



          
          
         (vii)     
each joint venture, partnership and other Applicable Contract (however named)
involving a sharing of profits, losses, costs, or liabilities by any Acquired
Company with any other Person; 



          
          
         (viii)     
each Applicable Contract containing covenants that in any material way purport
to restrict the business activity of the Business or any Acquired Company or any
Related Person of an Acquired Company or limit the freedom of the Business or
any Acquired Company or any Related Person of an Acquired Company in any
material way to engage in any of its line of business or to compete with any
Person in its lines of business;



          
          
         (ix)
     each Applicable Contract providing for payments to
or by any Person based on sales, purchases or profits, other than direct
payments for goods;



          
          
         (x)
     each power of attorney that is currently effective
and outstanding which could effect in a material way the Business or the Acquired
Companies;



          
          
         (xi)     
each Applicable Contract entered into other than in the Ordinary Course of
Business that contains or provides for an express undertaking by any Acquired
Company to be responsible for indirect, consequential or punitive damages;



          
          
         (xii)
     each Applicable Contract for capital expenditures
in excess of $25,000;



          
          
         
(xiii)     
each written warranty, guaranty and other similar undertaking with respect to
contractual performance extended by any Acquired Company other than in the
Ordinary Course of Business; and



          
          
         
(xiv)     each material amendment, supplement and modification
(whether oral or written) in respect of any of the foregoing.



Schedule 3.17(a) sets forth sufficient details concerning such Contracts to identify the
Contracts, and the Acquired Companies’ office where details relating to the
Contracts are located. 



          
          
(b)     Except as set forth in Schedule 3.17(b):



          
          
         
(i)     Neither Seller nor any Related Person of Seller
has or may acquire any rights
under, and Seller has not become subject to any obligation or liability under,
any material Contract that relates to the business of, or any of the material
assets owned or used by, any Acquired Company; and




30





          
          
         
(ii)     To Seller’s Knowledge, no officer or employee
of any Acquired Company is
bound by any Contract that purports to limit the ability of such officer or
employee to (A) engage in or continue any conduct, activity or practice relating
to the business of any Acquired Company, or (B) assign to any Acquired Company
any material rights to any invention, improvement or discovery made in the
course of said officer’s or employee’s employment.



          
          
(c)     Except as set forth in Schedule 3.17(c), each Contract
identified or required to be identified in Schedule 3.17(a) is in full force and effect and is
valid and enforceable in accordance with its terms in all material respects.



          
          
(d)     Except as set forth in Schedule 3.17(d)



          
          
         
(i)     
to Seller’s Knowledge, each Acquired Company is, and at all times has been,
in compliance in all material respects with all applicable terms and
requirements of each Contract under which such Acquired Company has or had any
obligation or liability or by which such Acquired Company or any of the assets
owned or used by such Acquired Company or otherwise in connection with the
Business is or was bound;



          
          
         
(ii)     to Seller’s Knowledge, each other Person that
has or had any obligation or
liability under any Contract under which an Acquired Company has or had any
rights is, and at all times has been, in compliance in all material respects
with all applicable terms and requirements of such Contract;



          
          
         
(iii)     to Seller’s Knowledge, no event has occurred or circumstance exists that
(with or without notice or lapse of time) may contravene, conflict with or
result in a material violation or breach of, or give any Acquired Company or
other Person the right to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel, terminate or modify,
any Applicable Contract; and



          
          
         
(iv)     neither Seller nor any Acquired Company has given to or received from any other
Person any notice or other communication (whether oral or written) regarding any
actual, alleged potential material violation or breach of, or default under, any
Contract.



          
          
(e)     There are no
renegotiations of any material amounts paid or payable to Seller or any Acquired
Company under current or completed Contracts with any Person and no such Person
has made written demand for such renegotiation. 



          
          
(f)     The Contracts relating
to the sale, design, manufacture, or provision of products or services by the
Acquired Companies or otherwise in connection with the Business have been
entered into in the Ordinary Course of Business and have been entered into
without the commission of any act alone or in concert with any other Person, or
any consideration having been paid or promised, that is or would be in material
violation of any Legal Requirement. 



31




     
3.18     INSURANCE.



          
          
(a)     
Seller has delivered to
Buyer a true and complete list of all policies of insurance to which any
Acquired Company is a party or under which the Business, any Acquired Company,
or any director of any Acquired Company, is or has been covered at any time
within the five (5) years preceding the date of this Agreement and a list of all
pending applications for policies of insurance. 



          
          
(b)     Schedule 3.18(b) describes:



          
          
         
(i)     any self-insurance arrangement by or affecting
the Business or any Acquired Company, including any reserves established thereunder;



          
          
         
(ii)     any contract or arrangement, other than a policy
of insurance, for the transfer or sharing of any risk by any Acquired Company or otherwise in
connection with the Business; and



          
          
         
(iii)     all obligations of the Acquired Companies or
otherwise in connection with the
Business to third parties with respect to insurance (including such obligations
under leases and service agreements) and identifies the policy under which such
coverage is provided.



          
          
(c)     Schedule 3.18(c)
sets forth, by year, for the current policy year and each of the five (5)
preceding policy years: 



          
          
         
(i)     a summary of the loss experience under each policy;




          
          
         
(ii)     a statement describing
each claim under an insurance policy for an amount in excess of $50,000, which
sets forth: 



           
           
           
         
(A)     the name of the claimant;



           
           
           
         
(B)     description of the policy by insurer, type of
insurance and period of coverage; and



           
           
           
         
(C)     the amount and a brief description of the claim;
and



          
          
         (iii)     
a statement
describing the loss experience for all claims that were self-insured, including
the number and aggregate cost of such claims. 



          
          
(d)     Except as set forth on Schedule 3.18(d),
to Seller's Knowledge:



          
          
         
(i)     
All policies to which any Acquired Company is a party or will be a party at the
Effective Time, or that provide coverage to Seller, the Business, any Acquired
Company or any director or officer of an Acquired Company in all material
respects:



           
           
           
         
(A)     are valid, outstanding and enforceable;



32





           
           
           
         
(B)     are issued by an insurer that is financially
sound and reputable;



           
           
           
         
(C)     taken together, provide adequate insurance
coverage for the Business and the assets and the operations of the Acquired
Companies;



           
           
           
         
(D)     are sufficient for
compliance with all Legal Requirements and Contracts to which any Acquired
Company is a party, by which any Acquired Company is bound or otherwise in
connection with the Business to the extent insurance is customarily available
therefor; 



           
           
           
         
(E)     will continue in full
force and effect following the consummation of the Contemplated Transactions or,
as applicable, will have been replaced by similar policies on or before the
Closing Date; and 



           
           
           
         
(F)     do not provide for any retrospective premium
adjustment or other experienced-based liability on the part of any Acquired Company or otherwise in
connection with the Business.



          
          
         
(ii)     Neither Seller nor any Acquired Company has
received (A) any refusal of coverage
or any notice that a defense will be afforded with reservation of rights, or (B)
any notice of cancellation or any other indication that any insurance policy is
no longer in full force or effect or will not be renewed or that the issuer of
any policy is not willing or able to perform its obligations thereunder.



          
          
         
(iii)     
The Acquired Companies or Seller have paid all premiums due, and have otherwise
performed all of their respective obligations, under each policy to which any
Acquired Company is a party or that provides coverage to the Business or to any
Acquired Company or director thereof.



          
          
         
(iv)     To Seller’s
Knowledge, the Acquired Companies have given notice to the insurer of all claims
that may be insured thereby. 


     
     3.19     ENVIRONMENTAL MATTERS.
Except as set forth in Schedule 3.19 or
as described in the reports supplied by Seller or obtained by Buyer and each of which
reports is specifically listed on Schedule 3.19, to Seller's Knowledge:



          
          
(a)     Each of the Acquired
Companies and the Business is in compliance with in all material respects and is
not in violation of or liable under in any material respect, any Environmental
Law. Neither Seller nor any Acquired Company has any reasonable basis to expect,
nor has any of them received, any actual or Threatened order or notice from (i)
any Governmental Body or private citizen acting in the public interest, or (ii)
the current or prior owner or operator of any Facilities, of any actual or
potential material violation or material failure to comply with any
Environmental Law, or of any actual or Threatened obligation to undertake or
bear the cost of any Environmental, Health, and Safety Liabilities with respect
to any of the Facilities or any other properties or assets (whether real,
personal, or mixed) in which Seller or any Acquired Company has or had an
interest, or with respect to any property or Facility at or to which Hazardous
Materials were generated, manufactured, refined,



33





transferred, imported, used, or
processed by Seller, any Acquired Company, or any other Person for whose conduct
they are or may be held responsible, or from which Hazardous Materials have been
transported, treated, stored, handled, transferred, disposed, recycled, or
received. 



          
          
(b)     There are no pending or
Threatened claims, Encumbrances, or other material restrictions of any nature,
resulting from any Environmental, Health, and Safety Liabilities or arising
under or pursuant to any Environmental Law, with respect to or affecting any of
the Facilities or any other properties and assets (whether real, personal, or
mixed) in which Seller or any Acquired Company has or had an interest. 



          
          
(c)     Neither Seller nor any
Acquired Company has any basis to expect, nor has any of them or any other
Person for whose conduct they are or may be held responsible, received, any
citation, directive, inquiry, notice, Order, summons or warning that relates to
Hazardous Activity, Hazardous Materials, or any alleged, actual, or potential
violation or failure to comply with any Environmental Law, or of any alleged,
actual, or potential obligation to undertake or bear the cost of any
Environmental, Health, and Safety Liabilities with respect to any of the
Facilities or any other properties or assets (whether real, personal, or mixed)
in which Seller or any Acquired Company had an interest, or with respect to any
property or facility to which Hazardous Materials generated, manufactured,
refined, transferred, imported, used, or processed by Seller, any Acquired
Company, or any other Person for whose conduct they are or may be held
responsible, have been transported, treated, stored, handled, transferred,
disposed, recycled, or received. 



          
          
(d)     Neither Seller nor any
Acquired Company nor any other Person for whose conduct they are or may be held
responsible has any Environmental, Health, and Safety Liabilities with respect
to the Facilities or with respect to any other properties and assets (whether
real, personal, or mixed) in which any Acquired Company (or any predecessor),
has or had an interest, or at any property geologically or hydrologically
adjoining the Facilities or any such other property or assets. 



          
          
(e)     Except in material
compliance with or as permitted by applicable Environmental Law, there are no
Hazardous Materials present on or in the Environment at the Facilities or at any
geologically or hydrologically adjoining property in material quantities that
emanated from Seller, any Acquired Company or any predecessor thereof, including
any Hazardous Materials contained in barrels, above or underground storage
tanks, landfills, land deposits, dumps, equipment (whether moveable or fixed) or
other containers, either temporary or permanent, and deposited or located in
land, water, sumps, or any other part of the Facilities or such adjoining
property, or incorporated into any structure therein or thereon. Except in
material compliance with or as permitted by applicable Environmental Law,
neither Seller nor any Acquired Company nor any other Person for whose conduct
they are or may be held responsible has permitted or conducted, or is aware of,
any Hazardous Activity conducted with respect to the Facilities or any other
properties or assets (whether real, personal, or mixed) in which any Acquired
Company has or had an interest. 



          
          
(f)     Except in material compliance with or as
permitted by applicable Environmental Law, there has been no Release or Threat
of Release, of any material
amounts of Hazardous Materials at or from the Facilities.



34





          
          
(g)     
Seller has delivered or
made available to Buyer true and complete copies and results of the most recent
material reports, studies, analyses, tests, or monitoring possessed or initiated
by Seller or any Acquired Company or such other reports as Buyer has requested
pertaining to Hazardous Materials or Hazardous Activities in, on, or under the
Facilities, or concerning compliance by Seller, any Acquired Company, or any
other Person for whose conduct they are or may be held responsible, with
Environmental Laws. 



     3.20     EMPLOYEES.




          
          
(a)     Schedule 3.20(a)
contains a complete and accurate list of the following information for each
employee of the Acquired Companies whose compensation in 2001 exceeded
$100,000.00 US Dollars, including each employee on leave of absence or layoff
status: employer, name, job title, current compensation paid or payable
and any change in compensation since the Effective Time, vacation accrued and
service credited for purposes of vesting and eligibility to participate under
any Acquired Company’s severance pay plan. 



          
          
(b)     No employee or director
of any Acquired Company is a party to, or is otherwise bound by, any agreement
or arrangement, including any confidentiality, noncompetition or proprietary
rights agreement, between such employee or director and any other Person
(“Proprietary Rights Agreement”) that in any material
way adversely affects or will affect (i) the performance of his or her duties as
an employee or director of the Acquired Companies, or (ii) the ability of the
Business to be conducted or of any Acquired Company to conduct its business,
including any Proprietary Rights Agreement with Seller or the Acquired Companies
by any such employee or director. To Seller’s Knowledge, no director,
officer or other key employee of any Acquired Company intends to terminate his
or her employment with such Acquired Company. 


     
     
3.21     LABOR RELATIONS; COMPLIANCE.



          
          
(a)     Except as set forth on Schedule 3.21(a),
neither the
Business nor any Acquired Company has been or is a party to or bound by any collective
bargaining
or other material labor Contract.



          
          
(b)     Except as set forth on
Schedule 3.21(b), since January 1, 1998, there has not been,
there is not presently pending or existing and, to Seller’s Knowledge,
there is not Threatened, (i) any strike, work stoppage or material employee
grievance process, (ii) any Proceeding against or affecting the Business or any
Acquired Company relating to the alleged material violation of any Legal
Requirement pertaining to labor relations or employment matters, including any
charge or complaint filed by an employee or union with the National Labor
Relations Board, the Equal Employment Opportunity Commission or any comparable
Governmental Body, organizational activity or other material labor or employment
dispute against or affecting the Business or any of the Acquired Companies or
their premises, or (iii) any application for certification of a collective
bargaining agent. No event has occurred or circumstance exists that could on any
reasonable basis provide the basis for any work stoppage or other labor dispute.
There is no lockout of any employees by the Seller or any Acquired Company, and
no such action is contemplated by the Seller or any Acquired Company. 



35





          
          
(c)     
Except as set forth on
Schedule 3.21(c), the Seller and each Acquired Company have complied
in all material respects with all Legal Requirements relating to employment,
equal employment opportunity, nondiscrimination, immigration, wages, hours,
benefits, collective bargaining, the payment of social security and similar
taxes, occupational safety and health and plant closing. Except as set forth on
Schedule 3.21(c), no Acquired Company is liable for the payment of
any material compensation, damages, taxes, fines, penalties or other amounts,
however designated, for failure to comply with any of the foregoing Legal
Requirements. 


     
     3.22     
INTELLECTUAL PROPERTY.


          
          
(a)     Intellectual Property Assets
.
The term
“Intellectual Property Assets” includes to the extent
owned or used by the Business:



          
          
         
(i)     the names Heatcraft, Livernois, and all
derivatives or combinations thereof, and
all fictional business names, trading names, registered and unregistered
trademarks, service marks and applications (collectively,
“Marks”);



          
          
         
(ii)     all patents, patent applications and
inventions that may be patentable
(collectively, “Patents”);



          
          
         
(iii)     all copyrights in both published works and
unpublished works
(collectively, “Copyrights”);



          
          
         
(iv)     all rights in mask works (collectively,
“Rights in Mask Works”); and



          
          
         
(v)     all know-how, trade secrets, confidential information,
customer lists, software,
technical information, data, process technology, plans, drawings and blue prints
(collectively, “Trade Secrets”) owned, used or licensed
in connection with the Business.



          
          
         
(vi)     the internet domain names relating to the Business.




          
          
(b)     
Agreements. Schedule 3.22(b) contains a complete and accurate list
and summary description, including any royalties paid or received by Seller or
the Acquired Companies, of all Contracts relating to the Intellectual Property
Assets to which Seller or any Acquired Company is a party or by which Seller or
any Acquired Company is bound, except for any license implied by the sale of a
product and perpetual, paid-up licenses for commonly available software programs
with a value of less than $10,000 under which Seller or an Acquired Company is
the licensee. There are no outstanding and, to Seller’s Knowledge, no
Threatened disputes or disagreements of a material nature with respect to any
such agreement. 



          
          
(c)     Know-How Necessary for the Business.




          
          
         
(i)     The Intellectual Property Assets are all those
necessary for the operation of
the Business as it is currently conducted. One or more of the Acquired Companies
is the owner of all right, title and interest in and to each of the Intellectual
Property Assets which are, except as set



36





forth on Schedule 3.22(c)(i),
free and clear of all Encumbrances, and has the right to use without payment to
a third party all of the Intellectual Property Assets.



          
          
         
(ii)     Except as set forth in Schedule 3.22(c)(ii),
all current employees
of each Acquired Company have executed written Contracts with Seller or one or
more of the Acquired Companies that assign to Seller or one or more of the
Acquired Companies all rights to any inventions, improvements, discoveries or
information relating to the Business. No employee, officer or director of Seller
or any Acquired Company has entered into any Contract that restricts or limits
in any way the scope or type of work in which the employee may be engaged or
requires the employee to transfer, assign or disclose information concerning his
or her work to anyone other than Seller or one or more of the Acquired
Companies.



          
          
(d)     Patents.



          
          
         
(i)     Schedule 3.22(d)(i) contains a complete
and accurate list and summary
description of all Patents. Seller or one or more of the Acquired Companies is
the owner of all right, title and interest in and to each of the Patents, free
and clear of all Encumbrances.



          
          
         
                (ii)     All of the issued Patents are
currently in
compliance with formal legal
requirements (including payment of filing, examination and maintenance fees and
proofs of working or use), to Seller’s Knowledge, are valid and enforceable
and, except as set forth on Schedule 3.22(d)(ii), are not subject to any
maintenance fees or taxes or actions falling due within ninety (90) days after
the Closing Date.



          
          
         
                (iii)     No Patent has been or is now
involved in any
interference, reissue,
reexamination or opposition proceeding. To Seller’s Knowledge, there is no
potentially interfering patent or patent application of any third party.



          
          
         
                (iv)     No Patent is infringed or, to
Seller’s Knowledge,
has been challenged or
threatened in any way.  None of the products manufactured and sold, nor any
process or know-how used, by the Business or any Acquired Company infringes or
is alleged to infringe any patent or other proprietary right of any other
Person.



          
          
        (e)     Trademarks.




          
          
         
                (i)     Schedule 3.22(e)(i) contains
 a complete
and accurate list and summary
description of all Marks. One or more of the Acquired Companies is or will be at
Closing the owner of all right, title, and interest in and to each of the Marks,
free and clear of all Encumbrances.



          
          
         
                (ii)     All Marks that have been registered with the United
States Patent and Trademark
Office are currently in compliance with all formal legal requirements (including
the timely post-registration filing of affidavits of use and incontestability
and renewal applications), are valid and enforceable, except as disclosed on
Schedule 3.22(e)(ii), and are not subject to any maintenance fees or
taxes or actions falling due within ninety (90) days after the Closing Date.




37





          
          
         
                (iii)     
No Mark has been or is now involved in any opposition, invalidation or
cancellation and, to Seller’s Knowledge, no such action is Threatened with
the respect to any of the Marks. 



          
          
         
                (iv)     To Seller's Knowledge, there is no potentially
interfering trademark or trademark application of any third party.



          
          
         
                (v)     To Seller’s Knowledge, no Mark is infringed
or has been challenged or
threatened in any way.  None of the Marks used by any Acquired Company
infringes or is alleged to infringe any trade name, trademark or service mark of
any third party.



          
          
        (f)     Copyrights.



          
          
         
                (i)     To Seller’s Knowledge, no Copyright is
infringed or has been challenged or
threatened in any way. To Seller’s Knowledge, none of the subject matter of
any of the Copyrights infringes or is alleged to infringe any copyright of any
third party or is a derivative work based on the work of a third party.



          
          
        (g)     Trade Secrets.



          
          
         
(i)     Seller and the Acquired
Companies have taken all reasonable precautions to protect the secrecy,
confidentiality and value of their Trade Secrets. 



          
          
         
                (ii)     One or more of the Acquired Companies has good title and an absolute (but not
necessarily exclusive) right to use the Trade Secrets. To the Seller’s
Knowledge, the Trade Secrets are not part of the public knowledge or literature,
and, to Seller’s Knowledge, have not been used, divulged or appropriated
either for the benefit of any Person (other than one or more of the Acquired
Companies) or to the detriment of the Acquired Companies. No Trade Secret is
subject to any adverse claim or has been challenged or threatened in any way.



          
3.23     CERTAIN
PAYMENTS. To Seller’s Knowledge, no Acquired Company or
director, officer, agent or employee of any Acquired Company, nor any other
Person associated with or acting for or on behalf of the Business or any
Acquired Company, has directly or indirectly (a) made any contribution, gift,
bribe, rebate, payoff, influence payment, kickback or other payment to any
Person, private or public, regardless of form, whether in money, property or
services (i) to obtain favorable treatment in securing business, (ii) to pay for
favorable treatment for business secured, (iii) to obtain special concessions or
for special concessions already obtained, for or in respect of the Business, any
Acquired Company or any Related Person of an Acquired Company, or (iv) in
violation of any Legal Requirement, or (b) established or maintained any fund or
asset that has not been recorded in the books and records of the Acquired
Companies. 




38




     
     
3.24     DISCLOSURE.



          
          
        (a)     No representation or
warranty of Seller in this Agreement and no statement in any Schedule attached
hereto omits to state a material fact necessary to make the statements herein or
therein, in light of the circumstances in which they were made, not misleading. 



          
          
        (b)     No notice given
pursuant to Section 5.5 will contain any untrue statement or omit to state
a material fact necessary to make the statements therein or in this Agreement,
in light of the circumstances in which they were made, not misleading. 



          
          
        (c)     There is no fact known
to Seller that has specific application to Seller or any Acquired Company (other
than general economic or industry conditions) and that materially adversely
affects the assets, business, prospects, financial condition, or results of
operations of the Business or Acquired Companies (on a consolidated basis) that
has not been set forth in this Agreement. 


     
     
3.25     RELATIONSHIPS WITH RELATED PERSONS. Neither Seller nor any
Related Person of Seller or of any Acquired Company currently has, or since
January 1, 1998 has owned (of record or as a beneficial owner), an equity
interest or any other financial or profit interest in, a Person that has (i) had
business dealings or a material financial interest in any transaction with any
Acquired Company other than business dealings or transactions conducted in the
Ordinary Course of Business with the Acquired Companies at substantially
prevailing market prices and on substantially prevailing market terms except for
less than one percent (1%) of the outstanding capital stock of any such business
that is publicly traded on any recognized exchange or in the over-the-counter
market. Except as set forth in Schedule 3.25, neither Seller nor any
Related Person of Seller or of any Acquired Company is a party to any Contract
with, or has any claim or right against, any Acquired Company. 


     
     3.26     
BROKERS OR FINDERS. Except as set forth in Schedule 3.26, Seller
and its agents have incurred no obligation or liability, contingent or
otherwise, for brokerage or finders’ fees or agents’ commissions or
other similar payment in connection with this Agreement. 



4.     REPRESENTATIONS AND WARRANTIES OF BUYER AND OCP.
Buyer and OCP represent and warrant to Seller as follows:


     
     
4.1     ORGANIZATION AND GOOD STANDING.
Buyer is a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware.


     
     
4.2     AUTHORITY; NO CONFLICT.



          
          
        (a)     This Agreement
constitutes the legal, valid and binding obligation of Buyer and OCP,
enforceable against Buyer and OCP in accordance with its terms. Upon the
execution and delivery by Buyer of the LLC Agreement, and the
Members’ Agreement (collectively, the “Buyer’s
Closing Documents”), the Buyer’s Closing
Documents will constitute the legal, valid and binding obligations of Buyer,
enforceable against Buyer in accordance with their respective terms. Buyer has
all the necessary rights, power and authority to execute and deliver this
Agreement and the Buyer’s 



39





Closing Documents and to perform its obligations
under this Agreement and the Buyer’s Closing Documents.




          
          
        (b)     Except as set forth in
Schedule 4.2, neither the execution and delivery of this Agreement by
Buyer nor the consummation or performance of any of the Contemplated
Transactions by Buyer will contravene, conflict with or result in a violation of
or give any Government or other Person the right to challenge, prevent, delay or
otherwise interfere with any of the Contemplated Transactions or exercise any
remedy or obtain any relief under or pursuant to: 



          
          
         
                (i)     any provision of Buyer's or OCP's Organizational
Documents;



          
          
         
                (ii)     any resolution adopted by the board of directors
or the stockholders of Buyer or OCP;



          
          
         
                (iii)     any Legal Requirement or Order to which Buyer
or OCP may be subject; or



          
          
         
                (iv)     any Contract to which Buyer or OCP is a party or
by which Buyer or OCP may be bound.


Except as set forth in
Schedule 4.2, Buyer and OCP are not and will not be required to give
notice or obtain any Consent from any Person in connection with the execution
and delivery of this Agreement or the consummation or performance of any of the
Contemplated Transactions. 


     
     4.3     INVESTMENT INTENT.
Buyer is acquiring the Shares for its own account and not with a view to their distribution within the meaning of Section 2(11) of
the Securities Act.


     
     4.4     CERTAIN PROCEEDINGS. There is no pending Proceeding that has been
commenced against Buyer or OCP and that challenges, or may have the effect of
preventing, delaying, making illegal or otherwise interfering with, any of the
Contemplated Transactions. To the Knowledge of Buyer and OCP, no such Proceeding
has been Threatened. 


     
     
4.5     BROKERS OR FINDERS. Buyer, OCP and their officers and agents have incurred
no obligation or liability, contingent or otherwise, for brokerage or
finders’ fees or agents’ commissions or other similar payment in
connection with this Agreement and will indemnify and hold Seller harmless from
any such payment alleged to be due by or through Buyer or OCP as a result of the
action of Buyer, OCP or their officers or agents. 



5.     ADDITIONAL COVENANTS OF SELLER AND BUYER.



     
     5.1     
ACCESS AND INVESTIGATION.



          
          
(a)     Between the date of
this Agreement and the Closing Date, Seller will, and will cause each Acquired
Company and its Representatives to, (a) afford Buyer and its Representatives and
prospective lenders and their Representatives (collectively,
“Buyer’s Advisors”) reasonable access to



40





each Acquired Company’s personnel, properties (including subsurface
testing), contracts, books and records, and other documents and data, (b)
furnish Buyer and Buyer’s Advisors with copies of all such material
contracts, books and records, and other existing documents and data as Buyer may
reasonably request, and (c) furnish Buyer and Buyer’s Advisors with such
additional financial, operating and other data and information as Buyer may
reasonably request. 



          
          
(b)     In addition to any
environmental investigations and audits conducted by Buyer or its
Representatives prior to the date of this Agreement, Buyer shall be permitted to
cause further environmental audits of the Facilities to be conducted as are
reasonably necessary for assessing the presence and or disposition of Hazardous
Materials and compliance with Environmental Laws, including such Phase II
environmental audits as Buyer and Seller may mutually agree upon. Seller hereby
agrees to permit Buyer’s qualified environmental consultants to enter upon
the Facilities, upon giving Seller reasonable notice, with men and materials
reasonably necessary to conduct such environmental audits. In connection with
any such environmental audits and at the request of Seller, Buyer shall from
time to time enter into agreements relating to indemnification for damages and
confidentiality of audit results. 


     
     
5.2     OPERATION OF THE BUSINESSES OF THE ACQUIRED
COMPANIES.  Except as provided for in Section 6, between the Effective Time and the Closing Date, Seller
will, and will cause each Acquired Company to:



          
          
         
(i)     conduct the Business only in the Ordinary Course of Business and
without any material deviation from the Base Business Plan;



          
          
         
(ii)     
use its Best Efforts to preserve intact the current business organization of the
Business, keep available the services of the current officers, employees and
agents of the Business and maintain the relations and good will with suppliers,
customers, landlords, creditors, employees, agents and others having business
relationships with the Business;



          
          
         
(iii)     consult with Buyer concerning operational
matters of a material
nature (subject to any Legal Requirement limiting any such consultation); and



          
          
         (iv)     
otherwise report
periodically to Buyer concerning the status of the business, operations and
finances of the Business and such Acquired Company. 



          
5.3     
NEGATIVE
COVENANT. Except as otherwise expressly permitted by this
Agreement, between the date of this Agreement and the Closing Date, Seller will
not, and will cause each Acquired Company not to, without the prior written
consent of Buyer, take any affirmative action, or fail to take any reasonable
action within their or its control, as a result of which any of the changes or
events listed in Section 3.16 is reasonably likely to occur. Without limiting
the foregoing, Seller will cause the Acquired Companies not to incur any
Indebtedness other than Permitted Indebtedness. 


     
5.4     REQUIRED APPROVALS.



41





          
          
                (a)     As promptly as
practicable after the date of this Agreement, Seller and Buyer will, and Seller
will cause each Acquired Company to, make all filings required by Legal
Requirements to be made by them in order to consummate the Contemplated
Transactions, including all filings required under the HSR Act (if any) and the
competition laws of any other Governmental Body, including Council Regulation
(EEC) No. 4064/89 or similar laws within Finland or other applicable
jurisdictions such as France, Italy and the Czech Republic. In addition, each of
Seller and Buyer agree that if any Governmental Body requests additional
information under the HSR Act or any other Legal Requirement, it will use its
reasonable commercial efforts to comply with such requests as promptly as
possible. 



          
          
                (b)     Between the date of
this Agreement and the Closing Date, Seller will, and will cause each Acquired
Company to, (i) cooperate with Buyer with respect to all filings that Buyer
required by Legal Requirements to make in connection with the Contemplated
Transactions, and (ii) cooperate with Buyer in obtaining all consents identified
in Schedule 4.2. provided that this Agreement will not require Seller to
dispose of or make any change in any portion of its business or to incur any
other burden to obtain a Governmental Authorization. 



          
          
                (c)     Between the date of
this Agreement and the Closing Date, Buyer will, and will cause each Related
Person to, (i) cooperate with Seller with respect to all filings that Seller is
required by Legal Requirements to make in connection with the Contemplated
Transactions, and (ii) cooperate with Seller in obtaining all consents
identified in Schedule 3.2; provided that this Agreement will not require
Buyer to dispose of or make any change in any portion of its business or to
incur any other burden to obtain a Governmental Authorization. 


     
     5.5     
NOTIFICATION. Between the date of this Agreement and the
Closing Date, either party will promptly notify the other party in writing if
such party, including any Acquired Company becomes aware of any fact or
condition that causes or constitutes a Breach of any of either party’s
representations and warranties as of the Effective Time or as of the date of
this Agreement (as applicable), or that party becomes aware of the occurrence
after the date of this Agreement of any fact or condition that would (except as
expressly contemplated by this Agreement) cause or constitute a Breach of any
such representation or warranty had such representation or warranty been made as
of the time of occurrence or discovery of such fact or condition. If any such
fact or condition requires any change in any Schedule if the Schedule were dated
the date of the occurrence or discovery of any such fact or condition, the party
responsible for the Schedule will promptly deliver to other party a supplement
to the Schedule specifying such change. During the same period, either party
will promptly notify the other party of the occurrence of any Breach of any
covenant of a party in this Agreement or of the occurrence of any event that may
make the satisfaction of the conditions in the Agreement impossible or unlikely. 


     
     5.6     
NO NEGOTIATION. Until such time, if any, as this Agreement is
terminated pursuant to Section 9, Seller will not, and will cause each Acquired
Company and each of their Representatives not to, directly or indirectly
solicit, initiate, or encourage any inquiries or proposals from, discuss or
negotiate with, provide any non-public information to, or consider the merits of
any unsolicited inquiries or proposals from, any Person (other than Buyer)
relating to any transaction involving the 



42





sale of the business or assets (other
than in the Ordinary Course of Business) of the Business or of any Acquired
Company, or any of the capital stock of any Acquired Company, or any merger,
consolidation, business combination, or similar transaction involving the
Business and any Acquired Company. 


     
     5.7     
BEST EFFORTS. Between the date of this Agreement and the Closing Date,
both Buyer and Seller will use its Best Efforts to cause the conditions in
Sections 7 and 8 to be satisfied except as set forth in the provisos to Sections
5.4(b) and 5.4(c), as applicable. 


     
     5.8     
STATUTE OF LIMITATIONS. Prior to the Closing, Seller shall not permit any
Acquired Company to agree with any Governmental Body to extend the statute of
limitations with respect to any Taxes, without the prior written consent of
Buyer. 


     
     5.9     INTERIM
FINANCIAL STATEMENTS. From the date of this Agreement through the
Closing Date, Seller will prepare monthly financial statements for the Business
and the Acquired Companies on a consolidated basis (beginning with the month of
January, 2002), and will promptly (and in any event not later than the fifteenth
Business Day following the end of the month to which a statement relates)
deliver them to Buyer. These unaudited financial statements will be prepared in
accordance with GAAP (except for the absence of footnotes and subject to normal
year end adjustments which will be immaterial in amount) and in a manner
consistent with the basis of presentation used in the unaudited financial
statements referred to in Section 3.4, and will fairly present, in all
material respects, the consolidated financial position,and results of
operations of the Business and the Acquired Companies as at and for the
periods indicated. 


     
     
5.10     MATTERS RELATING TO REAL PROPERTY.



          
          
                (a)     
Buyer shall obtain, at
Buyer’s sole cost and expense, a commitment from Chicago Title Insurance
Company or any other title insurance company acceptable to Buyer (the
“Title Company”) for the issuance of an extended
coverage owner’s policy of fee title insurance (including mechanics’
lien coverage) for each parcel included in the Grenada Real Property setting
forth the status of title to each such parcel (individually a “Title
Commitment” and collectively the “Title
Commitments”). The Title Commitments shall be accompanied by
true, complete and legible copies of all Encumbrances identified therein. At
Closing, the policies to be issued pursuant to the Title Commitments
(individually a “Title Policy” and collectively
the “Title Policies”) shall insure that the
Company will have good, marketable and indefeasible title to such Grenada Real
Property, subject only to those Encumbrances accepted by Buyer pursuant to
subparagraph (c) of this Section 5.10 (“Permitted Title
Encumbrances”). At the Closing, Buyer shall pay all premiums
for the issuance of the Title Policy and such standard endorsements as Buyer may
reasonably require (the “Endorsements”), and Seller shall deliver to
the Title Company such affidavits, indemnities and other documentation as is
necessary to enable the Title Company to issue the Title Policies with the
Endorsements subject only to Permitted Title Encumbrances. 



          
          
                (b)     
Buyer shall obtain, at
Buyer’s sole cost and expense, surveys covering each parcel included in the
Grenada Real Property (individually a “Survey”
and collectively the “Surveys”),



43





dated subsequent
to this Agreement, each of which shall be prepared by a surveyor duly licensed
under the laws of the state in which the Grenada Real Property is located. Each
survey shall be in form and substance reasonably satisfactory to Buyer and the
Title Company, and (ii) shall be certified to Buyer and the Title Company using
a form of certification acceptable to Buyer. 



          
          
                (c)     
On or prior to the
fifth Business Day following Buyer’s receipt of the Title Commitment or all
of the Surveys, whichever is later, Buyer shall notify Seller in writing (the
“Defect Notice”) of any unacceptable Encumbrances
or other matters disclosed by either the Title Commitments or the Surveys
(individually a “Disapproved Encumbrance” and
collectively the “Disapproved Encumbrances”).
Seller agrees to use commercially reasonable efforts to eliminate the
Disapproved Encumbrances or otherwise resolve the Disapproved Encumbrances to
the satisfaction of Buyer on or before the Closing Date. Seller shall have three
(3) days after receipt of the Defect Notice to notify Buyer in writing (i) that
the Disapproved Encumbrances will be eliminated an otherwise resolved as
provided above or (ii) that the Disapproved Encumbrances will not be eliminated
or otherwise resolved. If Seller elects not to cause any Disapproved Encumbrance
to be eliminated or otherwise resolved, Buyer shall have the right, in its sole
discretion, for a period of five (5) days following the expiration of the three
(3) day period provided for above, to notify Seller of Buyer’s election to
either waive such objection and proceed with the Closing, without impairing any
right of indemnification or other right or remedy hereunder, or to terminate
this Agreement. Absent any notice from Buyer within such five (5) day period,
Buyer shall be deemed to have elected to terminate this Agreement. If Seller
gives notice that one or more Disapproved Encumbrances will be eliminated or
otherwise resolved, and such Disapproved Encumbrances are not so eliminated or
otherwise resolved on or before the Closing Date, Buyer shall have the right to
terminate this Agreement by written notice to Seller. 


     
     
5.11     TRIDAN CONTRACT.  Heatcraft Inc.,
one of the Heat Transfer Existing Subsidiaries ("HI"), is a party to a Contract
with Tridan International
Inc. dated on or about May 3, 2000 (the "Tridan Contract").  Buyer and Seller
acknowledge and agree that notwithstanding any other provision of this Agreement or
the Members' Agreement (a) the Tridan Contract will be assigned to the Company in
connection with the JV Transactions and (b) if HI's failure to purchase any
product covered by the Tridan Contract prior to the Closing Date cannot be cured
by the Company purchasing such product, then the Seller shall indemnify the Company
against any payment required as a result of such failure.  Seller agrees (for itself
and HI) and Buyer agrees to cooperate with HI to the extent commercially
reasonable in connection with preserving all rights under the Tridan Contract
(including but not limited to the right to purchase fin presses).


6.     
CERTAIN ACTIONS PRIOR TO CLOSING DATE; TRANSITION AND EMPLOYEE MATTERS


     
     
6.1     THE ACQUIRED COMPANIES.  Prior to the
Closing Date, Seller will take or cause to be taken all actions necessary or advisable
to effectuate the actions
described on Attachment E to the Members' Agreement and will cause the ownership
of the Acquired Companies to be as set forth on Attachment E to the Members'
Agreement.



44




     
     
6.2     TRANSITION MATTERS.



          
          
                (a)     At or prior to the
Closing, Buyer and Seller shall cause the Company to enter into the Shared
Services Agreement. 



          
          
                (b)     At or prior to the
Closing, Seller shall cause all right, title and interest in and to the
trademark “Heatcraft” to be assigned to the Company and Buyer and
Seller shall cause the Company to license the name “Heatcraft” to
Seller for use in certain refrigeration operations mutually agreeable to Buyer
and Seller pursuant to a Trademark License Agreement in the form attached as
Exhibit 6.2(b). 


     
     
6.3     PAYMENT OF INDEBTEDNESS.



          
          
                (a)     Except as expressly
provided in Paragraph (b) of this Section 6.3, Seller will cause all
Indebtedness owed by any Acquired Company to Seller (or any Related Person of
Seller), or owed to any Acquired Company by Seller (or any Related Person of
Seller) to be paid in full prior to Closing, except that any account payable
from Seller or any Related Person arising out of sales of goods or from any
shared services will be paid in accordance with its terms. 



          
          
                (b)     Seller will cause all
Indebtedness owed by any Acquired Company to be paid in full prior to Closing
and will have caused the termination of all other financing activities of the
Company prior to the Closing (other than Permitted Indebtedness or Indebtedness
otherwise approved in writing by Buyer), it being the general intent of the
parties that the Acquired Companies shall be free of Indebtedness other than
Permitted Indebtedness as of the Closing (with the provisions of Section 2.2 and
the Closing Adjustment for Indebtedness being intended to take into account any
failure to effectuate such intent). 


     
     
6.4     EMPLOYEES AND BENEFITS


     
     
6.4.1     Background.



          
          
                (a)     The Business has been managed,
operated and maintained by employees of Seller or its Subsidiaries. Prior to the
Closing Date, such employees have been compensated at established wage and
salary rates, and some or all of such employees have had rights under some or
all of the following: (i) employee benefit plans, as defined in ERISA Section
3(3) and (ii) published employment policies in effect at their respective work
locations. All such benefit plans, published policies, and any other agreements
or policies affecting employment are described in Schedule 3.13(b).
Seller’s salaried employees assigned to the Business (except those who at
the Closing Date have retired or are on long-term disability, and those whom
Buyer and Seller have excluded are herein called “Continuing Salaried
Employees.” 



          
          
                (b)     The Continuing Salaried
Employees will remain employed by the Company after the Closing under
essentially the same terms and conditions as in effect immediately prior to the



45





Closing Date. The Company will also continue the employment of all hourly
employees after Closing at the Facilities (except those who are on layoff),
herein called “Continuing Hourly Employees”.
Continuing Salaried Employees and Continuing Hourly Employees are collectively
referred to herein as “Continuing Employees”.
Nothing in this Section will limit the right of the Company to terminate the
employment or to make any adjustments, including both increases and decreases,
in salary and benefits of any Continuing Employee at any time after the Closing
Date. Except as otherwise provided in this Section, the Company will have
absolute discretion with respect to the terms and conditions of employment of
any Continuing Employee and other persons at any time employed by the Company,
including the right to hire, terminate, promote, demote, transfer, reduce
compensation or benefits or change the job status of any employee of the Company
at any time after the Closing Date. No provision of this Agreement is intended
or will be construed as a promise or guaranty of the continued employment of any
Continuing Employee or any other employee of either party. 


     
     
6.4.2     Seller's Defined Contribution
Plans.



          
          
                (c)     Seller has delivered to
Buyer copies of the qualified 401(k) plans and profit sharing plans, which plans
are listed in Schedule 3.13(b) (the “Defined Contribution
Plans”) under which the interest of each participant is
maintained in an individual account. 



          
          
                (d)     Seller will continue to
maintain the Defined Contribution Plans with respect to Continuing Employees who
are participants therein, and will distribute 100% of the respective account
balances to such participants upon their request (or to a qualified plan
established by the Company or an IRA of a participant) on a fully vested basis
as soon as practicable following the Closing Date. There will be no employer or
employee contributions under the Defined Contribution Plans with respect to such
participants following the Closing Date except for Seller’s fulfillment of
contribution obligations incurred under any such plans prior to the Closing
Date. Neither Buyer nor the Company will assume, adopt or have any
responsibility with respect to, such plans. 


     
     
6.4.3     Seller's Defined Benefit
Plans.



          
          
                (a)     Seller presently maintains the
Lennox International Inc. Pension Plan for Salaried Employees (“Salaried
Pension Plan”)
and the Heatcraft Inc. Hourly
Employees Pension Plan (“Hourly Pension Plan”).
Such plans are defined benefit pension plans as defined in ERISA Section 3(35)
and are herein called the “Defined
Benefit Plans”.



          
          
                (b)     Following the Closing
Date, the Company may adopt one or more defined benefit pension plans covering
Continuing Employees (“New Pension Plan”),
providing such benefits and containing such provisions as the Company may
determine. The Company will be responsible for administration, funding and
benefit payments under the New Pension Plan, and Seller does not assume any
responsibility or liability thereunder. 



          
          
                (c)     Seller will retain all
liability for administration and funding of the Defined Benefit Plans, based
upon the accrued benefits as of the Closing Date and 100% vesting in their
accrued benefits for all Continuing Employees, and will provide to Continuing
Employees who were



46





participants in either of the Defined Benefit Plans on the
Closing Date (and to their beneficiaries) all benefits under the Defined Benefit
Plans, including unreduced benefits and benefit supplements set forth in the
Defined Benefit Plans; and neither Buyer, the Company nor the New Pension Plan
will have any liability therefor. In addition, the Defined Benefit Plans will
provide unreduced benefits and benefit supplements under its early retirement
provisions to Continuing Employees except as expressly provided for in the
Defined Benefit Plan, taking into account attained age and service with the
Seller prior to the Closing Date. In addition, if any Continuing Employee who is
on disability on the Closing Date thereafter completes the period of disability
required for disability retirement under either of the Defined Benefit Plans,
such plan will provide such disability retirement benefit, and Seller will
provide to such retiree the benefits, if any, referred to in Subsection 6.4.5(d)
below. 



          
          
                (d)     Seller will be
responsible for the funding and administration of the Defined Benefit Plans and
the payment of benefits thereunder after the Closing Date, and neither Buyer nor
the Company assumes any responsibility or liability in connection therewith. 


     
     
6.4.4     Service Credit.



          
          
                (a)     Service with Seller up
to the Closing Date will be credited by the Company for eligibility and vesting
purposes in any qualified pension benefit plan that Buyer or the Company may
adopt on or after the Closing Date with respect to Continuing Employees. Seller
will furnish to Buyer and the Company as soon as practicable after the Closing,
a list of Continuing Employees and the amount of pre-Closing service of each
such person under Seller’s qualified pension benefit plans, all certified
by Seller to be true and correct on the basis of Seller’s records
pertaining thereto; and Buyer and the Company will have the right to rely
thereon. 



          
          
                (b)     Service with the
Company after the Closing Date will not be credited by Seller under its Defined
Contribution Plans and Defined Benefit Plans, but all Continuing Employees will
be treated as 100% vested in their accrued benefits under such plans as a result
of the transactions contemplated by this Agreement. 


     
     
6.4.5     Employee Welfare Plans and Policies.




          
          
                (a)     As used in this
Subsection 6.4.5, “Welfare Plan or Policy” means
any employee welfare benefit plan as defined in ERISA Section 3(1), and also any
policy, practice or program maintained by Seller for the Company and the
Acquired Companies as of the Closing Date with respect to any employee fringe
benefits. Except as provided in Subsection 6.4.6 below, the Company will have no
liability under any Welfare Plan or Policy for any employment-related claim of
an employee arising out of care or service received on or before the Closing
Date. Seller will retain liability for any claim under each Welfare Plan or
Policy based upon care or service received on or prior to the Closing Date. In
patient stays begun prior to Closing will remain Seller’s liability until
such time as the stay has ended. Such liability will include all claims arising
out of events on or prior to the Closing Date (i) under severance or termination
pay plans, long term disability plans, salary continuation plans and accident
and sickness plans and (ii) for medical, dental, life/survivor, accidental death
and dismemberment, Company travel accident and workers’ compensation
benefits. 



47





          
          
                (b)     Seller will have no
liability under any employee Welfare Plan or Policy adopted by the Company after
the Closing Date. Except as provided in Subsection 6.4.4 or under continuation
coverage referred to in Paragraph (e) of this Subsection 6.4.5, Seller will have
no liability for any employment-related claim of an employee of the Company
arising out of occurrences after the Closing Date. The Company will have the
right at any time to adopt such Welfare Plans and Policies as the Company may
determine, and to modify, amend or terminate any such plan or policy. 



          
          
                (c)     Any of the
Company’s Welfare Plans or Policies in which benefits are calculated on the
basis of service will provide credit for service with Seller for Continuing
Employees up to the Closing Date. Seller will furnish to Buyer and the Company,
as soon as practicable after the Closing, a list of Continuing Employees and the
amount of pre-Closing service of each such person under any Welfare Plan or
Policy in which service is relevant, all certified by Seller to be true and
correct on the basis of Seller’s records pertaining thereto; and Buyer and
the Company will have the right to rely thereon. 



          
          
                (d)     At such time as any
Continuing Employee who is eligible to retire at or before the Closing Date
under either of the Defined Benefit Plans terminates employment with the Company
after the Closing Date, Seller will be responsible to offer to provide each such
Person, commencing on the date when such Person so terminates, the individual
and family medical and life insurance benefits that Seller would have provided
on the Closing Date to its employees who retired on the Closing Date (subject to
any changes made by Seller in such benefits between the Closing Date and the
date such Person so terminates). Neither Buyer nor the Company assumes any
obligation, liability or any other responsibility to provide, fund or otherwise
pay for any post-employment medical or health coverage of any Continuing
Employee or of any other employee of Seller that was earned or accrued on or
before the Closing Date. 



          
          
                (e)     All Continuing
Employees and any qualified beneficiaries who are covered under any group health
plan, as defined in ERISA Section 607 and for which the Closing is deemed to be
a termination of employment, of Seller as of the Closing Date will be entitled
to continuation coverage under such group health plan as a result of the
transactions contemplated by this Agreement. The Company will establish a group
health plan to cover Continuing Employees and their qualified beneficiaries as
soon as practicable after the Closing Date. If such a group health plan is not
in place the day after the Closing Date, the Company may, on behalf of all
Continuing Employees and their qualified beneficiaries, agree to pay to Seller
the amount of the applicable continuation premium under ERISA Section 604 for
the period of continuation coverage. Seller agrees to cooperate with the Company
to coordinate the group health plan to be effective after the Closing Date and
the payment of continuation premiums by the Company, if applicable. All
continuation premiums payable by the Company will be paid promptly on the due
date. 



     
     During any period of continuation  coverage,  the only liability of the Company
will be to pay the applicable premium to Seller
or to Seller's group health plan on behalf of Continuing  Employees who are actively
employed by the Company. The cost of health and
related benefits will be allocated as of the Effective Time.



48





     
     With respect to the  Continuing  Employees  and any  qualified  beneficiaries
 who are covered  under any group health plan, as
defined in ERISA Section 607 and for which the Closing is deemed to not to be a
termination  of employment,  if the Company's  group
health plan to cover  Continuing  Employees and their  qualified  beneficiaries
is not in place the day after the Closing Date, the
Company may, on behalf of all Continuing Employees and their qualified beneficiaries,
agree to pay to Seller the cost of the claims
filed under the  continuation  coverage.  Seller  agrees to  cooperate  with the Company
to  coordinate  the group health plan to be
effective after the Closing Date and the payment of the costs of any claims arising
under the continuation  coverage by the Company,
if applicable. All continuation costs payable by the Company will be paid promptly
on the due date.



     
     During any period of continuation coverage, the only liability of the
Company will be to pay the applicable costs to Seller or to Seller's group health
plan on behalf of Continuing Employees who are actively employed by the Company.
The cost of health and related benefits will be allocated as of the Effective Time.


     
     6.4.6     Vacation Policy.



          
          
                (f) Seller represents that
Continuing Employees earn vacation rights ratably each year, to be taken or paid
for during the calendar year in which earned, in accordance with Seller’s
vacation policy, a true copy of which is annexed hereto as Schedule
6.4.6(a). The Company will assume liability for 2002 calendar year vacations
of Continuing Employees not yet taken or paid for as of the Closing Date. 



          
          
                (g) The Company will have
the right to establish from time to time such vacation policies with respect to
its employees as the Company may determine subject to applicable Legal
Requirements. 


     
     6.4.7     Cooperation.
  Following the Closing Date, Seller, Buyer and the Company
will supply one another sufficient employee data and
records to carry out the
purposes of this Section 6.4, including the data necessary to complete all
required actuarial valuations, reports and disclosures, and any other mandated
government filings. Without limiting the foregoing, Seller will cooperate as
requested by Buyer or the Company in providing data as to the status of employee
welfare benefits, including available deductible amounts and other relevant
benefit information. 



7.     CONDITIONS
PRECEDENT TO BUYER’S OBLIGATION TO CLOSE


     
     
     Buyer's obligation to purchase the Shares and to take the other actions
required to be taken by Buyer at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions (any
of which may be waived by Buyer, in whole or in part):


     
7.1     
ACCURACY OF REPRESENTATIONS. All of Seller’s representations and
warranties in this Agreement (considered collectively), and each of these
representations and warranties (considered individually), must have been
accurate in all material respects as of the date of this Agreement or as of the
Effective Time (as applicable), and must be accurate in all material



49





respects as
of the Closing Date as if made on the Closing Date, without giving effect to any
supplement to any Schedule. 


     
7.2     
SELLER’S PERFORMANCE.



          
          
                (a)     All of the covenants and obligations
that Seller is required to perform or to comply with pursuant to this Agreement at
 or prior to the Closing
(considered collectively), and each of these covenants and obligations (considered
individually), must have been duly performed and complied with in all material
respects.



          
          
                (b)     Each document required
to be delivered pursuant to Section 2.4 must have been delivered, and each
of the other covenants and obligations in Sections 5.4 and 5.7 must have
been performed and complied with in all respects. 


     
7.3     CONSENTS.  Each of the Consents identified in
Schedule 3.2 must have been obtained and must be in full force and effect.


     
7.4     ADDITIONAL DOCUMENTS.
Each of the following documents
must have been delivered to or obtained by Buyer:



          
          
                (a)     employment agreements, in form and
substance satisfactory to Buyer executed by the Company and the Key Executives; and



          
          
                (b) such other documents as
Buyer may reasonably request for the purpose of (i) evidencing the accuracy of
any of Seller’s representations and warranties, (ii) evidencing the
performance by Seller of, or the compliance by Seller with, any covenant or
obligation required to be performed or complied with by Seller,
(iii) evidencing the satisfaction of any condition referred to in this
Section 7, or (iv) otherwise facilitating the consummation or
performance of any of the Contemplated Transactions. 


     
7.5     NO
PROCEEDINGS. Since the date of this Agreement, there must not
have been commenced or Threatened against Buyer, or against any Person
affiliated with Buyer, any Proceeding (a) involving any challenge to, or
seeking damages or other relief in connection with, any of the Contemplated
Transactions, or (b) that may have the effect of preventing, delaying,
making illegal, or otherwise interfering with any of the Contemplated
Transactions. 


     
7.6     
NO CLAIM REGARDING SHARE OWNERSHIP OR SALE PROCEEDS. There must not have
been made or Threatened by any Person any claim asserting that such Person
(a) is the holder or the beneficial owner of, or has the right to acquire
or to obtain beneficial ownership of, any Membership Interests of the Company or
any stock of, or any other voting, equity or ownership interest in, any of the
other Acquired Companies, or (b) is entitled to all or any portion of the
Purchase Price payable for the Shares. 



50




     
     7.7     
NO PROHIBITION. Neither the consummation nor the performance of any
of the Contemplated Transactions will, directly or indirectly (with or without
notice or lapse of time), materially contravene, or conflict with, or result in
a material violation of, or cause Buyer or any Person affiliated with Buyer to
suffer any material adverse consequence under, (a) any applicable Legal
Requirement or Order, or (b) any Legal Requirement or Order that has been
published, introduced or otherwise formally proposed by or before any
Governmental Body. 


     
     
7.8     JV CLOSINGS.
The JV Closings shall have been completed.


8.     
CONDITIONS PRECEDENT TO SELLER’S OBLIGATION TO CLOSE



          
     Seller's obligation to sell the Shares and to take the other actions required
to be taken by Seller at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by Seller, in whole or in part):


     
     8.1     
ACCURACY OF REPRESENTATIONS.  All of Buyer’s representations and
warranties in this Agreement (considered collectively), and each of these
representations and warranties (considered individually), must have been
accurate in all material respects as of the date of this Agreement and must be
accurate in all material respects as of the Closing Date as if made on the
Closing Date. 


     
     8.2     
BUYER’S PERFORMANCE



          
          
                (a)     All of the covenants and obligations
that Buyer is required to perform or to comply with pursuant to this Agreement at or
prior to the Closing
(considered collectively), and each of these covenants and obligations (considered
individually), must have been performed and complied with in all material
respects.



          
          
                (b)     Buyer must have delivered each of the
 documents required to be delivered by Buyer pursuant to Section 2.4, and each of the
other covenants and
obligations in Section 5.4 and 5.7 must have been performed and complied in all respects
and (ii) made the cash payments required to be made by Buyer pursuant to
Sections 2.4(b)(i).


     
     
8.3     CONSENTS.  Each of the Consents identified in
Schedule 3.2 must have been obtained and must be in full force and effect.


     
     
8.4     
ADDITIONAL DOCUMENTS..  Buyer must have caused to be delivered to Seller such
other documents as Seller may reasonably request for the purpose of
(a) evidencing the accuracy of any representation or warranty of Buyer,
(b) evidencing the performance by Buyer of, or the compliance by Buyer
with, any covenant or obligation required to be performed or complied with by
Buyer, (c) evidencing the satisfaction of any condition referred to in this
Section 8, or (d) otherwise facilitating the consummation of any of
the Contemplated Transactions. 


     
     
8.5     
NO PROCEEDINGS. Since the date of this Agreement, there must not
have been commenced or Threatened against Seller, or against any Person
affiliated with Seller, any Proceeding 



51





(a)     involving any challenge to, or
seeking damages or other relief in connection with any of the Contemplated
Transactions, or (b) that may have the effect of preventing, delaying, making
illegal, or otherwise interfering with any of the Contemplated Transactions. 


     
     
8.6     
NO CLAIM REGARDING SHARE OWNERSHIP OR SALE PROCEEDS. There must not have
been made or Threatened by any Person any claim asserting that such Person (a)
is the holder or the beneficial or the beneficial owner of, or has the right to
acquire or to obtain beneficial ownership of, any Membership Interests of the
Company of the Company or any stock of, or any other voting, equity or ownership
interest in, any of the other Acquired Companies, or (b) is entitled to all or
any portion of the Purchase Price payable for the Shares. 


     
     
8.7     
NO PROHIBITION. Neither the consummation nor the performance of any
of the Contemplated Transactions will, directly or indirectly (with or without
notice or lapse of time), materially contravene, or conflict with, or result in
a material violation of, or cause Seller or any Person affiliated with Seller to
suffer any material adverse consequence under (a) any applicable Legal
Requirement or Order, or (b) any Legal Requirement or Order that has been
published, introduced or otherwise formally proposed by or before any
Governmental Body. 


     
     
8.8     JV CLOSINGS.
The JV Closings shall have been completed.




9.     
TERMINATION.


     
     
9.1     TERMINATION EVENTS.  This Agreement may, by
notice given prior to or at the Closing, be terminated:



          
          
                (a)     by either Buyer or
Seller if a material Breach of any provision of this Agreement has been
committed prior to Closing by the other party and such Breach has not been
waived; 



          
          
                (b)     (i)     
by Buyer if any of
the conditions in Section 7 has not been satisfied as of the Closing Date or if
satisfaction of such a condition is or becomes impossible (other than through
the failure of Buyer to comply with its obligations under this Agreement) and
Buyer has not waived such condition on or before the Closing Date; or (ii) by
Seller, if any of the conditions in Section 8 has not been satisfied of the
Closing Date or if satisfaction of such a condition is or becomes impossible
(other than through the failure of Seller to comply with its obligations under
this Agreement) and Seller has not waived such condition on or before the
Closing Date; 



          
          
                (c)     by mutual consent of Buyer and
 Seller; or



          
          
                (d)     by either Buyer or
Seller if the Closing has not occurred (other than through the failure of any
party seeking to terminate this Agreement to comply fully with its obligations
under this Agreement) on or before September 30, 2002 (the “Target
Date”), or such later date as the parties may agree upon. If
any Governmental Body with jurisdiction over the enforcement of any Competition
Laws requests additional information relating to the JV Transactions or the
parties and/or if any waiting period has not expired or any clearance or
approval under any such Competition Law has not been satisfied or obtained by
the Target Date, the Target Date will automatically be extended for such period




52





of time as may be reasonably necessary for the parties to have complied with the
Competition Laws and all such requests for information thereunder to the extent
applicable to the JV Transactions, but in no event shall the Target Date be
extended by this sentence beyond December 31, 2002. 


     
     
9.2     
EFFECT OF TERMINATION. Each party’s right of termination under Section
9.1 is in addition to any other rights it may have under this Agreement or
otherwise, and the exercise of a right of termination will not be an election of
remedies. If this Agreement is terminated pursuant to Section 9.1, all
further obligations of the parties under this Agreement will terminate, except
that the obligations in Sections 11.1 and 11.3 will survive; provided, however,
that if this Agreement is terminated by a party because of the Breach of this
Agreement by the other party or because one or more of the conditions to the
terminating party’s obligations under this Agreement is not satisfied as a
result of the other party’s failure to comply with its obligations under
this Agreement, the terminating party’s right to pursue all legal remedies
will survive such termination unimpaired. 



10.     
INDEMNIFICATION; REMEDIES; DISPUTE RESOLUTION


     
     
10.1     
SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY KNOWLEDGE; DEFINITIONS.



          
          
                (a)     All representations,
warranties, covenants and obligations in this Agreement, the Schedules, the
supplements to the Schedules, the certificate delivered pursuant to Section
2.4(a)(ii) and any other certificate or document delivered pursuant to this
Agreement will survive the Closing as set forth in this Article 10. Except as
expressly provided for in Section 10.2(b) and the last sentence of Section 10.2,
the right to indemnification, payment of Damages or other remedy based on such
representations, warranties, covenants and obligations will not be affected by
any investigation conducted with respect to, or any Knowledge acquired (or
capable of being acquired) at any time, whether before or after the execution
and delivery of this Agreement or the Closing Date, with respect to the accuracy
or inaccuracy of or compliance with, any such representation, warranty, covenant
or obligation, and the waiver of any condition based on the accuracy of any
representation or warranty, or on the performance of or compliance with any
covenant or obligation, will not affect the right to indemnification, payment of
Damages or other remedy based on such representations, warranties, covenants and
obligations. 



          
          
                (b)     For purposes of this
Article 10, the following terms have the meanings specified or referred to in
this Section 10.1(b): 



          
          
                “Buyer Indemnified Persons” -- means Buyer, OCP, the
Acquired Companies and their respective Representatives and Related Persons.



          
          
                “Seller Indemnified Persons”-- means Seller and its
-Representatives and Related Persons.



          
          
                “Damages” -- means any loss, liability, claim, damage
(including incidental and consequential damages), expense (including costs of
investigation and defense and reasonable 



53





attorneys' fees and expenses of attorneys,
accountants, engineers and other experts and consultants), fine, penalty or
obligation, whether or not involving a third-party claim.



          
          
                “Indemnified Party” -- any Person entitled to
 indemnification under this Article 10.



          
          
                “Indemnifying Party” -- any Person required to
indemnify another Person under this Article 10.



          
          
                “Loss” -- means an amount for the applicable
Livernois Contract determined by subtracting (A) the sum of all direct costs of designing,
manufacturing, selling and distributing the product and/or services necessary to
meet the specifications set forth in such Livernois Contract plus an amount for
overhead such that the product and/or service is fully burdened with overhead in the
 same manner that Livernois historically has allocated overhead for the same
product or service or, if it is a new product and/or service, in the manner that is
used for the product or service of Livernois that is most comparable thereto
from (B) the net proceeds received under the Livernois Contract, provided, however,
that (i) “Loss” shall not include any discount, rebate or credit to the customer
under any Livernois Contract pursuant to a decision made after the Effective Time;
and (ii) to the extent that any Loss represents a Loss that has been incurred
prior to the Effective Time (based on revenues received or booked on Livernois
records as an unbilled receivable, and costs incurred by Livernois prior to the
Effective Time), the Loss will be reduced to that extent.



          
          
                “Livernois Contracts” -- means the Contracts
for the delivery of products or services by Livernois to any other Person that was
in effect
or entered into at any time prior to the Closing Date. including but not limited to
those listed on Schedule 10.1; provided, however, that the Livernois Contracts
shall not include the Showa Contract (other than with respect to any services to be
provided by Livernois under the Showa Contract after the Closing Date).


     
     
10.2     
INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLER. Seller
will indemnify and hold harmless the Buyer Indemnified Persons, for, and will
pay to the Buyer Indemnified Persons the amount of, any Damages, arising,
directly or indirectly, from or in connection with: 



          
          
                (a)     any Breach of any
representation or warranty made by Seller in this Agreement or by Seller or any
Related Person thereof in the European Share Purchase Agreement (without giving
effect to any supplement to any Schedule) or any other certificate or document
delivered by Seller or such Related Person pursuant to this Agreement or the
European Share Purchase Agreement (provided, however, that this Section 10.2(a)
shall only apply if the Closing shall not occur), 



          
          
                (b)     any Breach of any
representation or warranty made by Seller in this Agreement or by Seller or any
Related Person thereof in the European Share Purchase Agreement as if such
representation or warranty were made on and as of the Closing Date (without
giving effect to any supplement to any Schedule), other than any such Breach
that is disclosed in a supplement to any Schedule and is expressly identified in
the certificate delivered pursuant to Section 2.4(a)(ii) as having caused the
condition specified in Section 7.1 not to be satisfied; 



54





          
          
                (c)     any Breach by Seller of any covenant
or obligation of Seller in this Agreement or by Seller or any Related Person thereof in the European Share Purchase
Agreement;



          
          
                (d)     the operation of the
Business prior to the Closing Date, including Damages relating to any product
shipped by, or any services provided by the Business or any Acquired Company or
by the EU JVCo or any subsidiary or predecessor thereof prior to the Closing
Date including but not limited to any liabilities assumed by the Company or any
other Acquired Company arising from the Seller’s actions provided for by
Attachment E to the Members’ Agreement whether pursuant to a certain
Reorganization Agreement among Heatcraft Inc. or certain Affiliates thereof and
a certain Heat Transfer Contribution Agreement (the “US Reorganization
Agreements”) or othrwise. 



          
          
                (e)     the Proceedings and matters disclosed
in Schedule 3.15 and Schedule 3.15 to the European Share Purchase
Agreement;



          
          
                (f)     any claim by any Person
for brokerage or finder’s fees or commissions or similar payments based
upon any agreement or understanding made by any such Person with Seller or any
Acquired Company (or any Person acting on their behalf or on behalf of the
Business for which they are responsible) in connection with any of the
Contemplated Transactions or the transactions contemplated by the European Share
Purchase Agreement; and 



          
          
                (g)     all Losses, in the
aggregate, arising from the Livernois Contracts. On a semi-annual basis after
the Closing, the Company shall prepare and deliver initially to Buyer and Seller
accounting statements for each Livernois Contract in a form agreed upon by the
parties (the “Contract Status Sheet”). The Contract
Status Sheet shall reflect the status of the contract, the costs incurred,
revenue received, expected completion date and any changes to the terms of the
original contract. Once completed, a detailed income statement for the completed
contract and the adjustment for any losses incurred (the “Contract
Loss Adjustment”), will be prepared in accordance with GAAP which
shall be subject to an audit or review by Seller’s Accountants. The Company
shall make available any work papers or other information relating to the
Contract Loss Adjustment then or thereafter requested by Seller’s
Accountants. If Seller does not object, or otherwise fails to respond, to the
Contract Loss Adjustment within 30 days after delivery to Seller, such Contract
Loss Adjustment shall automatically become final and conclusive and shall be
payable by Seller to Company within ten (10) Business Days. In the event that
Seller objects to the Contract Loss Adjustment within such 30 day review period,
Seller and Buyer shall promptly meet and endeavor to reach agreement as to the
content of the Contract Loss Adjustment. If Seller and Buyer agree on the
content of the Contract Loss Adjustment, such Contract Loss Adjustment shall
become final and conclusive and shall be payable by Seller to Company within ten
(10) Business Days. If Seller and Buyer are unable to reach agreement within 30
days after the end of Seller’s 30 day review period, then the Independent
Accountants shall promptly be retained to undertake a determination of the
Contract Loss Adjustment, which determination shall be made as quickly as
possible (it being understood that the parties shall direct the Independent
Accountants to complete their work within 30 days). Only disputed items shall be
submitted to the Independent Accountants for review. In resolving any disputed
item, the Independent Accountants may not assign a value to such item greater
than the greatest value for such item claimed by either party or less than the
lowest value for such item claimed by either party, in each case as presented to




55





the Independent Accountants. Such determination of the Independent Accountants
shall be final and binding on Seller and Buyer, and all expenses of the
Independent Accountants shall be borne equally by Seller and Buyer. The payments
required to be made after the final determination of the Independent Accountants
shall be payable by Seller to Company within ten (10) Business Days. The parties
shall make appropriate and equitable reconciliations from time to time to
account for the requirement that Losses be determined on an aggregate basis. 



          
          
        Notwithstanding the provisions of clauses (a) and (b) of this Section 10.2,
to the extent that Seller can prove (and Seller has the burden
of proof in that regard) that Buyer had Knowledge that any of Seller's representations
or warranties contained in this Agreement or in the European Share Purchase
Agreement were false at the time such agreement was signed, Seller shall have no
indemnification obligation for the Breach of such representation or warranty.



          
          
        In the event of any conflict between this Agreement and either of the US
Reorganization Agreements, this Agreement shall control in all
respects.


     
10.3     INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLER --
ENVIRONMENTAL MATTERS.



          
          
10.3.1     Indemnification.  In addition to the
provisions of Section 10.2, Seller will indemnify and hold harmless the Buyer Indemnified
Persons for, and will pay to Buyer, the Acquired Companies and the other Buyer Indemnified Persons the
amount of, any Damages (including costs of investigation, cleanup, containment
or other remediation and associated operation, maintenance and monitoring)
arising, directly or indirectly, from or in connection with: 



          
          
                (a)     any Environmental,
Health and Safety Liabilities arising out of or relating to: (i) (A) the
ownership, operation or condition at any time on or prior to the Closing Date of
the Facilities or any other properties and assets (whether real, personal or
mixed and whether tangible or intangible) in which Seller, any Heat Transfer
Existing Subsidiary or any Acquired Company has or had an interest, including
any fact, event, condition, circumstance, incident, operation or practice
identified or covered in any of the reports listed in Schedule 3.19 (the
“Known Environmental Liabilities”), or (B) any Hazardous Materials or
other contaminants that were present on the Facilities or such other properties
and assets at any time on or prior to the Closing Date; or (ii) (A) any
Hazardous Materials or other contaminants, wherever located, that were
generated, transported, stored, treated, Released or otherwise handled by
Seller, any Heat Transfer Existing Subsidiary or any Acquired Company or by any
other Person for whose conduct they are or may be held responsible at any time
on or prior to the Closing Date, or (B) any Hazardous Activities with respect to
the Facilities or relating to the Business that were conducted by Seller, any
Heat Transfer Existing Subsidiary or any Acquired Company or by any other Person
for whose conduct they are or may be held responsible, including any fact,
event, condition, circumstance, incident, operation or practice identified in or
covered by any of the reports listed in Schedule 3.19; or 



          
          
                (b)     any bodily injury
(including illness, disability and death, and regardless of when any such bodily
injury occurred, was incurred or manifested itself), personal injury, property
damage 



56





(including trespass, nuisance, wrongful eviction and deprivation of the
use of real property), or other damage of or to any Person, including any
employee or former employee of Seller, any Heat Transfer Existing Subsidiary or
any Acquired Company or any other Person for whose conduct they are or may be
held responsible, in any way arising from or allegedly arising from any
Hazardous Activity conducted with respect to the Facilities or the operation of
the Acquired Companies, any Heat Transfer Existing Subsidiary or the Business
prior to the Closing Date,including any fact, event, condition,
circumstance, incident, operation or practice identified in or covered by any of
the reports listed in Schedule 3.19, or from Hazardous Material that was (i)
present on or before the Closing Date on or at the Facilities (or present or
suspected to be present on any other property, if such Hazardous Material
emanated from any of the Facilities and was present on any of the Facilities on
or prior to the Closing Date), including any fact, event, condition,
circumstance, incident, operation or practice identified in or covered by any of
the reports listed in Schedule 3.19 or (ii) Released by Seller, any Heat
Transfer Existing Subsidiary or any Acquired Company or any other Person for
whose conduct they are or may be held responsible, at any time on or prior to
the Closing Date, including any fact, event, condition, circumstance, incident,
operation or practice identified in or covered by any of the reports listed in
Schedule 3.19. 


     
     
10.3.2     Environmental Management.



          
          
                (c)     Contractual Predicate:


        
          
          
         
                    (i)
The reports listed on Schedule 3.19 or the additional Phase II reports prepared
under Section 5.1(b) identify operating practices of the Acquired Companies or
their predecessors and/or physical conditions at one or more of the Facilities
which are not in full compliance with Environmental Law and/or which create
latent or actual Environmental, Health and Safety Liabilities.


        
          
          
         
                    (ii)     
Under Section 10.3.1, Seller is obligated to indemnify and hold harmless Buyer,
the Acquired Companies and the other Buyer Indemnified Persons for and has
agreed to pay Buyer, the Acquired Companies and the other Buyer Indemnified
Persons the amount of any Damages arising, directly or indirectly, from or in
connection with Environmental, Health and Safety Liabilities.


        
          
          
         
                    (iii)     
The liabilities associated with the matters identified in the reports listed on
Schedule 3.19 are covered by Seller’s indemnification and payment
obligations under Section 10.3.1. The purpose of this Section 10.3.2 is to
provide for the efficient administration of the rights of Seller, Buyer, the
Acquired Companies and the other Buyer Indemnified Persons and the obligations
of Seller under Section 10.3.



          
          
                (d)     Management Framework:



          
          
         
                    (i)     
All of the tasks necessary to manage and/or resolve the Environmental, Health
and Safety Liabilities, including Cleanup, arising from the matters identified
in the reports listed in Schedule 3.19 and any other Environmental,
Health and Safety Liabilities for which Seller is




57





obligated to provide indemnity
and pay Damages under Section 10.3.1, including Cleanup, constitutes the
“Work” to be governed by this Section 10.3.


        
          
          
         
                    (ii)     
Seller and its Representatives shall manage the Work. Buyer will be given the
opportunity to participate in the Work as defined in the subsequent provisions
of this section. 


        
          
          
         
                    (iii)     
Seller hereby appoints Mark Yohman to serve as its initial overall project
coordinator (“PC”) for the Work. Buyer hereby appoints Earl
Robinson to serve as its initial representative (“OR”) to
review and provide input on the Work. Either party may change its appointed
representative by written notice to the other. The rights and responsibilities
of the PC and the OR with respect to managing the Work and /or any Cleanup are
as follows:



           
           
           
         
                         (A)     The PC, with the
OR’s concurrence, will select such environmental/engineering firms as may
be necessary to plan and carry out the Work. The PC, with the OR’s
concurrence, can change or supplement such environmental/engineering firms as
necessary to efficiently and effectively carry out the Work. 



           
           
           
         
                         (B)     
The PC and OR in consultation with the environmental/ engineering firms, will jointly develop long-range plans, budgets, schedules and execution
strategies (for at least one year in advance) for the Work.



           
           
           
         
                         (C)     The PC, OR and
engineering/environmental consulting firms will jointly develop project specific
scopes of work and related work plans. 



           
           
           
         
                         (D)     The PC will take the
lead in managing the environmental/ engineering firms. The firms will be
instructed to provide duplicate originals of all written correspondence
including teleconferencing communications and work products, to the PC and the
OR simultaneously. 



           
           
           
         
                         (E)     The PC shall require
 performance of the Work according to each project's schedule; that schedule will reflect that the Work must be performed
economically and expeditiously.



           
           
           
         
                         (F) All relevant
correspondence and work products generated by Buyer, Seller or their respective
Representatives or by the environmental/engineering firms engaged to perform any
Work, or received by Buyer, Seller or their respective Representatives from any
environmental/engineering firms or any Governmental Bodies, will be transmitted
to the other party as soon as practicable, to the extent that such material has
not already been forwarded directly. 



           
           
           
         
                         (G)     The PC will be
responsible for dealing with all Governmental Bodies, but the PC shall give the
OR prompt notice of all scheduled meetings, conference calls and other
pre-arranged conversations with Governmental Bodies and shall allow the OR to
attend or participate in all scheduled meetings, conference calls and other
pre-arranged conversations with such Governmental Bodies which relate to the
Work at any of the Facilities. The OR will be given a





58





reasonable time in advance
to review, discuss and propose modifications to the timing or content of any
proposed communication with such agencies which pertain to the Work. 



           
           
           
         
                         (H)     The PC and the OR will
jointly develop negotiating positions and strategies for communicating with the
Governmental Bodies about the process for evaluating and selecting Cleanup or
other remedies, compliance strategies or other necessary actions. 



           
           
           
         
                         (I)     If the PC and OR
disagree on any element of the Work (including plans, Cleanup or other execution
strategies, scopes of the Work, work plans, schedules, budgets or contract terms
of the Work proposals) or on the content or timing of any communication to a
Governmental Body or if the OR believes that the PC is failing to diligently
attend to or prosecute any element of the Work, (collectively, “ENV
Disagreements”), the OR shall promptly and concisely state
its position in writing. The PC shall give due consideration to the LR’s
position, and the PC shall then make a determination which, subject to Paragraph
(J) below, resolves the ENV Disagreement. 



           
           
           
         
                         (J)     If the OR or Buyer
requests, the PC’s decision will be subject to review by the CEO of Buyer
and Seller, after a meeting or telephone conference between the CEO of Buyer and
the CEO of Seller. After the foregoing review, Buyer will have the authority to
resolve any ENV Disagreement and to effect any actions with respect to the Work
with any Governmental Body; provided, however, that Seller will no longer be
obligated to indemnify Buyer or any other Buyer Indemnified Person. At the
election of the Buyer, the dispute may be submitted to a qualified independent
third party for resolution. The parties will select this party by mutual
agreement, all costs for the review will be shared equally by Buyer and Seller
and any decisions will be governed by the principle that any Work performed must
be that necessary to comply with any applicable Legal Requirement and in the
most cost-effective manner. 



           
           
           
         
                         (K)     If the manner in which
Seller is managing any element of the Work negatively impacts or harms the
Business (with any ENV Disagreement regarding the same to be resolved as
provided in paragraph (J) above), Buyer will have the right to assume management
of such Work by notice to Seller. 



          
          
                (e)     
Cost Control:  The PC and Buyer will take all reasonable steps to insure the
project costs which are subject to payment by Seller or Company are closely
monitored and controlled.



          
          
                (f)     Project Controls: Every
environmental/engineering firm who performs any Work shall prepare periodic
written progress reports in a format jointly developed by the PC and OR for the
specific tasks and projects they are contracted to perform. Each environmental/
engineering firm shall also be available to confer with the PC and the OR as the
PC and the OR determine is necessary, about the Work. 



          
          
                (g)     Funding/Invoicing Procedures:



        
          
          
         
                    (i)     Each environmental/engineering firm who performs any Work shall submit invoices
for payment in a form developed jointly by both the PC and the OR. Invoices must
be sent to both the PC and OR concurrently. The OR shall communicate any
questions about or 




59





objections to any environmental/engineering firm invoice
within thirty (30) days after receipt. After completing its review, and
conferring with the OR the PC shall make a decision concerning payment of the
invoice. On determining that an invoice is to be paid, the PC shall arrange for
such payment to be by Seller, which payment will be made by Seller in its
ordinary accounts payable cycle unless Paragraph (ii) below applies.


        
          
          
         
                    (ii)     
If the OR and Buyer disagree with the PC’s decision as to payment of any
invoice amount, Seller or Buyer shall deliver a Dispute Notice (as defined in
Section 10.13(a)) with respect to any portion or the entire all of the invoice.
In such event the Dispute will be resolved pursuant to Section 10.13. If it is
ultimately determined pursuant to Section 10.13 that Seller is required to pay
any amount which was the subject of a Dispute Notice sent pursuant to this
section, Seller shall pay such amount to the Company.


     
     
10.3.3.     Procedure.  Notwithstanding Section 10.3.2,
the procedure described in Section 10.11 will apply to any claim solely for monetary
 damages
relating to a matter covered by this Section 10.3.


     
     
10.4     INDEMNIFICATION AND PAYMENT OF DAMAGES
BY SELLER - TAX MATTERS.


     
     
10.4.1     General.



          
          
                (a)     In addition to the
provisions of Section 10.2, Seller shall indemnify each Buyer Indemnified Person
and hold them harmless from (i) all liability for Taxes that may be imposed or
assessed against the Acquired Companies (which for purposes only of this Section
10.4 shall include the Acquired Companies and the entities set forth on
Schedule 10.4.1(a) or the assets of the Acquired Companies based on
income attributable to all taxable periods ending on or before the Closing Date
reduced without duplication by the actual payment of Taxes prior to the Closing
Date and any reserves with respect to Taxes set forth on the Closing Balance
Sheet, (ii) all liability (as a result of Treasury Regulation
§ 1.1502-6 or otherwise) for Taxes of any Person (other than any of
the Acquired Companies) with which any of the Acquired Companies is or has been
affiliated or has filed or has been required to file a consolidated, combined or
unitary Tax Return, and (iii) subject to the last sentence of Section 10.4.2(b),
all liability for reasonable legal, accounting, consulting or similar fees and
expenses for any item attributable to any item in clauses (i) or (ii) of this
sentence. 



          
          
                (b)     In the case of any taxable period
that includes (but does not end on) the Closing Date (a “Straddle
Period”):


        
          
          
         
                    (i)     
real, personal and intangible property Taxes (“Property
Taxes”) of the Acquired Companies attributable to all
taxable periods ending on or before the Closing Date will be equal to the amount
of such property Taxes for the entire Straddle Period multiplied by a fraction,
the numerator of which is the number of days during the Straddle Period that are
in all taxable periods ending on or before the Closing Date and the denominator
of which is the number of days in the Straddle Period; and



60




        
          
          
         
                    (ii)     
the Taxes of the Acquired Companies (other than Property Taxes) attributable to
all taxable periods straddling the Closing Date will be computed as if such
taxable period ended as of the close of business on the Closing Date and, in the
case of any Taxes attributable to the ownership by any of the Acquired Companies
of any equity interest in any non-U.S. corporation, partnership or other
“flow through” entity, as if a taxable period of such corporation,
partnership or other “flow through” entity ended as of the closing of
business on the Closing Date.


     
     10.4.2     
Tax Indemnification Procedures



          
          
                (c)     If a claim is made by
any Governmental Body, which, if successful, would result in an indemnity
payment to any Indemnified Person pursuant to Section 10.4.1, then the Company
shall give notice to Seller in writing of such claim within thirty (30) days
after receipt of such a claim (a “Tax Claim”);
provided, however, the failure to give such notice shall not affect the
indemnification provided pursuant to Section 10.4.1 except to the extent that
Seller has been actually prejudiced as a result of such failure. Notice to
Seller hereunder will constitute notice to Seller. 



          
          
                (d)     With respect to any Tax
Claim relating to a taxable period ending on or prior to the Closing Date,
Seller shall control all proceedings and may make all decisions taken in
connection with such Tax Claim (including selection of counsel) and, without
limiting the foregoing, may in its sole discretion pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with any
Governmental Body with respect thereto, and may, in its sole discretion, either
pay the Tax claimed and sue for a refund where applicable law permits such
refunded suits or contest the Tax Claim in any permissible manner; provided,
however, that Seller must first consult in good faith with Buyer before taking
any action with respect to the conduct of a Tax Claim. 



          
          
                (e)     Seller and Buyer shall
jointly control and participate in all proceedings taken in connection with any
Tax Claim relating to Taxes of the Acquired Companies for a Straddle Period.
Neither Seller nor Buyer shall settle any such Tax Claim without the prior
written consent of the other parties. Each party shall pay its own expenses with
respect to any such Tax Claim. 



          
          
                (f)     The Company shall
control all proceedings with respect to any Tax Claim relating to a taxable
period beginning after the Closing Date. 



          
          
                (g)     Buyer and the Acquired
Companies on the one hand, and Seller on the other, shall reasonably cooperate
in contesting any Tax Claim, which cooperation will include the retention and,
upon request, the provision to the requesting Person of records and information
which are reasonably relevant to such Tax Claim, and making employees available
on a mutually convenient basis to provide additional information or explanation
of any material provided hereunder or to testify at proceedings relating to such
Tax Claim. 


     
     10.4.3     
Transfer and Similar Taxes.
Seller shall pay and shall hold each Buyer Indemnified Person harmless from all transfer,
documentary, sales, use,
registration and similar Taxes (including all applicable real estate transfer or
gains taxes and state transfer taxes, and related fees, 



61





including any penalties
interest and additions to Tax) (“Transfer
Taxes”). The procedures set forth in Section 10.4.1 apply to
Transfer Taxes. On or prior to the Closing, Seller shall present Tax receipts or
other documents, satisfactory to Buyer, demonstrating that all Transfer Taxes
have been paid in full. 


     
     10.5     INDEMNIFICATION AND PAYMENT BY SELLER -
TRANSACTION EXPENSES.



          
          
                (a)     Prior to the Closing
Date, Seller shall have requested final invoices from all relevant third parties
(including accountants, attorneys and other similar professionals) reflecting
all fees and expenses payable by Seller and the Acquired Companies with respect
to services rendered in connection with the transactions contemplated hereby and
by the European Share Purchase Agreement. Not later than three (3) Business Days
prior to the Closing Date, the chief financial officer of Seller shall certify
in writing to Buyer the amount of (i) any Transaction Expenses that will have
been paid by Seller or any Acquired Company immediately prior to the Closing
Date, (ii) an estimate of any Transaction Expenses incurred but not paid as of
the Closing Date, and (iii) an estimate of any Transaction Expenses reasonably
expected to be incurred after the Closing Date. 



          
          
                (b)     In addition to the
provisions of Section 10.2, Seller agrees to indemnify, defend and hold the
Buyer Indemnified Persons harmless from and against any and all Losses that the
Buyer Indemnified Persons may suffer, sustain, incur or become subject to
arising out of or due to the failure of Seller to pay in full all Transaction
Expenses. Any amounts to be paid under this Section 10.5 by Seller to a Buyer
Indemnified Person shall be paid by Seller immediately upon receipt of written
notice from Buyer demanding payment. 



     
     10.6     
INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER. Buyer and
OCP agree, jointly and severally, to indemnify and hold harmless the Seller
Indemnified Persons, and will pay to Seller Indemnified Persons the amount of
any Damages arising, directly or indirectly, from or in connection with: 



          
          
                (a)     any Breach of any
representation or warranty made by Buyer in this Agreement or by Buyer or any
Related Person thereof in the European Share Purchase Agreement (without giving
effect to any supplement to any Schedule) or any other certificate or document
delivered by Buyer or such Related Person pursuant to this Agreement or the
European Share Purchase Agreement (provided, however, that this Section 10.6(a)
shall only apply if the Closing shall not occur), 



          
          
                (b)     any Breach of any
representation or warranty made by Buyer in this Agreement or by Buyer or any
Related Person thereof in the European Share Purchase Agreement as if such
representation or warranty were made on and as of the Closing Date (without
giving effect to any supplement to any Schedule), other than any such Breach
that is disclosed in a supplement to any Schedule and is expressly identified in
the certificate delivered pursuant to Section 2.4(b)(ii) as having caused the
condition specified in Section 8.1 not to be satisfied; 



          
          
                (c)     any Breach by Buyer of any covenant
or obligation of Buyer in this Agreement
 or by Buyer or any Related Person thereof in the European Share Purchase
Agreement;



62





          
          
                (d)     any claim by any Person
for brokerage or finder’s fees or commissions or similar payments based
upon any agreement or understanding made by such Person with Buyer (or any
Person acting on its behalf) in connection with any of the Contemplated
Transactions. 


     
     10.7     TIME LIMITATIONS.



          
          
                (a)     If the Closing occurs, Seller
will have no liability (for indemnification or otherwise) with respect to:


        
          
          
         
                    (i)     
any representation or warranty unless notice is given to Seller in accordance
with Section 10.10 or Section 10.11 prior to the expiration of the following
periods: 



           
           
           
         
                         (A)     for the representations
and warranties set forth in Sections 3.1 through 3.3, 3.12, 3.14, 3.16, 3.20, 3.21
and 3.23 through 3.25 - two years after the
Closing Date



           
           
           
         
                         (B)     for the representations and
warranties set forth in Sections 3.4 through 3.9, 3.13. 3.17, 3.18 and 3.22 - three
years after the Closing Date;



           
           
           
         
                         (C)     for the representations
and warranties set forth in Sections 3.10, 3.15, 3.19 and 3.26 - five years after
 the Closing Date; and



           
           
           
         
                         (D)     for the representations
and warranties set forth in Section 3.11 - 60 days following expiration of the applicable
 statute of limitations, or


        
          
          
         
                    (ii)     
any covenant or obligation to be performed and complied with prior to the
Closing Date unless on or before the fourth anniversary of the Closing Date
Buyer notifies Seller of a claim in accordance with Section 10.10 or Section
10.11. Seller shall have no liability for indemnification or reimbursement (x)
under Section 10.2 not based upon any representation or warranty, (y) under
Section 10.3, 10.4 or 10.5, or (z) with respect to any covenant or obligation to
be performed and complied with after the Closing Date, unless notice is given to
Seller in accordance with Section 10.10 or Section 10.11 prior to the expiration
of the periods (“Notice Periods”) set forth below:



           
           
           
         
                         (A)     For Section 10.3:



           
           
           
           
        
                              (I)     With respect
 to any Known Environmental Liabilities, the
Notice Period shall continue in perpetuity.




           
           
           
           
        
                              (II)     
With respect to any Environmental, Health and Safety Liabilities that are not Known
Environmental Liabilities
(the “Unknown Environmental Liabilities”), the Notice Period
shall run from the Closing Date until the tenth (10th) anniversary of
the Closing Date. Seller shall be required to indemnify the Buyer Indemnified
Persons for any Unknown Environmental Liabilities according to the following
schedule: For Unknown Environmental Liabilities notice of which is delivered to
Seller prior to the eighth (8th) anniversary of the Closing Date -
100%; for Unknown Environmental Liabilities notice of which is delivered to
Seller after the eighth (8th) 



63





anniversary, and prior to the ninth
(9th) anniversary of the Closing Date - 67%; and for Unknown
Environmental Liabilities notice of which is delivered to Seller after the ninth
(9th), and prior to the tenth (10th) anniversary of the
Closing Date - 33%. Notwithstanding the foregoing provisions of this clause
(II): (x) if Seller proves that any Release, act, omission or violation of
Environmental Law giving rise to any Unknown Environmental Liability first
occurred after the Closing Date, Seller shall have no indemnity obligation under
this Agreement with respect to such Unknown Environmental Liability, and (y)
with respect to a Release, act, omission or violation of Environmental Law
giving rise to an Unknown Environmental Liability that first occurs before the
Closing Date, if Seller can prove that an Acquired Company’s acts or
omissions after the Closing Date exacerbated the conditions giving rise to such
Unknown Environmental Liability, the Seller’s indemnity obligation under
Section 10.3 and as limited by this Section 10.7(a)(ii)(A)(II) will be reduced
in equitable proportion to the respective contribution of Seller (or its
Affiliates) and the Acquired Companies to the Unknown Environmental Liability. 



           
           
           
         
                         (B)     For Section 10.2 (i.e.,
indemnity claims not based on a breach of any representation or warranty), 10.4 or 10.5 or
for indemnity claims with
respect to any covenant to be performed and complied with after the Closing
Date, the Notice Period shall commence on the Closing Date and continue until
the longer of (y) the fifth anniversary of the Closing Date or (z) 60 days after
the applicable statute of limitations. 



          
          
                    (b)     If the Closing occurs,
Buyer will have no liability (for indemnification or otherwise) with respect to
any representation or warranty, or covenant or obligation to be performed and
complied with prior to the Closing Date, unless on or before fifth anniversary
of the Closing Date Seller notifies Buyer of a claim specifying the factual
basis of that claim in reasonable detail to the extent then known by Seller. 



          
          
                    (c)     If the Closing does not occur,
Buyer and Seller will have liability under Section 10.6 or 10.2 (as applicable)
only if notice is given to the other
party within one year after this Agreement has been terminated.



          
          
                    (d)     The indemnifying party's
obligations to indemnify for any matter notice of which is given within the applicable
notice period will continue thereafter
until satisfied.



     
     10.8     
LIMITATIONS ON AMOUNT--SELLER. Seller will have no
liability (for indemnification or otherwise) with respect to the matters
described in Sections 10.2(a) through 10.2(d), Section 10.2(f) and Section 10.3
until Buyer has suffered Damages in excess of a $500,000 aggregate Threshold
(the “Threshold”) at which point Seller will be obligated to indemnify
Buyer from and against such Damages relating back to the first dollar.
Notwithstanding the foregoing, there is no threshold with respect to
Seller’s indemnification obligations under Section 10.3 with respect to
Known Environmental Liabilities (provided, however, that if the Base Business
Plan includes any accrual for or otherwise includes expenses specifically
identical as intended to cover the cost of remediating any Known Environmental
Liability, Seller shall indemnify the Buyer Indemnified Persons only for the
amount of costs incurred in connection with such remediation in any year that
are in excess of the accrual or other amounts expressly identified for such
expenses in the Base Business 



64





Plan for that year or, for years after 2006, the
amount accrued for 2006 in the Base Business Plan). For clarification purposes,
there is also no Threshold with respect to Seller’s indemnification
obligations under Section 10.2(e), Section 10.2(g), Section 10.4 or Section
10.5. This Section 10.8 does not apply to any Breach of any of Seller’s
representations and warranties of which Seller had Knowledge at any time prior
to the date on which such representation and warranty is made or any intentional
Breach by Seller of any covenant or obligation, and Seller will be jointly and
severally liable for all Damages with respect to such Breaches. The parties
agree that the $500,000 aggregate Threshold can be satisfied by Damages that are
indemnifiable under this Agreement or the European Share Purchase Agreement. 


     
     10.9     
LIMITATIONS ON AMOUNT--BUYER. Buyer will have no liability
(for indemnification or otherwise) with respect to the matters described in
clause (a) or (b) of Section 10.6 until Seller shall has suffered Damages in
excess of a $500,000 threshold (at which point Buyer will be obligated to
indemnify Seller from and against such Damages relating back to the first
dollar). However, this Section 10.9 will not apply to any Breach of any of
Buyer’s representations and warranties of which Buyer had Knowledge at any
time prior to the date on which such representation and warranty is made or any
intentional Breach by Buyer of any covenant or obligation, and Buyer will be
liable for all Damages with respect to such Breaches. 


     
     10.10     
PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS.



          
          
                (a)     Promptly after receipt
by an Indemnified Party under Section 10.2, 10.4, or (to the extent provided in
Section 10.3) Section 10.3.3 of notice of the commencement of any Proceeding
against it, such Indemnified Party will, if a claim is to be made against an
Indemnifying Party under such Section, give notice to the Indemnifying Party of
the commencement of such claim, but the failure to notify the Indemnifying Party
will not relieve the Indemnifying Party of any liability that it may have to any
Indemnified Party, except to the extent that the Indemnifying Party demonstrates
that the defense of such action is prejudiced by the Indemnifying Party’s
failure to give such notice. 



          
          
                (b)     If any Proceeding
referred to in Section 10.9(a) is brought against an Indemnified Party and it
gives notice to the Indemnifying Party of the commencement of such Proceeding,
the Indemnifying Party will, unless the claim involves Taxes, be entitled to
participate in such Proceeding and, to the extent that it wishes (unless (i) the
Indemnifying Party is also a party to such Proceeding and the Indemnified Party
determines in good faith that joint representation would be inappropriate, or
(ii) the Indemnifying Party fails to provide reasonable assurance to the
Indemnified Party of its financial capacity to defend such Proceeding and
provide indemnification with respect to such Proceeding), to assume the defense
of such Proceeding with counsel satisfactory to the Indemnified Party and, after
notice from the Indemnifying Party to the Indemnified Party of its election to
assume the defense of such Proceeding, the Indemnifying Party will not, as long
as it diligently conducts such defense, be liable to the Indemnified Party under
this Section 10 for any fees of other counsel or any other expenses with respect
to the defense of such Proceeding, in each case subsequently incurred by the
Indemnified Party in connection with the defense of such Proceeding, other than
reasonable costs of investigation. If the Indemnifying Party assumes the defense
of a Proceeding, (A) it will be conclusively established for purposes of this
Agreement that the claims made




65





in that Proceeding are within the scope of and
subject to indemnification; (B) no compromise or settlement of such claims may
be effected by the Indemnifying Party without the Indemnified Party’s
consent unless (Y) there is no finding or admission of any violation of Legal
Requirements or any violation of the rights of any Person and no effect on any
other claims that may be made against the Indemnified Party, and (Z) the sole
relief provided is monetary damages that are paid in full by the Indemnifying
Party; and (C) the Indemnified Party will have no liability with respect to any
compromise or settlement of such claims effected without its consent. If notice
is given to an Indemnifying Party of the commencement of any Proceeding and the
Indemnifying Party does not, within ten Business Days after the Indemnified
Party’s notice is given, give notice to the Indemnified Party of its
election to assume the defense of such Proceeding, the Indemnifying Party will
be bound by any determination made in such Proceeding or any compromise or
settlement effected by the Indemnified Party. 



          
          
                (c)     Notwithstanding the
foregoing, if an Indemnified Party determines in good faith that there is a
reasonable probability that a Proceeding may adversely affect it or its
affiliates other than as a result of monetary damages for which it would be
entitled to indemnification under this Agreement, the Indemnified Party may, by
notice to the Indemnifying Party, assume the exclusive right to defend,
compromise, or settle such Proceeding, but the Indemnifying Party will not be
bound by any determination of a Proceeding so defended or any compromise or
settlement effected without its consent (which may not be unreasonably
withheld). 


     
     10.11     
PROCEDURE FOR INDEMNIFICATION--OTHER CLAIMS. A claim for
indemnification under Sections 10.2, 10.3, 10.4, 10.5 and/or 10.6 (as
applicable) for any matter not involving a third-party claim may be asserted by
notice to the party from whom indemnification is sought which notice shall set
forth in reasonable detail the basis for such claim to the extent their known by
such party. 


     
     10.12     
EXCLUSIVITY. The parties agree that, except in the case of
fraud, their sole and exclusive remedy for, under or in connection with this
Agreement, including any violations or any breach of this Agreement, is a claim
under and in accordance with the provisions of this Section 10. 


     
     10.13     DISPUTE RESOLUTION.



          
          
                (a)     Negotiated
Resolution. - If any dispute arises (i) out of or relating to,
this Agreement or any alleged Breach thereof, (ii) with respect to any of the
transactions or events contemplated hereby or (iii) with respect to any
Person’s right to indemnification (“Dispute”), the party desiring
to resolve such Dispute shall deliver a written notice describing such Dispute
with reasonable specificity to the other parties (“Dispute Notice”).
If any party delivers a Dispute Notice pursuant to this Section 10.13, the Chief
Executive Officers of the parties or their designees involved in the Dispute
shall meet at least twice within the 30 day period commencing with the date of
the Dispute Notice and in good faith shall attempt to resolve such Dispute,
including any rejected indemnification claim. 



66





          
          
                (b)     
Mediation. - If any Dispute is not resolved or settled by
the parties as a result of negotiation pursuant to Section 10.13(a) above, the
parties shall submit the Dispute to non-binding mediation in accordance with
Attachment P to the Members’ Agreement. 



          
          
                (c)     Arbitration. -
If the Dispute
is not resolved by mediation pursuant to Section 10.13(b) above, the Dispute shall
 be settled by arbitration conducted in
accordance with Attachment P to the Members' Agreement



          
          
                (d)     Equitable Relief. - The provisions
of this Section 10.14 shall not preclude Buyer from seeking an injunction or
other equitable relief to enforce the
provisions of Article 9 of the Members' Agreement.



11.     GENERAL
PROVISIONS


     
     11.1     EXPENSES.



          
          
                (a)     Except as otherwise expressly
provided in this Agreement, each party to this Agreement will bear its
respective expenses incurred in connection with the preparation, execution and
performance of this Agreement and the Contemplated Transactions, including all
fees and expenses of agents, representatives, counsel, accountants and
investment bankers. 



          
          
                (b)     Buyer and Seller will each pay one-half
of the HSR Act filing fee.



          
          
                (c)     Seller shall pay all costs of reorganizing
the Business into the Acquired Companies.



          
          
                (d)     In the event of
termination of this Agreement, the obligation of each party to pay its own
expenses will be subject to any rights of such party arising from a breach of
this Agreement by another party. In addition, Seller shall reimburse Buyer for
one-half of Buyer’s Search Expenses. 


     
     
     11.2     PUBLIC ANNOUNCEMENTS.



          
          
                (a)     Seller and Buyer agree
that, promptly after the execution and delivery of this Agreement or at such
times as otherwise agreed upon by the parties, they shall each issue a press
release substantially in the form for Seller and Buyer, respectively, that are
provided for in the Members’ Agreement. Unless required by Legal
Requirements, any other public announcement or similar publicity with respect to
this Agreement or the Contemplated Transactions will be issued prior to the
Closing, if at all, at such time and in such manner as Buyer and Seller may
mutually determine. Prior to the Closing, Buyer and Seller will consult with
each other concerning the means by which the Acquired Companies’ employees,
customers and suppliers and others having dealings with the Acquired Companies
will be informed of the Contemplated Transactions, and Buyer will have the right
to be present for any such communication. 



          
          
                (b)     With respect to public
communications on the Closing Date or otherwise with respect to the Closing,
Seller and Buyer shall consult in good faith regarding appropriate press
releases 



67





and, unless otherwise required by Legal Requirements, the form and
content of, any press release, public announcement or similar publicity relating
to the Closing, the Company and the parties will be mutually determined. 


     
     11.3     
CONFIDENTIALITY.



          
          
                (a)     Between the date of
this Agreement and the Closing Date, Buyer and Seller will maintain in
confidence, and will cause the directors, officers, employees, agents, and
advisors of Buyer and the Acquired Companies to maintain in confidence, and not
use to the detriment of another party or an Acquired Company any written, oral
or other information obtained in confidence from another party or an Acquired
Company in connection with this Agreement or the Contemplated Transactions,
unless (i) such information is already known to such party or to others not
bound by a duty of confidentiality or such information becomes publicly
available through no fault of such party, (ii) the use of such information is
necessary or appropriate in making any filing or obtaining any consent or
approval required for the consummation of the Contemplated Transactions, or
(iii) the furnishing or use of such information is required by or necessary or
appropriate in connection with legal proceedings. 



          
          
                (b) If the Contemplated
Transactions are not consummated, each party will return or destroy as much of
such written information as the other party may reasonably request. Whether or
not the Closing takes place, Seller waives and will, upon Buyer’s request,
cause the Acquired Companies to waive, any cause of action, right or claim
arising out of the access of Buyer or its representatives to any trade secrets
or other confidential information of the Acquired Companies except for the
intentional competitive misuse by Buyer of such trade secrets or confidential
information. 



          
          
                (c) Nothing herein
contained is intended to void, replace in whole or in part or limit the
application of any Confidentiality Agreements previously entered into by and
between the parties or their Related Persons which shall remain in full force
and effect in accordance with the terms thereof. 


     
     11.4     
NOTICES. All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be deemed to
have been duly given when (a) delivered by hand (with written confirmation of
receipt), (b) sent by telecopier (with written confirmation of receipt),
provided that a copy is mailed by registered mail, return receipt requested, or
(c) when received by the addressee, if sent by a nationally recognized overnight
delivery service (receipt requested), in each case to the appropriate addresses
and telecopier numbers set forth below (or to such other addresses and
telecopier numbers as a party may designate by notice to the other parties): 



          
          Seller:



	 	
                Lennox International, Inc.
		
                P.O. Box 799900
		
                Dallas, Texas  75379-9900
		
                Attention: Carl E. Edwards, Jr.
		
                Facsimile No.: 972-497-5268




68





               
               
          Buyer or OCP:


		
                Outokumpu Copper Products Oy
		
                Riihitontuntie 7D
		
                P.O. Box 280
		
                Espoo, Finland   02201
		
                Attention: Corporate General Counsel
		
                Facsimile No.: 011-358-9-421-2428




               
               
          
        with a copy to:


		
                Hodgson Russ LLP
		
                One M&T Plaza, Suite 2000


		
                Buffalo, New York  14203
		
                Attention:  Robert B. Fleming, Jr., Esq.
		
                Facsimile No.:  716-849-0349



     
     11.5     
JURISDICTION; SERVICE OF PROCESS. Except as otherwise set
forth in Section 10.13 or elsewhere in this Agreement, any action or proceeding
seeking to enforce any provision of, or based on any right arising out of, this
Agreement may be brought in the courts of the State of Florida, Dade County, or,
if it has or can acquire jurisdiction, in the United States District Court for
the Southern District of Florida. Each of the parties consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the preceding sentence may be
served on any party anywhere in the world. 


     
     11.6     FURTHER ASSURANCES; INFORMATION.




          
          
                (a)     The parties agree
(i) to furnish upon request to each other such further information,
(ii) to execute and deliver to each other such other documents, and
(iii) to do such other acts and things, all as the other party may
reasonably request for the purpose of carrying out the intent of this Agreement
and the documents referred to in this Agreement. 



          
          
                (b)     From and after the
Closing, Seller and its Representatives will be allowed, upon reasonable
request, to inspect and copy at their expense the business records and accounts
of the Company. Buyer agrees with Seller that the Company shall not destroy or
abandon any business records or accounts relating to the Business except upon
thirty (30) days’ advance written notice to Seller for a period of five (5)
years thereafter. If Seller requests the surrender of such records or




69





accounts,
then the Company shall surrender, at Seller’s expense, such records or
accounts so required rather than proceeding with such destruction. 



          
          
                (c)     From and after the
Closing, Buyer, the Acquired Companies and their Representatives will be allowed
upon reasonable request to inspect and copy at their expense the records of
Seller and its Related Persons relating to the Acquired Companies and the
Business through the Closing Date that are in the possession or control of
Seller or any of its Related Persons and are not transferred to the Acquired
Companies, including all financial records and tax returns relating to the
Business. Seller agrees not to destroy or abandon any such records for a period
of five (5) years following the Closing. 



          
          
                (d)     If at any time within
three (3) years after the date of this Agreement, Buyer or any of its Related
Persons proposes to register under the Securities Act of 1933, as amended, any
securities in connection with any registered offering thereof and in connection
therewith the Securities and Exchange Commission (“SEC”) makes any
comments or requests any information with respect to accounting information
presented in the registration statement pertaining to any period prior to the
Closing Date, then Seller will cooperate fully in responding promptly to such
comments or questions, and will use its reasonable best efforts to cause
Seller’s Accountants to respond to comments on the relevant financial
statements or to provide such information as the SEC requests in order to cause
the SEC to declare effective such registration statement, at the expense of
Buyer or its designated Related Persons, as the case may be. In addition, Seller
will provide to any underwriter relating to financial information pertaining to
any period prior to the Closing Date as required by Legal Requirements or
applicable regulations or guidance of the accounting profession. 


     
     11.7     
WAIVER. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither the failure nor any delay
by any party in exercising any right, power or privilege under this Agreement or
the documents referred to in this Agreement will operate as a waiver of such
right, power or privilege, and no single or partial exercise of any such right,
power or privilege will preclude any other or further exercise of such right,
power or privilege or the exercise of any other right, power or privilege. To
the maximum extent permitted by applicable law, (a) no claim or right
arising out of this Agreement or the documents referred to in this Agreement can
be discharged by one party, in whole or in part, by a waiver or renunciation of
the claim or right unless in writing signed by the other party, (b) no
waiver that may be given by a party will be applicable except in the specific
instance for which it is given, and (c) no notice to or demand on one party
will be deemed to be a waiver of any obligation of such party or of the right of
the party giving such notice or demand to take further action without notice or
demand as provided in this Agreement or the documents referred to in this
Agreement. 


     
     11.8     ENTIRE
AGREEMENT AND MODIFICATION. This Agreement supersedes all prior
agreements between the parties with respect to its subject matter (including
without limitation the Memorandum of Agreement between Outokumpu Oyj and Seller
dated on or about April 9, 2002) and constitutes (along with the Schedules and
documents referred to in this Agreement) a complete and exclusive statement of
the terms of the agreement between the parties with respect to its subject
matter. 



70





This Agreement may not be amended except by a written agreement executed
by the party to be charged with the amendment. 


     
     11.9     
ASSIGNMENTS, SUCCESSORS AND NO THIRD-PARTY RIGHTS. Neither
party may assign any of its rights under this Agreement without the prior
consent of the other parties, except that Buyer or Seller may assign any of its
rights under this Agreement to any Subsidiary of Buyer or Seller. Subject to the
preceding sentence, this Agreement will apply to, be binding in all respects
upon and inure to the benefit of the successors and permitted assigns of the
parties. Nothing expressed or referred to in this Agreement will be construed to
give any Person other than the parties to this Agreement any legal or equitable
right remedy, or claim under or with respect to this Agreement or any provision
of this Agreement. This Agreement and all of its provisions and conditions are
for the sole and exclusive benefit of the parties to this Agreement and their
successors and assigns. 


     
     11.10     
SEVERABILITY. If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect. Any provision
of this Agreement held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or unenforceable.



     
     11.11     SECTION
HEADINGS, CONSTRUCTION. The headings of Sections in this
Agreement are provided for convenience only and will not affect its construction
or interpretation. All references to “Section” or “Sections”
refer to the corresponding Section or Sections of this Agreement. All references
to “Schedule” or “Schedules” refer to the corresponding
Schedule or Schedules attached to and made a part of this Agreement. All words
used in this Agreement will be construed to be of such gender or number as the
circumstances require. Unless otherwise expressly provided, the word
“including” does not limit the preceding words or terms. 


     
     11.12     TIME OF ESSENCE.
With regard to all dates and time periods set forth or referred to in this Agreement,
time is of the essence.


     
     11.13     GOVERNING LAW.
     This Agreement is governed by the laws of the State of
 New York without regard to conflicts of laws principles.


     
     11.14     
COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement. 


[SIGNATURES
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71





IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first written above.



			
        Seller:


			
			
			
                LENNOX INTERNATIONAL, INC.


			
			
			
                By:  /s/ Robert E. Schjerven  
			
                Name:  Robert E. Schjerven
			Title:
                   Chief Executive Officer



			
                Buyer:


			
                OUTOKUMPU COPPER

                HOLDINGS, INC.


			
                By:  /s/ Kalevi Nikkilä  

                Name:  Kalevi Nikkilä

                Title:    President



			OCP:


                OUTOKUMPU COPPER PRODUCTS OY


			
                By:  /s/ Kalevi Nikkilä  

                Name:  Kalevi Nikkilä

                Title:    President