EX 10.8



SHAREHOLDERS AGREEMENT



          
THIS AGREEMENT is made on July 18, 2002, between LGL HOLLAND B.V. (“LGL”);
OUTOKUMPU COPPER PRODUCTS OY a Finnish limited company (“OCP”);
OUTOKUMPU HEATCRAFT B.V.


RECITALS



          
WHEREAS,
LGL and OCP and Company (as defined below) wish to establish a mutually
beneficial long term business association based on mutual understanding,
cooperation and exchange of information, with LGL and OCP becoming Shareholders
(as defined below) in OUTOKUMPU HEATCRAFT B.V., a private limited liability
company (besloten vennootschap met beperkte aansprakelijkheid) to be
incorporated by LGL under the laws of The Netherlands and having its official
seat (statutaire zetel) in Amsterdam, The Netherlands (the
“Company”) to carry on the Business (as defined below); and 



          
WHEREAS,
the Shareholders have agreed to enter into this Agreement for the purposes of
recording the terms and conditions on which they will subscribe for shares in
and provide funding for the Company, regulating their relationship with each
other so long as they are Shareholders 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,
(a) any Person directly or indirectly controlling, controlled by or under
common control with, that Person, (b) a Person owning or controlling fifty
percent (50%) or more of the outstanding voting securities of that Person and
(c) any officer, director, shareholder, 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 LGL’s Attorneys and OCP’s Attorneys with
such changes as the Shareholders 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)       Articles of Association.
“Articles of Association” mean
the articles of
association of the Company contained in its deed of incorporation, in
the form attached hereto as Attachment G.



          
          
(e)       A Shares. “A Shares”
means all issued class A shares in the Company.



          
          
(f)        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, and
faillissement (bankruptcy) or surséance van betaling
(suspension of payments) in accordance with the Dutch bankruptcy code
(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. 



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



          
          
(h)       Board.  “Board” means
the managing board of the Company as
constituted from time to time.



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



          
          
(j)       B Shares. “B Shares”
means all issued class B shares in the Company.



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



          
          
          
(i)     Lennox International, Inc.’s (LII)
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; its heat transfer
operations in Torreglia, Italy; and its offices in Singapore and Shanghai. 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 



2




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
Heatcraft France S.A.S (formerly known as SCI Groupe Brancher); Heatcraft Prague
(formerly known as Friga-Coil) s.r.o.; Heatcraft Italia S.R.L; and
Livernois Engineering Co.



          
          
          
(iii)       
With respect to Asia Pacific, (A) the Assets are to are to include
certain manufacturing equipment located
at LII’s Australian
facility as provided for in 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, which include 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) or (B) LII's
interest in Frigus-Bohn S.A. de C.V. or (C) LII’s interest in joint venture in
Brazil, Heatcraft do Brasil Ltda.



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



          
          
(m)       Class A Shareholder.
  “Class A Shareholder” means OCP and any permitted
assignee of OCP.



          
          
(n)       Class B Shareholder.
  “Class B Shareholder” means LGL and any permitted
assignee of LGL.



          
          
(o)       Closing Date.
“Closing Date” is defined in Section 4.1.



          
          
(p)     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 US JVCo. 



3





          
          
(q)        Copper Tube Supply
Purchase Agreement - OCP/LGL. “Copper Tube Supply Purchase Agreement -
OCP/LGL” means an agreement under which OCP or its Related Persons will
supply copper tubing to LGL and its Related Persons. 



          
          
(r)        Depreciation.
“Depreciation” means, for each Fiscal Year or other period, an amount
equal to the depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the fair market value of assets contributed to the Company differs from its
adjusted basis for income tax purposes at the date of contribution, Depreciation
will be an amount which bears the same ratio to that beginning fair market value
as the income tax depreciation, amortization or other cost recovery deduction
for that Fiscal Year or other period bears to that beginning adjusted tax basis.




          
          
(s)        European Share
Purchase Agreement. “European Share Purchase Agreement” means a
share purchase agreement of even date herewith pursuant to which OCP (or its
Related Persons) will acquire 55% of the interest in all of the shares or other
equity interests of the Company. 



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



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



          
          
(v)        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. 



          
          
(w)       Joint Venture and Member’s
Agreement.
  “Joint Venture and Member’s  Agreement” means the  Joint Venture
and Member’s Agreement relating to the operation of US JVCo.



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



          
          
          
(i)       the European 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 US Transactions;



          
          
          
(iv)       the Shared Services Agreement;




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(v)       the Product Supply Agreement;



          
          
          
(vi)       the Copper Tube Supply Purchase
 Agreement - OCP/LGL;



          
          
          
(vii)       the Copper Tube Supply Purchase
 Agreement - OCP/Company; and 


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






          
          
(y)        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. 



          
          
(z)       LGL’s Attorneys.  “LGL’s
Attorneys” means Carl E. Edwards, Jr., Esq.



          
        
(aa)       OCP’s Attorneys.  “OCP’s
Attorneys” means Hodgson Russ LLP.



          
        
(bb)        OCP Shares.
“OCP Shares” means the Shares in the Company to be purchased by OCP
from LGL pursuant to the European Share Purchase Agreement. 



          
        
(cc)        Organizational
Documents. “Organizational Documents” means in the case of the
Company, its Articles of Association and shareholders register, as amended from
time to time, and in the case of any other Person (i) the articles or
certificate or deed of incorporation, shareholders register 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 or deed of formation and limited liability company
agreement, articles of association or operating agreement, shareholders register
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. 



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



          
        
(ee)       Product Supply Agreement.
“Product Supply Agreement” means an
agreement under which the Company and US JVCo will supply products to LII and
its Related Persons.



          
        
(ff)       Purchase Closing.  “Purchase
Closing” means the date of the
consummation of the transfer of the OCP Shares to OCP in accordance with the
European Share Purchase Agreement.



5





          
        
(gg)       Shares. “Shares”
means the A Shares and the B Shares.



          
        
(hh)       Shareholders.  “Shareholders”
means LGL and OCP and each Person who
or which may hereafter become a shareholder of the Company.



          
        
(ii)       
Shareholder’s Interest.“  Shareholder’s Interests”
means a Shareholder’s aggregate rights in the Company, including the
Shareholder’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. 



          
        
(jj)        Shared Services
Agreement.“  Shared Services Agreement” means an agreement between
the Company, Outokumpu Heatcraft LLC and LII pursuant to which LII and/or its
Related Persons shall provide certain transition services to the Company, US
JVCo and the other Acquired Companies. 



          
        
(kk)        Share Percentage.“  Share
Percentage” means, as to a Shareholder,
the percentage shareholding in the outstanding share capital of the Company,
as amended from time to time.



          
        
(ll)         Tech JV.
  “Tech J” means the joint venture
constituted by the Tech
JV Transactions.



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



          
        
(nn)       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. 



          
        
(oo)       US Transactions.
“US Transactions” means:



          
     
          
          
(i)       the completion of the pre-closing
actions by LII and its Affiliates
described in US Share Purchase Agreement;



          
          
          
     
(ii)       
the formation of Outokumpu Heatcraft USA LLC (“US JVCo”) and
the execution and delivery of the Joint Venture and Members’ Agreement and
the US Share Purchase Agreement by and between LII and OCP with respect
to US JVCo and the completion of transactions provided for therein. 



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



6





          
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 precedent (opschortende voorwaarden):



          
          
(a)        Incorporation and
Subscription. LGL shall have arranged for the incorporation of the Company
by July 26, 2002 in a manner satisfactory to OCP and (i) subscribed for one
hundred percent (100%) of the Shares in the Company in consideration for the
contribution of the assets and property as contemplated by this Agreement. The
Company shall have issued A Shares and B Shares, of which the A Shares shall
constitute and represent fifty-five percent (55%) of the aggregate share capital
of the Company, and the B Shares shall constitute and represent forty-five (45%)
of the aggregate share capital of the Company, each credited as fully paid up to
LGL and entered LGL’s name in the register of Shareholders as the holder of
those Shares. 



          
          
(b)        Approvals. LGL
and OCP shall have filed all necessary notices with, and shall have obtained on
terms and conditions satisfactory to LGL and OCP all necessary approvals or
consents from, any lender, lessor or other Person and any Governmental Body that
LGL or OCP may deem necessary in connection with the transactions contemplated
by this Agreement and the JV Transactions, including under the Council
Regulation (EEC) No. 4064/89 or similar laws within Finland, the Czech Republic,
France and Italy. 



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



          
          
(d)        JV Transactions.
LGL and OCP shall have completed the transactions provided for in the European
Share Purchase Agreement, OCP shall have acquired the OCP Shares from LGL
thereunder, and all of the other JV Transactions shall have been completed. 



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



          
          
(f)        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 European Share
Purchase Agreement. 



          
Section 2.2      Waiver.
Each Shareholder 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 Shareholder,
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 European 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 Council Regulation (EEC) No. 4064/89 or similar laws within Finland, the
Czech Republic, France and Italy (“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. 



          
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 15.2, 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, 



8





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 LGL . LGL hereby represents and
warrants to Company and OCP that: 



          
          
(a)        Authority. LGL
is a corporation duly organized, validly existing and in good standing under the
laws of the Netherlands. LGL 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 LGL
of this Agreement and the consummation by LGL 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 LGL and constitutes the binding obligation of LGL enforceable against LGL in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws and
overruling principles of reasonableness and fairness (redelijkheid en
billijkheid). 



          
          
(c)        No Violation.
The execution, delivery and performance by LGL of this Agreement and the
consummation by LGL 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 LGL or any of its
Affiliates is subject, (ii) violate any order, judgment, or decree applicable to
LGL 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 LGL or
its Affiliates or any agreement or other instrument to which LGL is a party or
by which any of them is bound. 



          
          
Section 3.2      Representations and Warranties of the
Company.  LGL shall procure
 that the Company shall as soon as possible after its incorporation represent
and warrant to LGL, OCP and OCI that:



          
          
(a)        Authority. The
Company is a limited liability company duly organized, validly existing and in
good standing under the laws of the Netherlands. 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. 



          
          
(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 



9





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.  OCP hereby represents and
warrants to LGL that:



            
            
(a)       Authority. OCP
is duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization. OCP 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/or its 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 constitutes the binding obligation thereof enforceable against OCP in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws and
overruling principles of reasonableness and fairness (redelijkheid en
billijkheid). 



            
            
(c)       No Violation.
The execution, delivery and performance by OCP of this Agreement and the
consummation by OCP 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 OCP or any of its
Affiliates is subject, (ii) violate any order, judgment or decree applicable to
OCP 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 or any
agreement or other instrument to which OCP or any of its Affiliates is a party
or by which any of them is bound. 



ARTICLE 4 
 CLOSING DATE



            
Section 4.1       Closing
Date. The Closing Date will be the date three Business Days after the
satisfaction or waiver of the conditions in Section 2.1 at the offices of
Clifford Chance, Amsterdam, The Netherlands, or at such other date and time as
the parties may agree. 



            
Section 4.2       Closing.
      On or immediately prior to the Closing Date:



10





          
          
(a)       LGL’s Voting.
LGL shall use its voting rights on the Shares and take
all other action in the Agreed Form to ensure that the Articles of
Association shall not have been amended after incorporation of the Company; and




          
           
(b)       [Reserved].



          
          
(c)        Closing
Documents. Subject to satisfaction of all of the conditions set forth in
Section 2.1, LGL and OCP 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 European Share
Purchase Agreement. Upon execution of the European Share Purchase Agreement and
OCP’s payment of the consideration set forth in the European Share Purchase
Agreement, the notarial deed of transfer pursuant to which all A Shares are
transferred to OCP shall be executed and the Company shall enter OCP’s name
in the register of Shareholders of the Company as the holder of all A Shares. 



          
          
(d)       Shareholders’ Meeting.
A meeting of the Shareholders shall be held, at which it shall be:



          
          
          
(i)       resolved that the following persons
are appointed as A Directors (as
defined below) in accordance with the Articles of Association:  Kalevi
Nikkila, Hannu Wahlroos, Jyrki Vesaluoma and Geoffrey Palmer..




          
          
          
(ii)       procured that all members of the
Board execute the Board Regulations (as defined below).



          
          
          
(iii)       procured that the President (CEO),
Chief Financial Officer and Managing
Director for European Operations of the Company be appointed, as
follows:  President (CEO) as nominated by OCP; Chief Financial Officer as nominated
by OCP; and Managing Director for European Operations as nominated by
LGL.



          
          
          
(iv)       approve of and procure that
PricewaterhouseCoopers LLC be appointed as auditors of the Company;



          
          
          
(v)        approve of and procure that the
Base Business Plan be adopted; and 



          
          
          
(vi)        approve of and procure
that agreements for financing lines of credit to meet anticipated cash
requirements set out in the Base Business Plan be entered into. 



          
Section 4.3     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.



11





          
Section 4.4      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 4.5      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 5 
 BUSINESS OF THE COMPANY



          
Section 5.1      Conduct of
Business. Except as otherwise required by law or by this Agreement, the
Shareholders agree to procure that the Business and the proceedings of the
Company will be conducted in such a way as to maximize profit available for
distribution to the Shareholders to the extent consistent with good business
practice. 



          
Section 5.2      Shareholder
Dealings with the Company. The Shareholders shall procure that the Company
shall deal with the Shareholders and their Affiliates on an arm’s length
basis. The Shareholders shall endeavor to ensure that any existing or potential
conflicts of interest are brought to the attention of the Company and the other
Shareholder at the earliest opportunity so that they can be dealt with in
accordance with this Agreement. The Shareholders acknowledge and agree that the
JV Transactions and any actions arising thereunder are, or for purposes of this
Agreement will be deemed to be at arm’s length. 



          
Section 5.3      Continuing Obligations.  The
parties agree that, for so long as LGL
and OCP are Shareholders, the parties shall cause compliance with the
obligations set forth in Attachment L. 



          
Section 5.4      Conflicting
Documents. The Shareholders agree that, if any provisions of the
Organizational Documents of the Company at any time conflict with any provisions
of this Agreement, they will endeavour to accomplish as close as possible the
intentions of the parties and the Shareholders shall exercise all powers and
rights available to them to cause the amendment of the Company’s
Organizational Documents to the extent necessary and permitted by law to permit
the Company and its affairs to be regulated as provided in this Agreement. 



ARTICLE 6 
 MEETINGS OF THE SHAREHOLDERS



          
Section 6.1     
Meetings. In addition as required by law, the parties shall procure that
meetings of Shareholders, for any purpose, will be called by the Board upon
receipt of a request in writing signed by Shareholders whose Share Percentages
aggregate ten percent (10%) or more. This request must state the purpose or
purposes of the proposed meeting and the business to be transacted. These
meetings will be held at the statutory address or the principal office of the
Company or at such other locations as the Board may indicate in its notice.
Notice of any such meeting must be delivered to all Shareholders in the manner
prescribed in Article 18 within ten 









days after receipt of the request and
not fewer than 15 days nor more than 60 days before the date of the
meeting. The notice must state the place, date, hour and purpose or purposes of
the meeting. At each meeting of Shareholders, the Shareholders present or
represented by proxy shall adopt such rules for the conduct of the meeting as
they deem appropriate. The Company will bear expenses of any such meeting,
including the cost of providing notice thereof. 



          
Section 6.2      Written
Consents. Whenever Shareholders are required or permitted to take any action
by vote, this action may be taken without a meeting provided that all
Shareholders vote in writing in favour of the proposal. 



ARTICLE 7 
 MANAGEMENT



          
Section 7.1      Nominations by Shareholders



          
          
(a)        Board
(“bestuur”). Except as otherwise provided in this
Agreement, the Shareholders agree that the business, affairs and properties of
the Company will be managed by the Board which will at all times be comprised of
seven (7) members, with four (4) individual members appointed at the nomination
by the Class A Shareholder (the “Class A Directors”, “A
directeur”) and three (3) individual members appointed by the Class B
Shareholder (the “Class B Directors”, “B directeur”).
The Class A Shareholder undertakes to vote in favour of the first candidate on
the list of nominations made by the Class B Shareholder and the Class B
Shareholder undertakes to vote in favour of the first candidate on the list of
nominations made by the Class A Shareholder. For purposes of this Agreement, the
term “entire Board” means seven (7) members of the Board (without
taking into account any vacancies or absences). 



          
          
(b)        The Shareholders agree
and procure that Board resolutions relating to any of the actions listed in (i)
Schedule 7.1(b)(i) require prior written approval of both the Class A
Shareholder and the Class B Shareholder (the “Major Decisions”) and
(ii) Schedule 7.1(b)(ii) require the approval of a majority of the votes
of the entire Board and at which that action is taken or by written consent of
the entire Board to the extent permitted by applicable law. 



          
Section 7.2      Appointment, Tenure and Voting of
Board.



          
          
(a)       Appointment.  Until changed in
accordance with this Agreement, the
Shareholders shall procure that the Board will consist of the following
individuals:


	
                Class A Directors:	
                 Kalevi Nikkila
		
           Hannu Wahlroos
		
           Jyrki Vesaluoma
		
           Geoffrey Palmer





	
          Class B Directors:	
                   Robert McDonough
		
                  Richard Smith
		
                 Linda Goodspeed




13





          
          
(b)       Vacancies. Upon
the death, disability, resignation or removal of a Class A Director, the Class A
Shareholder shall prepare a list of at least two candidates for nomination for
appointment to the general meeting of Shareholders as member of the Board to
fill the vacancy or shall vote to reduce the size of the Board. Upon the death,
disability, resignation or removal of a Class B Director, the Class B
Shareholder shall prepare a list of at least two candidates for nomination for
appointment to the general meeting of Shareholders as members of the Board to
fill the vacancy or shall vote to reduce the size of the Board. Article 7.1 (a)
shall apply mutatis mutandis. 



          
          
(c)       Salaries. The Shareholders
agree that the members of the Board will
not receive salaries or other compensation from the Company for serving in
their capacities as members of the Board.



          
Section 7.3      Officers.



          
          
(a)        President. The
Board shall appoint a President pursuant to a nomination by the Class A
Shareholder. The President shall perform the day to day operations of the
Company and shall perform all such other duties as are properly required of him
or her by the Board. The President shall have powers of attorney to represent
the Company (i), individually, for all transactions that do not exceed Euro
1,000,000 and (ii), jointly with the Chief Financial Officer or any Class A
Director, for any other transactions. Such powers of attorney shall be filed
with the Dutch Chamber of Commerce. Without limiting the foregoing as a matter
of internal corporate authority, the President shall have the authority to
approve and authorize capital expenditure that are provided for in the Base
Business Plan and the Annual Budget. If the Class B Shareholder loses confidence
for any reason in the President, the Class B Shareholder may request the Class A
Shareholder the President’s dismissal at any time. The Class A Shareholder
shall forthwith comply with such request and the Shareholders shall cause their
directors to vote in favor of such dimissal. Once the Class B Shareholder has
required such removal, that Shareholder may not thereafter require the removal
of the individual proposed by it to fill such office for a period of 12 months 



          
          
(b)        Chief Financial
Officer. The Board shall appoint a Chief Financial Officer pursuant to the
nomination by the Class A Shareholder and he or she shall have the care and
custody of all the moneys and securities of the Company. He or she shall cause
to be entered in books of the Company to be kept for that purpose full and
accurate accounts of all moneys received by him or her and paid by him or her on
account of the Company. He or she shall make and sign such reports, statements
and instruments as may be required of him or her by the Board or of any state,
country or other jurisdiction in which the Company transacts business, and shall
perform such other duties as usually pertain to his or her office or as are
properly required of him or her by the Board. If the Class B Shareholder loses
confidence for any reason in the Chief Financial Officer, that Shareholder may
request the Class A Shareholder dismissal of the Chief Financial Officer at any
time. The Class A Shareholder shall co-operate with such request and the
Shareholders shall cause their directors to vote in favor of such dimissal. Once
the Class B Shareholder has required such removal, that Shareholder may not
thereafter require the removal of the individual proposed by it to fill such
office for a period of 12 months. 



14





          
          
(c)        General Manager for
European Operations. The Board shall appoint a General Manager for European
Operations pursuant to the nomination by the Class B Shareholder and he or she
have the powers and duties of immediate supervision and management of the
Company’s European operations which usually pertain to his or her office
and shall perform all other duties as are properly required of him or her by the
Board. If the Class B Shareholder loses confidence for any reason in the General
Manager for European Operations, that Shareholder may request the Class B
Shareholder the dismissal of the General Manager at any time. The Class B
Shareholders shall co-operate with any such request and the Shareholders shall
cause their directors to vote in favor of such dismissal. Once the Class A
Shareholder has required such removal, that Shareholder may not thereafter
require the removal of the individual proposed by it to fill such office for a
period of 12 months. 



          
          
(d)       Compensation.  The
compensation of the President, the Chief Financial
Officer and the General Manager for European Operations will be
determined by the Board.



          
          
(e)        Generally. The
Board shall from time to time appoint such additional officers as the Board may
determine and each of these additional officers will have such authority and
perform such duties as the Board may from time to time prescribe and will serve
until his or her successor is duly appointed, or until his or her earlier death,
resignation or removal. Notwithstanding anything to the contrary contained
herein, no officer of the Company will have any power or authority outside the
normal day-to-day business of the Company to bind the Company by any contract or
engagement or to pledge its credit or to render it liable in connection with any
transaction unless expressly authorized to do so by the Board. 



          
          
(f)       Subsidiaries.  The elections
of the managing boards and chief executive
 officers of each of the Company's subsidiaries must be approved by an
absolute majority of the appointed members of the Board.



          
Section 7.4     
Representative Standard of Care; Liability to Shareholders. The members
of the Board, the President, the Chief Financial Officer and the General Manager
for European operations shall perform their managerial duties in good faith and
with such care as an ordinarily prudent person in a like position would use
under similar circumstances. No member of the Board will be deemed to guarantee,
in any way, profit for Shareholders from the operations of the Company. No
member of the Board will be liable to the Company or to any Shareholder
for any loss or damage sustained by the Company or any Shareholder, unless the
loss or damage is the result of fraud, deceit, gross negligence, willful
misconduct or a wrongful taking by a member of the Board or as provided by law.
To the extent that, any Affiliate of a member of the Board has duties and
liabilities relating thereto to the Company or the Shareholders, that member of
the Board acting under this Agreement or otherwise will not be liable to the
Company or to any Shareholder for his or her good faith reliance on the
provisions of this Agreement. 



          
Section 7.5     No Management and Control.  Except
as expressly provided in this
Agreement or by law, no Shareholder shall take part in or interfere in any
manner with the control, conduct or operation of the Company or have any right or
 authority to act for or bind the Company or to vote on matters relating
to the Company.



15





          
Section 7.6        Other
Activities. Except as otherwise set forth in this Agreement, any Shareholder
or its Affiliates may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, whether
presently existing or hereafter created. Except as otherwise set forth in this
Agreement, neither the Company nor any Shareholder or its Affiliates will have
any rights in or to any such independent ventures or the income or profits
derived therefrom. 



          
Section 7.7      Transactions
with Affiliates. Any services performed for the Company by any Shareholder
or Affiliates of any Shareholder must be services that the Board reasonably
believes to be, at the time of requesting such services, in the best interests
of the Company, and the rate of compensation to be paid for any such services
must be reasonable as compared to the amount paid for similar services under
similar circumstances. 



          
Section 7.8      Continuing Obligations.  For so
long as LGL and OCP are Shareholders,
 they shall cause compliance with the obligations set forth in Attachment
L.



ARTICLE 8 
 OPERATING COSTS AND EXPENSES



          
Section 8.1      Operating
Costs. The parties agree that the Company shall pay or cause to be paid all
costs and expenses of the Company incurred in pursuing and conducting, or
otherwise related to, the business of the Company. 



          
Section 8.2     
Reimbursement. The parties shall procure that the Company shall reimburse
the Shareholders and members of the Board of the Company for any out-of-pocket
costs and expenses reasonably incurred by them in pursuing and conducting, or
otherwise related to, the business of the Company. 



ARTICLE 9 
 FUNDING AND CAPITAL CONTRIBUTIONS



          
Section 9.1      Funding Needs.



          
          
(a)        Bank Loans. The
Shareholders shall (i) use all reasonable efforts to arrange banking facilities
at the most favorable commercial rates then available for the borrowing required
by subsection 10.1(a) and (ii) cause the Company to grant a security interest in
its assets in connection with such financing, if required. 



          
          
(b)        Shareholder Loans
and Guaranties. In lieu of bank or other institutional financing, the
Shareholders may agree, but shall not be required, to lend funds to the Company
(and/or the US JVCo) on terms to be mutually agreed upon. No Shareholder will be
obligated to guaranty any bank or other indebtedness of the Company or the US
JVCo. Notwithstanding the foregoing, if the Class B Shareholder does not make
any additional capital contribution required by a Capital Call Notice (as
defined in and delivered in accordance with the provisions below), OCP may
elect, in lieu of making all or some of its own and LGL’s additional
capital contributions pursuant to such Capital Call Notice to loan some or all
of the amount of the 



16





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 9.2     Capital Call.



          
          
(a)       In the event that the Board or the
Shareholders determine  to further
finance the Company by way of an increase in the share capital of the
Company, the Board or the Shareholders, as the case may be, shall request that the
Shareholders contribute the additional capital in accordance with the
following provisions:



          
          
          
(i)      the Board shall request
by written notice (the “Capital Call Notice”) that the Shareholders
make additional capital contributions to the Company pursuant to this Article 10
by subscribing for additional Shares from the class of Shares such Shareholder
already holds in consideration for which each Shareholder shall contribute its
share of the total amount of capital contributions requested in the Capital Call
Notice determined by multiplying that total by its Share Percentage. 



          
          
          
(ii)       Each Capital Call Notice must
include a reasonably detailed statement
of the proposed uses of the capital contributions and a date (which date
may be no earlier than the fifteenth Business Day following each Shareholder's
receipt of the Capital Call Notice) before on which the share issue will
take place.



          
          
(b)        Delinquent and
Contributing Shareholders. If a Shareholder (the “Delinquent
Shareholder”) does not subscribe for its Shares and contribute its capital
contribution, by the date specified in the Capital Call Notice, all or any
portion of the capital contribution the Delinquent Shareholder is required to
make, as provided in this Article, the other Shareholder (the “Contributing
Shareholder”), may contribute the portion of the Delinquent
Shareholder’s capital contribution that is in default with the following
results: 



          
          
          
(i)     the sum so advanced will constitute a capital
contribution from the
Contributing Shareholder to the Company; and



          
          
          
(ii)        the Company shall
issue to the Contributing Shareholder that number of additional Shares of the
class of Shares he already holds equal to the number of Shares the Company would
have issued to the Defaulting Shareholder if the Defaulting Shareholder would
have contributed its capital contribution. 



ARTICLE 10 
 DIVIDEND POLICY



          
Section 10.1      Distributions.
Dividends. Unless (i) the Base Business Plan requires the expenditure of
available funds or (ii) the Company or the US JVCo is legally prohibited from
doing so, the Shareholders shall procure that the Company and the US JVCo shall
make a distribution to the Shareholders of an aggregate amount equal to thirty
percent (30%) of the funds available for distribution for each Fiscal Year. 



17





          
Section 10.2      Dividends
by Subsidiaries. To the extent that the Company is restricted from paying a
dividend under Section 10.1, but a subsidiary of the Company has available
distributable reserves, the Shareholders shall procure that the Company shall
take all reasonable steps to maximize profits available for distribution by the
Company including causing the payment of dividends by a subsidiary to enable the
Company to pay the dividends referred to in Section 10.1. 



          
Section 10.3      Timing.
The Shareholders shall procure that the Company shall, to the extent permitted
by law, pay dividends within 30 days after the dates of the annual meeting of
Shareholders at which its audited financial statements for the preceding Fiscal
Year and the dividend distributions are approved. 



          
Section 10.4     
Determination of Profits Available. In deciding whether in respect of any
Fiscal Year the Company has profits available for distribution, the Shareholders
shall procure that 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 Shareholders agree that the Company and the US JVCo
shall bear costs of the auditors incurred under this Section. 



          
Section 10.5     
Distributions in Kind. In the event that the Board determines that a
portion of the Company’s assets should be distributed in kind to the
Shareholders, the Shareholder shall procure that the Board shall determine the
fair market value of such assets as of a date reasonably close to the date of
distribution. 



          
Section 10.6      Offset.
The Shareholders agree between them and for the benefit of the Company that the
Company may offset all amounts owing to the Company by a Shareholder against any
distribution to be made to that Shareholder. 



ARTICLE 11 
 PROTECTIVE COVENANTS



          
Section 11.1      Certain Competition Matters.



          
          
(a)        Each of the
Shareholders covenants, except as provided for in this Section 13.1, that for so
long as it or any of its Affiliates remains a Shareholder 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 or likely to be competitive with the Business;



          
          
          
(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



18





          
          
          
(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 Shareholders agree that 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 OCP of this Section 11.1(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 Shareholder of Section 11.1(a). 



          
          
          
(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. 



          
          
(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 use in its HVAC/R products. 



          
          
(d)        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 Australia and New Zealand will not be considered to be a violation of
this Section 11.1 provided that it is in compliance with the Asia Pacific
Agreement. 



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



          
          
(f)        With respect to (i) any
company that LGL 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 LGL, 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 LGL or the Company (with LGL not voting), as the case
may be, may proceed to complete such acquisition subject to the following
conditions: (x) if LGL 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 (LGL if it is HVAC/R and the Company if it is heat transfer
products) which shall 



19





have exclusive distribution rights during the Restricted
Period on commercially reasonable terms to be negotiated in good faith. 



          
          
(g)       So long as LGL is a Shareholder 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 11.2     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 



          
          
(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 11.3     Exceptions.  Section 11.2 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 11.4      Prior
Knowledge of LGL. It is expressly acknowledged and agreed by LGL that in
connection with its ownership and operation of the Business prior to the
Closing, LGL 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 LGL 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 13.1. 



          
Section 11.5     Reasonableness.  Each party
acknowledges that the provisions of this Article are no more extensive than is
reasonable to protect the other parties. 



20





          
Section 11.6     
Representatives. A Shareholder will not be in breach of this Article by
virtue of any member of the Board passing to the Shareholder which nominated him
or her for appointment any information he or she receives as a member of the
Board, or as a director of any subsidiary of the Company, but nothing contained
in this Agreement will require such a disclosure where the member of the
Board’s duty to the Company or to any such subsidiary would be breached as
a result. 



          
Section 11.7      Equitable
Relief. Each of the Members hereby agrees that its failure to comply with
any provision of this Article 11 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 11, 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). 



ARTICLE 12 
 TRANSFER OF SHARES - GENERAL




           
Section 12.1     Share
Percentages.  LGL shall
transfer fifty-five percent  (55%) of the outstanding Shares to OCP.  The Share
Percentages of the Shareholders will be as set forth on Schedule 12.1.



          
Section 12.2      General
Restrictions on Transfer. No Shareholder shall transfer any of its Shares
except as otherwise specifically set forth in this Agreement and in accordance
with the Articles of Association. 



          
Section 12.3     Permitted Transfers.
Each Shareholder has the right to  transfer its Shares to an Affiliate of such
Shareholder provided that: 



          
          
(a)     the transferring Shareholder shall remain
jointly and severally (hoofdelijk aansprakelijk) liable for its
Affiliate’s performance under this Agreement; and 




          
          
(b)      the transferror, the
transferree and the non-transferring Shareholders shall consent in writing, in
form and substance satisfactory to the non-transferring Shareholders, that the
transferree shall be bound by the terms of this Agreement as if he, she or it
were the assignor; 



          
          
(c)      the transfer shall not
violate or cause the Company to violate any applicable law or governmental rule
or regulation or cause the Company to be subject to any reporting requirements
of any applicable securities law; and 



          
          
(d)      if requested by the
Board, an opinion from counsel to the transferree (which counsel and opinion
must be satisfactory to counsel for the Company) must be furnished to the
Company stating that, in the opinion of that counsel, the transfer would not
violate or cause the Company to violate any applicable law or governmental rule
or regulation or cause the Company to be subject to any reporting requirements
of any applicable securities law. 



21





          
Section 12.4     Transfer Closings.




          
          
(a)     Completion of any sale and purchase of a
Shareholder’s Interest
 (“Transfer Closing”) pursuant to Article 12 shall take place at the
offices of Clifford Chance on the date which is the third Business Day after the
Proposed Effective Date of such Transfer as provided by the applicable agreement
and law.



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



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



          
          
          
(ii)      such other documents
as may be reasonably necessary to enable the purchasing Shareholder or its
nominee(s) to obtain a good title to all of the Interests 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 12.4(b) above, the purchasing Shareholder shall
pay the purchase price to the selling Shareholder at the Transfer Closing by
wire transfer of immediately available funds. 



          
Section 12.5     Name, Logos
and Trademarks. In the event that any Shareholder transfers its 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 Shareholder;
provided, however, that, for clarification purposes, LGL 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. 



          
Section 12.6      Expenses.
Each transferring Shareholder agrees to pay, prior the transfer of its
Interests, all reasonable expenses, including attorneys’ fees, incurred by
the Company in connection with the transfer. 



          
Section 12.7     
Transferree’s Rights. A Permitted Transferee of any Interest will be
entitled to vote and to receive distributions of cash or other property from the
Company and to receive allocations of the income, gains, credits, deductions,
Profits and Losses of the Company attributable to that Interest after the
effective date of the transfer. 



22





ARTICLE 13 
 CALL OPTION



          
Section 13.1     Call Option.



          
          
(a)        Subject to all of the
terms and conditions of this Agreement, LGL grants to OCP the option and right
to purchase all of the Shares of LGL at the Option Price and during the Option
Exercise Period, both terms bearing the meaning as defined in the Joint Venture
and Members’ Agreement (the “Option”). Such Option may be
exercised by written notice to LGL in accordance with the terms and conditions
which are specified in the applicable provisions of the Joint Venture and
Members’ Agreement with respect to US JV Co. 



          
          
(b)       Closing of the
transactions upon the Option exercised under this Agreement and the transactions
provided for with respect to the Call Option as provided for in the Joint
Venture and Members’ Agreement shall always be made simultaneously with
respect to both transactions. 



          
Section 13.2     
Miscellaneous Call Option Matters.



          
          
(a)     The Option may only be exercised in respect of
all, and for not less
than all of LGL’s Shares; and exercise of the Option will oblige LGL to
sell, and OCP to purchase, all of LGL’s Shares.



          
          
(b)        LGL’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 or accruing to
the Shares at the date of service of the notice exercising the Option. 



          
          
(c)       Until completion of the
transfer of the Shares, LGL 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
Shares 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)        If OCP does not
exercise the Option during the Option Exercise Period, the provisions of Article
14 will be triggered. 



ARTICLE 14 
 COMPANY SALE; RIGHT OF FIRST REFUSAL



          
Section 14.1      Sale
Notice. At any time after the expiration of the Option Exercise Period,
either OCP or LGL (the “Electing Shareholder”) may send a notice (the
“Sale Notice”) to the other Shareholder and the Company indicating the
Electing Shareholder’s intent to commence a process leading to the sale of
all of the Shares. If the Sale Period (as defined below) expires as provided
below, neither party may give another Sale Notice for 24 months after such
expiration. 



          
Section 14.2     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
.. For purposes of this Section 14.2, the term “Sale Period” means the
one year period after a Sale Notice is delivered by an Electing Shareholder,
which shall be extended for a reasonable period to the extent recommended by the
investment banking firm. 



          
          
(b)      The Shareholders 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 Shareholders 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 Shareholders. 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 Shareholders 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 Shareholder desires to accept any such Third Party Offer, the
Shareholders agree that, subject to paragraph (c) below, they shall be required
to consummate the sale of all of their Shares pursuant to the Third Party Offer.




          
          
(c)      No Shareholder shall be
obligated under this Section 14.2 to sell its Shares pursuant to any Third Party
Offer that does not include (i) the release of all guaranties, if any, by such
Shareholder of any indebtedness or other obligations of the Company and of the
US JVCo and (ii) representations and warranties and indemnification provisions
that are reasonable and customary for transactions of this type. In addition, if
LGL is the Shareholder that desires to accept a Third Party Offer, OCP shall
have the option and right to purchase LGL’s Shares for a consideration
equal to what LGL 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 LGL 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. For purposes hereof, the term “LOI” means a
letter of intent, memorandum of understanding or similar preliminary agreement
that requires the Company and the Shareholders to negotiate exclusively with a
bona fide third party. 



          
Section 14.3      For purposes
of subsection (c) above, if the purchase price included in a Third Party Offer
includes any non-cash consideration, the party exercising its option 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 Shareholder notifies the Class B Shareholder 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 14.2, and
any such 



24





determination will be final and binding on the Shareholders. The
Company shall pay the fees of the investment banking firm in making such
determination. 



ARTICLE 15 
 TERM



          
Section 15.1        
Effective Date.  This Agreement commences on the date hereof.



          
Section 15.2     
Termination. This Agreement will be terminated by either Shareholder by
written notice to the other Shareholder 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 liquidation of the Company or (b)
there remaining only one Shareholder. 



          
Section 15.3     
Survival. The provisions of this Agreement that are by their terms
intended to survive, will continue to apply to a Shareholder notwithstanding
that it has ceased to own any Shares. Section 15.2 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 Shareholder ceased to own any
Shares. 



ARTICLE 16 
 DISPUTES



          
Section 16.1      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 16.2     
Meetings. The Shareholders 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 ultimate Shareholders and (b) a meeting,
telephone or video conference between the respective chief executive officers of
the Shareholders. If the dispute has not been settled within 60 days after
either Shareholder gives written notice of a Dispute, then either party may
trigger the ADR Procedures. 



ARTICLE 17 
 ANNOUNCEMENTS



          
Section 17.1      Press
Releases. OCP and LGL 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
Shareholders mutually determine. 



25





          
Section 17.2      Public
Communications. With respect to public communications on the Closing Date or
otherwise with respect to the Closing, the Shareholders 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. 



ARTICLE 18 
 GENERAL PROVISIONS



          
Section 18.1     Expenses.



          
          
(a)        Except as otherwise
expressly provided in this Agreement or the European 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 18.2     
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 18.3     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): 



26




	
                If to the Company:	





		
            Outokumpu Heatcraft B.V.

            [ADDRESS TO BE PROVIDED]

            Attention: CEO





	
                        with a copy to:	





		
             Outokumpu Copper Products Oy

             c/o Outokumpu Oyj

             Riihitontuntie 7 D

             P.O. Box 280

             FIN-02200 Espoo

             Attention: Corporate General Counsel

             Facsimile No.: + 358 9 421 2428





	
                        If to LGL:

	
		
                   LGL HOLLAND B.V.



                   c/o Lennox International, Inc.

                   2140 Lake Park Blvd

                   Richardson, Texas  75080-2254

                   Attention: General Counsel

                   Facsimile No.: 972-497-5268





	
                        If to OCP:


		
                    Outokumpu Copper Products OY

                    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]





	
                        with a copy to:	




27




		
                   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 18.4     
Jurisdiction; Service of Process. Except as otherwise
provided for in Article 21 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 Amsterdam, The Netherlands, subject to
appeal and appeal in the second instance (cassatie). 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. 



          
Section 18.5      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 Shareholders 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 18.6      Entire
Agreement. This Agreement constitutes the entire agreement
among parties with respect to the subject matter hereof (including the
Memorandum of Agreement between LGL 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 18.7      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



28





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 18.8     Governing Law.  This Agreement
is governed by and will be construed in accordance with the laws of the The
Netherlands.



          
Section 18.9      Binding
Effect. Except as provided for in Section 12, 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 18.10     
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 prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction. 



          
Section 18.11     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 18.12     
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. 



29





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


		
        LGL HOLLAND B.V.


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

                Name: 
        Carl E. Edwards, Jr.

               Title: Director A
        





		
        By: ________________________________

                Name:  
        Charles E. Donnelly, Jr.

               Title:  Director B
        





		
        OUTOKUMPU COPPER PRODUCTS OY


        By:   /s/ Kalevi Nikkilä

                Name:

                Title: