EX 10.7





JOINT VENTURE AND MEMBERS’ AGREEMENT



          
THIS AGREEMENT is made on July 18, 2002, between LENNOX INTERNATIONAL, INC., a
Delaware corporation (“LII”); OUTOKUMPU COPPER PRODUCTS OY a
Finnish limited company (“OCP”); OUTOKUMPU COPPER HOLDINGS, INC., a Delaware
corporation and a wholly-owned subsidiary of OCP (“OCHI”); and HEATCRAFT HEAT
TRANSFER LLC (to be re-named OUTOKUMPU HEATCRAFT USA LLC), a Delaware limited
liability company (the “Company”).




RECITALS



          
WHEREAS, LII, OCP and OCHI wish to establish a mutually beneficial long term
business association based on mutual understanding, cooperation
and exchange of information, with LII and OCHI becoming Members (as defined below)
in the Company to carry on the Business (as defined below); and



          
WHEREAS, the Members have agreed to enter into this Agreement for the purposes
of recording the terms and conditions on which they will
subscribe for interests in and provide funding for the Company, regulating their
relationship with each other so long as they are Members in the Company
and regulating, as between themselves, certain aspects of the affairs of the
Company;



          
NOW, THEREFORE, in consideration of the covenants and agreements set forth in this
Agreement, the parties agree as follows:



ARTICLE 1 
 INTERPRETATION



          
Section 1.1 The following defined terms used in this Agreement have the
respective meanings specified below.



          
          
(a)     Affiliate.  “Affiliate” means,
when used with respect to a particular
Person, (i) any Person directly or indirectly controlling, controlled by
or under common control with, that Person, (ii) a Person owning or controlling
fifty percent (50%) or more of the outstanding voting securities of that
Person and (iii) any officer, director, member, manager, partner or employee of
that Person.



          
          
(b)     Agreed Form.  “Agreed Form”
means, in relation to any document, the form of that document which has been agreed
upon by the parties hereto and initialed for the purpose of identification by
LII’s Attorneys and OCHI’s Attorneys with such changes as the Members may
agree upon in writing before the Purchase Closing.









          
          
(c)     Agreement.  “Agreement” means
this Agreement, together with the Exhibits and Schedules hereto, as amended from
time to time in accordance herewith.



          
          
(d)     Bankruptcy.  “Bankruptcy” of a
Person means (a) the Person’s filing of a voluntary petition seeking liquidation,
reorganization, arrangement or readjustment, in any form, of its debts under the
laws or regulations of any Governmental Body, including but not limited to Title
11 of the United States Code or any other federal or state insolvency law, (b)
the making by a Person of any assignment for the benefit of its creditors or (c)
the expiration of 90 days after the filing of an involuntary petition under Title
11 of the United States Code, an application for the appointment of a receiver for the
assets of a Person, or an involuntary petition seeking liquidation, reorganization,
arrangement or readjustment of a Person’s debts under any other federal
or state insolvency law, provided that the same has not been vacated, set aside
or stayed within such 90-day period or immediately upon a Person’s filing
an answer consenting to or acquiescing in any such petition.



          
          
(e)     Base Business Plan.  “Base Business
Plan” means the initial business plan of the Company attached as Attachment
A.



          
          
(f)     Board.  “Board” means the board
of Representatives of the Company as constituted from time to time pursuant to
the LLC Agreement.



          
          
(g)     Bona fide third party.  “Bona fide
third party” means a Person which is completely independent from the Company
and each Member by reference to equity ownership, management control, strategic
alliance or other relationship.



          
          
(h)     Business.  “Business” means,
subject to clause (iv) below:



          
          
          
        (i)     LII’s heat transfer business in
North America (including its manufacturing operations in Juarez
in Mexico), France, Italy, the Czech Republic and Asia Pacific, which includes)
its original equipment manufacturing (“OEM”) heat transfer division located
in Grenada, Mississippi, its commercial coil heat transfer operation located in
Grenada, Mississippi, its Livernois operations in Dearborn, Michigan, its
heat transfer operations located in Cremieu, France and its heat transfer operations
located in Prague, the Czech Republic; and its heat transfer operations in Torreglia,
Italy.  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”).



          
          
          
        (ii)     LII's companies that own and operate
the Assets are: Heatcraft Inc. (only the heat transfer operations); Heatcraft Heat
Transfer Inc.; Heatcraft Advanced 









Technologies Inc.; LGL France S.A. (only the
heat transfer operations located at Cremieu, France and SCI Groupe Brancher);
Heatcraft Prague (formerly known as Friga-Coil) s.r.o.; Heatcraft Italia S.R.L;
and Livernois Engineering Co. or their successors as contemplated by the Share
Purchase Agreement and European Share Purchase Agreement.



          
          
          
        (iii)     With respect to Asia Pacific, (A)
the Assets include certain manufacturing equipment located at LII’s
Australian facility as contemplated by the European Share Purchase Agreement and
(B) with respect to the Singapore and Shanghai offices, the Company will
have the right to hire those employees of those offices who have been primarily
involved in the heat transfer business.



          
          
          
        (iv)     “Business” does not include (A)
 the heat transfer operations which are integrated into LII’s other businesses,
including its HVAC/R operations in North America, Europe, Australia, Mexico, South
America and other locations consisting of the following companies: Lennox Industries
Inc.; Armstrong Air Conditioning Inc.; Advanced Distributor Products LLC; Excel
Comfort Systems Inc.; Allied Air Enterprises Inc.; Heatcraft Refrigeration Products;
and Heatcraft Australia Pty Ltd. (all of the heat transfer operations except as
specified above), (B) LII’s interest in Frigus-Bohn S.A. de C.V. or (C) LII’s
interest in its joint venture in Brazil, Heatcraft do Brasil Ltda.



          
          
(i)     Business Day.  “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.



          
          
(j)     Class A Member.  “Class A Member”
means OCHI and any permitted assignee of OCHI.



          
          
(k)     Class B Member.  “Class B Member”
means LII and any permitted assignee of LII.



          
          
(l)     Closing Date.  “Closing Date”
is defined in Section 5.1.



          
          
(m)     Copper Tube Supply Purchase Agreement - OCP/Company.
“Copper Tube Supply Purchase Agreement - OCP/Company” means an agreement
under which OCP or its Related Persons will supply copper tubing to the Company
and EU JVCo, in the form attached hereto as Attachment B.



          
          
(n)     Copper Tube Supply Purchase Agreement - OCP/LII.
 “Copper Tube Supply Purchase Agreement - OCP/LII” means an agreement
under which OCP or its Related Persons will supply copper tubing to LII and its
Related Persons, in the form attached hereto as Attachment C.



          
          
(o)     European Share Purchase Agreement.  “European Share
Purchase Agreement” means a share purchase agreement pursuant to which OCP
(or its Related Persons) will acquire 55% of the interest in all of the shares or
other equity interests of Outokumpu Heatcraft B.V.



3





          
          
(p)     Fiscal Year.  “Fiscal Year”
means the calendar year.



          
          
(q)     GAAP.  “GAAP” means generally
accepted accounting principles as in effect in the United States of America
from time to time.



          
          
(r)     Governmental Body.  “Governmental Body”
means any (i) nation, state, county, city, town, village, district, or other
jurisdiction of any nature; (ii) federal, state, local, municipal, foreign, or other
government; (iii) governmental or quasi-governmental authority of any nature (including
any governmental agency, branch, department, official, commission or entity and
any court or other tribunal); (iv) multi-national organization or body; or (v) body
exercising, or entitled to exercise, any administrative, executive, judicial, legislative,
police, regulatory or taxing authority or power of any nature.



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



          
          
(t)     JV Transactions.  “JV Transactions”
means the following transactions and agreements between the parties and their
Affiliates:


	 	 	   
         (i)	
        the Share Purchase Agreement, and the completion of
        the transactions provided for therein and in Part 1 of Attachment E;
        
	 	 	   
         (ii)	
        the Tech JV Transactions;
	 	 	   
         (iii)	
        the Non-US Transactions;
	 	 	   
         (iv)	
        the Shared Services Agreement;
	 	 	   
         (v)	
        the Product Supply Agreement;
	 	 	
            (vi)	
        the Copper Tube Supply Purchase Agreement - OCP/LII;
	
         	
         	
            (vii)	
        the Copper Tube Supply Purchase Agreement - OCP/Company; and



	 	 	
            (viii)	
        a license agreement between the Company as licensor and LII as licensee regarding
        the HEATCRAFT mark and also covering a license by the Company
        to LII of one patent.





          
          
(u)     Joint Technology Development Agreement.
“Joint Technology Development Agreement” means an agreement among OCP
(or its Related Persons), LII, the Company and Tech LLC relating to development
activities for heat transfer products, processes and technologies, in the form
attached hereto as Attachment F.



4





          
          
(v)     LLC Agreement.  “LLC Agreement”
means the Restated Limited Liability Company Agreement of the Company to be entered
into by the Members on the Closing Date, in the form attached as Attachment G.



          
          
(w)     LII's Attorneys.  “LII’s Attorneys”
means Carl E. Edwards, Jr., Esq.



          
          
(x)     Members.  “Members” means LII and
OCHI and each Person who or which may hereafter become a member of the Company.



          
          
(y)     Membership Interests.  “Membership
Interests” means a Member’s aggregate rights in the Company, including
the Member’s (i) right to share in the profits and losses of, and the right
to receive distributions and allocations from, the Company and (ii) right to vote
in all matters coming before the Company.



          
          
(z)     Mexican Joint Venture Agreements.  “Mexican
Joint Venture Agreements” means (i) a letter agreement dated on or about
March 1, 2002 between Heatcraft, Inc. and Corporacion Frigus - Therme S.A. de C.V.
entitled “Agreement for Marketing Strategy for the Joint Venture”, Frigus Bohn
S.A. de C.V. and (ii) a letter agreement dated on or about March 1, 2002 between
Heatcraft, Inc. and Frigus-Bohn S.A. de C.V. entitled “Letter of Agreement.”



          
          
(aa)     Non-US Transactions.
“Non-US Transactions” means:



          
          
          
        (i)     the completion of the pre-closing actions
by LII and its Affiliates described in Part 2 of Attachment E;



          
          
          
        (ii)     the formation of Outokumpu Heatcraft B.V.
(“EU JVCo”) and the execution and delivery of the Shareholders
Agreement and the European Share Purchase Agreement by and between LGL Holland B.V.
and OCP with respect to EU JVCo and the completion of transactions
provided for therein; and



          
          
          
        (iii)     the assignment of the Mexican Joint Venture
Agreements to the Company;



          
          
          
         (iv)     the execution and delivery of an agreement
between Heatcraft Australia Pty. Ltd. and the EUJVCo (or its
Affiliate) providing for certain marketing and supply arrangements relative to
Australia and New Zealand (in substantially the form attached hereto as
Attachment Q (the “Asia Pacific Agreement”)); and



          
          
          
        (v)     the execution and delivery of an agreement
between Heatcraft do Brasil Ltda. and the Company (or its
Affiliate) providing for certain marketing and supply arrangements relative to
South and Central America (in substantially the form attached hereto as
Attachment Q-1 (the “South America Agreement”)).



5





          
          
(bb)     OCHI Interests.  “OCHI Interests”
means the Membership Interests of the Company to be purchased by OCHI from LII
pursuant to the Share Purchase Agreement.



          
          
(cc)     OCHI’s Attorneys.  “OCHI’s
Attorneys” means Hodgson Russ LLP.



          
          
(dd)     Organizational Documents.  “Organizational Documents” means
in the case of the Company, its Certificate of Formation and the LLC Agreement, as
amended from time to time, and in the case of any other Person (i) the articles or
certificate of incorporation and the bylaws of a corporation; (ii) the
partnership agreement and any statement of partnership of a general partnership; (iii)
the limited partnership agreement and the certificate of limited
partnership of a limited partnership; (iv) the certificate of formation and limited
liability company agreement or operating agreement of a limited
liability company; (v) any charter or similar document adopted or filed in connection
 with the creation, formation, or organization of a Person and
(vi) any amendment to any of the foregoing.



          
          
(ee)     Person.  “Person” means any individual,
corporation, partnership, limited liability company, partnership, joint venture, unincorporated
association, trust, Governmental Body or other entity.



          
          
(ff)     Product Supply Agreement.  “Product
Supply Agreement” means an agreement under which the Company, the EU JVCo and their
Affiliates will supply products to LII and its Affiliates, in the form attached hereto as
Attachment H.



          
          
(gg)     Purchase Closing.  “Purchase Closing”
means the date of the consummation of the transfer of the OCHI Interests to OCHI in
accordance with the Share Purchase Agreement.



          
          
(hh)     Shared Services Agreement.  “Shared
Services Agreement” means an agreement between the Company and LII in the form
attached hereto as Attachment I pursuant to which LII and/or its Related Persons shall
provide certain transition services to the Company, EU JVCo and the other Acquired
Companies.



          
          
(ii)     Share Purchase Agreement.  “Share Purchase
 Agreement” means the Share Purchase Agreement entered into by LII, OCP, OCHI
and the Company on the date of this Agreement providing for the sale of the OCHI
Interests by LII to OCHI.



          
          
(jj)     Shareholders' Agreement.  “Shareholders’
Agreement”  means the Shareholders' Agreement relating to the operation of
EU JV Co.



          
          
(kk)     Tech JV Transactions.  “Tech JV Transactions”
 means the execution and delivery of (i) the Joint Venture and Members’ Agreement
between LII and OCHI relating to Advanced Heat Transfer LLC, a Delaware limited
liability company (“Tech LLC”), (ii) the Limited Liability Company Agreement
for Tech LLC between LII and OCHI (Attachment J) and (iii) the Joint Technology
Development Agreement, and the completion of all of the transactions provided for in
those agreements.



6





          
          
(ll)     Transfer.  “Transfer” means,
when used as a noun, any gift, sale, hypothecation, pledge, assignment, attachment
or other transfer and, when used as a verb, to give, sell, hypothecate, pledge,
assign, attach or otherwise transfer.



          
Section 1.2     Accounting Terms.  Accounting terms used
in this Agreement and
not otherwise defined herein have the meanings ascribed thereto under GAAP.



          
Section 1.3      Gender and Number.  Unless the
context clearly indicates to the contrary, words singular or plural in number will be
deemed to include the other, and pronouns having a neuter, masculine or feminine
gender will be deemed to include and refer to any and all genders.  Whenever the terms
“herein,” “hereunder” or words of like import are used in this
Agreement, the intended reference is to the entire Agreement and not to the clause,
sentence, section or subsection in which that word appears.  Unless otherwise expressly
provided, the word “including” does not limit the preceding words or terms.



          
Section 1.4      Headings.  The headings of Sections
in this Agreement are provided for convenience only and will not affect its construction or
interpretation.  All references to “Article” or “Section” refer to the
corresponding Article or Section of this Agreement.  All references to “Attachment”
refer to the corresponding Attachment attached to and made a part of this Agreement.



          
Section 1.5      Drafting.  This Agreement represents
the culmination of extensive and arms length negotiations among the parties.  No party
will be deemed the drafter of this Agreement, and this Agreement will not be construed
for or against any party by reason of a particular party being deemed the drafter.



          
Section 1.6      Dollars.  All references in this Agreement
to “Dollars” or “$” means and refers to United States dollars.



ARTICLE 2 
 CONDITIONS PRECEDENT




          
Section 2.1      Conditions.  Subject to Section
2.4, the obligations of the parties under this Agreement are subject to satisfaction
of the following conditions:



          
          
(a)     Subscription.  LII shall have (i) subscribed
for one hundred percent (100%) of the Membership Interests of the Company, and (ii) paid to the
Company the cash sum of One Hundred Dollars ($100) and contributed the assets and
property provided for in the LLC Agreement to the capital of the
Company.  Upon the Company’s receipt of such consideration, the Company shall
have issued one hundred percent (100%) of its Membership Interests credited
as fully paid to LII and entered LII’s name in the register of Members as the
holder of those Membership Interests.



          
          
(b)     Approvals.  LII and OCHI shall have filed
all necessary notices with, and shall have obtained on terms and conditions satisfactory
to LII and OCHI all necessary approvals or consents from, any lender, lessor or
other Person and any Governmental Body that LII or 



7





OCHI may deem necessary in
connection with the transactions contemplated by this Agreement and the JV Transactions,
including under the HSR Act, Council Regulation (EEC) No. 4064/89
or similar laws within Finland, the Czech Republic, France and Italy.



          
          
(c)     LII and Heatcraft Inc.  LII shall have caused
the transfer to the Company or EU JVCo, or a 100% subsidiary thereof, of all assets,
rights and
licenses relating to the Business and owned or used by Heatcraft Inc. and any other
 Affiliate of LII, including taking the actions and steps set forth on
Attachment E.



          
          
(d)     JV Transactions.  LII and OCHI shall have
completed the transactions provided for in the Share Purchase Agreement, OCHI shall
have acquired the OCHI Interests from LII thereunder, and all of the other JV Transactions
shall have been completed.



          
          
(e)     LLC Agreement.  LII and OCHI shall have executed
and delivered the LLC Agreement and the other Organization Documents shall be in
Agreed Form.



          
          
(f)     Litigation.  There shall be no pending or
threatened litigation of a material nature regarding the Business, its assets, the
Company, this Agreement or the agreements contemplated by the JV Transactions.



          
          
(g)     No Material Adverse Change.  There shall not
have occurred any change in the assets, operations and/or the financial conditions
or prospects of the Business or the Company which constitutes a Material Adverse
Change, as defined in the Share Purchase Agreement.



          
Section 2.2     Waiver.  Each Member may waive all
or any of the conditions set forth in Section 2.1 in whole or in part at any time
by notice in writing to
the other Member, provided that both parties must waive each condition in order
for the waiver to be effective.



          
Section 2.3 Best Efforts; Target Closing Date.



          
          
(a)     The parties shall use their reasonable best efforts
to ensure the conditions set forth in Section 2.1 and in the Share Purchase Agreement
are satisfied on or before September 30, 2002 (the “Target Date”), as such
date may be extended by mutual written agreement of the parties or pursuant to
Paragraph (b) of this Section 2.3.



          
          
(b)     If any Governmental Body with jurisdiction over
the enforcement of any law or regulation intended to prohibit or regulate mergers,
restraints of trade or monopolization, including the HSR Act (“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 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 pursuant to this
Paragraph (b) beyond December 31, 2002.



8





          
Section 2.4     No Liability.  If the conditions in
Section 2.1 are not fulfilled or waived on or before the Target Date, as extended
pursuant to Section 2.3, and this Agreement is terminated as provided for in Section
13.2, none of the parties will have any rights or obligations under this Agreement (so that no
party will have any claim against the others for costs, damages, compensation or otherwise)
 except those rights or obligations in respect of any previous breach of this Agreement.



ARTICLE 3 
 REPRESENTATIONS AND WARRANTIES



          
Section 3.1      Representations and Warranties of LII.
LII hereby represents and warrants to the Company, OCP and OCHI that:



          
          
(a)     Authority.  LII is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.  LII has full
power and authority under its Organizational Documents to execute, deliver
and perform this Agreement and to consummate the JV Transactions.  The
execution, delivery and performance by LII of this Agreement and the consummation
by LII and/or its Affiliates of the JV Transactions have been duly
authorized by all necessary action.



          
          
(b)     Binding Obligation.  This Agreement has
been duly and validly executed and delivered by LII and constitutes the binding
obligation of LII enforceable against LII in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and
other similar laws and equitable principles.



          
          
(c)     No Violation.  The execution, delivery
and performance by LII of this Agreement and the consummation by LII and/or its
Affiliates of the JV
Transactions will not, with or without the giving of notice or the lapse of time,
or both, (i) violate any provision of law, statute, rule or regulation to
which LII or any of its Affiliates is subject, (ii) violate any order, judgment, or
decree applicable to LII or any of its Affiliates or (iii) conflict
with, or result in a breach or default under, any term or condition of its Organizational
 Documents of LII or its Affiliates or any agreement or other
instrument to which LII is a party or by which any of them is bound.



          
Section 3.2     Representations and Warranties of the Company.
The Company hereby represents and warrants to LII, OCP and OCHI that:



          
          
(a)     Authority.  The Company is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Delaware.  The Company has full power and authority under its Organizational
Documents to execute, deliver and perform this Agreement and to consummate the
JV Transactions.  The execution, delivery and performance by the Company of this
Agreement and the consummation by the Company of the JV Transactions have
been duly authorized by all necessary action.



9





          
          
(b)     Binding Obligation.  This Agreement has
been duly and validly executed and delivered by the Company and constitutes the
binding obligation of the Company enforceable against the Company in accordance
with its terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws and equitable principles.



          
          
(c)     No Violation.  The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company of the JV
Transactions will not, with or without the giving of notice or the lapse of time,
or both, (i) violate any provision of law, statute, rule or regulation to
which the Company is subject, (ii) violate any order, judgment or decree applicable
to the Company or (iii) conflict with, or result in a breach or default
under, any term or condition of its Organizational Documents or any agreement or
other instrument to which the Company is a party or by which it is bound.



          
Section 3.3     Representations and Warranties of OCP and
OCHI.  OCP and OCHI each hereby represent and warrant to the Company and LII that:



          
          
(a)     Authority.  Each of OCP and OCHI is duly
organized, validly existing and in good standing under the laws of its jurisdiction
of incorporation or organization.  Each of OCP and OCHI has full power and authority
under its Organizational Document to execute, deliver and perform this Agreement and to
consummate the JV Transactions.  The execution, delivery and performance by OCP and
OCHI and/or their Affiliates of this Agreement and the consummation of
the JV Transactions have been duly authorized by all necessary action.



          
          
(b)     Binding Obligation.  This Agreement has
been duly and validly executed and delivered by OCP and OCHI and constitutes the
binding obligation thereof enforceable against OCP and OCHI in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws and equitable principles.



          
          
(c)     No Violation.  The execution, delivery
and performance by OCP and OCHI of this Agreement and the consummation by OCP,
OCHI and/or their Affiliates of the JV Transactions will not, with or without
the giving of notice or the lapse of time, or both, (i) violate any provision of
law, statute, rule or regulation to which OCP or OCHI or any of their Affiliates
is subject, (ii) violate any order, judgment or decree applicable to OCP, OCHI or
any of their Affiliates or (iii) conflict with, or result in a breach or default
under, any term or condition of their respective Organizational Documents or any
agreement or other instrument to which OCP, OCHI or any of their Affiliates is a
party or by which any of them is bound.



ARTICLE 4 
 BUSINESS OF THE COMPANY



          
Section 4.1     Conduct of Business.  Except as
otherwise required by law or by this Agreement, the Business and the proceedings
of the Company will be conducted in such a way as 



11





to maximize profit available
for distribution to the Members to the extent consistent with good business practice.



          
Section 4.2     Member Dealings with the Company.
The Company shall deal with the Members and their Affiliates on an arm’s length
basis.  The Members shall endeavor to ensure that any existing or potential conflicts
of interest are brought to the attention of the Company at the earliest opportunity so that
they can be dealt with in accordance with this Agreement and the LLC Agreement.
The Members acknowledge and agree that the JV Transactions and any actions
arising thereunder are, or for purposes of this Agreement will be deemed to be, arm’s
length.



          
Section 4.3     Continuing Obligations.  The
parties agree that, for so long as LII and OCHI are Members, the parties shall
cause compliance with the obligations set forth in Attachment L.



          
Section 4.4     Conflicting Documents.  The
Members agree that, if any provisions of the Organizational Documents of the
Company at any time conflict with any provisions of this Agreement, the provisions
of this Agreement will prevail and the Members shall exercise all powers and rights
available to them to cause the amendment of the Company's Organizational Documents
 to the extent necessary to permit the Company and its affairs to be regulated as
provided in this
Agreement.



ARTICLE 5 
 CLOSING DATE



          
Section 5.1     Closing Date.  The Closing Date
will be the date three Business Days after the satisfaction or waiver of the conditions
 in Section 2.1(b) at the offices of LII, Richardson, Texas, or at such other date
and time as the parties may agree.



          
Section 5.2     Closing.  On or immediately prior
to the Closing Date: 



          
          
(a)     LII's Voting.  LII shall vote its Membership
Interests and take all other action in the Agreed Form to effect the following actions:




          
          
          
(i)     the Certificate of Formation of the Company dated
December 20, 2000 shall not have been amended except to change the name as contemplated
hereby; and 



          
          
          
(ii)     the LLC Agreement shall be adopted.



          
          
(b)     Closing Documents.  Subject to satisfaction
of all of the conditions set forth in Section 2.1, LII and OCHI shall, and shall cause
their Affiliates to, execute and deliver all instruments, agreements, certificates
and other documents, and take all other actions necessary or appropriate, to
complete the JV Transactions including the transactions contemplated by this Agreement
 and the Share Purchase Agreement.  Upon OCHI’s payment of the
consideration set forth in the Share Purchase Agreement, LII shall transfer to OCHI
a fifty-five percent (55%) Membership Interest in the Company and the
Company shall issue this Membership Interest 



11





credited as fully paid to OCHI and
enter OCHI’s name in the register of Members of the Company as the holder
of this Membership Interest.



          
          
(c)     Members’ Meeting.  A meeting of the
Members shall be held, at which it shall be resolved that:



          
          
          
(i)     the Representatives be appointed in accordance
with the LLC Agreement, as follows:  The initial Class A Representatives and Class B
Representatives will be as specified in the LLC Agreement;



          
          
          
(ii)     the Chair, the President (CEO), Chief Financial
Officer, General Manager for North American Operations and Managing Director for European
Operations of the Company be appointed in accordance with the LLC Agreement, as follows:
 the Chair by OCHI; President (CEO) by OCHI; Chief Financial
Officer by OCHI; General Manager for North American Operations by LII; and Managing
Director for European Operations by LII.



          
          
          
(iii)     PriceWaterhouseCoopers LLC be appointed as
auditors of the Company;



          
          
          
(iv)     the Base Business Plan be adopted; and 



          
          
          
(v)     agreements for financing lines of credit to meet
anticipated cash requirements set out in the Base Business Plan be entered into
or authorized.



          
Section 5.3     Receipt.  The receipt of any
party’s attorney for any sum or document to be paid or delivered to that party
will discharge the obligor’s obligation to pay or deliver it to that party.



          
Section 5.4     No Partnership.  Nothing in this
Agreement will be deemed to constitute a partnership between any of the parties nor
constitute any party the
agent of any other party for any purpose.



          
Section 5.5     No Obligation.  No party will be
obliged to complete any of the transactions or do any of the things referred to
in this Article unless all
other transactions and things are completed in accordance with this Article.



ARTICLE 6 
 RESERVED MATTERS



          
The Members agree that, except as expressly provided for in the Base Business Plan,
the Company shall not take any of the actions listed in (a)
Attachment M without the approval of both the Class A Member and the Class B Member
(the “Major Decisions”) and (b) Attachment N without the approval of a
majority of the Representatives present at a meeting of the Board.



12





ARTICLE 7 
 FUNDING



          
Section 7.1     Funding Needs.



          
          
(a)     Bank Loans.  The Members shall (i) use
all reasonable efforts to arrange banking facilities at the most favorable commercial
rates then
available for any borrowing required by, or advisable in connection with, the
Base Business Plan and (ii) cause the Company to grant a security interest in
its assets in connection with such financing.



          
          
(b)     Member Loans and Guaranties.  In lieu of
bank or other institutional financing, the Members may agree, but shall not be
required, to lend funds to the Company (and/or the EU JVCo) on terms to be mutually
agreed upon.  No Member will be obligated to guaranty any bank or other indebtedness of
the Company or the EU JVCo without its prior written consent.  Notwithstanding the
foregoing, if either Member does not make any additional capital contribution
required by a Capital Call Notice (as defined in and delivered in accordance with
the LCC Agreement), the other Member may elect, in lieu of making all or some of
its own and the non-contributing Member’s additional capital contributions
pursuant to such Capital Call Notice, to loan some or all of the amount of the
additional capital contributions required under such Capital Call Notice to the
Company at an interest rate per year equal to one year USD interest rate (without
margin) as indicated by Reuters Libor O1 Screen (British Bankers Association)
plus the margin of three percent (3%).



          
Section 7.2     Capital Call.  In the event that
the Board or the Members determine (subject to the provisions of Article 6) to
further finance the Company by way of an increase in the capital of the Company,
the Board or the Members, as the case may be, shall request that the Members contribute
the additional capital in accordance with the LLC Agreement.



ARTICLE 8 
 DIVIDEND POLICY



          
Section 8.1     Distributions.



          
          
(a)     Tax Distributions.  With respect to each
Fiscal Year, the Company and the EU JVCo shall make distributions to each Member
on a quarterly basis out of funds legally available for distribution in an amount
equal to the product of (A) an amount equal to the Taxable Income (as hereinafter
defined) of the Company allocated to such Member under the LLC Agreement), multiplied
 by (B) the highest marginal corporate income tax rate which may be imposed under
the Code, and, in addition, an amount similarly determined for state taxes using
an assumed effective tax rate of five percent (5%) (“Tax Distributions”).



          
          
(b)     After-Tax Income.  The Board will determine
with respect to each Fiscal Year the After-Tax Income (as hereinafter defined) of
the Company and the EU JVCo and, unless (i) the Base Business Plan requires the
expenditure of available funds or (ii) the Company or the EU JVCo is legally prohibited
from doing so, the Company and the EU JVCo shall make a 



13





distribution to the Members
of an aggregate amount equal to thirty percent (30%) of the After-Tax
Income for such Fiscal Year. 



          
          
(c)     For purposes hereof, (i) “After-Tax Income” means
in respect of any Fiscal Year the Taxable Income (as hereinafter defined) of the Company
and/or the EU JVCo reduced by the amount of the aggregate Tax Distributions with respect
 to that Fiscal Year; and (ii) “Taxable Income” for any Fiscal Year
or other period means the Company's and the EU JVCo’s taxable income for such
Fiscal Year or period determined in accordance with applicable law including,
with respect to the Company, Section 703(a) of the Code included for this purpose
all items of income, gain, loss or deduction required to be stated
separately by Section 703(a)(1) of the Code.



          
Section 8.2     Dividends by Subsidiaries.  To the
extent that the Company or the EU JVCo is restricted from paying a dividend under
Section 8.1, but a subsidiary of the Company or the EU JVCo has available distributable
reserves, the Company and the EU JVCo shall take all reasonable steps to maximize
profits available for distribution by the Company and the EU JVCo including causing
 the payment of dividends by a subsidiary to enable the Company and the
EU JVCo to pay the dividends referred to in Section 8.1.



          
Section 8.3     Timing.  The Company and the EU
JVCo each shall, to the extent permitted by law, pay dividends within 30 days after
the dates of the annual Board meetings at which their audited financial statements
for the preceding Fiscal Year are to be finalized.



          
Section 8.4      Determination of Profits Available.
In deciding whether in respect of any Fiscal Year the Company and/or the EU JVCo
has profits available for distribution, the Company shall ask its auditors to report
 whether any such profits are available and, if so, the amount of those profits.  In
giving this report, the Company’s auditors shall act as experts and not as
arbitrators and their determination, in the absence of manifest error, will be final and
binding on the parties.  The Company and the EU JVCo shall bear costs of the auditors
incurred under this Section.



ARTICLE 9 
 PROTECTIVE COVENANTS 



          
Section 9.1      Certain Competition Matters.



          
          
(a)     Each of the Members covenants, except as provided
for in this Section 9.1, that for so long as it or any of its Affiliates remains a
member of the Company and for a period of four (4) years thereafter (the “Restricted
Period”), it shall not and shall ensure that none of its Affiliates shall,
either directly or indirectly, through an agent or otherwise:



          
          
          
(i)     engage in any business operating anywhere in the
world which is competitive with the Business;



14





          
          
          
(ii)     induce or attempt to induce any supplier or customer
 of the Company or its Affiliates to terminate its business relationships with the Company
or its subsidiaries; or 



          
          
          
(iii)     induce, or attempt to induce, any director,
officer or key employee of the Company to leave the employment of the Company or
its Affiliates.



          
          
(b)     For clarification purposes, the Members agree that
(i) the sale to any Person by OCP or any of its Affiliates of copper tube, including “ACR
tube” and chiller tube, will not constitute a violation by the Class A Member of
Section 9.1(a) and (ii) the sale to any Person by LII or any of its
Affiliates of heating, ventilating, air conditioning and refrigeration
(“HVAC/R”) products will not constitute a violation by the Class B Member of Section
9.1(a).



          
          
(c)     For clarification purposes, the Members agree that
LII can continue to own its interests in the Mexican joint venture consisting of its
ownership of 50% of Frigus-Bohn S.A. de C.V. (“Mex-JV”), and its joint
venture company in Brazil, Heatcraft do Brasil Ltda. (“Brazil-JV”) subject to
subsections (d), (e), (f) and (g) below; Heatcraft Australia Pty Ltd. can continue
to manufacture and sell heat transfer products in Australia and New
Zealand; and LII can continue to manufacture heat transfer surfaces for internal
consumption in its HVAC/R products.



          
          
(d)     LII’s ownership of its interest in the Mex-JV
will not be considered to be a violation of this Section 9.1 provided that LII conducts its
activities as a partner in Mex-JV as follows:



          
          
          
(i)     LII agrees to conduct its activities, including
voting of its shares in Mex-JV, making any management decisions or taking any other
action in Mex-JV which it has the power to take in a way that will not violate the
 terms of the Mexican Joint Venture Agreements, the Share Purchase Agreement or
this Agreement and to take no action which will have an adverse impact on the Company.



          
          
          
(ii)     The Company agrees not to knowingly take any
actions that would cause LII to violate the Mexican Joint Venture Agreements or
its other joint venture agreement relating to Mex-JV.



          
          
          
(iii)     With respect to any and all actions of Mex-JV
that affect the Business of the Company, the Class B Member agrees to allow the
Company to participate in any discussions relative thereto and represent the
Company’s interests in such actions.



          
          
(e)     Brazil-JV’s activities involving the manufacture,
sale and distribution of heat transfer surfaces in South and Central America will not be
considered to be a violation of this Section 9.1 provided that it is in compliance
with the South America Agreement.



          
          
(f)     The heat transfer activities of Heatcraft Australia
Pty Ltd. within Australia and New Zealand involving the manufacture, sale and distribution
of heat transfer surfaces within 



15





Australia and New Zealand will not be considered to be a violation of this Section
9.1 provided that it is in compliance with the Asia Pacific Agreement.



          
          
(g)     The obligations restricting the Company in subsections
(c) through (f) above will terminate when LII is no longer a member of the Company.  The
obligations restricting LII, Heatcraft Australia Pty Ltd., and Brazil-JV and Affiliates
in subsections (c), (e) and (f) above will terminate when LII is no
longer a member of the Company but those in subsection (d) for both LII and the Company
will continue for three (3) years after such termination.



          
          
(h)     With respect to (i) any company that the Class B
member proposes to acquire or acquires after Closing that includes a heat transfer
business or (ii) any company that the Company proposes to acquire or acquires after
Closing that includes any HVAC/R business (“After Acquired Company”) during the
Restricted Period: (A) the other party shall have exclusive negotiation rights to
purchase the assets of such After Acquired Company that competes with the Business
or the HVAC/R business of the Class B member, as applicable (“Overlapping
Business”), but (B) if such other party does not acquire such Overlapping
Business of the After Acquired Company pursuant to such negotiations, then the Class
B Member or the Company (with the Class B Member not voting), as the case may be,
may proceed to complete such acquisition subject to the following conditions: (x)
if the Class B member is the acquiring party of an Overlapping Business, it shall
not have the right to use the Heatcraft name or mark with respect to the Overlapping
Business, but may use it in its refrigeration business; and (y) the acquiring party
shall sell the products of such Overlapping Business through the other party (the
Class B Member if it is HVAC/R and the Company if it is heat transfer products)
which shall have exclusive distribution rights during the Restricted Period on commercially
reasonable terms to be negotiated in good faith.



          
          
(i)     So long as the Class B Member is a Member of the
Company, the Members and the Company agree to review and discuss from time to time after
Closing whether the Company should acquire the heat transfer business of Mex-JV and
Brazil-JV.



          
          
(j)     So long as LII is a Member of the Company, the
Company will not engage in the design, manufacture or sale of equipment and accessory end use
products in the HVAC/R industry.



          
Section 9.2     Confidential Information.  Each party
covenants that it and its Affiliates shall:



          
          
(a)     not (directly or indirectly, through an agent or
otherwise) use, copy or disclose to any other Person any information of a trade
secret, proprietary or confidential nature relating to the business or affairs of
any other party or its Affiliates;



          
          
(b)     not (directly or indirectly, through an agent or
otherwise) use or allow to be used any trade name used by the Company or its
subsidiaries or any other name intended or likely to be confused with such a trade
name; and 



16





          
          
(c)     use all reasonable efforts to ensure that any
information of a trade secret, proprietary or confidential nature relating to any
other party or its Affiliates will be treated as confidential and will not be
disclosed to any other Person.



          
Section 9.3     Exceptions.  Section 9.2 does not
apply to information which:



          
          
(a)     is now or hereafter becomes in the public domain
other than as a result of a disclosure in breach of this Agreement;



          
          
(b)     becomes available to a party on a non-confidential
basis from a source other than a party;



          
          
(c)     is developed by a party independently of information
received from a party; or 



          
          
(d)     is ordered to be disclosed by a court of competent
jurisdiction or otherwise required to be disclosed by law.



          
Section 9.4     Prior Knowledge of LII.  It is expressly
acknowledged and agreed by LII that in connection with its ownership and operation
of the Business prior to the Closing, LII and its Affiliates had special and
extensive access and knowledge of the Business, and that this Article applies to all such
knowledge which predates this Agreement; provided, however, that LII reserves the right
 to use all such information and any information derived therefrom in its HVAC/R
businesses so long as such use does not violate the provisions of Section 9.1.



          
Section 9.5     Reasonableness.  Each party acknowledges
 that the provisions of this Article are no more extensive than is reasonable to
protect the other parties.



          
Section 9.6     Equitable Relief.  Each of the Members
hereby agrees that its failure to comply with any provision of this Article 9 will
cause the other Member and the Company irreparable harm and that the other Member
and the Company will be entitled to equitable relief including specific performance, an
injunction, a restraining order or other equitable relief in order to enforce any
provision of this Article 9, which right will be in addition, to, and not
in lieu of, any other remedy to which such Member and the Company may be entitled
under applicable law (including monetary damages).



          
Section 9.7     Representatives.  A Member will
not be in breach of this Article by virtue of any Representative passing to the
Member which appointed him or her any information he or she receives as a
Representative, or as a director of any subsidiary of the Company, but nothing
 contained in this Agreement will require such a disclosure where the
Representative’s fiduciary duty to the Company or to any such subsidiary
would be breached as a result.



17





ARTICLE 10 
 TRANSFER OF MEMBERSHIP INTERESTS - GENERAL



          
Section 10.1     General Restrictions on Transfer.
No Member shall transfer any of its Membership Interest except as otherwise specifically set
forth in this Agreement and in accordance with the LLC Agreement.



          
Section 10.2     Permitted Transfers.  Each Member
has the right to assign its Membership Interest to an Affiliate of such Member
provided that (i) the assigning Member and such Affiliate comply with the terms and
conditions of Section 9.1(b) of the LLC Agreement and (ii) the assigning Member shall
remain contingently liable for its Affiliate’s performance under this Agreement.



          
Section 10.3     Definitions.  The following defined
terms used in this Article 10 and in Articles 11 and 12 have the meanings specified in this
Section 10.3.



          
          
(a)     “Option Exercise Period” means
the period commencing on January 1, 2004 and ending December 31, 2007.



          
          
(b)     “Option Price” means the price
for all of the Shares of the Class B Member (including its entire Membership Interest)
determined in accordance with the formula and procedure set forth on Attachment O.




          
          
(c)     “Option” means the call option granted
to the Class A Member under Section 11.2.



          
          
(d)          “Proposed Effective Date” means (and may only mean)
each December 31 during the Option Exercise Period next succeeding the date of the Call
Option Notice (as defined in Section 11.1).



          
          
(e)     “Shares” means (i) the
Membership Interests of a Member in the Company together with (ii) the shares
and other equity interests that such Member or its Affiliate owns in EU JVCo
(the “EU JV Shares”)..



          
Section 10.4     Transfer Closings.



          
          
(a)     Completion of any sale and purchase of a Member’s
Shares (“Transfer Closing”) pursuant to Article 11 shall take place at the
offices of the Company at 10:00 a.m. on the date which is the third Business Day
after the later of (i) the Proposed Effective Date or (ii) if applicable, the date of
final determination of the Option Price in accordance with Attachment O except that
the completion of the purchase and sale of the EU JV Shares shall take
place in accordance with applicable law in The Netherlands.



          
          
(b)     At the Transfer Closing, the selling Member shall
procure the delivery to the purchasing Member of:



18





          
          
          
(i)     a duly executed and, if applicable, duly stamped
assignment or assignments or notarial deed, as applicable, in respect of the Shares
in favor of the purchasing Member (or such Person or Persons as the purchasing
Member may direct) and any certificate(s) representing the Shares; and



          
          
          
(ii)     such other documents as may be reasonable necessary
to enable the purchasing Member or its nominee(s) to obtain a good title to all of the
Shares being sold, free and clear of all liens, charges, security interests and other
 encumbrances of any kind.



          
          
(c)     Against delivery of the documents referred to
in Section 10.4(b) above, the purchasing Member shall pay the purchase price to the selling
Member at the Transfer Closing by wire transfer of immediately available funds.



          
Section 10.5     Name, Logos and Trademarks.  In the
event that any Member transfers its Membership Interests for any reason, the parties
agree that the name, logos and trademarks of the Company will be amended to remove
any reference to the transferring Member; provided, however, that, for clarification
purposes, the Class B Member acknowledges that the Company will not be required to
remove “HEATCRAFT” from its name, logos or trademarks
under any circumstances and shall continue to have the right to use the other
trademarks owned or used by the Company in the same manner as permitted prior
to any such transfer.



ARTICLE 11 
 CALL OPTION



          
Section 11.1     Call Option.



          
          
(a)     Subject to all of the terms and conditions of
this Agreement, the Class B Member grants to the Class A Member the option and
right to purchase all of the Shares of the Class B Member (including its entire
 Membership Interest) at the Option Price.  Such Option may be exercised by written
notice to the Class B Member delivered during the Option Exercise Period and not
less than nine (9) months prior to the Proposed Effective Date for the completion of
the purchase and sale of the Class B Member’s Shares (the “Call Option
Notice”).



          
          
(b)     Within 30 days after receipt of the Call Option
Notice, the parties shall meet to discuss a mutually agreed upon schedule to
determine the Option Price (in accordance with Attachment O).



          
Section 11.2     Miscellaneous Call Option
Matters.



          
          
(a)     The Option may only be exercised in respect of all,
and for not less than all of the Class B Member’s Shares (including its entire
Membership Interest); and exercise of the Option will oblige the Class B Member to
sell, and the Class A Member to purchase, all of the Class B Member’s Shares.



19





          
          
(b)     The Class B Member’s Shares shall be sold
free and clear of all liens, charges, security interests and other encumbrances of
any kind and together with all rights attached to the Shares at the date of service
of the Call Option Notice.



          
          
(c)     Until such time as a Call Option Notice is served,
the Class B Member or the holder of any of its Shares (as the case may be) will be
entitled to exercise all voting and other rights attached to its Membership Interest
and the EU JV Shares, as applicable, and will be entitled to receive and retain
all distributions in respect thereof in the event that the receipt date for
distributions and/or dividends is prior to the Closing Date.



          
          
(d)     The completion of the exercise of the Call Option
shall be subject to making all necessary filings with, and obtaining any required Consents
from, all Persons and Governmental Bodies having jurisdiction over such transaction,
including under the HSR Act.  Between the date of the Call Option Notice and the
completion of the exercise of the Call Option, each of the Members will cooperate
with respect to all filings that they are required by Legal Requirements to make
in connection with the completion of the Call Option, provided that this Agreement
will not require any Member to dispose of or make any change in any portion of its
business or the business of the Acquired Companies or to incur any other burden to
obtain a governmental authorization.



          
          
(e)     If the Class A Member does not exercise the Call
Option during the Option Exercise Period or if all consents or approvals required from
Governmental Bodies to complete the exercise of the Call Option shall not have
been obtained within twelve (12) months after the Call Option Notice is
served, the provisions of Article 12 will be triggered.



ARTICLE 12 
 COMPANY SALE; RIGHT OF FIRST REFUSAL 



          
Section 12.1     Sale Notice.  At any time after
the expiration of the Option Exercise Period, either the Class A Member or the Class
B Member (the “Electing Member”) may send a notice (the “Sale Notice”)
to the other Member and the Company indicating the Electing Member’s intent to commence
a process leading to the sale of all of the Shares of the Company and EUJVCo.  If the
Sale Period expires as provided below, neither party may give another Sale
Notice for 24 months after such expiration.



          
Section 12.2     Sale Procedures.



          
          
(a)     If a Sale Notice is sent, the Board shall within 60 days thereafter retain an
investment banking firm to solicit offers from Bona fide third
parties to acquire all of the Shares of the Company and EU JVCo.  For purposes of
this Section 12.2, the term “Sale Period” means the one year period after
a Sale Notice is delivered by an Electing Member, which shall be extended for a
reasonable period to the extent reasonably recommended by the investment
banking firm but in any event for not more than three (3) months.



20






          
          
(b)     The Members shall cooperate in all respects with the
investment banking firm selected hereunder in connection with its due diligence and
services to the Board.  In connection therewith, the Company and Members will not be
required to enter into a LOI (as defined below) unless it includes a proposed firm price or
firm total consideration that is acceptable to both Members.  For purposes hereof, the term
“LOI” means a letter of intent, memorandum of understanding or similar preliminary
agreement that requires the Company and the Members to negotiate exclusively with a Bona fide
third party.  If one or more offers to purchase all of the Shares is received from a Bona fide
third party(s) during the Sale Period (“Third Party Offers”), the
Members shall review any and all such Third Party Offers with such investment banking
firm and seek its opinion as to the fairness of such Third Party Offers and the value
of the Company.  If either Member desires to accept any such Third Party Offer, the Members
agree that, subject to Paragraph (c) below, they both shall be required to consummate
the sale of all of their Shares pursuant to the Third Party Offer.



          
          
(c)     No Member shall be obligated under this Section 12.2
to sell its Shares pursuant to any Third Party Offer that does not include (i) the release
of all guaranties, if any, by such Member of any indebtedness or other obligations of
the Company and of the EU JVCo and (ii) representations and warranties and
indemnification provisions that are reasonable and customary for transactions of this
type.  In addition, if the Class B Member is the Member that desires to accept a Third
Party Offer, the Class A Member shall have the option and right to purchase the Class B
Member’s Shares for a consideration equal to what the Class B Member would have
received in connection with the completion and closing of the sale of its Shares pursuant
to the Third Party Offer under the following circumstances: (A) the Third Party was a
result of an auction process managed by the investment banking firm and no LOI was required
or (B) if an LOI was required in connection with the receipt of a Third Party Offer, and
the total consideration that the Class A Member will receive in connection with the
completion of the Third Party Offer is not equal to or greater than 90% of the consideration
provided for in the LOI. The ROFR Option shall be exercised by written notice to the Class
B Member within twenty (20) Business Days after the later of (x) the Class B Member notifies
the Class A Member that it desires to accept a Third Party Offer or (y) the conditions set
forth in clauses (i) and (ii) of this Section 12.2(c) have been satisfied.



          
          
(d)     For purposes of subsection (c) above, if the purchase
price included in a Third Party Offer includes any non-cash consideration, the Class A
Member will have the right to substitute cash in an amount equal to the fair market value
of such non-cash consideration.  If any part of the non-cash consideration consists of
registered securities, the fair market value of such securities will be deemed to be the
average of their closing sale prices as reported on the applicable national securities
exchange or quotation system on which such securities are listed, quoted or admitted to
trading for the 20 trading days immediately preceding the date which is two Business Days
prior to the day on which the Class A Member notifies the Class B Member that it is exercising
the ROFR Option.  The fair market value of any other non-cash consideration will be determined
by the investment banking firm selected pursuant to Section 12.2, and any such determination
will be final and binding on the Members.  The Company shall pay the fees of the investment
banking firm in making such determination.



21





ARTICLE 13 
 TERM



          
Section 13.1     Effective Date.  This Agreement
commences on the date hereof.



          
Section 13.2     Termination.  This Agreement will be
terminated by either Member by written notice to the other Member if the Purchase
Closing has not occurred by the Target Date (as extended pursuant to Section 2.3 or
otherwise by mutual written agreement).  If the Purchase Closing occurs, this
Agreement will terminate on the earlier to occur of (a) the termination of the
Company or (b) there remaining only a Class A Member but not Class B Member,
or vice versa.



          
Section 13.3     Survival.  The provisions of this
Agreement that are by their terms intended to survive, will continue to apply to a Member
notwithstanding that it has ceased to own any Membership Interest.  Section 13.2
will not affect any of the rights or liabilities of any parties in connection with
any breach of this Agreement which may have occurred before that Member ceased to
own any Membership Interest.



ARTICLE 14 
 DISPUTES 



          
Section 14.1     ADR Procedures.  All claims, disputes
and matters in controversy arising out of, or related to this Agreement, or the breach
thereof (“Disputes”), shall be settled in accordance with the procedures set forth
in this Article and in Attachment P (the “ADR Procedures”).



          
Section 14.2     Meetings.  The Members shall use
reasonable efforts to settle any Disputes but, in the absence of agreement, the remaining
provisions of this Article will apply.  Such efforts will include (a) at least
two meetings of the Board or senior representatives of the Members and (b) a
meeting, telephone or video conference between the respective chief executive officers
of the Members.  If the dispute has not been settled within 60 days
after either Member gives written notice of a Dispute, then either party may trigger
the ADR Procedures.



ARTICLE 15 
 ANNOUNCEMENTS 



          
Section 15.1     Press Releases.  OCP and LII each
issued a press release on April 22, 2002.  Unless required by legal requirements of any
Governmental Body (“Legal Requirements”), additional public announcements or similar
publicity with respect to this Agreement or the JV Transactions will
be issued prior to the Closing Date, if at all, only at such time and in such manner
as the Members mutually determine.



          
Section 15.2     Public Communications.  With respect
to public communications on the Closing Date or otherwise with respect to the Closing, the
Members shall consult in good faith regarding appropriate press releases and,
unless 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 shall be mutually determined.



22





ARTICLE 16 
 GENERAL PROVISIONS



          
Section 16.1     Expenses.



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



          
          
(b)     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 that party arising from a breach of this Agreement by another party.



          
Section 16.2     Confidentiality.  Between the date
of this Agreement and the Closing Date, the parties shall maintain in confidence,
and will cause their respective directors, officers, employees, agents, and advisors
 to maintain in confidence, and not use to the detriment of another party, any trade
secret, confidential or proprietary information obtained from another party in
connection with this Agreement or the transactions contemplated hereby,
unless (a) that 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 that party, (b) the use of that information is necessary or appropriate
in making any filing or obtaining any consent or approval required for the
consummation of the transactions contemplated hereby or (c) the furnishing or use
of such information is required by or necessary or appropriate in connection with
legal proceedings.



          
Section 16.3     Notices.



          
          
(a)     Method.  Unless otherwise provided in
this Agreement, any notice, consent, waiver or other communication to be given
hereunder must be in writing and (i) delivered personally (to be effective when
so delivered), (ii) mailed by registered or certified mail, return receipt requested
(to be effective four days after the date it is mailed), (iii) sent by Federal
Express or other overnight courier service (to be effective when received by the
addressee) or (iv) sent by facsimile transmission (to be effective upon receipt
by the sender of electronic confirmation of the delivery of the facsimile
provided that a copy is delivered in accordance with clause (a), (b) or (c)), to
the following addresses and telecopy numbers (or to such other addresses
or telecopy numbers which any party designates in writing to the other parties):


	
                If to the Company:	





		
        Outokumpu Heatcraft USA LLC

        [ADDRESS]

        ___________________________

        Attention:  President

        Facsimile No.:  [TO BE PROVIDED]






23




	
             If to the Class B Member:   	





		
          Lennox International, Inc.

          P.O. Box 799900

          Dallas, Texas  75379-9900

          Attention: General Counsel

          Facsimile No.: 972-497-5268





	
            If to OCP or the Class A Member:	





		
         Outokumpu Copper Holdings Inc

         c/o Outokumpu Oyj

         Riihitontuntie 7 D

         PO Box 280

         FIN-02201 Espoo, Finland

         Attention:  Corporate General Counsel

         Facsimile No.: 011-358-9-421-2428






	
            and	





		
         Hodgson Russ LLP

         1800 One M&T Plaza, Suite 2000

         Buffalo, New York  14203

         Attention:  Robert B. Fleming, Jr., Esq.

                   
              
        Christine A. Bonaguide, Esq.

         Facsimile No.: 716-849-0349






          
          
(b)     Computation of Time.  In computing any
period of time under this Agreement, the day of the act, event or default from which
the designated period of time begins to run will not be included.  The last day
of the period so computed will be included, unless it is not a Business Day, in which
event the period will run until the end of the next day which is a Business Day.



          
Section 16.4     Jurisdiction; Service of Process.
Except as otherwise provided for in Article 14 and Attachment P, 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.



24





          
Section 16.5     Further Assurances.  The parties
agree (a) to furnish upon request to each other such further information, (b) to
execute and deliver to each other such other documents, and (c) to do such other
acts and things, all as any other party may reasonably request for the purpose of
carrying out the intent of this Agreement.  Without limiting the foregoing, the
Members agree that they shall cause the convening of all meetings, the giving of
all waivers and consents and the adoption of all resolutions, and shall otherwise
exercise all powers and rights available to them, in order to
give effect to the provisions of this Agreement.



          
Section 16.6     Entire Agreement.  This Agreement
constitutes the entire agreement among parties with respect to the subject matter hereof
(including without limitation the Memorandum of Agreement between LII and Outokumpu Oyj
dated on or about April 9, 2002) and supercedes any prior agreement
or understanding matter among the parties with respect to the subject matter
hereof.



          
Section 16.7     Amendment: Waiver.  Except as
provided otherwise herein, this Agreement may not be amended nor may any rights
hereunder be waived except by an instrument in writing signed by the party sought
to be charged with such amendment or waiver.  The rights and remedies of the parties
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 except as set forth in this Agreement, (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.



          
Section 16.8     Governing Law.  This Agreement
is governed by and will be construed in accordance with the laws of the State of
New York without regard to conflict of laws principles.



          
Section 16.9     Binding Effect.  Except as provided
for in Section 10.2, neither party may assign any of its rights under this Agreement without
the prior consent of the other parties.  Subject to the preceding sentence, this
Agreement is binding upon and inures to the benefit of the parties and
their respective legal representatives, heirs, 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.
This Agreement and all of its provisions and conditions are for the sole and
exclusive benefit of the parties hereto.



          
Section 16.10     Severability.  Any provision of
this Agreement which is prohibited or unenforceable in any jurisdiction will be ineffective,
as to such jurisdiction, to the extent of such 



25





prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.



          
Section 16.11     Time of Essence.  With regard
to all dates and time periods set forth or referred to in this Agreement, time
 is of the essence.



          
Section 16.12     Counterparts.  This Agreement
may be executed in one or more counterparts, each of which will be deemed to be an
original and all of which, when taken together, will be deemed to constitute one
and the same agreement.



          
Section 16.13     Specific Performance.  Each party
agrees that remedies at law may be inadequate to protect the other party from and
against any actual or threatened breach of this Agreement by such part or any of
its representatives.  Without prejudice to the rights and remedies otherwise available
to it (including monetary relief), each party agrees that any other party may seek
equitable relief in favor of the other party by way of specific performance or otherwise
without proof of actual damages, if that party or any of its Representatives breaches
or threatens to breach any of the provisions of this Agreement.



26





          
IN WITNESS WHEREOF the parties have caused this Agreement to be executed as of the
date first above written.


		
         LENNOX INTERNATIONAL, INC.





        By: /s/ R. E. Schjerven

                   Name:  
                Robert E. Schjerven

                   Title:  
                  Chief Executive Officer





		
        OUTOKUMPU COPPER PRODUCTS OY





        By: /s/ Kalevi Nikkilä

                   Name:

                   Title:





		
         OUTOKUMPU COPPER HOLDINGS, INC.





        By: /s/ Kalevi Nikkilä


                   Name:

                   Title:





		
        HEATCRAFT HEAT TRANSFER LLC

        (To be renamed OUTOKUMPU HEATCRAFT USA LLC)





        By: /s/ Carl E. Edwards, Jr.

                   Name:  
                Carl E. Edwards, Jr.

                   Title:  
                  Secretary