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EXHIBIT 10.13
AMENDED AND RESTATED
VENTURE AGREEMENT
This Amended and Restated Venture Agreement (the "Amended Agreement")
is entered into by and between Lennox Global Ltd., a Delaware corporation and
Lennox International Inc., a Delaware corporation (to the extent necessary to
bind its subsidiaries and affiliates to the terms of this Agreement), with
principal offices at 0000 Xxxx Xxxx Xxxx., Xxxxxxxxxx, Xxxxx 00000 (collectively
referred to as "Lennox"), and Ets. Brancher S.A. and its subsidiary, Xxxxx X.X.,
both French corporations with their principal place of business at 00 xxx
x'Xxxxxx Xxxxxxxx, 00000 Xxxx, Xxxxxx (collectively referred to as "Brancher
Co."), to amend and restate the Venture Agreement entered into by and among the
Parties as of the 13th day of May, 1996 which was amended by letter agreement of
13 May 1996 and the amendment of 24 May 1996 (the "Original Agreement").
WITNESSETH:
WHEREAS, Brancher Co. and Xx. Xxxx-Xxxxxxx Xxxxxxxx ("Brancher"), and
Lennox, entered into the Original Agreement to form a joint venture by combining
the designated assets of a company owned by Lennox and certain companies owned,
in whole or in part, by Brancher for the purpose of creating a heating,
ventilating, air conditioning and refrigeration ("HVAC/R") business
headquartered in France (the "Venture"); and
WHEREAS, the Parties have agreed to amend the Original Agreement to
restructure the Venture as described in the Restructure Agreement ("Restructure
Agreement") by and among the Parties which is entered into on the same date as
this Amended Agreement.
NOW, THEREFORE, in consideration of the covenants set forth in this
Amended Agreement, the Parties hereby agree as follows:
I. DEFINITIONS: When capitalized and used in this Amended Agreement and
on any attached schedules or exhibits hereto, the following terms and phrases
shall have the following meanings:
"Amended Agreement" shall refer to this Amended and Restated Venture
Agreement and all its attached schedules and exhibits.
"Applicable Law" shall mean any statute or law or any judgment, order,
decree, rule, or regulation of any Governmental Entity to which a specified
person or property is subject.
"Brancher Companies" shall mean the companies owned, in whole or in
part, by Brancher to be included in the Venture consisting of HCF Xxxxxx X.X.
and all subsidiaries ("HCF") and Xxxxx-Xxxx S.A. and all subsidiaries
("Xxxxx-Xxxx).
"Closing" and "Closing Date" shall have the meanings assigned to such
terms in Section 9.2.
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"Company Statutes" shall mean the bylaws, articles of incorporation or
statutes which under the laws of the jurisdiction of a company prescribe the
rules of its operation and governance.
"Company Stock", with respect to any one of the Venture Company,
Brancher Companies or Lennox U.K. (as hereafter defined), shall mean all of the
issued and outstanding shares of all stock, common or otherwise, representing
the entire ownership interest in and control of such company.
"Encumbrances" shall mean liens, charges, pledges, options, mortgages,
security interests, claims, restrictions (whether on voting, sale, transfer or
disposition or otherwise) and other encumbrances of every type and description,
whether imposed by law, agreement, understanding or otherwise.
"Ets. Brancher" shall mean Ets. Brancher S.A. which shall include the
subsidiaries HCF, Xxxxx-Xxxx and all subsidiaries of each along with Frinotec
S.A., SCI Geraval and SCI Groupe Brancher.
"Financial Statements" shall have the meaning set forth in Section
8.1.C. with respect to the Brancher Companies and Section V.E.2. of Exhibit
3.2.A. with respect to Lennox U.K. (as hereafter defined).
"Governmental Entity" shall mean any court or tribunal in any
jurisdiction (domestic or foreign) or any federal, state, municipal, domestic,
foreign or other administrative agency, department, commission, board, bureau or
other governmental authority or instrumentality.
"Intellectual Property" shall mean patents, trademarks, service marks,
trade names, copyrights, trade secrets, know-how and similar rights, and all
registrations, applications, licenses, and rights with respect to any of the
foregoing, foreign or domestic.
"Inventory" shall mean all of a company's finished goods, work in
process and raw materials.
"Latest Balance Sheet" shall have the meaning assigned to such term in
Section 8.1.C. with respect to the Venture Company and in Section V.E.2. of
Exhibit 3.2.A. with respect to Lennox U.K.
"Lennox U.K." shall mean that corporation organized under the laws of
the United Kingdom which has been created to contain the assets of Lennox
Industries which is to be sold to the Venture.
"Material Adverse Effect" shall mean any adverse change in the
financial condition, business or operations of a company which is material to
such company.
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"Net Book Value" shall mean the net book value as reflected in the
applicable Latest Balance Sheet as defined by conventional accounting practices
in effect on the Closing Date; provided however, in the event of extraordinary
events which distort Net Book Value, the Parties agree to adjust year-ending Net
Book Value so as to remove such distortion.
"New Companies" shall mean the Brancher Companies and all related
subsidiaries combined with Lennox U.K. as provided herein.
"Original Agreement" shall mean the Venture Agreement entered into by
the Parties as of 13 May 1996 which was amended by letter agreement dated 13 may
1996 and amendment dated 24 September 1996.
"Permitted Encumbrances" means those certain Encumbrances, easements,
rights of way, encroachments, conflicts, protrusions or other exceptions to
title to the Real Property accepted by the Parties hereto.
"Permits" shall mean licenses, permits, franchises, consents, approvals
and other authorizations obtained or to be obtained from Governmental Entities.
"Party" or "Parties" shall mean the parties to this Amended Agreement.
"Proceedings" shall mean all proceedings, actions, suits,
investigations or inquiries in or before any arbitrator or Governmental Entity.
"Real Property" shall mean the real property owned by or leased to the
Venture Company more particularly described in Sections 8.1.F. and 8.1.G. and
Sections V.E.5. and V.E.6. of Exhibit 3.2.A. with respect to Lennox U.K.,
together with all buildings and other improvements situated thereon, all
fixtures and other property affixed thereto and all and singular the rights and
appurtenances pertaining to the property, including any right, title and
interest of the owner of such property in and to adjacent streets, alleys or
rights of way.
"Securities Act" shall mean the any laws of France, the United States
or the United Kingdom which apply to the transfer of stock or assets or other
securities pursuant to the terms of this Amended Agreement.
"Shareholders" shall mean Brancher and Lennox or the designee of
either.
"Venture Company" shall mean Ets. Brancher S.A. which shall include the
subsidiaries of Frinotec S.A., SCI Geraval and SCI Groupe Brancher (with the
Ets. Brancher ownership of SCI Groupe Brancher being transferred from Ets.
Brancher to Xxxxx-Xxxx); but not HCF, Xxxxx-Xxxx and all subsidiaries of each.
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II. NAME AND BASIC PRINCIPLES
SECTION 2.1. NAMES
Pursuant to the terms of this Amended Agreement, the Parties will
conduct the business of the Venture through companies with such names as the
Parties may from time to time select.
SECTION 2.2. BASIC PRINCIPLES
The Parties have agreed to form the Venture to consist of the Brancher
Companies and Lennox U.K. for the purpose of conducting an HVAC/R business in a
defined geographic area. The Venture will operate with Brancher and Lennox
sharing the ownership of a holding company which will own all the interests of
each party in the participating companies. Lennox will ultimately acquire all of
the ownership of Ets. Brancher as described in this Amended Agreement. For the
conduct of the Venture, the Parties have established by mutual agreement certain
basic principles which will govern the formation of the Venture and its
operations and include the following:
A. OBJECTIVE. Ets. Brancher will be managed with the
fundamental objective of profitable growth of Ets. Brancher through the
production, marketing and sales of products within the HVAC/R industry with a
geographic focus of operations in Europe, Africa, and the Middle East including
Iran (the "Territory"). The existing products and markets of Ets. Brancher will
be the focus for the products and markets of the Venture. Lennox agrees, as the
majority partner, to use its best efforts to maintain and increase the
profitability of Ets. Brancher consistent with reasonable business judgment with
due regard to its other business interests.
B. EXCHANGE OF TECHNOLOGY. The technology of Ets. Brancher
will be made available to Lennox and the technology of Lennox will be made
available to Ets. Brancher under mutually agreed upon terms; except that no
license fee shall be charged or sublicense granted unless agreed upon by the
Parties. Also, the products manufactured by Ets. Brancher will be supplied for
resale to Lennox and the products manufactured by Lennox will be supplied for
resale to Ets. Brancher, where appropriate, within the Territory and outside the
Territory, as agreed from time to time subject to the Parties agreement
regarding competition.
C. NON-COMPETITION. Throughout the term of this Amended
Agreement, the Parties agree that neither shall participate, directly or
indirectly, in the businesses of Ets. Brancher within the Territory other than
through participation in Ets. Brancher as described in this Amended Agreement.
Lennox further agrees not to compete, directly or indirectly, with Ets. Brancher
within the Territory and Brancher and Ets. Brancher agrees not to compete,
directly or indirectly, with Lennox outside the Territory. Each Party
acknowledges that neither Party can control any third party who purchases such
products; however, both Parties agree to take those reasonable steps to prevent
a third party from violating the intent of this Section 2.2.C. where not
prohibited by law.
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III. ACQUISITION OF OWNERSHIP BY LENNOX
SECTION 3.1. OWNERSHIP OF BRANCHER COMPANIES STOCK
Lennox has purchased and Brancher owns certain shares of the Brancher
Companies which constitute essentially one hundred percent (100%) of all
interests in the Brancher Companies. Lennox and Brancher have transferred or
will transfer all such interests, not already owned by Ets. Brancher, such that
it now owns essentially one hundred percent (100%) of all interests in the
Brancher Companies. Brancher and Lennox now own or will own Ets. Brancher in
proportions set forth in the Restructure Agreement. The Parties further agree
that all obligations of each Party as required by the Agreement relating to the
transfer of ownership of the Brancher Companies have been completed except as
specifically set out in this Amended Agreement.
SECTION 3.2. TRANSFER OF LENNOX U.K.
Lennox and Brancher have agreed to the following with respect to the
purchase by Ets. Brancher of Lennox U.K.:
A. PURCHASE OF LENNOX U.K. HCF has agreed to purchase from
Lennox and Lennox shall sell all of its ownership interests in Lennox U.K. in
accordance with the principles set forth on Exhibit 3.2.A. The purchase price
for this purchase shall equal Twenty Nine Million Nine Hundred Ninety-Nine
Thousand Nine Hundred Seventy French Francs ("Ffs") (29,999,970Ffs).
B. SCOPE OF LENNOX U. K. PURCHASE. The parties have agreed
that Lennox U.K. shall consist of one hundred percent (100%) of the ownership
interests in Lennox Industries (including all of its assets and liabilities),
which company will have a net book value of at least Thirty Million Ffs
(30,000,000.00 Ffs) at the time of the transfer.
C. TIMING OF THE TRANSFER. The parties have further agreed
that the transfer shall occur on or before 1 January 1998 ("Transfer Date").
Until the transfer, Lennox shall be responsible for the profits and losses of
Lennox U.K. although it will be operated as though it were integrated with HCF.
The purchase price referenced above shall be paid upon the transfer specified
above at time agreed upon by the Parties.
SECTION 3.3. PHASED ACQUISITION OF REMAINING OWNERSHIP OF ETS.
BRANCHER.
At the times specified below for a change in the Lennox percentage
ownership in Ets. Brancher, Lennox will purchase the amount of additional
Company Stock of Ets. Brancher prescribed below using the Company Stock Price
defined below.
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A. STOCK PRICE. The stock price for any specified purchase
shall be calculated by dividing the Ets. Brancher yearly Company Value for the
applicable year by the number of shares of Ets. Brancher Company Stock issued
and outstanding at time of the calculation (the "Stock Price").
(i) Yearly Ets. Brancher Company Value. The yearly Ets.
Brancher Company value (Ets. Brancher Company Value or "CV") shall be
calculated using its consolidated Net Book Value as defined below at
the close of each business year ("Yearly Book Value" or "YBV") . The
Yearly Book Value will be the consolidated Net Book Value of Ets.
Brancher as of 30 September 1997 (this value is 233,662,837 Ffs before
restructuring adjustments described below and as described in more
detail on Schedule 3.3.A(i)) after taking into account all
restructuring steps and as adjusted for any consolidated profits or
losses accumulated through the business year just ended. The Ets.
Brancher Company Value is computed as follows:
CV = [YBV + 9*{(Y(-2)+2 * Y(-1)+3 * Y(-0)) /6}]/2
Where:
YBV = its Yearly Book Value for the business year just ended.
Y(-2) = its consolidated Net Income or loss for the business
year two years before the year just ended.
Y(-1) = its consolidated Net Income or loss for the business
year one year before the year just ended.
Y(-0) = its consolidated Net Income or loss for the business
year just ended.
CV = the Company Value will never be less than its Yearly Book
Value for any business year.
(ii) The Effect of Goodwill on Ets. Brancher Company Value. In
the event assets or companies are acquired by Ets. Brancher for a cost
greater than their net book value, the amortization of goodwill will be
over a period of not less than thirty (30) years or in the event
changes in generally accepted accounting practices, the goodwill will
be accounted for so as not to materially damage the CV of Ets.
Brancher.
B. SALE OF ETS. BRANCHER COMPANY STOCK. The further sale of
Ets. Brancher Company Stock shall take place using the stock price (as defined
above) within thirty (30) days after adequate audited financial data is
available in the year of purchase to calculate the Ets. Brancher Company Value,
Lennox will pay to Brancher an amount equal to the Ets. Brancher Company Stock
Price defined above times the number of additional shares necessary for Lennox
to achieve the
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Lennox Percentage of Ownership applicable at that time. In exchange for this
payment, Brancher agrees to transfer to Lennox sufficient shares of the Ets.
Brancher Company Stock to represent the Additional Percentage of Ownership (as
defined below) being acquired by Lennox for that specified year.
C. ADDITIONAL PERCENTAGE OF OWNERSHIP AND SCHEDULE. In the
event that Brancher has not sold and Lennox has not purchased at least 74% of
Ets. Brancher by the end of calendar year 2005, Lennox will acquire sufficient
additional ownership of the Ets. Brancher to allow the percentage then owned by
Lennox to equal 74%. Further, in the event that Brancher has not sold and Lennox
has not purchased all the remaining ownership of Ets. Brancher by the end of
calendar year 2006, Lennox will acquire all the remaining ownership of the Ets.
Brancher. These purchases may be accelerated as described below.
D. ACCELERATION OF PURCHASE. The Lennox purchases described
above may be accelerated in any of the following circumstances:
(i) Death of Xxxx-Xxxxxxx Brancher. In the event of the death
of Xxxx-Xxxxxxx Brancher, Lennox will purchase and Brancher shall sell
all of the remaining Additional Percentage of Ownership of Ets.
Brancher for a purchase price equal to the greater of (1) the number of
shares representing the remaining Additional Percentage of Ownership
times the applicable Ets. Brancher Company Stock Price or (2) the
minimum company value described in Section 3.3.A(ii). Xxxx-Xxxxxxx
Brancher agrees to comply with any reasonable request of Lennox to take
any action which, under French Law, will increase the enforceability of
the agreement to sell Ets. Brancher Company Stock as described in this
Section 3.3.D(i). The purchase will be completed within three (3)
months of the notice to Lennox of the date of the death of Xxxx-Xxxxxxx
Brancher.
(ii) Option of Brancher. In addition, Brancher shall have the
right but not the obligation, at any time, to require Lennox to
purchase all or any portion of the remaining shares in Ets. Brancher at
a purchase price per share equal to Stock Price. The accelerated
purchase will be completed within ninety (90) days of the date of the
exercise of this option in writing by Brancher.
SECTION 3.4. ISSUANCE OR TRANSFER OF SHARES
A. SHARES OF STOCK. Brancher agrees that all shares of Ets.
Brancher Company Stock either issued or transferred to Lennox hereunder shall be
shares of the common stock which possess the highest form of voting power,
preferences, dividends or other rights.
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B. ISSUANCE OR TRANSFER OF SHARES TO LENNOX. Brancher agrees
to issue or transfer or have issued or transferred to Lennox or its nominee
sufficient shares of the Ets. Brancher Company Stock under the terms of Section
3.3.B(ii), to reflect the Lennox percentage of ownership acquired by Lennox
pursuant to the terms and conditions of this Amended Agreement. This issuance
will be completed within thirty (30) days of the date specified for any Lennox
acquisition of Ets.
Brancher Company Stock.
SECTION 3.5. EXPENSES OF RESTRUCTURE (PROFESSIONAL FEES, TAXES OR
OTHER FEES)
The Shareholders shall bear individually the costs and expenses
incurred in connection with the consummation of the transactions contemplated
under this Amended Agreement related to that Shareholder incurred prior to 30
September 1997 including, but not limited to, all professional fees, costs or
any taxes or fees levied on or in respect of the transactions contemplated
hereunder, however designated and whenever or wherever levied, including by way
of example but not limited to ad valorem, sales, excise, purchase or use taxes,
stock transfer, mortgage registration, deed recording or other property transfer
fees, but not including income taxes of any kind. Thereafter, all such expenses
will be borne by Ets. Brancher except as the expenses relate to a capital
reduction of Ets.
Brancher will be borne by Brancher.
SECTION 3.6. RESTRICTION ON THE SALE OF SHARES OF COMPANY STOCK
The Shareholders each agree that neither shall sell shares of Ets.
Brancher Company Stock except as specifically provided for in this Amended
Agreement except as each may transfer ownership to other affiliates of Brancher
or Lennox.
SECTION 3.7. FINDING OF AN UNLAWFUL STOCK PRICE FOR THE SALE OF
SHARES OF COMPANY STOCK
In the event that a determination by any court of competent
jurisdiction that the Stock Price or Ets. Brancher Company Stock Price defined
in this Amended Agreement is null and void, the Shareholders agree that a new
Stock Price or Company Stock Price will be determined by an expert appointed by
the Commercial Court in France.
IV. FUTURE CAPITAL CONTRIBUTIONS
SECTION 4.1. FUTURE CAPITAL CONTRIBUTIONS
Contributions of capital to Ets. Brancher that have not been
anticipated at the date of this Amended Agreement, and therefore not scheduled,
shall be made by the Shareholders as follows:
A. FUTURE CAPITAL CALLS. The Parties acknowledge and agree
that it is anticipated, assuming satisfactory business performance, that Ets.
Brancher may expand its operations in a manner and at a time to be determined by
the Committee (as defined below), and
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additional capital contributions may be required for the expansion of Ets.
Brancher. The Parties hereby agree that the Committee may evaluate the
circumstances of the Ets. Brancher Company and approve a proposal for a capital
contribution from the Shareholders. If the Committee fails to agree on the
necessity of such a capital contribution, it shall constitute a dispute under
the terms of Section 7.1. and shall be resolved under such terms. Further,
should any Shareholder not make any contribution approved by the Committee and
the Parties, within twenty (20) days of the date of the formal decision, the
other Shareholder, at its sole discretion, shall have the option to pay the
Expansion Capital Contribution of the nonpaying Shareholder; provided, the
Shareholder contributing additional capital shall be entitled to additional
shares of Company Stock of the requesting company sufficient such that the
percentage of ownership of stock of the requesting company held by such
Shareholder shall equal the percentage that the total capital contributions made
by such Shareholder to such company bears to the sum of the then applicable Net
Book Value of Ets. Brancher and such total capital contributions. It is further
agreed that all further capital increases will be based on the Ets. Brancher
Stock Price defined in Section 3.3.B(i). In the event Xxxx-Xxxxxxx Brancher
elects not to make any approved capital contribution and his contribution is
offered by Lennox as provided above which would cause the ownership of
Xxxx-Xxxxxxx Brancher in the Venture Company to fall below Twenty Five Percent
(25%), the Parties agree that Xxxx- Xxxxxxx Brancher may also elect to sell the
balance of his shares in the Ets. Brancher Company to Lennox as provided for in
Section 3.3.D(ii). It is further agreed that Lennox may utilize any other means
of financing in Ets. Brancher or pursue the business venture sought to be
financed by the capital contribution outside the Venture notwithstanding the
terms of this Amended Agreement under Section 2.2.C, without limitation.
B. SPECIAL CAPITAL CALLS. If Ets. Brancher, for any period of
time greater than thirty (30) consecutive days, shall experience a cash deficit
sufficient to place the continued operations of Ets. Brancher in jeopardy, then
the management of the Ets. Brancher Company shall immediately notify the
Committee and request that it immediately take any and all steps necessary to
cure the cash deficit. Within ten (10) days of receiving such a request, the
Committee, at its sole discretion, may elect to: (i) attempt to arrange for an
emergency loan to the company, such loan to be made by any lender acceptable to
the Committee (including either or both Shareholders) upon such terms as the
Committee in its sole discretion shall approve; (ii) propose a Special Capital
Call upon the Shareholders in an amount sufficient to cure the cash deficit; or
(iii) decline to act on the request. If the Committee for any reason shall not
elect one of the actions specified above within ten (10) days of the receipt of
such request, it shall give rise to a dispute and the remedies available under
Section 7.1. Further, should any Shareholder not make any contribution approved
by the Committee and the Parties, within twenty (20) days of the date of the
formal decision, the other Shareholder, at its sole discretion, shall have the
option to pay the capital contribution of the nonpaying Shareholder; provided,
the Shareholder contributing additional capital shall be entitled to additional
shares of Company Stock of Ets. Brancher sufficient such that the percentage of
ownership of stock of Ets. Brancher held by such Shareholder shall equal the
percentage that the total capital contributions made by such Shareholder to Ets.
Brancher bears to the Ets. Brancher Company Value as described in Section
3.3.A(i) and such total capital contributions. It is further agreed that
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all further capital increases will be based on the Ets. Brancher Stock Price
defined in Section 3.3.B(i).
SECTION 4.2. RETURN OF PAYMENTS OF CAPITAL
In the event either Shareholder shall make a capital contribution to
Ets. Brancher which fails to be completed as specified by the Board of Directors
of such company, that Shareholder shall be entitled to a return of such
contribution as provided by the applicable law.
SECTION 4.3. RETURN OR WITHDRAWAL OF CAPITAL
To the extent allowed by the applicable laws, the Shareholders agree
that no capital shall be returned to any Shareholder unless agreed upon by the
Parties.
V. MANAGEMENT AND STAFF
SECTION 5.1. NEW COMPANIES STAFF
A. JOINT OWNERSHIP PHASE. For so long as Ets. Brancher is
jointly owned, its activities shall be conducted by the personnel serving as its
officers or in key positions selected from time to time by the Committee. It is
understood and agreed that if the Committee selects a President Director General
of Ets. Brancher over the formal objection of Xxxx-Xxxxxxx Brancher, the
selection by the Committee shall be suspended for fourteen (14) days to allow
Xxxx-Xxxxxxx Brancher the opportunity to present reasons for such objection to
the Chief Executive Officer of Lennox. The Chief Executive Officer may either
overrule the selection of the Committee or sustain its selection with reasons
provided for the decision. In the event Xxxx-Xxxxxxx Brancher continues to
object to the selection, he shall have all of the remedies otherwise available
under the terms of this Amended Agreement. The staff of any company may include
employees of either Shareholder who may be temporarily or permanently assigned
to any one of Ets. Brancher. The Committee may decide that any such employee
shall be made available for such period of time as to meet the needs of the
company. For administrative convenience, the Committee may, at its discretion,
request that payroll, benefit and related employment matters with respect to
Ets. Brancher staff be handled through the respective Shareholder for those
employees selected from that Shareholder. Upon such request, such payroll,
benefits and related employment matters shall be handled by such Shareholder
pursuant to a general services agreement to be entered into between Ets.
Brancher and such Shareholder. The duties of the staff for Ets. Brancher shall
be defined by the Committee.
B. PHASE OF SOLE OWNERSHIP BY LENNOX. In the event Lennox
assumes sole ownership of Ets. Brancher, the respective Boards of Directors of
Ets. Brancher shall solely determine staffing Ets. Brancher.
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SECTION 5.2. VENTURE COMPANY PLANNING AND OPERATING COMMITTEE
A. NATURE, FUNCTIONS AND PROCEDURES OF COMMITTEES. The
Shareholders agree that the existing Committee may continue or a new Committee
or Committees established for Ets. Brancher or its subsidiary companies to
perform such functions, using such procedures as the Shareholders' may from time
to time elect. The nature of the Committee or Committee's, its functions and
procedures will be decided by the Shareholders by majority vote
B. THE APPLICATION OF COMMITTEE DECISIONS TO ETS. BRANCHER OR
THE NEW COMPANIES. The Parties acknowledge and agree that each will participate,
either directly or indirectly through its authorized representatives on the
Boards of Directors or as officers of or in other capacities with Ets. Brancher
or the New Companies. The Parties further agree that, limited only by
obligations imposed on such Party by Law, each Party in that capacity shall act
consistent with the decisions of the Committee as those decisions apply to the
operations and Policies of Ets.
Brancher or the New Companies.
SECTION 5.3. BOARDS OF DIRECTORS
A. DESIGNATION OF MEMBERS; POWERS OF REVIEW. The Boards of
Directors shall consist of: for Ets. Brancher four (4) members, for Xxxxx-Xxxx
eight (8) members, and for the Boards of HCF ten (10) members, with each Party
designating a number of members in its sole discretion equivalent to its
percentage of ownership of Ets. Brancher. The Shareholders agree to reduce
restructure the membership of the respective Boards to provide the smallest
number of members who can be available to attend meetings and respond to the
requirements of each company as soon as practical giving due consideration for
the expiration of the terms of the existing directors. The Shareholders further
agree that so long as Xxxx-Xxxxxxx Brancher shall remain a Shareholder with at
least Twenty-Five Percent (25%) interest in Ets. Brancher, he shall be elected a
director of Ets. Brancher and its subsidiaries or serve as the representative of
a director.
B. BOARD MEETINGS; VOTING; ACTION OF THE BOARD. All actions of
each Board of Directors shall be taken in accordance with the procedures set
forth in the applicable Company Statutes. All provisions in such Company
Statutes shall govern notice of the meetings to such Board, quorum requirements,
votes and voting, and the conduct of the meetings.
C. CURRENT MEMBERS OF THE XXXXX-XXXX BOARD OF DIRECTORS.
(i) INDIVIDUAL REPRESENTATIVES: Term Ends:
Xxxxxx Xxxxxx,
President Director General 31-12-1999
Ets. Brancher S.A. 31-12-1999
Representative: Xxxx-Xxxxxxx Brancher
M. Xxxxx Xxxxxxx 31-12-1997
M. Xxxx-Xxxxxxx Blanchedeau 31-12-1997
(ii) REPRESENTATIVES OF LENNOX: Term Ends:
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Lennox Global Ltd. 31-12-2001
Representative: Xxxx X. Xxxxxx, Xx.
Heatcraft Inc. 31-12-2001
Representative: Xxxxxx X. Xxxxxxx
Heatcraft Technologies Inc. 31-12-2001
Representative: H.E. (Ed) French
Lennox International Inc. 31-12-2001
Representative: Xxxxx Xxxxx
D. CURRENT MEMBERS OF THE HCF BOARD OF DIRECTORS:
(i) INDIVIDUAL REPRESENTATIVES: Term Ends:
Xxxx-Xxxxxx Xxxxxxx,
President Director General 31-12-1997
Xxxx-Xxxxxxx Brancher 31-12-1996
Ets. Brancher S.A. 31-12-1996
Representative: Xxxxxxx Xxxxxxx
M. Xxxxx Xxxxxxx 31-12-1998
M. Xxxxxx Xx Xxxxxx 31-12-1999
(ii) REPRESENTATIVES OF LENNOX: Term Ends:
Lennox International Inc. 31-12-2001
Representative: Xxxxx X Xxxxxxxxxx
Lennox Global Ltd. 31-12-2001
Representative: Xxxx X. Xxxxxx Xx.
Heatcraft Inc. 31-12-2001
Representative: Xxxxx Xxxxx
Heatcraft Technologies Inc. 31-12-2001
Representative: Xxxx X. Xxxxxxx, Xx.
Lennox Industries Inc. 31-12-1998
Representative: Xxxxxx X. Xxxxxxx
E. MEMBERS OF THE ETS. BRANCHER BOARD OF DIRECTORS.
(i) REPRESENTATIVES OF BRANCHER: Term Ends:
Xxxx-Xxxxxxx Brancher 31-12-2002
(ii) REPRESENTATIVES OF LENNOX: Term Ends:
Xxxxxx X. Xxxxxxx 31-12-2002
Lennox Global Ltd. 31-12-2002
Representative: Xxxx X. Xxxxxx Xx.
Lennox International Inc. 31-12-2002
Representative: Xxxxx Xxxxx
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F. LENGTH OF SERVICE OF BOARD MEMBERS. Each Board member shall
serve until the term of his or her election shall expire unless re-elected by
the shareholders at any duly constituted meeting or until such member is removed
by the action of the shareholders as provided for on the Company Statutes or
applicable law.
G. BOARD DUTIES. Each Board shall meet periodically to do
those functions specified in the applicable Company Statutes, and such other
things as may from time to time be necessary for the conduct of Ets. Brancher or
the New Companies' businesses.
G. REIMBURSEMENT OF DIRECTORS' EXPENSES. Each company in the
New Companies shall reimburse its directors for travel, food and lodging
expenses incurred in attending directors' meetings and otherwise in conducting
the affairs of the Board.
VI. TERM, TERMINATION AND PHASE OUT
SECTION 6.1. TERM
The term of this Amended Agreement shall be for as long as any of the
Parties remain shareholders or their respective successors or assigns own stock
in Ets. Brancher. Sections 6.3. and 13.5. shall survive termination of this
Amended Agreement.
SECTION 6.2. TERMINATION
A. NORMAL TERMINATION. Upon completion of the purchase by Lennox of all
remaining interests of Brancher in Ets. Brancher, this Amended Agreement shall
be deemed terminated. It is expressly understood and agreed that such purchase
may be completed through the exercise by Xxxx- Xxxxxxx Brancher of his option to
accelerate the purchase as provided under Section 3.3.D(ii). Brancher shall
provide written notice to Lennox as provided under Section 6.2.E(i).
B. TERMINATION BY THE DEATH OF XXXX-XXXXXXX BRANCHER. Upon the
death of Xxxx-Xxxxxxx Brancher, Lennox shall purchase all remaining interest in
Ets. Brancher from Brancher as provided under Section 3.3.D(i). Brancher's
estate shall provide written notice to Lennox as provided under Section
6.2.E(i).
C. TERMINATION BY PURCHASE OR SALE AT BUYOUT PRICE PER SHARE.
Upon the occurrence of one (1) or more of the following events, Brancher or
Lennox may, at its sole discretion as a terminating Party, by giving notice to
the other Party as provided under Section 6.2.E(ii) within thirty (30) days
after the occurrence of such event, terminate this Amended Agreement and cause
the other Party, at the terminating Party's sole discretion, to either: (A) sell
all of such other Party's
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shares in Ets. Brancher to the terminating Party, or (B) to purchase all of the
shares in Ets. Brancher held by the terminating Party:
(i) breach of this Amended Agreement by the other
Party; provided, however, that no Party may terminate this
Amended Agreement pursuant to this clause until after the
notice and cure provisions set forth in Sections 12.1. and
12.2. and the dispute resolution mechanism set forth in
Section 7.1. have been exhausted.
(ii) either Party shall file or have filed against
it, under the laws of the appropriate jurisdiction,
declaration of bankruptcy or insolvency or enter into any
agreement which acts as an assignment of its assets for the
satisfaction of its debts; provided, however, the terminating
Party may only purchase the shares of the other Party in
accordance with the terms of this Section 6.2.C. unless
otherwise permitted under the applicable laws under which such
insolvency or bankruptcy event occurs.
The price of any shares in Ets. Brancher purchased or sold as
provided under this Section 6.2.C. shall be as specified
below, and the terms of such purchase and the closing thereof
shall be as set forth in Section 6.2.F.
(iii) If Lennox is the terminating Party, the
purchase price shall be the lesser of Ets. Brancher Stock
Price per share determined under Section 3.3.B(i). or a price
determined using the minimum Venture Company values under
Section 3.3.A(ii) and the sale price shall be the aggregate
purchase price paid by Lennox to acquire its interest; or
(iv) If Brancher is the terminating Party, the
purchase price shall be the aggregate purchase price paid by
Lennox to acquire its interest, and the sale price shall be
the greater of the Stock Price per share determined under
Section 3.3.B(i) or a price determined using the Minimum
Company Values under Section 3.3.A(ii).
D. TERMINATION BY REASON OF IMPASSE. Upon the occurrence of a
dispute between the Parties which is not resolved by use of the procedures for
dispute resolution set forth below in Section 7.1., the Dispute Committee shall
be asked to propose a solution to the dispute. If the Dispute Committee is
unable to agree on such a solution, each Party shall appoint a representative,
which representative shall appoint a third representative to propose a solution.
All such representatives shall not be members of the Committee or involved in
any way with Ets. Brancher. Any Party may, at its sole discretion, reject the
proposed solution by giving notice to the other Party as provided under Section
6.2.E(iii). In this event the dissenting Party shall sell its remaining
interests in Ets. Brancher to the other Party at the then applicable Stock Price
and the terms of such purchase and the closing thereof shall be as set forth in
Section 6.2.F.
E. NOTICES.
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(i) Notice of Termination under Sections 6.2.A. and
6.2.B. Any notice of termination by Brancher or his estate
shall be given to Lennox in writing. Such notice shall state
that the Amended Agreement is terminated by reason of
Brancher's death or exercise of the option to accelerate the
purchase of the remaining shares of Brancher by Lennox in
accordance with Section 6.2.A. or 6.2.X. Xxxxxx shall complete
the purchase within ninety (90) days after receipt of such
written notice, which period will be automatically extended to
the extent necessary to comply with any requirements for
completing such purchase.
(ii) Notice of Section 6.2.C. Termination and Buyout.
Any notice of termination of this Amended Agreement and
purchase or sale of shares of Ets. Brancher under the
provisions of Section 6.2.C. shall be given by the terminating
Party to the other Party in writing within thirty (30) days of
the event causing such termination. Such notice shall clearly
state that the Amended Agreement is being terminated under
Section 6.2.C., the reason for such termination and that the
terminating Party thereby elects to sell its interest or to
purchase the other Party's interest, as the case may be, in
Ets. Brancher. A binding contract shall exist between the
Parties as to the termination and buyout as provided herein
upon the receipt of such notice.
(iii) Notice of Section 6.2.D. Termination. Any
notice of termination of this Amended Agreement under the
provisions of Section 6.2.D., shall be given by the
terminating Party to the other Party in writing. Such notice
shall clearly state that the Amended Agreement is being
terminated under Section 6.2.D., the reason for such
termination being the existence of a dispute which, after
exhaustion of the dispute resolution procedures in Section
7.1., has failed to be resolved and that the terminating
Party, having reject the proposed solution of the dispute,
thereby elects to terminate the Amended Agreement under
Section 6.2.D.
F. TERMS OF PURCHASE AND CLOSING OF SECTION 6.2.C. OR SECTION
6.2.D. The terms of any purchase or sale under Section 6.2.C. or Section 6.2.D.
shall be as follows:
(i) There shall be a closing of any transfer of
shares in Ets. Brancher no later than thirty (30) days
following the notice given under Section 6.2.E(ii) or Section
6.2. E(iii).
(ii) The purchase price specified in Section 6.2.C.
or Section 6.2.D. shall be paid in full to the selling Party
at the closing.
(iii) The purchasing Party shall provide a
representation and warranty to the selling Party that the
shares of Ets. Brancher are being purchased for investment
purposes only and not with a view toward the offer, sale or
other distribution thereof without being in compliance with
Applicable Law.
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(iv) The selling Party shall provide the following
representations and warranties:
(A) It has good and marketable title to the
shares of Ets. Brancher being transferred, free and clear of
all liens and encumbrances;
(B) It has taken all steps and complied with
all corporate formalities required to transfer the shares of
Ets. Brancher to the purchasing Party; and
(C) It is legally empowered to transfer the
shares of Ets. Brancher to the purchasing Party.
SECTION 6.3. PHASE OUT OF TECHNOLOGY AND PRODUCTS.
In the event the selling Party has a material requirement for the use
of the technology and/or products of the Company existing at the time of
termination hereunder (other than a termination under Section 6.2.A. or 6.2.B.),
the Parties shall arrange and agree upon the phase out of such use to be
completed within one (1) year of the termination of this Amended Agreement.
VII. DISPUTE RESOLUTION
SECTION 7.1. DISPUTE RESOLUTION MECHANISM
Every dispute whatsoever that may arise between the Parties or their
nominees, designees or other representatives with respect to the subject matter
of this Amended Agreement shall be submitted for resolution as provided in this
Section 7.1.
A. DISPUTE AMONG THE PARTIES; REFERRAL TO COMMITTEE. Any
dispute arising with respect to the operation of the Venture or execution,
application or interpretation of this Amended Agreement as it relates to any
specific company in the Company shall be referred to the Committee for review
and resolution. The Committee in good faith shall strive to resolve any dispute
that may arise among the Parties as to any matter that is within the scope of
its authority. If, however, the Committee shall fail for any reason to resolve,
to the mutual satisfaction of the Brancher nominees and the Lennox nominees who
serve on the Committee, any disputed matter, then the dissatisfied members of
the Committee shall notify the Chairman of the Committee in writing that if such
matter is not resolved in a satisfactory manner within thirty (30) days of such
notice, then the Chairman of the Committee shall refer such matter to the
Dispute Resolution Committee (referred to as the "Dispute Committee" in this
Amended Agreement and shall consist of the Chief Executive or Chief Operating
Officers of Brancher and Lennox) and request that the Dispute Committee
immediately call a special meeting to resolve such disputed matter. If, for any
reason, the Chairman of the Committee shall fail to refer such disputed matter
to the Dispute
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Committee and request a special meeting of the Committee to resolve such matter
as required hereunder, then any Party shall have the right to call such meeting
of the Dispute Committee.
B. REFERRAL TO DISPUTE COMMITTEE; MEDIATION. The Parties,
through the Dispute Committee, in good faith shall strive to resolve any dispute
that may arise between them as to any matter arising from or in any way
connected with the Venture, or that is related to or otherwise connected with
the subject matter of this Amended Agreement. If, however, the Dispute Committee
shall fail to resolve any matter in dispute (including any matter referred to
the Dispute Committee by the Chairman of the Committee) within sixty (60) days
of its first meeting to consider the matter, then at the request of either or
both Parties, the dispute shall be submitted for resolution depending on the
nature of the dispute as described in Section 7.1.C. below.
C. FAILURE OF DISPUTE RESOLUTION; REMAINING REMEDIES. If the
Dispute Resolution Committee shall fail to produce a resolution of the dispute
within sixty (60) days of the commencement thereof, then, and only then, the
Parties shall:
(i) For any dispute not involving a claim of the
breach of any term of this Amended Agreement, resolve such
dispute in accordance with Section 6.2.D., no later than
thirty (30) days following the notice of a failure to resolve
such dispute by any Party.
(ii) For any dispute involving a claim of the breach
of any term of this Amended Agreement, the dispute shall be
submitted for resolution under the International Chamber of
Commerce Rules for arbitration in a location agreed to by the
Parties or failing agreement, The Hague of the Netherlands.
The result of such arbitration shall be binding on the parties
and enforceable by application to a court of competent
jurisdiction.
VIII. REPRESENTATIONS AND WARRANTIES
SECTION 8.1. REPRESENTATIONS OF BRANCHER.
Brancher hereby represents and warrants that to the best of its
knowledge and belief all representations and warranties made in the Original
Agreement remain true and accurate and with respect this Amended Agreement, it
hereby represents and warrants as to the Venture Company:
A. DUE INCORPORATION, GOOD STANDING, POWER AND AUTHORITY. The
Venture Company is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization, with all necessary
corporate power and authority to carry on its business as now being conducted
and to own, operate and lease all properties owned, operated or leased by it,
and is duly qualified to do business in all jurisdictions where such
qualification is required, except where the failure to be so qualified will not
result in a Material Adverse Effect.
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Brancher has delivered to Lennox true, correct and complete copies of the
Company Statutes of the Venture Company;
B. AUTHORIZATION OF AMENDED AGREEMENT. Brancher has taken all
corporate action required or necessary for the authorization, execution,
delivery and performance of this Amended Agreement and has full corporate power
to enter into this Amended Agreement and to carry out its obligations hereunder,
and the execution and delivery by Brancher of this Amended Agreement and the
performance by Brancher of its obligations hereunder have been duly authorized
by all necessary corporate action of Brancher. This Amended Agreement has been
duly executed and delivered by Brancher and constitutes a valid and legally
binding obligation of Brancher enforceable against Brancher in accordance with
its terms (subject only to the limitations to enforceability that might result
from bankruptcy, insolvency or other similar laws affecting creditors' rights
generally). No actions or proceedings to dissolve Brancher or the Venture
Company is pending.
C. FINANCIAL STATEMENTS. Brancher has delivered or will
deliver as soon as available to Lennox, true, complete and correct copies of (i)
the unaudited Balance Sheet of the Venture Company at June 30, 1997 (the "Latest
Balance Sheet") and the related Statements of Operating Income, and the notes
and schedules thereto, and (ii) the audited Balance Sheet of the Venture Company
at December 31, 1996 and the related Statements of Operating Income for the year
then ended, and the notes and schedules thereto (collectively, the Financial
Statements"). The Venture Company Financial Statements have been prepared from
the Venture Company's books and records in accordance with the Venture Company's
accounting practices applied on a basis consistent with preceding years
throughout the period involved. The Venture Company Financial Statements present
fairly the Venture Company's financial condition at the respective dates thereof
and their results of operations for the periods then ended. Brancher further
agrees to provide any updates to such statement, including final 1997 audited
Financial Statements, as soon as such statements become available.
D. CAPITALIZATION. The authorized capital stock of the Venture
Company consists of the number of shares of common stock, of the indicated par
value as set forth on Schedule 8.1.E. All outstanding shares of capital stock of
the Venture Company--have been validly issued and are fully paid and
nonassessable. No shares of capital stock of the Venture Company have been
issued in violation of preemptive or similar rights, and there are no
outstanding or contingent rights to acquire any of the capital stock of the
Venture Company (whether or not outstanding), and no outstanding agreements or
other arrangements by which the Venture Company is or may be bound to repurchase
or otherwise acquire any shares of their capital stock have not been disclosed
to Lennox.
E. TITLE TO SHARES. Brancher has, and at Closing Lennox will
acquire, good and marketable title to the designated percentages, which may be
less than One Hundred Percent (100%), of all of the authorized and issued shares
of Company Stock of the Venture Company, HCF, Xxxxx-Xxxx, Frinotec S.A. and
other related companies, free and clear of all Encumbrances except as listed on
Schedule 8.1.E.
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F. ASSETS AND PROPERTIES.
(i) Real Property. Lennox has been supplied a complete
listing of all Real Properties, owned by the Venture Company. Those
Real Properties will be owned by the Venture Company except as
described on Schedule 8.1.F.
(ii) Personal Property. Except as set forth on Schedule
8.1.F. and except for Inventory and supplies disposed of or consumed
and accounts receivables collected or written off and cash utilized,
all in the ordinary course of business consistent with the past
practices, the Venture Company owns all of its Inventory, equipment and
other personal property (both tangible and intangible) reflected on the
Latest Balance Sheet, free and clear of all Encumbrances.
(iii) Condition of Property. Except as set forth on
Schedule 8.1.F., the Real Property and tangible personal property owned
or leased by the Venture Company is in good operating condition and
repair, ordinary wear and tear excepted; and the Venture Company has no
knowledge of any condition or defect, not disclosed herein of the Real
Property or such personal property that would materially affect its
fair market values or otherwise have a Material Adverse Effect on the
Venture Company or its operation.
(iv) Title to Properties. The Venture Company has good and
indefeasible title to all properties (real, personal, tangible and
intangible) it owns, as set forth in the Latest Balance Sheet, other
than those sold or otherwise disposed of in the ordinary course of
business, free and clear of all Encumbrances, except (a) as disclosed
on Schedule 8.1.F, (b) as set forth in the Latest Balance Sheet as
securing specific liabilities, (c) the Permitted Encumbrances, and (d)
imperfections of title that are not substantial in character, amount or
extent and do not materially detract from the value of the properties
subject thereto.
(v) Utilities. To the best knowledge of the Venture Company
, all utilities (water, sewer, gas, electricity, telephones, etc.) are
available to its property to adequately service such property.
(vi) Compliance. To the best of knowledge of Venture
Company, the continued ownership, operation, use, and occupancy of the
Real Property, as currently operated, used or occupied, will not
violate any zoning, building, health, flood control, fire or other law,
ordinance or regulation or any restrictive covenant, except as set
forth on Schedule 8.1.F or otherwise reported to Lennox
G. LEASES. Lennox has been provided a complete list of all
real properties leased by the Venture Company which is used or required for use
in the businesses of the New Companies. Except as specified on Schedule 8.1.G.,
all rights to such properties shall be retained by the Venture Company. The
lessee under each such lease has been in peaceable possession (or remedied any
claims relating thereto) of the Real Property, buildings, machinery, equipment,
vehicles or other
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tangible property or assets covered thereby since the commencement of the
original term of such lease and such lessee is not in material default
thereunder except as described in Schedule 8.1.G. hereof. There are no liens on
the assets of the Venture Company except as set forth on Schedule 8.1.G.
H. INTELLECTUAL PROPERTY. Lennox has been provided a complete
list of all Intellectual Property that is material to the conduct of the
businesses of the Venture Company as currently being conducted and owned by the
Venture Company or which it is licensed to use. The listed Intellectual Property
constitutes all Intellectual Property necessary for the conduct of the
businesses of the Venture Company as currently conducted and all rights to such
Intellectual Property remain in the Venture Company except as set forth on
Schedule 8.1.H. To the best knowledge of Brancher, there are no Proceedings
pending or threatened in writing against the Venture Company asserting that the
use by the Venture Company of any of such Intellectual Property infringes in any
material respect the rights of any other person or seeking revocation,
termination, or concurrent use of any of such Intellectual Property. To the best
knowledge of Brancher, none of such Intellectual Property is being infringed
upon by any other person.
I. LEGAL PROCEEDINGS. Lennox has been provided a complete
listing of all pending and, to the best knowledge of Brancher, threatened in
writing, Proceedings involving the Venture Company or any of their properties in
which the damages sought to be imposed exceed Five Hundred Thousand Ffs
(500,000Ffs) in any one case or which, individually or in the aggregate, might
result in any Material Adverse Effect. There are no Proceedings pending or, to
the best knowledge of Brancher, threatened in writing, seeking to restrain,
prohibit or obtain damages or other relief in connection with this Amended
Agreement or the consummation of the transactions contemplated herein except as
set forth on Schedule 8.1.I.
J. GOVERNMENTAL CONSENTS, COMPLIANCE WITH LAW. Except for the
approvals of Governmental Entities disclosed in Schedule 8.1.J., to the best
knowledge of Brancher, there is no requirement applicable to Brancher to make
any filing with, or to obtain any permit, authorization, consent or approval of,
any Governmental Entity as a condition to the lawful consummation by Brancher of
the transactions contemplated by this Amended Agreement.
K. INVENTORY. All Inventory (including raw materials,
work-in-progress and finished goods) and related supplies reflected on the
Brancher Latest Balance Sheet or thereafter acquired and not disposed of in the
ordinary course of business is usable and salable in the ordinary course of
business of the Venture Company.
L. CONTRACTS AND AGREEMENTS. Lennox has been provided a
complete listing list of all material contracts or other agreements with a value
greater than Five Hundred Thousand Ffs (500,000Ffs) (other than those listed on
any other Schedule referred to in this Article), relating to the businesses of
the Venture Company to which the Venture Company is a party or by which the
Venture Company is bound, and Brancher has furnished or shall furnish prior to
the Closing Date to Lennox complete and correct copies of all such contracts or
other agreements, including all
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amendments as of the date hereof. The Venture Company is not in default in any
material respect, and no written notice of alleged default has been received by
the Venture Company under any of these agreements, and, to the best of
Brancher's knowledge, no other party thereto is in default or alleged in writing
to be in default in any material respect other than defaults as to which
requisite waivers or consents have been obtained and defaults which in the
aggregate would not have a Material Adverse Effect except as set forth on the
attached Schedule 8.1.X. Xxxxxxxx makes no representations about the possibility
or likelihood of renewal or extension of any such contract or other agreement
unless otherwise noted on Schedule 8.1.X.
X. COMPLIANCE WITH LAW. To the best of Brancher's knowledge,
the Venture Company is not in violation of (i) any applicable judgment, order,
injunction, award or decree relating to the operation of its businesses or (ii)
any Applicable Law except in the case of (i) and (ii) for such violation
individually or in the aggregate which would not have a Material Adverse Effect.
N. PERMITS. Lennox has been provided a complete listing of all
Permits which are material to or necessary in the conduct of the businesses of
the Venture Company as they are currently being conducted. The Venture Company
has conducted its businesses and operations substantially in accordance with the
conditions and provisions of the Permits except for noncompliance as to which it
has received requisite waivers or consents or which does not have a Material
Adverse Effect except as set forth on Schedule 8.1.N. hereto. There is no other
Permit the absence of which would have a Material Adverse Effect on the Venture
Company's ability to carry on its businesses and operations. Except as set forth
on Schedule 8.1.N.: (i) all such Permits are in full force and effect, (ii) no
violations are known to Brancher or have been recorded (which have not been
remedied) in respect of any such Permit, and (iii) no Proceeding is pending or
threatened in writing to revoke or limit any such Permit.
O. NO CONFLICT WITH OTHER AGREEMENTS. Neither the execution
nor delivery of this Amended Agreement, nor the consummation of the transactions
contemplated hereunder, nor the fulfillment of or compliance with the terms and
conditions hereof will conflict with the Company Statutes of the Venture
Company, or will result in a breach of, or constitute a conflict or default
under, any material contract, agreement or instrument to which it is a party or
by which it or its assets or personnel are bound; and
P. ABSENCE OF CERTAIN EVENTS. Other than those events
disclosed to Lennox, there has not been:
(i) Any Material Adverse Effect on the Venture Company or the
assets and properties described in Section 8.1.F. which has not been
disclosed to Lennox;
(ii) Any purchase, sale or transfer of assets in anticipation
of this Amended Agreement, or which would contravene the intent of this
Amended Agreement other than those necessary to complete the
Restructure and this Amended Agreements;
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(iii) Any illegal payment by the Venture Company and
the Brancher Companies to foreign or domestic governmental or
quasi-governmental officials, or payments to customers or suppliers for
rebating of charges, or other reciprocal practices, in connection with
the conduct of their businesses, other than normal price reductions
allowed to customers in the ordinary course of business; or
(iv) Any damage, destruction or loss (whether or not
covered by insurance) which has or would have a Material Adverse Effect
on the Venture Company or the Brancher Companies.
Q. EMPLOYEES. Lennox has been provided a complete list of the
collective bargaining agreements applicable to the facilities of the Venture
Company, as well as, a list of all employment agreements between any employee
and the Venture Company and the names and total compensation of all salaried
employees who are employed by the Venture Company who have an annual salary in
excess of Four Hundred Thousand Ffs (400,000Ffs). Except as set forth on
Schedule 8.1.Q, there are no strikes, slow-downs, disputes, litigation, agency
or other actions pending or threatened which are believed to be in excess of One
Hundred Thousand Ffs (100,000Ffs) in liability or considered adverse to the
operations of the Venture Company.
R. EMPLOYEE BENEFIT PLANS. Lennox has been provided a complete
list of all of the pension, profit sharing, thrift, deferred compensation,
bonus, incentive, stock purchase, severance, hospitalization, insurance or other
similar plans, agreements or arrangements, which are maintained by or
contributed to by the Venture Company for its employees. All obligations of the
Venture Company to contribute to such plans on behalf of the employees employed
for calendar years prior to 1997 have been paid, and all obligations of the
Venture Company to contribute to such plans on behalf of such employees for the
period beginning January 1, 1997 and ending on the Closing Date will be paid by
the Venture Company except as listed on Schedule 8.1.R. The Venture Company has
not incurred any liability under these plans or the laws governing them arising
in connection with the termination of, or complete or partial withdrawal from,
any plan covered or previously covered by Applicable Laws, and the Venture
Company has paid and discharged when due all obligations and liabilities arising
under Applicable Laws with respect to all employee benefit plans of a character
which, if unpaid or unperformed might result in the imposition of a lien against
any of the assets of the Venture Company. All employee benefit plans of the
Venture Company (the "Brancher Plans") have been and are being maintained in
compliance with each of their terms and with the requirements prescribed by any
and all Applicable Laws. Brancher has furnished to Lennox a copy of the Brancher
Plans and related documents, where applicable, and all amendments thereto and
written interpretations thereof together with the any reports prepared in
connection with the Brancher Plans. There are not now, nor have there been, any
transactions with respect to the Plans which could result in material liability
on the part of the Venture Company under Applicable Laws except as listed on
Schedule 8.1.R. There are no threatened or pending claims by or on behalf of the
Brancher Plans or by any employee participating therein alleging a breach of
fiduciary duties or violations of Applicable Laws with respect to the Brancher
Plans which could result in material liability on the part of the Venture
Company or the Brancher Plans under Applicable Laws except as listed on Schedule
8.1.R.
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S. INSURANCE. Lennox has been provided a true and complete
list of all policies of fire, liability, casualty, life and all other forms of
insurance owned or held by the Venture Company with a value in excess of Five
Hundred Thousand Ffs (500,000Ffs). Such policies will remain in full effect
subject to its term and not be altered as a result of this Amended Agreement
except as Set forth on Schedule 8.1.S.
T. TAXES. The Venture Company has filed all necessary tax
reports or returns required to be filed and have either discharged or adequately
provided for the discharge of all taxes, costs, expenses, charges and debts of
every kind and character, except those taxes, costs, expenses, charges and debts
which are being protested in good faith by the Venture Company which are set
forth on Schedule 8.1.T.
SECTION 8.2. REPRESENTATIONS OF LENNOX.
Lennox hereby represents and warrants that to the best of its knowledge
and belief all representations and warranties made in the Original Agreement
remain true and accurate and with respect this Amended Agreement, it hereby
represents and warrants:
A. DUE INCORPORATION, GOOD STANDING, POWER AND AUTHORITY.
Lennox is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, United States of America.
B. AUTHORIZATION OF AMENDED AGREEMENT. Lennox has taken all
corporate action required or necessary for the authorization, execution,
delivery and performance of this Amended Agreement and has full corporate power
to enter into this Amended Agreement and to carry out its obligations hereunder,
and the execution and delivery by Lennox of this Amended Agreement and the
performance by Lennox of its obligations hereunder have been duly authorized by
all necessary corporate action of Lennox. This Amended Agreement has been duly
executed and delivered by Lennox constitutes a valid and legally binding
obligation of Lennox, enforceable against it in accordance with its terms
(subject only to the limitations to enforceability that might result from
bankruptcy, insolvency or other similar laws affecting creditors' rights
generally). No actions or proceedings to dissolve Lennox or Lennox U.K. are
pending or will be undertaken between now and the Transfer Date.
C. FINANCIAL STATEMENTS. Lennox has delivered to Brancher
true, complete and correct copies of (i) the unaudited Balance Sheet of Lennox
U.K. and Lennox International Inc. at July 31, 1997 and the related Statements
of Operating Income for the year then ended, and the notes and schedules
thereto, and (ii) the audited Balance Sheet of Lennox U.K. and Lennox
International Inc. at December 31, 1996 (the "Latest Balance Sheet") and the
related Statements of Operating Income for the year then ended, and the notes
and schedules thereto (collectively, the "Lennox U.K. and Lennox International
Inc. Financial Statements"). The Lennox U.K. and Lennox International Inc.
Financial
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Statements have been prepared from Lennox U.K. and Lennox International Inc.
books and records in accordance with Lennox U.K. and Lennox International Inc.
accounting practices applied on a basis consistent with preceding years
throughout the period involved. The Lennox U.K. and Lennox International Inc.
Financial Statements present fairly Lennox U.K. and Lennox International Inc.'s
financial condition at the respective dates thereof and their results of
operations for the periods then ended.
D. NO CONFLICT WITH OTHER AGREEMENTS. Neither the execution
nor delivery of this Amended Agreement, nor the consummation of the transactions
contemplated hereunder, nor the fulfillment of or compliance with the terms and
conditions hereof will conflict with the Company Statutes of Lennox or Lennox
U.K. and Lennox International Inc., or will result in a breach of, or constitute
a conflict or default under, any material contract, agreement or instrument to
which either of them is a party or by which either of them or any of their
assets or personnel are bound.
E. GOVERNMENTAL CONSENTS, COMPLIANCE WITH LAW. Except for the
approvals of Governmental Entities disclosed in writing to Brancher, to the best
knowledge of Lennox, there is no requirement applicable to Lennox to make any
filing with, or to obtain any permit, authorization, consent or approval of, any
Governmental Entity as a condition to the lawful consummation by Lennox of the
transactions contemplated by this Amended Agreement. The execution, delivery or
performance by Lennox of this Amended Agreement will not violate any Applicable
Law to which Lennox is subject.
F. INVESTMENT INTENT. Lennox is acquiring the shares of the
Venture Company solely for investment purposes and not with a view to the
distribution thereof.
IX. CLOSING AND CONDITIONS PRECEDENT
SECTION 9.1. CERTAIN PARTY ACTIONS TO BE COMPLETED PRIOR TO
CLOSING
A. COMPLETION OF DUE DILIGENCE BY THE PARTIES. Prior to the
Closing, the Parties shall have completed or caused to be completed, where
required, such due diligence as deemed necessary or desirable by either Party,
including, without limitation:
(i) review of any documents of the Venture Company or
Lennox Industries;
(ii) conduct of any required surveys of facilities of
either Lennox Industries or the Venture Company;
(iii) review by agents or consultants of Lennox and
Brancher of any documents, materials or facilities; and
(iv) any other due diligence actions deemed
appropriate by either Party.
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B. SECURE REQUIRED PERMITS, CERTIFICATES AND LICENSES. Apply
or cause either Party to apply, where necessary, prior to Closing, to obtain any
and all permits, certificates and licenses required to be obtained from, or the
approval or permission of, any and all agencies, instrumentalities, departments,
regulatory authorities or political subdivisions of any government with
authority to regulate any part or aspect of the businesses of the Venture
Company or the transactions contemplated by this Amended Agreement, such that by
obtaining said permits, certificates and licenses, the Venture Company legally
shall be able to operate the Venture Company and the New Companies facilities
and conduct the Venture Company and the New Companies businesses as contemplated
hereunder.
SECTION 9.2. CLOSING
The closing of the transactions provided for herein (the "Closing")
shall take place in a series of steps at various locations agreed to by the
parties, to be completed on or before November 15, 1997 or at such other time as
may be mutually agreed by the Parties (the "Closing Date"). At the Closing:
A. DELIVERY BY BRANCHER OF CERTAIN DOCUMENTS.
(i) An signed copy of this Amended Agreement;
(ii) Properly signed corporate documents reflecting
the transfer of the Company Stock of the Venture Company as provided in
this Amended Agreement.
B. DELIVERY BY LENNOX OF CERTAIN DOCUMENTS.
An signed copy of this Amended Agreement.
SECTION 9.3. CERTAIN PARTY ACTIONS TO BE TAKEN FOLLOWING CLOSING.
At or immediately following the Closing, Brancher and Lennox shall use
their best efforts to:
A. SECURE PERMITS, CERTIFICATES AND LICENSES. Where not
previously obtained under Section 9.1.C. above, apply or cause either Party to
apply, where necessary, to obtain any and all permits, certificates and licenses
required to be obtained from, or the approval or permission of, any and all
agencies, instrumentalities, departments, regulatory authorities or political
subdivisions of any government with authority to regulate any part or aspect of
the businesses of the Venture Company and the New Companies or the transactions
contemplated by this Amended Agreement, such that by obtaining said permits.
certificates and licenses, the Venture Company and the New Companies legally
shall be able to operate the Venture Company and the New Companies facilities
and conduct the New Companies businesses as contemplated hereunder.
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In addition, the Board of Directors of each Party shall adopt in writing such
resolutions as may be necessary or advisable to implement the provisions hereof.
SECTION 9.4. CONDITIONS PRECEDENT TO BRANCHER'S OBLIGATION TO CLOSE.
The obligation of Brancher to close is subject to the fulfillment of
each of the following conditions at the time of Closing:
A. REPRESENTATIONS AND WARRANTIES OF LENNOX. The
representations and warranties of Lennox contained in this Amended Agreement
shall be true and correct in all material respects;
B. FULFILLMENT OF CONDITIONS. Lennox shall have fully executed
all agreements and other documents required by this Amended Agreement to be
executed and delivered at the Closing, and shall have fulfilled or otherwise
complied with all conditions required by this Amended Agreement to be performed
or complied with by Lennox at or prior to the Closing;
C. ASSURANCE OF PERFORMANCE BY OFFICER'S CERTIFICATE. If
requested by Brancher, Lennox shall have furnished to Brancher an officer's
certificate stating that:
(i) Lennox is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware,
United States of America;
(ii) the execution, delivery and performance of this
Amended Agreement by Lennox have been duly authorized by all requisite
corporate action;
(iii) this Amended Agreement constitutes the valid
and binding obligation of Lennox and is enforceable in accordance with
its terms (subject only to the provisions of the United States
Bankruptcy Code and to limitations on enforceability that might result
from bankruptcy, insolvency or other similar laws affecting creditors'
rights generally); and
(iv) all actions and proceedings required by law or
by the provisions of this Amended Agreement do not require any action
by the shareholders of Lennox, do not violate any of the provisions of
Lennox's Company Statutes, and do not violate any of the provisions of
any note of which Lennox is the maker or of any indenture, agreement or
other instrument to which Lennox is a party or by which it is bound;
upon the understanding that the foregoing representations shall be made to and
for the benefit of Brancher alone; and
D. CONSENTS AND APPROVALS. Lennox shall have obtained all
consents and approvals from third parties that may be required to consummate and
perform this Amended Agreement.
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SECTION 9.5. CONDITIONS PRECEDENT TO LENNOX OBLIGATION TO CLOSE.
The obligation of Lennox to close is subject to the fulfillment of each
of the following conditions at the time of Closing:
A. REPRESENTATIONS AND WARRANTIES OF BRANCHER. The
representations and warranties of Brancher contained in this Amended Agreement
shall be true and correct in all material respects;
B. FULFILLMENT OF CONDITIONS. Brancher shall have fully
executed all agreements and other documents required by this Amended Agreement
to be executed and delivered at the Closing, and shall have fulfilled or
otherwise complied with all conditions required by this Amended Agreement to be
performed or complied with by Brancher at or prior to the Closing;
C. ASSURANCE OF PERFORMANCE BY PRESIDENT DIRECTOR GENERAL'S
CERTIFICATE. If requested by Lennox, Brancher shall have furnished to Lennox an
officer's certificate stating that:
(i) The Venture Company is a corporation duly
organized, validly existing and in good standing under the laws of
France;
(ii) the execution, delivery and performance of this
Amended Agreement by Brancher have been duly authorized by all
requisite corporate action;
(iii) this Amended Agreement constitutes the valid
and binding obligation of Brancher and is enforceable in accordance
with its terms (subject only to the limitations on enforceability that
might result from bankruptcy, insolvency or other similar laws
affecting creditors' rights generally); and
(iv) all actions and proceedings required by law or
by the provisions of this Amended Agreement do not require any action
by the shareholders of Brancher, do not violate any of the provisions
of Venture Company's Company Statutes, and do not violate any of the
provisions of any note of which Brancher is the maker or of any
indenture, agreement or other instrument to which Brancher is a party
or by which it is bound;
upon the understanding that the foregoing representations shall be made to and
for the benefit of Lennox alone; and
D. CONSENTS AND APPROVALS. Brancher shall have obtained all
consents and approvals from third parties that may be required to consummate and
perform this Amended Agreement.
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X. RESTRICTIONS ON TRANSFER
SECTION 10.1. RESTRICTION ON TRANSFER TO THIRD PARTIES
No Party may transfer or permit to be transferred any of the
Company Stock in Ets. Brancher or the New Companies other than as provided
herein.
SECTION 10.2. SECURITIES LAW RESTRICTIONS ON TRANSFER
No Party shall attempt to transfer or permit to be transferred
or consent to any transfer any of the Company Stock in Ets. Brancher and the New
Companies where such transfer shall constitute a violation of any Securities
Law.
XI. INDEMNIFICATION AND INSURANCE
SECTION 11.1. INDEMNIFICATION OF PARTIES.
Each Party hereto agrees to hold the other Party harmless and
indemnify such Party from and against any and all claims against the other Party
which are due to the actions or failure to act of the indemnifying Party, its
officers, directors, employees, agents or assigns; including, without
limitation, all damages, costs, and reasonable attorneys fees.
SECTION 11.2. INDEMNIFICATION OF PRIOR OPERATIONS OF ETS. BRANCHER
AND THE NEW COMPANIES.
Lennox hereto agrees to hold Brancher harmless and indemnify
Brancher, its officers, directors, employees, agents or assigns from and against
any and all claims against Brancher; including, without limitation, all damages,
costs, and reasonable attorneys fees which arise out of the operations of Lennox
Industries prior to the Transfer Date as defined in Exhibit 3.2.A. , other than
warranty claims arising in the normal and usual operations of the Lennox
Industries.
Brancher hereto agrees to hold Lennox harmless and indemnify
Lennox, its officers, directors, employees, agents or assigns from and against
any and all claims against Lennox; including, without limitation, all damages,
costs, and reasonable attorneys fees which arise out of the operations of Ets.
Brancher and the Brancher Companies prior to the Closing Date, other than
warranty claims arising in the normal and usual operations of Ets. Brancher and
the Brancher Companies.
The parties agree that the reserves maintained by Ets.
Brancher for the employee litigation (Xxxx Xxxxx Xxxxxxx) (when and to the
extent such reserves are released and no longer required) and payments made by
the Blondell's as required under the terms of the Agreement dated in 1994 to the
extent such payments are made to Ets. Brancher will be used for the purpose of
satisfying all claims for indemnification against Brancher until such sums are
exhausted.
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SECTION 11.3. INSURANCE.
The Venture Company shall purchase and maintain at its expense
such policy or policies of insurance with respect to the operations, products
and personnel of the Venture Company as may be necessary or appropriate in the
judgment of the respective Board of Directors, or as otherwise may be required
by law.
XII. BREACH, NOTICE AND OPPORTUNITY TO CURE
SECTION 12.1. NOTICE OF BREACH
If either Party in good faith should conclude that the other Party has committed
a breach of this Amended Agreement, the Party so concluding shall notify the
other Party that it is in breach hereof.
SECTION 12.2. OPPORTUNITY TO CURE
Any Party receiving notice under Section 12.1. of this Amended
Agreement shall have thirty (30) days to cure its breach, if any, or to begin
those steps reasonably necessary to cure and diligently continue such steps and
to notify the Party sending such notice that such breach has been cured or the
steps to cure have been taken.
SECTION 12.3. RESOLUTION OF DISPUTED BREACH
Following the cure period specified in Section 12.2., if the
notifying Party shall reject the cure or otherwise maintain that an uncured
breach of this Amended Agreement exists, then such matter shall be referred to
the Chairman of the Dispute Committee by the complaining Party, whereupon, the
disputed matter shall be treated as a dispute to be resolved beginning under
Section 7.1., as if the disputed matter had been referred to the Dispute
Committee by either of the Parties.
SECTION 12.4. REMEDIES
Neither Party may pursue any remedy at law for a breach of
this Amended Agreement until it first shall have exhausted the dispute
resolution mechanism set forth in Section 7.1. Nothing in this Amended Agreement
shall preclude or limit the right of any Party at any time or under any
circumstances to seek injunctive relief hereunder.
XIII. GENERAL PROVISIONS
SECTION 13.1. ACCURACY OF RECITALS
The paragraphs contained in the recitals in this Amended
Agreement are incorporated herein by this reference, and the Parties hereto
acknowledge the accuracy thereof.
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SECTION 13.2. AUDIT RIGHTS
Each Party at any time may inspect and audit the books and
records of any of the Company and the New Companies, either through its own
employees or through independent auditors, or both.
SECTION 13.3. PUBLIC STATEMENTS
Neither Party shall, without the permission of the other,
release any public statement describing or in any way relating to the business
or operations of any of the Company and the New Companies.
SECTION 13.4. WAIVER OF CONSEQUENTIAL DAMAGES
The Parties hereby waive any and all claims to incidental or
consequential damages arising out of any breach of this Amended Agreement.
SECTION 13.5. TREATMENT OF CONFIDENTIAL OR PROPRIETARY INFORMATION
Neither Party, nor any of the Company or the New Companies,
shall share with any other person any confidential or proprietary information
obtained through or for any of the Company and the New Companies, or otherwise
use such information to the detriment of either or both Parties or any of the
Company or the New Companies.
SECTION 13.6. NOTICES
All notices, demands and other communications provided for
hereunder shall be in writing and shall be mailed, communicated by means of
facsimile transmission or delivered (by hand or courier service) to the Parties
at their respective addresses set forth below:
Brancher: Ets. Brancher S.A.
Attention: President
00 xxx x'Xxxxxx-Xxxxxxxx
00000 Xxxx, Xxxxxx
Telephone: (00) 000 00 00 00
Fax: (00) 000 00 00 00
Xxxx Xxxxxxx Brancher
00 Xxxxx xx Xxxx xx Xxxxx
00000 Xxxxxxxxxxxx, Xxxxxx
Telephone: (00) 000 00 00 00
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Lennox: Lennox Global Ltd.
Attention: President
0000 Xxxx Xxxx Xxxx.
Xxxxxxxxxx, Xxxxx 00000
X.X.X.
Telephone: 000-000-0000
Fax: 000-000-0000
or at such other address as the Party desiring to change the address set forth
above under its name may direct by written notice to the other Party hereto. All
such notices and communications, when mailed by certified mail or sent by
courier or fax, shall be effective upon the earlier to occur actual receipt or
three (3) business days after deposit in the mail, postage prepaid.
SECTION 13.7. FURTHER ASSURANCES
The Parties agree to execute such additional agreements and
documents, and to take such other actions, as may be necessary to effect the
purposes of this Amended Agreement.
SECTION 13.8. MODIFICATIONS
Any action or agreement by the Parties to modify this Amended
Agreement, in whole or in part, shall be binding upon the Parties even though
such agreement may lack legal consideration, so long as such modification
agreement shall be in writing and shall be executed by both Parties with the
same formality with which this Amended Agreement was executed.
SECTION 13.9. HEADINGS
The headings in this Amended Agreement are inserted for
convenience only and shall not affect the meaning or interpretation of this
Amended Agreement or of any section hereof.
SECTION 13.10. BINDING EFFECT
This Amended Agreement shall be binding upon, and shall inure
to the benefit of, the Parties and their respective successors, assigns and
legal representatives.
SECTION 13.11. COUNTERPARTS
This Amended Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
together shall constitute one and the same Amended Agreement. Each Party may
execute this Amended Agreement by signing any such counterpart.
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SECTION 13.12. GOVERNING LAW
This Amended Agreement shall be deemed to be a contract made
under, and for all purposes shall be construed in accordance with and governed
by, the laws of France.
SECTION 13.13. CONSTRUCTION
Wherever possible, this Amended Agreement, and all documents
contemplated hereunder, shall be construed and interpreted so as to be effective
and valid under Applicable Law. If any provision of this Amended Agreement, or
any document contemplated hereunder, for any reason shall be deemed invalid or
prohibited under Applicable Law, such provision shall be invalid or prohibited
only to the extent of such invalidity or prohibition, which shall not invalidate
the remainder of such provision or the remaining provisions of this Amended
Agreement.
SECTION 13.14. DELAY OR PARTIAL EXERCISE NOT WAIVER
No failure or delay on the part of any Party to exercise any
right or remedy hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right or remedy hereunder preclude any other
or further exercise thereof or the exercise of any other right or remedy granted
hereby or by any related document.
SECTION 13.15. INTERPRETATION
As used in this Amended Agreement, any singular noun shall
include the plural and any plural the singular, and any reference to one gender
shall include the other.
SECTION 13.16. COMMITMENTS FROM SUBSIDIARIES
Each Party shall cause its subsidiaries to act in such a
manner as to give effect to the purposes, provisions and obligations of such
Party under this Amended Agreement.
SECTION 13.17. ENTIRE AGREEMENT
This Amended Agreement and the Exhibits and Schedules attached
or to be attached hereto constitute and express the entire agreement between the
Parties with respect to the matters referred to herein. All previous
discussions, promises, representations and understandings relative thereto are
hereby merged in and superseded by this Amended Agreement; including
specifically, the agreement between Ets. Brancher S.A. and Heatcraft Inc. dated
November 1, 1990, the Letter of Intent between Lennox Global Ltd. and Ets.
Brancher S.A. dated November 16, 1995 and the Venture agreement between the
Parties dated 13 May 1996 as amended by the letter agreement dated 13 May 1996
and the amendment dated 24 September 1996. It is further agreed that the
Restructure Agreement signed contemporaneously with this Amended Agreement is
not superseded and remains independent from this Amended Agreement and of full
force and effect.
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SECTION 13.18. WAIVER
To be effective, any waiver of any right hereunder shall be in
writing and be signed by a duly authorized officer or representative of the
Party bound thereby.
SECTION 13.19. SIGNATORIES DULY AUTHORIZED
Each of the signatories to this Amended Agreement represents
that he is duly authorized to execute this Amended Agreement on behalf of the
Party for which he is signing, and that such signature is sufficient to bind the
Party purportedly represented.
SECTION 13.20. INCORPORATION OF EXHIBITS AND SCHEDULES BY REFERENCE
Any reference herein to any Exhibit or Schedule to this
Amended Agreement shall incorporate such Exhibit or Schedule herein, as if it
were set out in full in the text of this Amended Agreement.
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IN WITNESS WHEREOF, Brancher and Lennox have caused this Amended
Agreement to be duly executed and delivered as of the date first written above.
ETS. BRANCHER X.X. XXXXXX GLOBAL LTD.
A French Corporation A Delaware Corporation
By: /s/Xxxx-Xxxxxxx Brancher By: /s/Xxxxxx X. Xxxxxxx
---------------------------- --------------------------
XXXX-XXXXXXX BRANCHER LENNOX INTERNATIONAL INC.
A Delaware Corporation
/s/ Xxxx-Xxxxxxx Brancher By: /s/Xxxxx Xxxxx
------------------------------- --------------------------
Xxxx-Xxxxxxx Brancher Executive Vice President
XXXXX X.X.
A French Corporation
By: /s/Xxxx-Xxxxxxx Brancher
----------------------------
President
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EXHIBIT 3.2.A
CONTRIBUTION OF LENNOX U.K. TO HCF
The following principles will be used to govern the contribution of Lennox U.K.
to the New Company:
X. Xxxxxx U.K., will consist of all the assets of Lennox Industries.
II. The parties will develop an inventory of assets; including, all
equipment (at book value); all raw material inventory; all accounts
payable; finished goods inventory; all other assets and liabilities;
and accounts receivable. The assets will reflect an agreed upon net
value of at least Twenty Nine Million Nine Hundred Ninety-Nine Thousand
Nine Hundred Seventy Ffs (29,999,970.00Ffs).
III. The process to be used to complete the transfer is as follows:
A. All shares of Lennox U.K. will be transferred to HCF or HCF's
designated subsidiary on or before 1 January 1998.
X. Xxxxxx will be responsible for the financial results of the
integrated operation for 1997.
V. The share transfer agreement shall consist of the following terms and
conditions:
A. Agreement to Sell and Purchase Shares. Subject to the terms
and conditions set forth in this share transfer agreement, the
Parties agree that HCF will purchase and Lennox will sell all
of the shares of Company Stock of Lennox U.K.
B. Purchase Price. At the Transfer Date, the Parties agree that
HCF will pay or cause to be paid to Lennox the sum of Twenty
Nine Million Nine Hundred Ninety-Nine Thousand Nine Hundred
Seventy Ffs (29,999,970.00Ffs) as the purchase price for all
of the shares of Company Stock Of Lennox U.K.
C. Delivery of Shares of Lennox U.K. Lennox agrees to deliver to
HCF all of the shares of Company Stock of Lennox U.K., which
shares represent One Hundred Percent (100%) of the ownership
of Lennox U.K., on or before January 1, 1998 or such other
date as the parties may agree ("Transfer Date"). Such shares
shall be free of any lien, encumbrance or claim except as
agreed upon by HCF.
D. Assets of Lennox U.K. Lennox agrees that the net book value,
as provided under normal and usual accounting conventions,
shall equal no less than Twenty Nine Million Nine Hundred
Ninety-Nine Thousand Nine Hundred Seventy Ffs
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(29,999,970.00Ffs) on the Date of Transfer. HCF shall have the
right to have such book value audited by a third party. If
there is a dispute as to the book value, then each party shall
appoint an independent third party, which parties shall
appoint a third party to constitute a panel (the "Panel") to
determine the net book value of Lennox U.K. The Panel shall
then determine, by a majority vote, the net book value of
Lennox U.K. within thirty (30) days of their appointment. If
the net book value is less than Twenty Nine Million Nine
Hundred Ninety-Nine Thousand Nine Hundred Seventy Ffs
(29,999,970.00Ffs), Lennox agrees to add sufficient assets
such that the net book value, as determined by the Panel,
shall equal or exceed Twenty Nine Million Nine Hundred
Ninety-Nine Thousand Nine Hundred Seventy Ffs
(29,999,970.00Ffs). If the net book value exceeds Twenty Nine
Million Nine Hundred Ninety-Nine Thousand Nine Hundred Seventy
Ffs (29,999,970.00Ffs) then Lennox shall have the option to
remove any assets at its election so long as the remaining net
book value remains equal to or greater than Twenty Nine
Million Nine Hundred Ninety-Nine Thousand Nine Hundred Seventy
Ffs (29,999,970.00Ffs).
E. Representations of Lennox. Lennox hereby represents and warrants
that:
1. DUE INCORPORATION, GOOD STANDING, POWER AND
AUTHORITY. Lennox U.K. is or will, at the Transfer
Date, be a corporation duly organized, validly
existing and in good standing under the laws of the
United Kingdom, with all necessary corporate power
and authority to carry on its business as being
conducted on the Transfer Date and to own, operate
and lease all properties owned, operated or leased by
it, and it will, at the Transfer Date, be duly
qualified to do business in all jurisdictions where
such qualification is required, except where the
failure to be so qualified will not result in a
Material Adverse Effect. Lennox has delivered or
will, at the Transfer Date, deliver to HCF true,
correct and complete copies of the current Company
Statutes or similar organizational documents of
Lennox U.K.
2. FINANCIAL STATEMENTS. Lennox agrees to provide HCF,
at least monthly or upon its request, unaudited
Balance Sheets and the related Statements of
Operating Income of Lennox U.K. for its operations
from the Closing Date until the Transfer Date. In
addition, Lennox agrees to deliver to HCF, as soon as
available, true, complete and correct copies of (i)
the unaudited Balance Sheet of Lennox U.K. at
December 31, 1997. The Lennox U.K. Financial
Statements have been prepared from Lennox U.K. books
and records in accordance with Lennox U.K. accounting
practices applied on a basis consistent with
preceding years throughout the period involved. The
Lennox U.K. Financial Statements present fairly
Lennox U.K. 's financial condition at the respective
dates thereof and their results of operations for the
periods then ended.
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3. CAPITALIZATION. The authorized capital stock of
Lennox U.K. consists or 470,000 Redeemable
Non-Cumulative Preference Shares of 1(pound)each and
15,000 Ordinary Shares of 1(pound)each. All
outstanding capital stock of Lennox U.K. has been
validly issued and is fully paid and nonassessable.
No shares of capital stock of Lennox U.K. will have
been issued in violation of preemptive or similar
rights, and there will be no outstanding or
contingent rights to acquire any of the capital stock
of Lennox U.K. (whether or not outstanding), and no
outstanding agreements or other arrangements by which
Lennox U.K. is or may be bound to repurchase or
otherwise acquire any shares of its capital stock.
4. TITLE TO SHARES OR PROPERTY. At the Transfer Date,
HCF will acquire, good and marketable title to the
shares of Company Stock of Lennox U.K. as provided
herein, free and clear of all Encumbrances.
5. ASSETS AND PROPERTIES.
(i) Real Property. Lennox agrees to
supply to HCF, on or before the Transfer
Date, a list of all Real Property owned by
or leased to Lennox U.K.;
(ii) Personal Property. Except for
Inventory and supplies disposed of or
consumed and accounts receivables collected
or written off and cash utilized, all in the
ordinary course of business consistent with
the past practices of Lennox U.K., Lennox
U.K. will own all of its Inventory,
equipment and other personal property (both
tangible and intangible) reflected on the
Latest Balance Sheet as of the Transfer
date, free and clear of all Encumbrances.
(iii) Condition of Property. Except
as specifically identified to HCF on or
before the Transfer Date, the Real Property
and tangible personal property owned or
leased by Lennox U. K. on the Transfer Date
will be in good operating condition and
repair, ordinary wear and tear excepted; and
Lennox U.K. has no knowledge of any
condition or defect, not disclosed to HCF,
of the Real Property or such personal
property that would materially affect its
fair market values or otherwise have a
Material Adverse Effect on Lennox U.K. or
its operations.
(iv) Title to Properties. Lennox U.
K. has or will have as of the Transfer Date,
good and indefeasible title to all
properties (real, personal, tangible and
intangible) it owns other than those sold or
otherwise disposed of in the ordinary course
of business, free and
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clear of all Encumbrances, except (i) as
disclosed to HCF, (ii) as set forth in the
Latest Balance Sheet as securing specific
liabilities, (iii) the Permitted
Encumbrances, and (iv) imperfections of
title that are not substantial in character,
amount or extent and do not materially
detract from the value of the properties
subject thereto.
(v) Utilities. To the best knowledge
of Lennox U.K., all utilities (water, sewer,
gas, electricity, telephones, etc.) are or
will available to its property to adequately
service such property as of the Transfer
Date.
(vi) Compliance. To the best
knowledge of Lennox U.K., as of the Transfer
date, the continued operation, use or
occupancy of the Real Property, as currently
operated, used or occupied, will not violate
any zoning, building, health, flood control,
fire or other law, ordinance or regulation
or any restrictive covenant, except as
disclosed to HCF prior to the Transfer Date
in writing.
6. LEASES. On or before the Transfer date,
Lennox will provide to HCF a list of all real
properties leased by Lennox U.K. and Lennox U.K. has
or will have been in peaceable possession (or
remedied any claims relating thereto) of the Real
Property, buildings, machinery, equipment, vehicles
or other tangible property or assets covered thereby
since the commencement of the original term of such
lease and is or will not be in material default
thereunder as of the Transfer date. There will not be
any liens on the assets of Lennox U.K. except as have
been identified to HCF in writing on the Transfer
Date.
7. INTELLECTUAL PROPERTY. On or before the
Transfer date, Lennox will provide to HCF a list of
all Intellectual Property that is material to the
conduct of the businesses of Lennox U.K. as being
conducted on the Transfer Date and owned by Lennox
U.K. or which it is licensed to use. The listed
Intellectual Property will constitute all
Intellectual Property necessary for the conduct of
the businesses of Lennox U.K. as being conducted as
of the Transfer date. To the best knowledge of
Lennox, there are no Proceedings pending or
threatened in writing against Lennox U.K. asserting
that the use by Lennox U.K. of any of such
Intellectual Property infringes in any material
respect the rights of any other person or seeking
revocation, termination, or concurrent use of any of
such Intellectual Property. Nor will such proceeding
exist at the Transfer Date without prior written
notice to HCF. To the best knowledge of Lennox, none
of such Intellectual Property is being infringed upon
by any other person.
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8. LEGAL PROCEEDINGS. On or before the Transfer date,
Lennox will provide to HCF a list, in writing, of all
pending and, to the best knowledge of Lennox,
threatened Proceedings involving Lennox U.K. or any
of its properties in which the damages sought to be
imposed exceed 500,000Ffs in any one case or which,
individually or in the aggregate, might result in any
Material Adverse Effect on the Transfer Date. There
are no Proceedings pending or, to the best knowledge
of Lennox, threatened in writing, seeking to
restrain, prohibit or obtain damages or other relief
in connection with this Amended Agreement or the
consummation of the transactions contemplated herein.
9. GOVERNMENTAL CONSENTS, COMPLIANCE WITH LAW. Except
for the approvals of Governmental Entities disclosed
in writing to HCF, to the best knowledge of Lennox,
there is no requirement applicable to Lennox or
Lennox U.K. to make any filing with, or to obtain any
permit, authorization, consent or approval of, any
Governmental Entity as a condition to the lawful
consummation by Lennox of the transactions
contemplated by this share transfer agreement. The
execution, delivery or performance by Lennox of this
Amended Agreement will not violate any Applicable Law
to which Lennox or Lennox U.K. is subject.
10. INVENTORY. As of the Transfer Date, all Inventory
(including raw materials, work-in progress and
finished goods) and related supplies reflected on the
Lennox U.K. Latest Balance Sheet or thereafter
acquired and not disposed of in the ordinary course
of business will be usable and salable in the
ordinary course of business of Lennox U.K.
11. CONTRACTS AND AGREEMENTS. On or before the Transfer
date, Lennox will provide to HCF a list, in writing,
of all material contracts or other agreements,
relating to the businesses of Lennox U.K. to which
Lennox U.K. is a party or by which Lennox U.K. is
bound, and Lennox has furnished or shall furnish
prior to the Transfer Date to HCF complete and
correct copies of all such contracts or other
agreements, including all amendments as of the date
hereof. Lennox U.K. will not be in default in any
material respect, and no written notice of alleged
default will have been received by Lennox U.K. under
any of these agreements, and, to the best of Lennox'
knowledge, no other party thereto is in default or
alleged in writing to be in default in any material
respect other than defaults as to which requisite
waivers or consents have been obtained and defaults
which in the aggregate would not have a Material
Adverse Effect which have not been identified to HCF,
in writing. Lennox makes no representations about the
possibility or likelihood of renewal or extension of
any such contract or other agreement unless otherwise
noted to HCF, in writing.
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12. COMPLIANCE WITH LAW. To the best of Lennox'
knowledge, Lennox U.K. will not, as of the Transfer
Date, be in violation of (i) any applicable judgment,
order, injunction, award or decree relating to the
operation of its businesses or (ii) any Applicable
Law except in the case of (i) and (ii) for such
violation individually or in the aggregate which
would not have a Material Adverse Effect which have
not been identified to HCF, in writing.
13. PERMITS. On or before the Transfer date, Lennox will
provide to HCF a list, in writing of all Permits
which are material to or necessary in the conduct of
the businesses of Lennox U.K. as they are being
conducted as of the Transfer date. Lennox U.K. will
have conducted its businesses and operations
substantially in accordance with the conditions and
provisions of the Permits except for noncompliance as
to which it has received requisite waivers or
consents or which does not have a Material Adverse
Effect. There will be no other Permit the absence of
which would have a Material Adverse Effect on Lennox
U.K.'s ability to carry on its businesses and
operations on the Transfer Date except as identified
to HCF in writing. Except as identified to HCF in
writing: (i) all such Permits will be in full force
and effect, (ii) no violations are known to Lennox or
have been recorded (which have not been remedied) in
respect of any such Permit, and (iii) no Proceeding
is pending or threatened in writing to revoke or
limit any such Permit.
14. EMPLOYEES. On or before the Transfer date, Lennox
will provide to HCF a list, in writing, a complete
list of the collective bargaining agreements
applicable to the facilities of Lennox U.K.; a list
of all employment agreements between any employee and
Lennox U.K. and the names and total compensation of
all salaried employees who are employed by Lennox
U.K. who have an annual salary in excess of $100,000.
Except as identified to HCF in writing, there are no
and will not have been strikes, slow-downs, disputes,
litigation, agency or other actions pending or
threatened which are considered adverse to the
operations of Lennox U.K.
15. EMPLOYEE BENEFIT PLANS. On or before the Transfer
date, Lennox will provide to HCF a list, in writing,
of all of the pension, profit sharing, thrift,
deferred compensation, bonus, incentive, stock
purchase, severance, hospitalization, insurance or
other similar plans, agreements or arrangements,
which are maintained by or contributed to by Lennox
U.K. for its employees. All obligations of Lennox
U.K. to contribute to such plans on behalf of the
employees employed for calendar years prior to 1996
have been paid, and all obligations of Lennox U.K. to
contribute to such plans on behalf of such employees
for the period beginning January 1, 1996 and ending
on the Transfer Date will be paid by Lennox U.K.
Lennox U.K. has not incurred any liability under
these plans or the laws governing them arising in
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connection with the termination of, or complete or
partial withdrawal from, any plan covered or
previously covered by Applicable Laws, and Lennox
U.K. has paid and discharged when due all obligations
and liabilities arising under Applicable Laws with
respect to all employee benefit plans of a character
which, if unpaid or unperformed might result in the
imposition of a lien against any of the assets of
Lennox U.K. All employee benefit plans of Lennox U.K.
(the "Lennox U.K. Plans") have been, are being and
will have been, at the Transfer Date, maintained in
compliance with each of their terms and with the
requirements prescribed by all Applicable Laws.
Lennox has furnished or will furnish, on the Transfer
Date, to HCF a copy of the Lennox U.K. Plans and
related documents, where applicable, and all
amendments thereto and written interpretations
thereof together with any reports prepared in
connection with the Lennox U.K. Plans. There are not
now, nor will there have been prior to the Transfer
Date, any transactions with respect to the Lennox
U.K. Plans which could result in material liability
on the part of Lennox U.K. under Applicable Laws.
There are no threatened or pending claims by or on
behalf of the Lennox U.K. Plans or by any employee
participating therein alleging a breach of fiduciary
duties or violations of Applicable Laws with respect
to the Lennox U.K. Plans on or before the Transfer
Date which could result in material liability on the
part of Lennox U.K. or the Lennox U.K. Plans under
Applicable Laws of which HCF will have not been
notified in writing. The Parties further agree that
HCF shall have the option to terminate all Lennox
U.K. Plans upon the Closing or such mutually agreed
upon date thereafter and any employees of Lennox U.K.
transferred to shall be a participant in such
employee benefit plans as are in force for other
employees of the.
16. INSURANCE. On or before the Transfer date, Lennox
will provide to HCF a list, in writing, of all
policies of fire, liability, casualty, life and all
other forms of insurance owned or held by Lennox U.K.
As of the Transfer Date or the first policy renewal
date thereafter, HCF shall have the option to
terminate all Lennox U.K. coverages under said
policies with respect to assets being transferred to
the New Companies and the HCF will be responsible for
obtaining any insurance it deems necessary and
reasonable.
17. TAXES. Lennox U.K. has or will have filed all
foreign, federal, state, local and other tax reports
or returns required to be filed on or before the
Transfer Date and has or will have either discharged
or adequately provided for the discharge of all
taxes, costs, expenses, charges and debts of every
kind and character, except those taxes, costs,
expenses, charges and debts which are being protested
in good faith by Lennox U.K. which are identified to
HCF in writing.
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18. NO CONFLICT WITH OTHER AGREEMENTS. Neither the
execution nor delivery of this Amended Agreement, nor
the consummation of the transactions contemplated
hereunder, nor the fulfillment of or compliance with
the terms and conditions hereof will conflict with
the Company Statutes of Lennox or Lennox U.K., or
will result in a breach of, or constitute a conflict
or default under, any material contract, agreement or
instrument to which either of them is a party or by
which either of them or any of their assets or
personnel are bound.
19. ABSENCE OF CERTAIN EVENTS. Since December 31, 1995,
there has not been:
(i) Any Material Adverse Effect on Lennox U.K.
or the assets and properties described above
which has not been disclosed to HCF;
(ii) Any purchase, sale or transfer of assets in
anticipation of this Amended Agreement, or
which would contravene the intent of this
Amended Agreement;
(iii) Any illegal payment by Lennox U.K. to
foreign or domestic governmental or
quasi-governmental officials, or payments to
customers or suppliers for rebating of
charges, or other reciprocal practices, in
connection with the conduct of its
businesses, other than normal price
reductions allowed to customers in the
ordinary course of business; or
(iv) Any damage, destruction or loss (whether or
not covered by insurance) which has or would
have a Material Adverse Effect on Lennox
U.K.
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SCHEDULES
Schedule 3.3.A(i) Consolidated Net Book Value of Ets. Brancher as of
30 September 1997.
Schedule 8.1.E. Description of the Stock of the Venture Company
Schedule 8.1.F. Assets and Properties of the Venture Company
Schedule 8.1.G. Real Properties Leased by the Venture Company
Schedule 8.1.H. Intellectual Property of the Venture Company
Schedule 8.1.I. Legal Proceedings Involving the Venture Company
Schedule 8.1.J. Governmental Consents of the Venture Company
Schedule 8.1.L. Contracts & Agreements of the Venture Company
Schedule 8.1.N. Permits of the Venture Company
Schedule 8.1.Q. Labor Disputes of the Venture Company
Schedule 8.1.R. Employee Benefit Plans Maintained or Contributed to
by the Venture Company
Schedule 8.1.S. Insurance Policies of the Venture Company
Schedule 8.1.T. Taxes under Protest by the Venture Company
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