Share Sale and Purchase Agreement between Luvata Heat Transfer Solutions II AB and Modine Manufacturing Company, dated as of September 6, 2016

This Agreement is made on 6 September 2016

 

Between:

 

(1)	Luvata Heat Transfer Solutions II AB, a company incorporated in Sweden with registered number ###-###-#### and whose registered office is at c/o Luvata Söderköping AB, Industrigatan 2, 614 81 Söderköping, Sweden (the “Seller”); and

 

(2)	Modine Manufacturing Company, a company incorporated in Wisconsin and whose principal executive office is at 1500 DeKoven Avenue, Racine, Wisconsin 53403, USA (the “Purchaser”),

 

(the Seller and the Purchaser each separately a “Party” and together the “Parties”).

 

Whereas:

 

(A)	The Seller has agreed to sell, and the Purchaser has agreed to purchase, all of its Shares, in each case on the terms and subject to the conditions of this Agreement.

 

(B)

In order to facilitate an efficient process in the event of breaches by the Seller of the Warranties (as defined below), the Purchaser will arrange for a buyer’s representations and warranties insurance in the name of the Purchaser, without the possibility of recourse against the Seller (except if there is fraud or wilful misconduct from the Seller’s side in which case the insurance will still be valid but there will be recourse against the Seller).

 

(C)

Accordingly, the Seller and the Purchaser intend to take the steps set out in this Agreement, including payment of the Consideration and procuring repayment of the Intercompany Financing Arrangement Payables and Intercompany Financing Arrangement Receivables, in return for, inter alia, the transfer of the Shares and the procurement of the release of various guarantees and security interests in connection with the Shares and underlying businesses to be transferred.

 

It is agreed:

 

 

1.1	In this Agreement:

 

“Agents” means, in relation to a person, that person’s directors, officers, employees, advisers, agents and representatives;

 

“Announcement” means the announcement in the agreed form relating to the subject matter of this Agreement;

 

“Antitrust Conditions” means those conditions set out in paragraphs 1, 2 and 3 of Schedule 2, and each an “Antitrust Condition”;

 

“Auditor” has the meaning given to it in Clause 11.3 (Provision of Information);

 

“Bank Guarantees” means any guarantee, indemnity, letter of comfort or similar form of actual or contingent financial obligation issued or entered by any bank or other financial institution for the purpose of securing obligations of any of the Target Companies, each as set out in Schedule 11 (Guarantees), in connection with the operation of the Business;

 

“Base Cash Consideration” means one hundred sixty six million seven hundred thirty eight thousand two hundred twenty US dollars (USD 166,738,220);

 

“Business Day” means a day (other than a Saturday or Sunday or a public holiday) when commercial banks are open for ordinary banking business in Finland and New York;

 

“Business” means the business of the design, marketing and manufacturing of commercial and industrial coils, coolers (such as heat exchangers) and related products of the Target Companies as conducted at the date hereof;

 

“Cash Consideration” means:

 

(a)

the Base Cash Consideration;

 

(b)

plus the Daily Payment Amount;

 

(c)

plus the Equity Contribution Amount (if any); and

 

(d)

less the amount of known Leakage (if any);

 

“Circular 59” means the Circular Issued by the Department of Finance of the PRC and the State Taxation Bureau of the PRC Concerning Relevant Issues of Enterprise Income Tax Treatment in the Enterprise Reorganization (Cai Shui [2009] No. 59);

 

“Claim” means any claim made by Purchaser under this Agreement;

 

“Closing Settlement Schedule” means the schedule to be provided by the Seller to the Purchaser pursuant to Clause 4 (Closing Settlement Schedule);

 

“Code” means the U.S. Internal Revenue Code of 1986, as amended.

 

“Combined Accounts” means the combined accounts of the Target Companies as of the Locked Box Date included under index numbers 03.03.01.12 and 03.03.01.10 of the Data Room.

 

“Companies Act” means the Companies Act 2006;

 

“Completion” means completion of the sale and purchase of the Shares under this Agreement;

 

“Completion Date” means the first day that is (i) the last Business Day of a calendar month and (ii) at least ten (10) Business Days after the day on which the last of the Conditions has been satisfied or waived, or such other date as the Parties may agree in writing;

 

“Conditions” means the conditions referred to in Clause 3 (Conditions) and set out in Schedule 2 (Conditions);

 

“Consideration” means the Cash Consideration and the Stock Consideration;

 

“Continuing Provisions” means Clause 1 (Definitions and Interpretation), Clause 20 (Confidentiality), Clause 21 (Announcements), Clause 22 (Assignment), Clause 25 (Entire Agreement), Clause 26 (Severance and Validity), Clause 27 (Variations), Clause 28 (Remedies and Waivers), Clause 30 (Third Party Rights), Clause 32 (Costs and Expenses), Clause 33 (Notices) and Clause 35 (Governing Law and Settlement of Disputes), all of which shall continue to apply after the termination of this Agreement pursuant to Clause 3.10 (Conditions) or Clause 7.4(c) (Completion) without limit in time;

 

“Daily Payment Amount” means an amount equal to the sum of:

 

(a)

twenty five thousand Euro (EUR 25,000) per day from (and excluding) the Locked Box Date to (and including) the date (the “Ticking Fee Closing Date”) that is first day that is (x) the last Business Day of a calendar month and (y) at least ten (10) Business Days after the day on which the last of the Antitrust Conditions has been satisfied or waived; PLUS

 

(b)

in the event that the Completion Date is not the same date as the Ticking Fee Closing Date, an amount being a daily payment amount for each day from (and excluding) the Ticking Fee Closing Date to (and including) the Completion Date, starting at twenty four thousand Euro (EUR 24,000) in respect of the first day following the Ticking Fee Closing Date and reducing by one thousand Euro (EUR 1,000) each day thereafter until the 25th day following the Ticking Fee Closing Date (in respect of which day and every day thereafter the daily amount shall be zero);

 

“Data Room” means the data room managed by Ansarada, and entitled “Project Vincent” (URL: https://dataroom.ansarada.com/project.vincent/) and comprising copies of documents and other information (on the date which is two days prior to the date of this Agreement) relating to the Business and the Target Companies made available to the Purchaser online. The index of such data room is provided to the Purchaser as an enclosure to the Disclosure Letter on the date of this Agreement;

 

“Disclosed” means facts, matters or other information fairly disclosed by or in the Disclosed Information and for these purposes “fairly disclosed” means disclosed in a manner that, on a review of the Disclosed Information, a reasonable purchaser would be aware of the fact, matter or other information and be in a position to make a reasonably informed assessment of such fact, matter or other information;

 

“Disclosed Information” means:

 

(a)

the contents of this Agreement and the Transaction Documents;

 

(b)

the contents of the Disclosure Letter;

 

(c)

the contents of the Data Room; and

 

(d)

information made public on the following:

 

(i)

Companies’ Register of Udine;

 

(ii)

Austrian Companies’ Register (Firmenbuch);

 

(iii)

Austrian Insolvency Database (Ediktsdatei);

 

(iv)

Swedish Companies Registration Office (Bolagsverket);

 

(v)

Swedish Patent and Registration Office (Patent och Registreringsverket);

 

(vi)

the Companies Registry of England and Wales;

 

(vii)

the internet site of the Official Serbian Commercial Registry of the Serbian Business Registers Agency;

 

(viii)

Commercial Registry of Guadalajara (Registro Mercantil de Guadalajara);

 

(ix)

Property Registry of Guadalajara 3 (Registro de la Propiedad de Guadalajara Nº 3);

 

(x)

Spanish Public Registry on Insolvency (Registro Público Concursal);

 

(xi)

Public Registry of Property and Commerce of Monterrey, Nuevo León;

 

(xii)

Brazilian Internal Revenue Service (CNPJ/MF) - Enrollment Confirmation;

 

(xiii)

Commercial Registry of the State of Minas Gerais - Summary of filings (ficha cadastral);

 

(xiv)

MCA Services, Ministry of Corporate Affairs, Government of India; and

 

(xv)

the official website of the PRC National Enterprise Credit Information Public Disclosure System,

 

in each case, as at midday local time in the relevant jurisdiction of the applicable public register two (2) Business Days prior to the date of this Agreement;

 

“Disclosure Letter” means the letter from the Seller to the Purchaser in the agreed terms and delivered to the Purchaser before the execution of this Agreement;

 

“Dispute” has the meaning given to it in Clause 35.2 (Governing Law and Settlement of Disputes);

 

“Dispute Notice” has the meaning given to it in Clause 35.2 (Governing Law and Settlement of Disputes);

 

“Effects” has the meaning given to it in the definition of “Underinsured Incident”;

 

“Encumbrance” means any pledge, charge, lien (other than a lien arising by operation of law in the ordinary course of trading), mortgage, debenture, hypothecation, security interest, pre-emption right, option, title retention or any other encumbrance or security agreement or arrangement or other or any other type of preferential arrangement, agreement or obligation having similar effect, or any agreement to create any of the above;

 

“Environment” means all or any of the following media (alone or in combination): air (including the air within buildings and the air within other natural or man-made structures whether above or below ground); water (including water under or within land or in drains or sewers); soil and land and any ecological systems and living organisms supported by any of those media, including man and his property;

 

“Environmental Law” means all applicable laws (including, for the avoidance of doubt, common law), statutes, regulations, statutory guidance notes and final and binding court and other tribunal decisions applicable to the Target Companies and in force in the relevant jurisdictions were the Target Companies operate on the date of this Agreement whose purpose is to protect, or prevent pollution of, the Environment or to regulate emissions, discharges, or releases of Hazardous Substances into the Environment, or to regulate the use, treatment, storage, burial, disposal, transportation or handling of Hazardous Substances, and all bye-laws, codes, regulations, decrees or orders issued or promulgated or approved thereunder or in connection therewith to the extent that the same are applicable as at the date of this Agreement;

 

“Environmental Permit” means any licence, approval, authorisation, permission, notification, waiver, order or exemption which is issued, granted or required under Environmental Law;

 

“Euro” or “EUR” means euro, the lawful currency of the eurozone, used by the institutions of the European Union;

 

“Equity Contribution Amount” means in both cases between the date hereof and the Completion Date (i) any amount paid by the Seller or any member of the Seller’s Group in the form of a cash equity contribution to the equity of any Target Company with the prior written consent of the Purchaser (such consent not to be unreasonably withheld in the event the contribution is being made to comply with any regulatory requirements applicable under law or regulation and the conversion of an existing intra-group loan into equity is not a possible alternative to comply with the relevant law or regulation), and (ii) the amount of any intra-group loan converted to the equity of any Target Company by the Seller or any member of the Seller’s Group.  In the case of a conversion of an intra-group loan to the equity of any Target Company such Equity Contribution Amount shall be denominated in the same currency as the intra-group loan that is so converted.  In the case of a conversion of an intra-group loan to the equity of any Target Company, the principal amount of the intra-group loan so converted shall be increased by (i) the amount of interest that would have accrued on such loan amount from the date of conversion until the Completion Date but for such conversion and (ii) the amount of any incremental tax expense incurred as a result of such conversion when compared to repayment of the intra-group loan, provided that such tax expense is first notified by the Seller in writing to the Purchaser prior to the implementation of such conversion, and the Purchaser has not instructed the Seller not to proceed with such conversion within 5 Business Days of such notification by the Seller;

 

“Exchange Act” means Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder;

 

“FATCA” means (i) Code Sections 1471 - 1474, any amended or successor legislation, any U.S. Department of Treasury Regulations, forms, instructions or other guidance issued pursuant thereto, (ii) any intergovernmental agreement entered into pursuant to such authorities, and (iii) any legislation, regulations or guidance promulgated by any jurisdiction giving effect to any item described in limb (i) or (ii) of this definition;

 

“Financing Letters” has the meaning given to it in Clause 35.5;

 

“Fundamental Warranties” means the Warranties set out in paragraphs 1 (The Seller) and 2 (Corporate Information) of Schedule 6 (Warranties);

 

“GAAP” has the meaning given to it in Clause 10.1(m);

 

“Hazardous Substances” means any natural or artificial substance of any nature whatsoever (whether in the form of a solid, liquid, gas or vapour alone or in combination with any other substance) which is capable of causing harm or damage to the Environment or to public health or welfare or capable of causing a nuisance, including controlled, special, hazardous, toxic or dangerous wastes or pollutants;

 

“IFRS” means the International Financial Reporting Standards;

 

“Intellectual Property Rights” means all patents, utility models, business names, trademarks, goodwill and right to sue for passing off or unfair competition, service marks, trade names, registered designs, design rights, database rights, copyrights (including copyrights in software) and neighbouring rights, moral rights, domain names, semiconductor topography rights, rights in inventions, know-how, trade secrets, rights in confidential information and other similar proprietary rights in any part of the world (whether registered or not), including, where such rights are obtained or enhanced by registration, any registration of such rights and all applications and rights to apply for such registrations which may subsist anywhere in the world;

 

“Intercompany Cash Pooling Arrangements” means any cash pooling arrangement between the Target Companies and the Seller's Group consistent with the terms and conditions (including as the rates of interest paid or accrued pursuant to such arrangements) set out in the summary of cash pooling arrangements included under index number 04.02.01.10 of the Data Room;

 

“Intercompany Financing Agreements” means any inter-group financing arrangement or contract between the Target Companies and the Seller's Group consistent with the terms and conditions (including as the rates of interest paid or accrued pursuant to such arrangements) set out in the intercompany financing agreements included under index numbers 04.02.01.11 of the Data Room, consistent with Schedule 13 (Interest rates to be applied to Intercompany Financing Arrangements and internal deposits) and otherwise consistent with the ordinary course of business and past practice of the Target Companies;

 

“Intercompany Financing Arrangement Payables” means, in relation to each Target Company, any amounts owed as at Completion by that Target Company to any member of the Seller's Group under the Intercompany Financing Agreements, the Intercompany Hedging Arrangements and the Intercompany Cash Pooling Arrangements (including any interest accrued but unpaid thereunder);

 

“Intercompany Financing Arrangement Receivables” means, in relation to each Target Company, any amounts owed as at Completion to that Target Company by any member of the Seller's Group under the Intercompany Financing Agreements, the Intercompany Hedging Arrangements and the Intercompany Cash Pooling Arrangements (including any interest accrued but unpaid thereunder);

 

“Intercompany Hedging Arrangements” means any hedging arrangement or contract between any of the Target Companies and any member of the Seller's Group of a similar purpose and nature and consistent with the terms and conditions set out in the hedging transactions included under index numbers 04.02.01.05 of the Data Room and in all cases such that the spread of internal FX hedges is a maximum of 4 Pips (Pip = price interest point) on top of: (i) the prevailing market price on Reuters; or (ii) the respective price received for the external hedge by Luvata Treasury calculated for EUR FX rate and converted to the other relevant currency by using the respective FX rate;

 

“IT Separation Plan” means the IT separation plan to be agreed between the Parties after the date of this Agreement, in accordance with Clause 6.7;

 

“Leakage” means, in each case from or by any Target Company to or for the benefit of the Seller or any of its Related Persons (but excluding item (b) in the definition of Related Person) during the period from (but excluding) the Locked Box Date to (and including) the Completion Date:

 

(a)

any dividend or distribution (whether in cash or in kind) or any payments in lieu of any dividend or distribution, declared, paid or made;

 

(b)

any redemption, repurchase, repayment or return of shares, loans, debt or debt-like securities or other securities, or return of capital (whether by reduction of capital or otherwise and whether in cash or in kind);

 

(c)

any payments made or agreed to be made (directly or indirectly) or assets transferred by any Target Company;

 

(d)

any waiver or release (whether conditional or not) of any amount, right, value or obligation, or any claim in respect thereof owed, or due to any of the Target Companies;

 

(e)

any payments made, or liabilities incurred by any Target Company in connection with the transactions contemplated by this Agreement or as a result of Completion including payments or incurrence of any costs, expenses, professional fees or transaction bonuses to any person (including any bonuses and director’s fees, consultancy fees, advisory fees, management fees, monitoring fees, or compensation of a similar nature paid, but excluding salary and other expenses payable to, or in respect of, any employees of the Target Companies in the ordinary course of business pursuant to employment contract or law) (which, for the purposes of Clause 11, shall be deemed to be received by the Seller);

 

(f)

the agreement, undertaking, arrangement or vote in favour to do any of the matters set out in (a) to (e) above (including, for the avoidance of doubt, any such agreement, undertaking, arrangement or vote prior to Completion which results after Completion in any of the items referred to in paragraphs (a) to (e) above); and

 

(g)

any fees, costs or Tax (excluding any VAT in respect of the fees which are recovered by any Target Company by repayment or credit) becoming payable by any Target Company as a consequence of any of the matters referred to in sub-paragraphs (a) to (f) inclusive above,

 

but, in each case, not including any Permitted Leakage;

 

“Leakage Amount” has the meaning given to it in Clause 5.3 (Consideration Adjustment);

 

“Leakage Claim” means any claim, proceeding, suit or action against any Seller in respect of any breach of Clause 11 (Leakage);

 

“Leakage Dispute” has the meaning given to it in Clause 11.6;

 

“Leakage Expert” has the meaning given to it in Clause 11.6;

 

“LCIA” means the London Court of International Arbitration;

 

“LCIA Rules” means the London Court of International Arbitration Rules;

 

“Local SPA” means the short form transfer documents pursuant to which Sale Shares will be transferred on the Completion Date, in each case in the form included in Part B of Schedule 4 (Shares to Be Transferred) and “Local SPAs” means all of them;

“Locked Box Date” means December 31, 2015;

 

“Lock-up Agreements” means the lock-up agreements to be entered into at Completion between the Purchaser and each of the Stock Consideration Recipients, in form set out in Schedule 12, each a “Lock-up Agreement”;

 

“Long Stop Date” means February 22, 2017 or such other date as the Parties may agree in writing;

 

“Loss” or “Losses” means any and all losses, liabilities, actions and claims, including charges, costs, damages, fines, penalties, interest and all legal and other professional fees and expenses including, in each case, all related Taxes;

 

“Luvata Audit Procedures” means that for each entity there is as part of the preparation of Luvata group consolidated financial statements (i) an audit or an review, or (ii) no work, depending on the scale of operations, as specified for each entity under index number 03.01.01.01 of the Data Room;

 

“Non-Satisfaction” has the meaning given to it in Clause 3.10 (Conditions);

 

“Notice” has the meaning given to it in Clause 33.1 (Notices);

 

“Permitted Encumbrances” means:

 

(a)

any restriction or Encumbrance arising in the ordinary course of business in connection with the Intercompany Financing Arrangement Payables or debt facilities of the Seller; and

 

(b)

any security established to secure the Intercompany Financing Arrangement Payables or debt facilities of the Seller;

 

“Permitted Leakage” means any of the following:

 

(a)

payments made under or other actions taken in relation to:

 

(i)

any Intercompany Financing Agreement which action is permitted thereunder;

 

(ii)

any Intercompany Hedging Arrangement which action is permitted thereunder;

 

(iii)

any Intercompany Cash Pooling Arrangement which action is permitted thereunder;

 

(b)

payments of guarantee fees on Bank Guarantees arranged by any member of the Seller’s Group on behalf of any Target Company in the ordinary course of business consistent with the terms set out in the summary of bank and parent company guarantees under index number 04.02.01.12 of the Data Room;

 

(c)

payments of each of:

 

(i)

the Seller's Group management fee, in the ordinary course of business consistent with past practice and subject to a maximum amount of two hundred thousand Euro (EUR 200,000) in respect of any calendar month;

 

(ii)

service charges or costs incurred in connection with the procurement of IT services pursuant to the Information Technology Services Agreements, dated 12 April 2016 contained under index numbers 09.17.02, 09.17.03, 09.17.04 and 09.17.05 of the Data Room, in the ordinary course of business consistent with past practice and subject to a maximum amount of two hundred thousand Euro (EUR 200,000) in respect of any calendar month;

 

(iii)

the AX fee, in the ordinary course of business consistent with past practice and subject to a maximum amount of one hundred thousand Euro (EUR 100,000) in respect of any calendar month;

 

(iv)

the insurance fee, in the ordinary course of business consistent with past practice and subject to a maximum amount of fifty thousand Euro (EUR 50,000) in respect of any calendar month; and

 

(v)

other minor recharges in the ordinary course of business consistent with past practice, including but not limited to management, monitoring or similar fees, insurance fees, fees in relation to IT systems and personnel charges, subject to a maximum amount of twenty five thousand Euro (EUR 25,000) in respect of any calendar month,

 

provided that the payments made (i) to (v) above shall not exceeed four million five hundred thousand Euro (EUR 4,500,000) in aggregate during the calendar year 2016;

 

(d)

payments of any service charges or costs reasonably incurred in connection with the separation of the IT systems of the Target Companies from the IT systems of the Seller’s Group in connection with the IT Separation Plan;

 

(e)

purchase of tubes products from the Seller’s Group and related payments by the Target Companies in the ordinary course of business on arm’s length terms and conditions consistent with past practice;

 

(f)

payment of salary and other contractually and legally required costs in respect of the employment of the Transferring Employee and Mr. Erik Hedin in the ordinary course of business and consistent with past practice;

 

(g)

any other action or matter undertaken or to be undertaken in relation to any matter required to be undertaken pursuant to the Transaction Documents; and

 

(h)

any Tax becoming payable by any Target Company as a result of any of the matters referred to in sub-paragraphs (a) to (g) inclusive above;

 

“PRC” means the People’s Republic of China;

 

“Pre-Closing Tax Period” has the meaning given to it in Clause 19;

 

“Proceedings” has the meaning given to it in paragraph 15.1 of Schedule 6 (Warranties);

 

“Public Notice 4” means the Enterprise Reorganization Enterprise Income Tax Administration Rules issued by the State Taxation Bureau of the PRC (Public Notice [2010] No. 4);

 

“Purchaser’s Completion Documents” has the meaning given to it in Clause 10.1(b) (Purchaser’s Warranties and Undertakings);

 

“Purchaser’s Group” means the Purchaser, its direct and indirect subsidiaries, any parent companies or partnership or an unincorporated association carrying on trade or business of the Purchaser and all other similar subsidiary undertakings of any such parent company as the case may be from time to time (and for the avoidance of doubt, including the Target Companies after Completion);

 

“Purchaser’s Warranties” means the warranties referred to in Clause 10 (Purchaser’s Warranties and Undertakings);

 

“Regulatory Authority” means (i) applicable government agencies in any jurisdiction where an approval of the Transaction is required; and (ii) competition, anti-trust or merger control authorities in the countries or regions where an anti-trust filing is required or a relevant threshold is met as a result of the Transaction;

 

“Related Person” means any person that is connected with another person, in particular but without limitation:

 

(a)

in the case of a person or body corporate, any other person or body corporate which, directly or indirectly, controls, or is controlled by, or is under common control with, such person or body corporate; for the purposes hereof, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a person, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise;

 

(b)

in the case of an individual, any spouse and/or lineal descendant by blood or adoption of that individual or any person(s) acting in the capacity of trustee(s) of a trust of which that individual is the settlor; and

 

(c)

in the case of a limited partnership, any nominee or trustee of the limited partnership, the partners in that limited partnership or their nominees, any investment manager or investment adviser to the limited partnership, any parent undertaking or subsidiary undertaking of that investment manager or investment adviser and any other investment fund managed or advised by any such person and/or any investor in any fund that directly or indirectly holds interests in the limited partnership,

 

provided that the Target Companies shall not be deemed Related Persons of the Seller for the purposes of this Agreement;

 

“Relevant Party’s Group” means: in relation to the Purchaser, the Purchaser’s Group; in relation to the Seller, the Seller’s Group;

 

“Resigning Directors” means Anneli Sääski, Jyrki Siltala, Jyrki Vesaluoma, Erik Hedin, Hannu Wahlroos and Robert Fleming, each a “Resigning Director”;

 

“Resolution Period” has the meaning given to it in Clause 35.2 (Governing Law and Settlement of Disputes);

 

“Restricted Period” means the period from (and including) the Completion Date to (and including) the second anniversary of the Completion Date;

 

“Requested Information” has the meaning given to it in Clause 11.3 (Provision of Information);

 

“SEC” means the U.S. Securities and Exchange Commission;

 

“SEC Reports” has the meaning given to it in Clause 10.1(m);

 

“Securities Act” means the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder;

 

“Seller Group Guarantees” means any corporate guarantee, indemnity, letter of comfort or similar form of actual or contingent financial obligation issued or entered into prior to the date hereof by any member of the Seller’s Group to a third party for the purpose of securing obligations of any Target Company, each as set out in Schedule 11 (Guarantees), in connection with the operation of the Business;

 

“Seller’s Designated Account” means any one or more of the bank account details which shall be notified to the Purchaser by the Seller at least five (5) Business Days prior to Completion;

 

“Seller’s Group” means the Seller, its direct and indirect subsidiaries, parent companies or partnership or an unincorporated association carrying on trade or business of the Seller and all other similar subsidiary undertakings of any such parent company as the case may be from time to time (but excluding the Target Companies);

 

“Seller’s knowledge” means the actual knowledge of Dennis Appel, David Dalton, Charles Gao, Erik Hedin, Michael Powell, Laura Puntin, Pasi Rosenberg, Jyrki Siltala, Anneli Sääski and Jyrki Vesaluoma, in each case, after having made reasonable enquiry of each other as at the date of this Agreement;

 

“Seller’s Lenders” means financial institutions and other entities that have provided the Seller with secured senior and mezzanine debt facilities originally put in place in 2007 (and as amended and amended and restated from time to time) and the security agent and facility agent in respect of such facilities;

 

“Senior Employee” means any employee of any Target Company with a base salary in excess of EUR 100,000 (or the equivalent in the local currency where such employee is employed);

“Settlement” has the meaning given to it in Clause 35.2 (Governing Law and Settlement of Disputes);

 

“Shares” means the shares in the Target Companies held by the Seller, as further detailed in Schedule 4 (Shares to be Transferred) together with any share capital in such Target Companies resulting from an Equity Contribution Amount (if any) excluding the shares of  Luvata Heat Transfer Solutions (Zhongshan) Co., Ltd., which shall be transferred to Luvata Heat Transfer Solutions Asia Holding AB prior to the Completion;

 

“Stock Consideration” means 2,219,424 validly issued, fully-paid and non-assessable shares in the common stock of the Purchaser, par value USD 0.625, to be issued on the Completion Date;

 

“Stock Consideration Recipients” means certain of the Seller's Lenders whom the Seller designates to receive the Stock Consideration;

 

“Target Companies” means the companies listed in Schedule 1 (The Target Companies), and “Target Company” means any of them;

 

“Target Company Data” means all business information and all personally-identifying information and data (whether of employees, contractors, consultants, customers, consumers, or other persons and whether in electronic or any other form or medium) that is accessed, collected, used, processed, stored, shared, distributed, transferred, disclosed, destroyed, or disposed of by any of the IT systems of the Target Companies;

 

“Tax” or “Taxation” means any form of tax, levy, impost, duty, charge, social security contribution or other governmental, state, provincial, local governmental or municipal charges, duties, contributions and levies, withholdings and deductions of whatever nature, whenever and wherever imposed, and all related penalties, charges, costs and interest and in respect of any person whether their liability for the same is a primary or secondary liability;

 

“Tax Return” means any return, report, form, declaration, claim for refund, information report or return, statement, supplementary or supporting schedules or other information filed or required to be filed with any taxing authority with respect to Taxes (including any amendment thereof);

 

“Tax Warranties” means the Warranties set out in paragraph 16 of Schedule 6 (Warranties);

 

“Taxation Authority” means any governmental or other authority competent to impose Taxation;

 

“Trademark License Agreement” means the Trademark License Agreement to be entered into at Completion substantially in the form of Schedule 8 (Trademark License Agreement);

 

“Transaction” means the transactions to be effected by the Transaction Documents;

 

“Transaction Documents” means this Agreement, the Trademark License Agreement, the Transitional Service Agreement, the Local SPAs, the Disclosure Letter, the Lock-up Agreements, and any Schedules thereto, and any other agreement or document referred to in, or ancillary to, those documents, to which the Seller and the Purchaser is a party, and “Transaction Document” shall mean any one of them;

 

“Transferring Employee” means the person listed in Schedule 5 (Transferring Employee);

 

“Transitional Services Agreement” means the Transitional Services Agreement to be entered into at Completion substantially in the form of Schedule 9 (Form of Transitional Services Agreement);

 

“Underinsured Incident” means:

 

(a)

any event, circumstance or effect that is deemed by the Seller's insurers to constitute an "earth movement", a "flood" or a "windstorm" under the Seller's Group Property Damage and Business Interruption Policy (collectively, “Effects”); and

 

(b)

such Effects take place after (and including) the date of this Agreement and prior to the time of Completion that causes damage to any of the Underinsured Properties where such damage exceeds the aggregate insurance coverage in respect of such Property under the Seller's Group Property Damage and Business Interruption Policy;

 

“Underinsured Properties” means each of the properties within the Seller's Group located at:

 

(a)

Via Giulio Locatelli, 22 - 33050 Pocenia (UD), Italy (to the extent insurance coverage in respect of such Underinsured Property under the Seller's Group Property Damage and Business Interruption Policy (or such other insurance policy) is less than EUR 101,193,810, on an individual and not aggregate basis);

 

(b)

Via Prometo Candoni 9, Zona Industriale, 33020 Amaro (UD), Italy (to the extent insurance coverage in respect of such Underinsured Property under the Seller's Group Property Damage and Business Interruption Policy (or such other insurance policy) is less than EUR 54,450,776, on an individual and not aggregate basis);

 

(c)

SE-614 81 Söderköping, Sweden (to the extent insurance coverage in respect of such Underinsured Property under the Seller's Group Property Damage and Business Interruption Policy (or such other insurance policy) is less than EUR 74,244,898, on an individual and not aggregate basis);

 

(d)

1000 Heat Craft Drive, Grenada, MS ###-###-####, USA (to the extent insurance coverage in respect of such Underinsured Property under the Seller's Group Property Damage and Business Interruption Policy (or such other insurance policy) is less than EUR 51,026,981, on an individual and not aggregate basis);

 

(e)

P.I. Henares 309-310, 19004 Guadalajara, Spain (to the extent insurance coverage in respect of such Underinsured Property under the Seller's Group Property Damage and Business Interruption Policy (or such other insurance policy) is less than EUR 75,967,500, on an individual and not aggregate basis); and

 

(f)

3984 Highway 51 South, Grenada, MS 38901, USA (to the extent insurance coverage in respect of such Underinsured Property under the Seller's Group Property Damage and Business Interruption Policy (or such other insurance policy) is less than EUR 218,986,974, on an individual and not aggregate basis);

 

“USD” or “US Dollars” means US dollars, the lawful currency of the United States of America;

 

“VAT” means any Taxation levied by reference to added value or any sales or turnover Tax of a similar nature;

 

“W&I Insurance Policy” means the warranty and indemnity insurance policy issued to the Purchaser by the W&I Insurance Provider;

 

“W&I Insurance Provider” means Pembroke/Ironshore;

 

“Warranties” means the warranties referred to in Clause 8 (Seller’s Warranties and Undertakings) and set out in Schedule 6 (Warranties) and “Warranty” shall mean any one of them;

 

“Warranty Claim” means any claim for breach of Warranty; and

 

“Zhongshan Transfer” means the transfer of the shares of Luvata Heat Transfer Solutions (Zhongshan) Co., Ltd. from the Seller to Luvata Heat Transfer Solutions Asia Holding AB prior to Completion.

 

1.2	The expression “in the agreed terms” means in the form agreed between the Purchaser and the Seller and signed for the purposes of identification by or on behalf of the Purchaser and the Seller.

 

1.3	Any reference to “writing” or “written” means any method of reproducing words in a legible and non‑transitory form.

 

1.4	References to “include” or “including” are to be construed without limitation.

 

1.5	References to a “company” include any company, corporation or other body corporate wherever and however incorporated or established.

 

1.6	Reference to a “subsidiary”, “subsidiary undertaking”, “parent undertaking” and “holding company” have the meanings given to them by the Companies Act

 

1.7	References to a “person” include any individual, company, partnership, joint venture, firm, association, trust, governmental or regulatory authority or other body or entity (whether or not having separate legal personality).

1.8	The table of contents and headings are inserted for convenience only and do not affect the construction of this Agreement.

 

1.9	Unless the context otherwise requires, words in the singular include the plural and vice versa and a reference to any gender includes all other genders.

 

1.10	References to Clauses, paragraphs and Schedules are to clauses and paragraphs of, and schedules to, this Agreement.  The Schedules form part of this Agreement.

 

1.11

References to any statute or statutory provision include a reference to that statute or statutory provision as amended, consolidated or replaced from time to time (whether before or after the date of this Agreement) and include any subordinate legislation made under the relevant statute or statutory provision except to the extent that any amendment, consolidation or replacement would increase or extend the liability of the Seller under this Agreement.

 

1.12

References to any English legal term for any action, remedy, method of financial proceedings, legal document, legal status, court, official or any legal concept or thing shall, in respect of any jurisdiction other than England, be deemed to include what most nearly approximates in that jurisdiction to the English legal term.

 

1.13

All payments required in accordance with this Agreement shall be made in Euro except for the payment of the Base Cash Consideration which shall be made in US Dollars and the payments of Intercompany Financing Arrangement Payables and Intercompany Financing Arrangement Receivables which shall be made in their relevant currency.  For the purpose of applying a reference to a monetary sum expressed in Euro, an amount in a different currency shall be converted into Euro on a particular date at an exchange rate equal to the official European Central Bank exchange rate for such date, as published by the European Central Bank.  All payments to the Seller payable under this Agreement shall be paid to the Seller’s Designated Account.

 

1.14	This Agreement shall be binding on and be for the benefit of the successors of the Parties.

 

2.1

The Seller shall sell and the Purchaser shall purchase, or shall designate a member of the Purchaser's Group to purchase, the Shares on the terms and subject to the conditions of this Agreement with effect from Completion with full title guarantee and free from all Encumbrances and with all rights which are now, or at any time hereafter may become, attached to them including the right to receive all distributions and dividends declared, paid or made in respect of the Shares after Completion.

 

2.2	The Seller shall procure that on or prior to Completion any and all rights of pre-emption, repurchase, acquisition or other such equivalent rights over the Shares are waived irrevocably by the persons entitled thereto.

 

2.3	Neither the Seller nor the Purchaser shall be obliged to complete the purchase of any of the Shares unless the purchase of all the Shares is completed at Completion.

 

 

3.1	The obligations of the Seller and the Purchaser to complete the sale and purchase of the Shares are in all respects conditional on the satisfaction (or waiver, as the case may be) of the Conditions.

 

3.2	The Purchaser shall use its best endeavours to procure the fulfilment of the Antitrust Conditions as soon as possible, and in any event before the Long Stop Date.

 

3.3	The Purchaser shall submit any notifications, filings or submissions to the Regulatory Authority as soon as possible following the date of this Agreement and in any event within ten (10) Business Days of the date of this Agreement.

 

3.4	The Seller and the Purchaser agree that:

 

(a)

the regulatory filings required in order to satisfy the Antitrust Conditions shall be prepared by the Purchaser, and the Purchaser shall be responsible for the payment of any associated filing fees; and

 

(b)

all requests and enquiries from the Regulatory Authority shall be dealt with, in each case, by the Seller and the Purchaser in consultation with each other and the Seller and the Purchaser shall co‑operate with each other and the Regulatory Authority and provide all necessary information and assistance required by the other or by the Regulatory Authority as soon as reasonably practical upon being requested to do so.

 

3.5	The Purchaser shall:

 

(a)

promptly inform the Seller of the content of any meeting, material conversation and any other communication which takes place between the Purchaser (or its Agents) and the Regulatory Authority and provide copies or, in the case of non‑written communications, a written summary, to the Seller;

 

(b)

except for communications which are immaterial or procedural in nature, procure that the Seller is given a reasonable opportunity to review, comment on and approve drafts of all notifications, filings and submissions before they are submitted to the Regulatory Authority and provide the Seller with final copies of all such notifications, filings and submissions (save that in relation to all disclosures to the Seller under this Clause 3.5(b), the Purchaser may redact business secrets and other confidential or competitively or commercially sensitive material provided unredacted copies of such information is provided on an outside counsel-to-counsel, confidential basis);

 

(c)

take all steps necessary to secure the satisfaction of the Antitrust Conditions by the end of the Regulatory Authority’s initial period of review without the need for a second phase of investigation (including agreeing to any conditions, undertakings or divestments to obtain clearance in accordance with any applicable merger control law, statute or regulation of any applicable jurisdiction); provided, however, that the Purchaser shall not, and no member of the Purchaser's Group shall, be required to perform any steps pursuant to this Clause 3.5(c) that would, in the opinion of the Purchaser acting in good faith, have a material effect on the businesses of either the Purchaser's Group or the Target Companies; and

 

(d)

use its best endeavours to avoid any declaration of incompleteness by the Regulatory Authority or any other suspension of the periods for clearance.

 

3.6	The Purchaser undertakes to the Seller to procure that neither it nor any member of the Purchaser's Group shall (either alone or acting in concert with any other person):

 

(a)

acquire (or cause another person to acquire or to offer to acquire); or

 

(b)

execute definitive transaction documentation (or cause another person to execute definitive transaction documentation) arrangements that, if carried into effect, would result in the acquisition of,

 

a competing business to the business of any of the Target Companies, the acquisition of which might reasonably be expected to prejudice or delay the outcome of any filings with, or applications to, any Regulatory Authority. For the avoidance of doubt, this Clause 3.6 shall not survive Completion.

 

3.7	Neither Party shall, without the prior written consent of the other Party, withdraw any notification, filing or submission made to the Regulatory Authority.

 

3.8	Both Parties undertake to notify the other Party in writing, of anything which will or may prevent any of the Conditions from being satisfied on or before the Long Stop Date immediately that it comes to its attention.

 

3.9	The Purchaser undertakes to notify the Seller as soon as possible on becoming aware that any of the Antitrust Conditions has been satisfied and in any event within one (1) Business Day of such satisfaction.

 

3.10	If the Conditions are not satisfied on or before the Long Stop Date or becomes incapable of satisfaction on or before the Long Stop Date (the “Non-Satisfaction”) the Seller shall be entitled to treat this Agreement as terminated subject to, and on the basis set out in, Clause 13.2 (Termination).

 

4.1	Not less than five (5) Business Days prior to the Completion Date, the Seller shall provide the Purchaser with a schedule (the “Closing Settlement Schedule”) setting out:

 

(a)

the amount payable under the Intercompany Financing Arrangement Payables, as calculated pursuant to Clause 16 (Cash Pool, Finance and Hedging) (including all appropriate details including currency, identity of payee and payee account details);

 

(b)

the Daily Payment Amount;

 

(c)

the Equity Contribution Amount (if any); and

 

(d)

the amount of any known Leakage (if any).

 

4.2

In the event that Completion is deferred beyond the intended Completion Date in accordance with the terms of this Agreement and a Closing Settlement Schedule has been delivered to the Purchaser prior to such deferral occurring, the Seller shall be entitled to deliver a revised Closing Settlement Schedule to the Purchaser in accordance with Clause 4.1 and the Closing Settlement Schedule previously submitted shall cease to apply or be relevant for all purposes.

 

 

5.1	Consideration Amount

 

The aggregate consideration for the sale and purchase of the Shares shall be: (i) the payment by the Purchaser of an amount equal to the Cash Consideration; and (ii) the issuance of the Stock Consideration, all of which shall be allocated and paid, issued or discharged (as appropriate) on Completion in accordance with this Clause 5 and Clause 7.3 (Completion) and the Seller agrees that such payments shall constitute good and valid discharge of the Purchaser's obligations with respect to payment of the Consideration under this Agreement.

 

5.2	Consideration Allocation

 

Unless otherwise agreed in writing, the Seller and the Purchaser agree that the Consideration shall be allocated among the Shares in accordance with Schedule 4 (Shares to be Transferred).

 

5.3	Consideration Adjustment

 

(a)

If any Leakage is notified under Clause 11.2 (Notification of Leakage) or otherwise comes to the attention of the Purchaser at or prior to Completion and the Seller agrees that such Leakage has occurred and the amount of such Leakage (a “Leakage Amount”), the Consideration shall be reduced by an amount equal to such agreed aggregate Leakage Amounts, which shall discharge the Seller's obligation to make payment of such Leakage Amount under Clause 11 (Leakage). The Seller agrees that any such Leakage Amount shall be deducted from the Consideration that would otherwise be paid to the Seller in accordance with this Clause 5 and Clause 7.3 (Completion).

 

(b)

If any payment is made by the Seller to the Purchaser in respect of any Leakage Claim or any breach of this Agreement (including any breach of a Warranty), the payment shall be treated as an adjustment to the Consideration paid by the Purchaser under this Agreement to the Seller and, in such circumstances, the Consideration shall be deemed to have been reduced by the amount of such payment. For the avoidance of doubt, this Clause 5.3 does not operate to reduce the ability of the Purchaser to make a Claim or any Leakage Claim or the amount of the Claim or any Leakage Claim.

 

6.1	The Seller shall procure that from the date of this Agreement until Completion:

 

(a)

the Target Companies will conduct the Business in all material respects only in the ordinary course; and

 

(b)

the Target Companies do not or do not agree to do anything set out in Schedule 10 (Conduct of Business prior to Completion), without the prior written approval of the Purchaser (such approval not to be unreasonably withheld or delayed).

 

6.2	In consultation with the Purchaser, the Seller shall use reasonable endeavours to procure that:

 

(a)

the relevant Target Company shall provide, as soon as reasonably practicable, such information as the Purchaser may reasonably request (at the expense of the Seller) in relation to the steps and actions being taken, or to be taken, by the relevant Target Company in order to effect repayment of the Intercompany Financing Arrangement Payables at Completion and the release of all relevant security under the Intercompany Financing Arrangement Payables and any associated hedging arrangements upon such repayment;

 

(b)

the senior management of the Seller's Group provides the Purchaser, on a timely basis, with such cooperation as the Purchaser may reasonably request in order for the Purchaser to complete, as soon as practicable and in consultation with any financing banks or other lenders (such banks and any other lenders providing any financing in connection with the Transaction, the “Financing Sources”) or as may be reasonably requested by a Financing Source, the entering into of a financing in connection with the Transaction, provided always that no Target Company shall be required to enter into any agreement or arrangement which, prior to Completion, results in an obligation for borrowed amounts or any other liability or contingent obligation or to pay any commitment or other similar fee or to incur any other out of pocket cost or expense to a third party (except such fees, costs and expenses as the Purchaser agrees in writing to promptly reimburse) in connection with any such financing, amendment, waiver or consent; and

 

(c)

the Target Companies and the senior management of the Seller's Group shall provide, as soon as reasonably practicable at the Purchaser's cost, such information and assistance as the Purchaser may reasonably request as is required by the Purchaser in order to begin preparatory work to prepare audited financial information in respect of the Target Companies to the extent required by law and to satisfy the Purchaser's regulatory obligations (including those of the New York Stock Exchange). Any auditing fees and expenses will be borne by the Purchaser; provided, that such fees are reasonable and reflect customary market rates for equivalent work of this nature.

 

6.3	The Purchaser shall promptly, upon request from the Seller, reimburse the Seller for all reasonable out of pocket expenses (including legal fees) incurred by the Seller in connection with the cooperation contemplated by Clauses 6.2(b) and 6.2(c)

 

6.4	Clause 6.1 shall not apply in respect of and shall not operate so as to restrict or prevent:

 

(a)

any Permitted Leakage;

 

(b)

payment of (through cash or conversion of a loan) any Equity Contribution Amount;

 

(c)

any matter reasonably undertaken by the Target Companies in an emergency or disaster situation with the intention of and to the extent only of those matters strictly required with a view to minimising any adverse effect thereof (and of which the Purchaser shall be promptly notified and, to the extent reasonably practicable, consulted on), but only for so long as such emergency or disaster situation continues and solely to the extent necessary or prudent to mitigate the effects of such emergency or disaster situation and provided further that nothing in this paragraph shall exonerate the Seller for any liability that it may have for any breach of Clause 6.2 which may have led to such emergency or disaster situation;

 

(d)

any matter expressly permitted by, or necessary for performance of, this Agreement (including for the avoidance of doubt any matters set out in the definition of Permitted Leakage) or the Transaction Documents or necessary for Completion; or

 

(e)

any matter undertaken at the written request or with the written consent of the Purchaser.

 

6.5	Underinsured Incident

 

(a)

The Parties agree that:

 

(i)

if an Underinsured Incident occurs; and

 

(ii)

such Underinsured Incident has a material adverse effect on the Target Companies,

 

the Purchaser shall be entitled to terminate this Agreement without any payment or penalty subject to, and on the basis set out in, Clause 13.2 (Termination), unless the Seller agrees to pay, or cause another Seller’s Group entity to pay, to the Purchaser the amount calculated as the difference (on a gross basis) between:

 

(iii)

the total damage caused by the Effect; and

 

(iv)

the aggregate of all insurance proceeds actually paid to the Seller by its relevant insurer(s) in respect of such Underinsured Property under the Seller’s Group Property Damage and Business Interruption Insurance.

 

(b)

The Parties agree that, in the event that the Seller arranges increased insurance coverage under the Seller’s Group Property Damage and Business Interruption Insurance (or under another insurance policy) in respect of any Underinsured Property after the date of this Agreement such that the relevant Underinsured Property is covered for property damage and business interruption insurance in an amount not less than the amount set out beside such Underinsured Property’s description in the definition of “Underinsured Properties,” and provides the Purchaser with written confirmation of such increased coverage, such Underinsured Property shall be excluded from the definition of “Underinsured Properties” with effect from the time such increased coverage takes effect. The Seller (and for the avoidance of doubt no Target Company) shall be responsible for the costs and expenses of  arranging such increased insurance coverage.

 

6.6	Replacement of Luvata on Certain US Letters of Credit

 

(a)

On or prior to the Completion Date, the Purchaser will provide to both the former insurance provider, Liberty Mutual Insurance Company, and the current insurance provider, Travelers, of Luvata Heat Transfer Solutions, Inc.:

 

(i)

an executed assumption agreement assuming responsibility for the obligations of (a) Luvata Heat Transfer Solutions Inc. and its subsidiaries, to the extent such obligations relate to the workers of Luvata Heat Transfer Solutions Inc. and its subsidiaries, under the workers compensation insurance policies, which assumption agreement shall become effective upon occurrence of Completion; and

 

(ii)

an acceptable replacement letter of credit or other acceptable collateral security, to the extent such letter of credit or collateral security relates to the obligation relating to the workers of Luvata Heat Transfer Solutions Inc. and its subsidiaries, which shall become effective upon occurrence of Completion;

 

in each case, satisfactory to the insurance providers.

 

(b)

With effect from Completion, the Seller will terminate the letter of credit that the Seller’s Group has provided as security deposit for the obligations of Luvata Heat Transfer Solutions Inc. and its subsidiaries. The Purchaser and Luvata Heat Transfer Solutions Inc. will use reasonable endeavours to assist the Seller in connection with termination of such letter of credit as of the Completion Date, provided that, at all times, the Purchaser’s exposure is limited to those obligations solely relating to the employees of Luvata Heat Transfer Solutions Inc. and its subsidiaries.

 

6.7	IT Separation Plan

 

As soon as practicable, and in any event within thirty (30) days of the date of this Agreement, both of the Parties undertake to work together in good faith with the other Party to finalise the terms of the IT Separation Plan, including to agree that:

 

(a)

the terms of the IT Separation Plan are reasonable and appropriate to effect the separation of the Seller's Group IT systems from the Target Companies; and

 

(b)

any charges, costs and expenses included in the IT Separation Plan are commercially reasonable charges that may be incurred by Target Companies for the benefit of the Seller.

 

6.8	Conversion of Intercompany Loans

 

(a)

No later than thirty (30) days after the date of this Agreement the Purchaser may notify the Seller that it requires the Seller to, prior to Completion, convert to equity any amount of any intra-group loan owed by Luvata Italy S.r.l. to the Seller’s Group.  The Parties agree and acknowledge that, in determining the relevant amount, the settlement of the aggregate amount of any cash deposits made by Luvata Italy S.r.l. shall be taken into account first in repaying such intra-group loan and only the remaining balance of such intra-group loan may be required to be converted.

 

(b)

In the event either of the Parties determines that it would be advisable to convert, prior to Completion, any intra-group loans to equity in respect of any other Target Company than Luvata Italy S.r.l., the Parties shall discuss in good faith to agree the amount, if any, and time of such proposed conversion.

 

7.1	Not less than fifteen (15) Business Days prior to Completion, the Seller shall notify the Purchaser in writing of the full details of the identity and jurisdiction of incorporation of each Stock Consideration Recipient.

 

7.2	Completion shall take place on the Completion Date at the offices of White & Case LLP, in Helsinki, Finland or at such other place and/or time as is agreed in writing by the Seller and the Purchaser.

 

7.3	At Completion the Seller shall undertake those actions listed in Part 1 of Schedule 3 (Completion Arrangements) and the Purchaser shall undertake those actions listed in Part 2 of Schedule 3 (Completion Arrangements).

 

7.4

If there is a material breach of Clause 7.3 (Completion) and Schedule 3 (Completion Arrangements) on the Completion Date the non-defaulting Party, as the case may be, (the “Non-Defaulting Party”) shall not be obliged to complete this Agreement and such Non-Defaulting Party shall be entitled by written notice to the other Party to:

 

(a)

defer Completion for a period of up to ten (10) Business Days (with the provisions of this Clause 7 applying to Completion as so deferred); or

 

(b)

proceed to Completion as far as practicable (without limiting its rights and remedies under this Agreement); or

 

(c)

treat this Agreement as terminated for breach of condition subject to, and on the basis set out in, Clause 13.2 (Termination),

 

in each case without prejudice to the Non-Defaulting Party's rights under this Agreement (including the right to claim damages) or otherwise. For the avoidance of doubt, if the Non-Defaulting Party is unable to comply with any of its obligations specified in Schedule 3 (Completion Arrangements) following the other Party’s failure to perform any of its obligations under Schedule 3 (Completion Arrangements), the Non-Defaulting Party shall not be deemed to have breached Schedule 3 (Completion Arrangements).

 

 

8.1

The Seller warrants to the Purchaser that each of the Warranties is at the date of this Agreement, and each of the Fundamental Warranties is at the date of this Agreement and at Completion will be, true and accurate in all material respects. The Warranties are given subject to Schedule 7 (Seller’s Limitations on Liability).

 

8.2	The Seller shall not be liable under the Warranties to the extent that the facts which cause the Warranties to be breached were Disclosed to the Purchaser as part of the Disclosed Information.

 

8.3	Unless expressly provided in this Agreement, each of the Warranties shall be separate and independent and shall not be limited by reference to any other paragraph or anything in this Agreement.

 

The liability of the Seller in respect of a Warranty Claim shall be limited as provided in Schedule 7 (Seller’s Limitations on Liability).

 

 

 

10.1

The Purchaser warrants to the Seller and, for the purposes of Clause 10.1(i) to (m) inclusive only, each of the Stock Consideration Recipients that the statements set out below are true and accurate as at the date of this Agreement and undertakes that they will be true and accurate at Completion as if they had been repeated at Completion:

 

(a)

the Purchaser is a company validly existing and duly incorporated under the laws of its jurisdiction of incorporation;

 

(b)

the Purchaser has the full legal right, power and authority to execute, deliver and perform the Transaction Documents to which it is a party (the “Purchaser’s Completion Documents”);

 

(c)

the Purchaser’s Completion Documents will, when executed by the Purchaser, constitute lawful, valid and binding obligations of the Purchaser in accordance with their respective terms;

 

(d)

the execution and delivery of, and the performance by the Purchaser of its obligations under, the Purchaser’s Completion Documents will not:

 

(i)

result in a breach of any provision of the memorandum or articles of association, by-laws or equivalent constitutional document of the Purchaser;

 

(ii)

result in a breach of, or constitute a default under, any instrument to which the Purchaser is a party or by which the Purchaser is bound and which is material in the context of the Transaction;

 

(iii)

result in a breach of any order, judgment or decree of any court or governmental agency to which the Purchaser is a party or by which the Purchaser is bound and which is material in the context of the Transaction; or

 

(iv)

require the Purchaser to obtain any consent or approval of, or give any notice to or make any registration with, any governmental or other authority (including any stock exchange on which the Purchaser’s common stock is then listed) which has not been obtained or made at the date hereof both on an unconditional basis and on a basis which cannot be revoked (provided that this paragraph (iv) shall not extend to those consents or approvals from anti-trust, governmental or regulatory authorities referred to in Schedule 2 (Conditions)); and

 

(e)

the Purchaser is acting as principal and not as agent or broker for any other person and no other person than the Purchaser will be interested in the Shares. For the purposes of this paragraph the word “interested” shall bear the same meaning as in Part 22 of the Companies Act;

 

(f)

the Purchaser has (and at Completion will have) on an unconditional basis (other than being conditional on Completion occurring) the necessary cash resources sufficient to meet its obligations under this Agreement and the Purchaser’s Completion Documents;

 

(g)

neither the Purchaser nor any member of the Purchaser’s Group which is a party to any Transaction Document is insolvent or bankrupt under the laws of its jurisdiction of incorporation, unable to pay its debts as they fall due or has proposed or is liable to any arrangement (whether by court process or otherwise) under which its creditors (or any group of them) would receive less than the amounts due to them.  There are no proceedings in relation to any compromise or arrangement with creditors or any winding up, bankruptcy or insolvency proceedings concerning the Purchaser or any member of the Purchaser’s Group which is a party to any Transaction Document and no events have occurred which would justify such proceedings.  No steps have been taken to enforce any security over any assets of the Purchaser or any member of the Purchaser’s Group which is a party to any Transaction Document and no event has occurred to give the right to enforce such security;

 

(h)

so far as the Purchaser is aware, neither the Purchaser nor any member of the Purchaser’s Group is subject to any order, judgment, direction, investigation or other proceedings by any governmental or other authority which will, or are likely to, prevent or delay the fulfilment of any of the Antitrust Conditions;

 

(i)

the Stock Consideration has been duly authorized and, when issued, delivered and paid for as provided in this Agreement, will be duly and validly issued, fully paid and nonassessable; the issuance of the Stock Consideration is not subject to any preemptive, subscription or similar rights;

 

(j)

no vote of the holders of any class or series of capital stock or other equity interests of the Purchaser is necessary to issue the Stock Consideration to be issued under this Agreement; prior to completion, Purchaser shall have reserved a sufficient number of shares of its common stock in order to fulfil its obligation to issue the Stock Consideration to be issued under this Agreement;

 

(k)

as of Completion, the Stock Consideration Recipients will have good title to the Stock Consideration, free and clear of all Encumbrances;

 

(l)

the Stock Consideration will be issued in compliance with all applicable U.S. state and federal laws, statutes, regulations, rules or regulatory guidance having the force of law concerning the issuance of securities; and

 

(m)

since January 1, 2014, the Purchaser has filed all reports, schedules, forms, statements and other documents required to be filed with the SEC by the Purchaser under the Securities Act and the Exchange Act, including pursuant to Section 13(a) thereof (the foregoing materials, including the exhibits and schedules thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”) on a timely basis.  As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  The financial statements of the Purchaser included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing.  Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Purchaser and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments.  Purchaser maintains a system of internal accounting controls sufficient to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Purchaser has (A) reasonably designed disclosure controls and procedures (within the meaning of Rules 13a- 15(e) and 15d-15(e) of the Exchange Act) to ensure that material information is made known to the Chief Executive Officer and the Chief Financial Officer of Purchaser and (B) disclosed, based on its most recent evaluation prior to the date of this Agreement, to its auditors and the audit committee of its board of directors (1) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) which are reasonably likely to adversely affect in any material respect its ability to record, process, summarize and report financial data and (2) any fraud, whether or not material, that involves management or other employees who have a significant role in its internal controls. There are no unresolved comments in comment letters received from the SEC staff with respect to the SEC Reports filed or furnished on or prior to the date hereof.

 

10.2	Notification Obligation

 

The Purchaser shall notify the Seller promptly in writing upon becoming aware of any fact, matter or circumstance that may delay Completion.

 

10.3	Waiver of Rights

 

The Purchaser hereby warrants and undertakes to the Seller for itself and as agent and trustee for each employee, director, agent or officer of any member of the Seller’s Group and/or the Target Companies (each a “Relevant Person”) that other than with respect to the terms of this Agreement, any other direct contractual obligation existing between the Purchaser and the Relevant Person and in the absence of fraud or fraudulent misrepresentation, the Purchaser:

 

(a)

has no rights against (and waives any rights it may have against); and

 

(b)

may not make a claim against (and waives any claim it may have against),

 

any Relevant Person, provided that nothing in this Clause 10.3 shall limit the ability of the Purchaser to bring any claim against (i) any adviser to the Target Companies and/or the Seller, to the extent it has prepared a report or other documentation for the specific benefit of the Purchaser in connection with the Transaction (subject always to the terms of any reliance letter entered into between the Purchaser and the relevant adviser and/or the terms of engagement of such adviser); and (ii) the Seller to the extent permitted by any contractual arrangements between the Seller and the Purchaser.

 

10.4	No Representation

 

The Purchaser acknowledges that, except where specifically otherwise provided, no representation or warranty has been made as to the accuracy or completeness of any of the information provided in relation to the Target Companies by the Seller, any member of the Seller’s Group nor any of their respective and Agents.

 

 

11.1	Warranty and Undertaking

 

The Seller:

 

(a)

warrants to the Purchaser that from (but excluding) the Locked Box Date to (and including) the date of this Agreement, there has been; and

 

(b)

undertakes to the Purchaser to procure that from the date of this Agreement to (and including) the Completion Date, there will be,

 

no Leakage.

 

11.2	Notification of Leakage

 

The Seller undertakes to the Purchaser that it shall promptly notify the Purchaser in writing of the details of any breach of Clause 11.1 (Warranty and Undertaking) upon it becoming aware of any such breach.

 

11.3	Provision of Information

 

Not less than three (3) weeks prior to the Completion Date, the Seller shall provide such access as is reasonably requested, upon reasonable notice and during reasonable times, by the Purchaser and an auditor engaged solely by and at the expense of the Purchaser (the “Auditor”) to the management, books and records of the Target Companies (the “Requested Information”) so as to enable the Purchaser and the Auditor to undertake a reasonable review identifying any Leakage during the period from (but excluding) the Locked Box Date to (and including) the date(s) to which such Requested Information relates, the results of which will be made available to the Target Companies (subject to the provision by the Target Companies of any reasonable and customary hold harmless that may be requested by the Auditor).

 

11.4	Payment for Leakage

 

If any Leakage occurs and is notified under Clause 11.2 (Notification of Leakage) or otherwise comes to the attention of the Purchaser during the period from (but excluding) the Locked Box Date up to (and including) the Completion Date, and the Seller agrees that such Leakage in such Leakage Amount has occurred then, to the extent not previously remedied pursuant to Clause 5.3, the Seller shall, no later than ten (10) Business Days after receipt of such written notification, pay to the Purchaser (or any Target Company, if applicable) on a Euro for Euro basis an amount in cash equal to the amount of such Leakage, net of any Tax deduction available to and utilised by the Purchaser, the Target or any Target Company in respect of such Leakage and any amount in respect of VAT which is recoverable as input tax by a member of the Relevant Party’s Group in respect of such Leakage.

 

11.5	Limitations

 

(a)

The liability of the Seller under this Clause 11 shall terminate on the expiry of the period of three (3) months following the Completion Date, save in respect of any claim for breach of Clause 11 of which the Purchaser has given notice in writing to the Seller before the expiry of that period containing reasonable details of the relevant breach and of the calculation of the amounts claimed, in which case, in relation to any relevant breaches so notified, the Seller shall remain liable until any relevant claims have been satisfied, settled or withdrawn and any payment in respect of such satisfaction or settlement has been made to the Purchaser.

 

(b)

The aggregate liability of the Seller in respect of all claims under Clause 11 shall not exceed the amount of Leakage received by or benefitted the Seller or its Related Persons.

 

(c)

The Parties agree that the Permitted Leakage do not constitute Leakage.

 

11.6	Expert Determination

 

If the liability for or quantum of a Leakage Claim notified pursuant to Clause 11.5(a) above is not agreed in writing between the Purchaser and the Seller within 10 Business Days of the Leakage Claim being notified to the Seller (the “Leakage Dispute”):

 

(a)

the Leakage Dispute shall be referred to an independent expert appointed by agreement between the Purchaser and the Seller (and, in the absence of such agreement as to the independent expert within five Business Days, the independent expert shall be chosen by the President for the time being of the Institute of Chartered Accountants in England and Wales on the written application by the Purchaser) (the “Leakage Expert”) who shall determine the amount of Leakage (if any) received by the Seller, such determination to be made by the Leakage Expert acting on the following basis:

 

(i)

the Leakage Expert shall act as an expert and not as an arbitrator;

 

(ii)

the Leakage Expert’s terms of reference shall be limited to determining the liability for and/or the quantum of Leakage as set out in the notice of the relevant Leakage Claim;

 

(iii)

the Leakage Expert’s determination with respect to any Leakage Dispute shall be within the range of values assigned by the Purchaser to such item in the notice of the relevant Leakage Claim and the liability for or quantum of Leakage in respect of such Leakage Claim asserted by the Seller, and shall be final and binding on the Purchaser and the Seller;

 

(iv)

except to the extent that the Purchaser and the Seller agree otherwise in writing, the Leakage Expert shall determine his own procedure, but the procedure of the Leakage Expert shall give the Purchaser and the Seller a reasonable opportunity to make written and oral representations, allow a party to the Leakage Dispute to be present while any oral representations are being made to the Leakage Expert by the other party, and require a party to the Leakage Dispute to supply to the other party a copy of any written representations at the same time as they are supplied to the Leakage Expert;

 

(v)

if, notwithstanding paragraph (iv) above, the Leakage Expert determines that he lacks sufficient evidence or information to determine the liability for and/or the quantum of Leakage as set out in the notice of the relevant Leakage Claim, he may decline to provide a determination and Clause 35 shall apply;

 

(vi)

the Leakage Expert’s costs (including any fees and costs of any advisers appointed by the Leakage Expert) shall be based upon the percentage that the portion of the contested amount not awarded to each Party bears to the amount actually contested between the Parties, as determined by the Leakage Expert. For example, if EUR 100 is contested by the relevant Parties and EUR 75 is awarded to the Purchaser, then the Purchaser shall pay 25% of the costs of the Leakage Expert and the Seller shall pay 75% of the costs of the Leakage Expert; and

 

(vii)

the Purchaser and the Seller shall cooperate with the Leakage Expert, and shall comply with all reasonable requests (including requests for information relating to a Target Company) made by the Leakage Expert in connection with the carrying out of his duties.

 

(b)

Following the Leakage Expert determining the amount of Leakage received by, or for the benefit of, the Seller, if any, the Seller shall pay to the Purchaser an amount in cash equal to the amount of any Leakage so determined.

 

(c)

For the avoidance of doubt, the appointment of a Leakage Expert prior to Completion shall not give rise to a right of any Party to defer, or otherwise delay, Completion.

 

12.1	The Seller shall not, and shall procure that none of its Related Persons shall, at any time during the Restricted Period solicit, or attempt to entice away, or hire any Senior Employee who at the relevant time is employed by any Target Company.

 

12.2

Whilst the undertaking in Clause 12.1 is considered by the Purchaser and the Seller to be reasonable in all the circumstances, if it should for any reason be held to be invalid, but would have been held to be valid if part of the wording were deleted or modified, the undertaking shall apply with the minimum modifications necessary to make it valid and effective.

 

13.1

Save for the Parties’ express right to terminate in Clause 3.10 (Conditions) or Clause 7.4(c) (Completion) referred to in Clause 13.2 below, the Purchaser shall not be entitled to rescind or terminate this Agreement, whether before or after Completion, and the Purchaser waives all and any rights of rescission which it may have in respect of any matter to the full extent permitted by law, other than such rights in respect of fraud, fraudulent misrepresentation or wilful concealment. Without prejudice to the generality of the foregoing, the Purchaser agrees that the remedy of rescission is excluded in relation to all matters and shall not be available, save in respect of fraud or wilful concealment.

 

13.2	If this Agreement is terminated by a Party in accordance with:

 

(a)

Clause 3.10 (Conditions);

 

(b)

Clause 6.5 (Underinsured Incident); or

 

(c)

Clause 7.4 (Completion),

 

the rights and obligations of the Parties under this Agreement shall cease immediately, save in respect of antecedent breaches (but excluding any right of the Purchaser to claim damages for breach of Warranty or of the Seller’s obligations under Clause 6 (Pre‑Completion Obligations)) and under the Continuing Provisions.

 

 

The Purchaser hereby agrees to release each Resigning Director, from any and all liability for their administration until Completion (or the earlier date of their resignation), other than in respect of fraud, fraudulent misrepresentation or any other criminal conduct by any such director or officer.

 

 

15.1	The Seller shall and shall procure that the Target Companies shall continue in force all pre-existing insurance cover in respect of the businesses and assets of the Target Companies maintained by them up to and including the Completion Date.

 

15.2

With effect from Completion all insurance cover previously maintained by the Seller’s Group in respect of the Target Companies or their businesses or assets shall cease; provided, however, that any insurance policies which are, prior to Completion, held directly by a Target Company independently from any group-level insurance policies shall not be terminated by the Seller (or relevant Target Company) and the Seller shall use reasonable efforts to assist the Purchaser to ensure that such insurance policy remains in place following the Completion Date.

 

16.1

The Parties agree that all Intercompany Cash Pooling Arrangements, Intercompany Financing Agreements and Intercompany Hedging Arrangements between the Target Companies and any member of the Seller’s Group will be settled and terminated at Completion and that the amounts payable under the Intercompany Financing Arrangement Payables and Intercompany Financing Arrangement Receivables will be established as follows:

 

(a)

On the day which is eight (8) Business Days prior to the Completion Date, the Seller shall provide the Purchaser with a schedule setting out the balance outstanding in respect of each Intercompany Financing Agreement;

 

(b)

On the day which is eight (8) Business Days prior to the Completion Date, all Intercompany Hedging Arrangements in place between any Target Company and any member of the Seller’s Group shall be closed, and an intra-group loan or intra-group receivable for the relevant Target Company shall be created as a result of the closing, depending on the position of the relevant Intercompany Hedging Arrangement;

 

(c)

On the day which is eight (8) Business Days prior to the Completion Date, all Intercompany Cash Pooling Arrangements in place between any Target Company and any member of the Seller’s Group shall be closed, and an intra-group loan or intra-group receivable for the relevant Target Company shall be created as a result of the closing, depending on the position of the relevant Intercompany Cash Pooling Arrangement;

 

(d)

On the day which is eight (8) Business Days prior to the Completion Date, the Seller and the Target Companies will cease to enter into any new Intercompany Financing Arrangement Payables and Intercompany Financing Arrangement Receivables, and separate the cash pool by separating each Target Company from the Seller’s cash pool into stand-alone accounts for each Target Company;

 

(e)

Immediately after the Seller completes the actions set out in Clauses 16.1(b), 16.1(c) and 16.1(d), in the event a Target Company has a positive balance in the cash pool, the Seller will on behalf of the Target Company deposit an amount equal to the funding required by the relevant Target Company until Completion in the stand-alone account of the relevant entity, and the remaining positive balance will be booked as an intra-group receivable of the relevant Target Company; in the event a Target Company has a negative balance in the cash pool, the negative balance will be booked as an intra-group loan (and such intra-group loan shall accrue interest in accordance with Schedule 13 (Interest rates to be applied to Intercompany Financing Agreements and internal deposits)) of the relevant Target Company;

 

(f)

In the event any Target Company, in the Seller’s reasonable opinion and subject to consultation with the Purchaser, requires additional funding on its stand-alone bank account until Completion the Seller will transfer the required amount to the stand-alone bank account of the Target Company, and this amount will be booked as an intra-group loan (and such intra-group loan shall accrue interest in accordance with Schedule 13 (Interest rates to be applied to Intercompany Financing Agreements and internal deposits)) of the relevant Target Company; and

 

(g)

On the day which is five (5) Business Days prior to the Completion Date, the Seller and the Target Companies will calculate the amounts outstanding under the Intercompany Financing Arrangement Payables and Intercompany Financing Arrangement Receivables, taking into account the actions taken under this Clause 16.1.

 

16.2

From the date of this Agreement the Purchaser may, upon request, appoint a representative or representatives to monitor the actions of the Seller and the Target Companies under Clause 16.1 above and in respect of all cash pooling agreements, financial clearing agreements, Intercompany Financing Agreements and Intercompany Hedging Arrangements between the Target Companies and any member of the Seller’s Group.

 

16.3

The Purchaser acknowledges and agrees that certain members of Seller’s Group have given, and may continue to give until Completion, Seller Group Guarantees, and that certain financial institutions have granted, and may continue to grant until Completion (provided such actions are reasonable and consistent with past practice), Bank Guarantees. The Seller shall on the fifth (5th) Business Day before the Completion Date provide the Purchaser with an updated list of the Seller Group Guarantees and Bank Guarantees outstanding at that date for the purposes of enabling compliance by the Purchaser of its obligation to release such Seller Group Guarantees and Bank Guarantees as of Completion.

 

16.4	Any foreign exchange or metal hedging contracts in place at Completion between any Target Company and a bank or other third party financial institution shall remain in force and transfer with the Target Company to the extent permitted under its terms.

 

16.5

The Purchaser acknowledges that on Completion, the Purchaser shall take the actions specified on Part 2 of Schedule 3 (Completion Arrangements), including but not limited to procure the release of any and all Seller Group Guarantees and procure the release of any and all Bank Guarantees, and that as of the Completion Date, the Purchaser shall arrange for all financing and guarantee matters of and for the Target Companies.

 

 

17.1

Prior to Completion, the Seller or any member of the Seller’s Group may transfer the Transferring Employee to any of the Target Companies, whether the transfer is implemented through the operation of applicable laws, or through the relevant Target Company making an offer of employment, or otherwise.  Where any such Transferring Employee is transferred to such Target Company, the Transferring Employee shall be employed by such Target Company upon terms no less favourable to the Transferring Employee than the employment contract of such Transferring Employee with the Seller’s Group immediately prior to the transfer; provided, however, that from the date of this Agreement the Seller shall not amend or alter the terms of the employment contract of such Transferring Employee without the prior written consent of the Purchaser.

 

17.2

If any Transferring Employee is not employed by the Target Companies on Completion and does not transfer automatically by operation of applicable laws to a Target Company, the Purchaser or any member of the Purchaser’s Group as a result of the Transaction, the Seller shall, or shall procure that the relevant member of the Seller’s Group shall, terminate the employment of such Transferring Employee with effect from Completion and the Purchaser shall, in consultation with the Seller, procure that an offer of employment is made in writing to that Transferring Employee by the Target Companies or a member of the Purchaser’s Group on terms no less favourable than the employment contract of such person in existence prior to such offer being made.

 

17.3

With effect from Completion, each Transferring Employee shall cease to be an active member of an employee benefit plan of the Seller’s Group and the Purchaser shall, or procure that a member of the Purchaser’s Group shall, establish new employee benefit plans for each Transferring Employee on terms no less favourable than the employee benefit plans in existence prior to an offer being made. The Purchaser shall be responsible for the costs and expenses of establishing such new employee benefit plans.

 

17.4

The Purchaser shall indemnify and hold harmless each member of the Seller’s Group from any and all Losses incurred on or after Completion as a result of, arising out of, or in connection with the termination of employment of any Transferring Employee who does not transfer to the Target Companies, the Purchaser or any member of the Purchaser’s Group or does not accept an offer of employment made by a member of the Purchaser’s Group, and any claim brought by such Transferring Employee in respect of any actual or anticipatory breach of contract and/or actual or anticipatory breach of statutory employment rights because of any change to any terms and conditions of employment or the termination of his or her employment on or after Completion.

 

18.1

For a period of seven (7) years following Completion, the Purchaser shall, and procure that the Target Companies shall, if reasonably requested by the Seller (at the expense of the Seller) and subject to the Seller giving such undertakings as to confidentiality as the Purchaser may reasonably require, allow the Seller, access (including the right to take copies) to the books and records of the Target Companies which:

 

(a)

is reasonably required by the Seller:

 

(i)

for the purpose of dealing with its Tax and accounting affairs; or

 

(ii)

in order to negotiate, refute, settle, compromise or otherwise deal with any claim, investigation or enquiry by a Taxation Authority regarding the Seller; and

 

(b)

relates to income, profits or gains earned, accrued or received (or treated for Tax purposes as earned, accrued or received) or any event occurring (or treated for Tax purposes as occurring) on or before Completion.

 

For the avoidance of doubt, this Clause 18.1 relates to the provision of Tax and accounting information and does not require the Purchaser or any Target Company to do anything other than to provide such information and give such assistance as is reasonably necessary for the provision of such information.

 

18.2

To the extent that any information reasonably required for the Business is not in the possession of the Purchaser but remains held by the Seller or the Seller’s Group, then for a period of seven (7) years following Completion the Seller shall use its reasonable endeavours to procure that, subject to the Purchaser giving such undertakings as to confidentiality as the Seller may reasonably require, copies of such information are provided to the Purchaser as soon as reasonably practicable following a written request for such information by the Purchaser, provided that this requirement shall not apply to any information which if provided would or, in the opinion of the Seller acting in good faith, may:

 

(a)

result in a breach of contract or breach of confidence owed to a third party; or

 

(b)

be detrimental to the business of the Seller or the Seller’s Group.

 

19.1

In respect of any accounting period (or portion thereof) for income Tax purposes commencing before the Completion Date and ending on the Completion Date (the “Pre-Closing Tax Period”), the Purchaser shall procure that the Tax Returns of the Target Companies shall be prepared on a basis which is consistent with the manner in which those Tax Returns were prepared for all accounting periods ending before the Completion Date, unless otherwise required by law. The Purchaser shall procure that the Target Companies provide to the Seller all Tax Returns for income Tax purposes relating to the Pre-Closing Tax Period no later than ten (10) Business Days before the date on which such Tax Returns are required to be filed with the appropriate Tax Authority without incurring interest or penalties. The Purchaser shall further procure that the Target Companies shall take the Seller’s reasonable comments into account before the Tax Returns are submitted to the appropriate Tax Authority.

 

19.2

The Seller covenants to pay the Purchaser an amount equal to any liability to Taxation which is the liability of a member of the Seller's Group (or any entity which at any time prior to Completion  was a member of the Seller's Group) (the “Primary Person”) and which arises on or before the date which falls two (2) years after the Completion Date, for which a Target Company, the Purchaser or any other member of the Purchaser's Group is liable in consequence of (i) the Primary Person failing to discharge such liability to Taxation, and (ii) a Target Company at any time before the Completion Date being or having been treated as connected or associated with the Primary Person or being or having been treated as connected or associated with the same person as the Primary Person for any Tax purpose (including as a result as being part of the same unitary, affiliated, consolidated, or combined tax grouping with the Primary Person, under Treasury Regulation Section 1.1502-6, or otherwise), and (iii) pursuant to any contract entered into on or before Completion; provided, at all times, the total amount payable by the Seller pursuant to this Clause 19.2 shall be limited to the Consideration.

 

19.3

No later than seven (7) days following the Zhongshan Transfer (or sooner if required under applicable PRC law or practice), the Seller shall file all Tax Returns that are applicable under PRC laws in connection with the Zhongshan Transfer, which shall be true, accurate and complete in all respects, and timely pay all Taxes due and payable with respect to such Tax Returns (including with respect to any official assessments of the PRC Taxation Authorities).  The Seller shall engage a reputable third-party valuation firm acceptable to the PRC Taxation Authorities in order to determine the quantum of PRC Taxes due in respect of the Zhongshan Transfer.

 

19.4

The Seller shall not make any filing with the PRC Taxation Authorities seeking to apply the "special tax treatment" under Circular 59, Public Notice 4 or other similar PRC laws to the Zhongshan Transfer and shall not seek to defer the filing of any Tax Returns or the payment of any Tax arising from the Zhongshan Transfer to a time after the Completion Date.

 

19.5	For the avoidance of doubt, the Seller shall be responsible for all PRC transfer taxes and related filings arising as a result of the Zhongshan Transfer.

 

19.6

The Seller shall provide to the Purchaser final, accurate copies of all Tax Returns relating to the Zhongshan Transfer, along with written confirmation of full payment of all applicable PRC Taxes, within ten (10) Business Days of such filing and payment and, in any event, not later than the Completion Date.  The Seller acknowledges and agrees that it is solely responsible for all PRC Taxes arising as a result of the Zhongshan Transfer, and in the event of any action taken by the PRC Taxation Authorities in respect of the Zhongshan Transfer, the Seller shall deal with such action promptly and shall not unreasonably delay any settlement in respect of such action.

 

19.7

On or before the Completion Date, the Seller will confirm to the Purchaser in writing Luvata Far East S.r.l.’s current tax basis (pursuant to applicable PRC Tax law) in respect of its shareholding in Luvata Heat Transfer Solutions (Wuxi) Co. Ltd..  In addition, promptly following receipt of a reasonable written request from the Purchaser, the Seller will provide any reasonably requested documents, returns, reports or other filings relating to the direct and indirect transfers of Luvata Heat Transfer Solutions (Zhongshan) Co., Ltd. and Luvata Heat Transfer Solutions (Wuxi) Co. Ltd. contemplated by this Agreement.

 

20.1

Save as expressly provided in Clause 20.2, the Seller undertakes that it shall treat as confidential the provisions of the Transaction Documents and all information it has received or obtained relating to the Purchaser’s Group as a result of negotiating or entering into the Transaction Documents and, with effect from Completion, all information it possesses relating to the Target Companies.

 

20.2

Save as expressly provided in Clause 20.2, the Purchaser shall, and shall procure that each member of the Purchaser’s Group shall, treat as confidential the provisions of the Transaction Documents and all information it has received or obtained relating to the Seller and the Seller’s Group as a result of negotiating or entering into the Transaction Documents and, at all times prior to Completion, all information it possesses relating to the Target Companies.

 

20.3

(a)

A Party may disclose, or permit the disclosure of, information which would otherwise be confidential if and to the extent that:

 

(i)

it is disclosed to Agents of that Party or of other members of the Relevant Party’s Group if this is reasonably required in connection with this Agreement (and provided that such persons are required to treat that information as confidential); or

 

(ii)

it is required by law or any securities exchange, regulatory or governmental body or Taxation Authority; or

 

(iii)

it was already in the lawful possession of that Party or its Agents without any obligation of confidentiality (as evidenced by written records); or

 

(iv)

it is in the public domain at the date of this Agreement or comes into the public domain other than as a result of a breach by a Party of this Clause 20; or

 

(v)

the disclosure is made to professional advisers or actual or potential debt or equity financiers (and their respective professional advisers) of any Party or the Sellers’ Lenders (and their respective professional advisers) provided that such person undertakes to comply with the provisions of Clause 20.1 or 20.2 in respect of such information as if it were a party to this Agreement;

 

(vi)

the disclosure is made on a confidential basis to potential purchasers of all or part of the Seller’s Group or the Purchaser’s Group or to their professional advisers or actual or potential financiers provided that any such persons need to know the information for the purposes of considering, evaluating, advising on or furthering the potential purchase or financing and provided further that such person undertakes to comply with the provisions of Clause 20.1 or 19.2 in respect of such information as if it were a party to this Agreement; or

 

(vii)

in the case of the Seller, the Purchaser has given its prior written consent or, in the case of the Purchaser, the Seller has given its prior written consent,

 

provided that, to the extent practicable and legally permitted, prior written notice of any confidential information to be disclosed pursuant to Clause 20.3(a)(ii) shall be given to the other Party and its reasonable comments taken into account.

 

(b)

The Seller may disclose, or permit the disclosure of, any confidential information to its direct or indirect shareholders and to the general partner and limited partners and any potential new limited partners of Nordic Capital Fund V and Nordic Capital Fund VI, subject to the recipient keeping such information confidential.

 

21.1

With the exception of the Announcement which shall be made on the date hereof (or on such other date as may be agreed), and save as expressly provided in Clause 21.2, no announcement shall be made by or on behalf of any Party or a member of the Relevant Party’s Group relating to the terms of the Transaction Documents without the prior written approval of the other Party, such approval not to be unreasonably withheld or delayed.

 

21.2

A Party may make an announcement relating to the terms of the Transaction Documents if (and only to the extent) required by the law of any relevant jurisdiction or any securities exchange, regulatory or governmental body in which case such Party shall take all steps as may be reasonable in the circumstances to agree the contents of such announcement with the other Party prior to making such announcement.

 

22.1

Except as provided in this Clause 22 or unless the Seller and the Purchaser specifically agree in writing, neither Party may assign, transfer, charge, declare a trust of or otherwise dispose of all or any part of its rights and benefits under this Agreement or any other Transaction Document (including any cause of action arising in connection with any of them) or of any right or interest in any of them.

 

22.2

The Purchaser may charge or assign its rights under this Agreement (i) to any member of the Purchaser's Group (in which case the Purchaser nonetheless shall remain responsible for the performance of all of its obligations hereunder) or (ii) (by way of security only) to any security agent(s) and/or bank(s) and/or financial institution(s) lending money or making other banking facilities available to the Purchaser (or any member of the Purchaser's Group) for the acquisition of the Shares, and such rights may further be assigned to any transferee under a valid enforcement of such security but so that, notwithstanding any such assignment in security, the Seller may unless it receives written notice of enforcement of the relevant security interest, deal with the Purchaser in connection with all matters arising under this Agreement. If the Purchaser assigns in accordance with this Clause 22.2 , the Seller’s liability shall be limited to the amount that would have been due, had no such assignment taken place.

 

22.3

The Purchaser may (at its sole discretion) designate any member or members of the Purchaser's Group to enter into one or more Local SPAs as the purchaser under such Local SPA, provided that the Purchaser will notify the Seller in writing of such designation not less than five (5) Business Days prior to the Completion Date.

 

 

23.1

All sums payable under this Agreement shall be paid gross, free and clear of any deduction, withholding, set off or counterclaim whatsoever save only as may be required by law.   If any deductions or withholdings are required by law from any such payment (other than payment of the Consideration pursuant to Clause 5 (Consideration), the payer will be obliged to pay the payee such sum as will, after such deduction or withholding has been made, leave the payee with the same amount as it would have been entitled to receive in the absence of any such requirement to make a deduction or withholding.

 

23.2

Where any payment is made under Clauses 11.4 (Payment for Leakage) and that sum is subject to a charge to Taxation in the hands of the Purchaser, the sum payable shall be increased to such sum as will ensure that after payment of such Taxation the Purchaser shall be left with a sum equal to the sum that it would have received in the absence of such a charge to Taxation.

 

Insofar as it is able to do so after Completion, the Seller shall from time to time do, execute and deliver or procure to be done, executed and delivered all such further acts, documents (in a form reasonably satisfactory to the Purchaser) and things reasonably required by the Purchaser in order to give full effect to this Agreement.

 

 

25.1

Save as otherwise agreed between the Parties, including any side agreements entered into by the Parties on the date hereof, this Agreement, together with the Transaction Documents and any other documents referred to in this Agreement or any Transaction Document, constitutes the whole agreement between the Parties and supersedes any previous arrangements or agreements between them relating to the sale and purchase of the Shares.

 

25.2

Each Party confirms that it has not entered into this Agreement or any other Transaction Document on the basis of any representation, warranty, undertaking or other statement whatsoever by another Party or any of its Related Persons which is not expressly incorporated into this Agreement or the relevant Transaction Document and that, to the extent permitted by law, a Party shall have no right or remedy in relation to action taken in connection with this Agreement or any other Transaction Document other than pursuant to this Agreement or the relevant Transaction Document.

 

25.3

A Party’s only right or remedy in respect of any provision of this Agreement or any other Transaction Document shall be for breach of this Agreement or that Transaction Document, and no Party shall have any right or remedy in respect of misrepresentation (whether negligent or innocent and whether made prior to and/or in this Agreement).

 

25.4	Save in relation to breach of this Agreement or any other Transaction Document, no Party nor any of its Related Persons shall have any right or remedy, or make any claim, against another Party nor any of its Related Persons or advisors in connection with the sale and purchase of the Shares.

 

25.5	Nothing in this Clause 25 shall operate to limit or exclude any liability for fraud or fraudulent misrepresentation.

 

If any provision of this Agreement is or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction, it shall be deemed to be severed from this Agreement.  The remaining provisions will remain in full force in that jurisdiction and all provisions will continue in full force in any other jurisdiction.

 

 

No variation of this Agreement shall be effective unless in writing and signed by or on behalf of the Parties.

 

 

28.1	No waiver of any right under this Agreement or any other Transaction Document shall be effective unless in writing.  Unless expressly stated otherwise a waiver shall be effective only in the circumstances for which it is given.

 

28.2	No delay or omission by any Party in exercising any right or remedy provided by law or under this Agreement, save to the extent otherwise provided in Clause 9 (Seller’s Limitations on Liability) constitute a waiver of such right or remedy.

 

28.3	The single or partial exercise of a right or remedy under this Agreement shall not preclude any other nor restrict any further exercise of any such right or remedy.

 

28.4	The rights and remedies provided in this Agreement are cumulative and do not exclude any rights or remedies provided by law except as otherwise expressly provided.

 

The provisions of this Agreement and of the other Transaction Documents which remain to be performed following Completion shall continue in full force and effect notwithstanding Completion.

 

30.1

This Agreement is made for the benefit of the Parties and their successors and is not intended to benefit any other person, and no other person shall have any right to enforce any of its terms, except that Clause 14 (Resigning Directors) is intended to benefit the present or former directors and officers of the Target Companies, Clause 18 (Access to Information), Clause 19 (Tax) and Clause 20 (Confidentiality) are intended to benefit members of the Seller’s Group and the Purchaser's Group (as applicable) and Clause 25 (Entire Agreement) is intended to benefit a Party’s Related Persons, and each such Clause shall be enforceable by any of them to the full extent permitted by law, subject to the other terms and conditions of this Agreement.

 

30.2	The Parties may amend or vary this Agreement in accordance with its terms without the consent of any other person.

 

30.3	Notwithstanding the above

 

(a)

the Financing Sources shall be deemed to be third party beneficiaries of this Agreement with respect to Clause 6.2(b), 30, 35 and 36, and Clauses 6.2(b), 30, 35 and 36 shall not be amended, modified, supplemented, or waived in a manner adverse to the Financing Sources without the prior written consent of the Financing Sources;

 

(b)

the Seller’s Lenders shall be deemed to be third party beneficiaries of this Agreement with respect to Clause 7.3, 7.4, 20, 30, 35 and 36 and Clauses 7.3, 7.4, 20, 30, 35 and 36 shall not be amended, modified, supplemented, or waived in a manner adverse to the Seller’s Lenders without the prior written consent of the Seller’s Lenders; and

 

(c)

the Stock Consideration Recipients shall be deemed to be third party beneficiaries of this Agreement with respect to Clause 10(i)–(m) and Clause 10(i)–(m) shall not be amended, modified, supplemented, or waived in a manner adverse to the Stock Consideration Recipients without the prior written consent of the Stock Consideration Recipients.

 

Any amount payable by the Seller to, or at the direction of, the Purchaser under this Agreement shall, so far as possible, be deemed to be a reduction of the Consideration.

 

32.1	Except as provided otherwise, each Party shall pay its own costs and expenses in connection with the negotiation, preparation and performance of this Agreement and the other Transaction Documents.

 

32.2

The Purchaser shall bear all transfer Tax and duty (including, where applicable, stamp duty) arising from the Transactions; provided that the Purchaser shall not be required to bear any such transfer Tax or duty in connection with the transfer of Luvata Heat Transfer Solutions (Zhongshan) Co., Ltd. pursuant to paragraph 4 of Schedule 2 (Conditions).

 

33.1

Any notice or other communication to be given under or in connection with this Agreement (“Notice”) shall be in the English language in writing and signed by or on behalf of the Party giving it.  A Notice may be delivered personally or sent by email, pre‑paid recorded delivery or international courier to the address, or email address provided in Clause 33.3 (Notices), and marked for the attention of the person specified in that Clause.

 

33.2	A Notice shall be deemed to have been received:

 

(a)

at the time of delivery if delivered personally;

 

(b)

at the time it is despatched, if sent by email;

 

(c)

two (2) Business Days after the time and date of posting if sent by pre‑paid recorded delivery; or

 

(d)

three (3) Business Days after the time and date of posting if sent by international courier,

 

provided that if deemed receipt of any Notice occurs after 6:00 pm or is not on a Business Day, deemed receipt of the Notice shall be 9:00 am on the next Business Day.  References to time in this Clause 33 are to local time in the country of the addressee.

 

33.3	The addresses and email address for service of Notice are:

 

Seller:

 

 

Purchaser:

 

 

33.4	Copies of all notices to the Seller shall also be given to Timo Airisto and Janko Lindros of White & Case LLP, Pohjoisesplanadi 37A, 00100 Helsinki, Finland and emailed at the same time to ***@*** and ***@***. Such communication shall not constitute a notice in accordance with this Clause 33.

 

33.5	Copies of all notices to the Purchaser shall also be given to Michael Paley, P.C. of Kirkland & Ellis LLP, 300 North LaSalle, Chicago, IL 60654, United States and emailed at the same time to ***@***. Such communication shall not constitute a notice in accordance with this Clause 33.

 

33.6	A Party shall notify the other Party of any change to its details in Clause 33.3 in accordance with the provisions of this Clause 33 provided that such notification shall only be effective on the later of the date specified in the notification and five (5) Business Days after deemed receipt.

 

This Agreement may be executed in counterparts and shall be effective when each Party has executed and delivered a counterpart.  Each counterpart shall constitute an original of this Agreement, but all the counterparts shall together constitute one and the same instrument.

 

 

35.1	This Agreement, including the arbitration clauses at Clauses 35.3 and 35.4 and any non‑contractual obligations arising out of or in connection with this Agreement, is governed by and shall be construed in accordance with English law.

 

35.2

The Parties agree that if any claim, dispute or difference of whatever nature arises under or in connection with this Agreement or any other Transaction Document (including a claim, dispute or difference regarding its existence, termination or validity or any non‑contractual obligations arising out of or in connection with this Agreement or any other Transaction Document) (a “Dispute”), the provisions of this Clause 35 shall apply.  A Party may notify the other Party in writing of a Dispute (a “Dispute Notice”), whereupon the Parties shall attempt to resolve the Dispute. If a full and final binding written agreement (a “Settlement”) in settlement of any elements of the Dispute has not been entered into during the period of twenty (20) Business Days following the date of service of the Dispute Notice (the “Resolution Period”), a Party shall be entitled to resort to arbitration under this Agreement in respect of those elements of the Dispute against the other Party.

 

35.3

All Disputes which are unresolved pursuant to Clause 35.2 and which a Party wishes to have resolved shall be referred upon the application of the Party to, and finally settled by, arbitration in accordance with the LCIA Rules as in force at the date of this Agreement and as modified by this Clause, which Rules are deemed incorporated by reference into this Clause. The number of arbitrators shall be three (3), one of whom shall be nominated by the Claimant, one by the Respondent and the third, who shall act as Chairman, shall be nominated by the two party nominated arbitrators, provided that if the third arbitrator has not been nominated within twenty (20) Business Days of the nomination of the second party nominated arbitrator, such third arbitrator shall be appointed by the LCIA.  The seat of arbitration shall be London, England and the language of arbitration shall be English.

 

35.4

The arbitrators shall have the power to grant any legal or equitable remedy or relief available under the applicable law, including injunctive relief (whether interim and/or final) and specific performance and any measures ordered by the arbitrators may be specifically enforced by any court of competent jurisdiction. The Parties agree that a Party may have recourse to any court of competent jurisdiction to seek interim or provisional measures pending the determination of any Dispute by arbitration, including injunctive relief and prearbitral attachments or injunctions and any such request shall not be deemed incompatible with the agreement to arbitrate or a waiver of the right to arbitrate. Notwithstanding any contrary provision of the LCIA Rules, the Parties agree that no Party may have recourse to any court of competent jurisdiction: (i) for final determination by that court of any substantive issue or question of law arising in the course of the arbitration, or (ii) to appeal any question of law arising out of any award made in the arbitration.

 

35.5

Notwithstanding anything to the contrary contained in this Agreement, each Party: (i) agrees that it will not bring or support any person in any claims or causes of action, or dispute of any kind or description, whether in law or in equity, whether in contract or in tort or otherwise, against any of the Financing Sources (which defined term for the purposes of this provision shall include any Financing Source and its respective affiliates, equityholders, members, partners, officers, directors, employees, agents, advisors and representatives involved in the financing contemplated by any financing commitment letters (“Financing Letters”)) in any way relating to this Agreement or any of the transactions contemplated herein, including any dispute arising out of or relating in any way to the Financing Letters or the performance thereof or the financings contemplated thereby, in any forum other than the federal and New York state courts located in the Borough of Manhattan within the City of New York; (ii) agrees that, except as specifically set forth in the Financing Letters, all claims or causes of action (whether at law, in equity, in contract, in tort or otherwise) against any of the Financing Sources in any way relating to the Financing Letters or the performance thereof or the financings contemplated thereby, shall be exclusively governed by, and construed in accordance with, the internal laws of the State of New York, without giving effect to principles or rules or conflict of laws to the extent such principles or rules would require or permit the application of laws of another jurisdiction; and (iii) hereby irrevocably and unconditionally waives any right such Party may have to a trial by jury in respect of any litigation (whether in law or in equity, whether in contract or in tort or otherwise) directly or indirectly arising out of or relating in any way to the performance thereof or the financings contemplated thereby. Notwithstanding anything to the contrary contained in this Agreement, (A) the Seller and its affiliates shall not have any rights or claims against the Financing Sources relating to this Agreement or any of the transactions contemplated herein, or in respect of any oral representations made or alleged to have been made in connection herewith or therewith, including any Dispute arising out of or relating in any way to the Financing Letters or the performance thereof or the financings contemplated thereby, whether at law or equity, in contract, in tort or otherwise and (B) no Financing Source shall have any liability (whether in contract, in tort or otherwise) to the Seller or its affiliates for any obligations or liabilities of any Party under this Agreement or for any claim based on, in respect of, or by reason of, the transactions contemplated hereby and thereby or in respect of any oral representations made or alleged to have been made in connection herewith or therewith, including any Dispute arising out of or relating in any way to the Financing Letters or the performance thereof or the financings contemplated thereby, whether at law or equity, in contract, in tort or otherwise.

 

 

36.1

Notwithstanding anything in this Agreement to the contrary, none of the Financing Sources shall have any liability or obligation to the Seller or any of its affiliates relating to this Agreement or any of the transactions contemplated herein (including in connection with or relating to any financing under the Financing Letters). This Clause 36 is intended to benefit and may be enforced by the Financing Sources and shall be binding on all successors and assigns of the Seller.

 

36.2

Notwithstanding anything in this Agreement to the contrary, none of the Seller’s Lenders shall have any liability or obligation to the Purchaser or any of its affiliates relating to this Agreement or any of the transactions contemplated herein, except under the Lock-up Agreement in respect of those Seller’s Lenders who are, or will be, Stock Consideration Recipients and enter into a Lock-up Agreement with the Purchaser. This Clause 36.2 is intended to benefit and may be enforced by the Seller’s Lenders and shall be binding on all successors and assigns of the Purchaser.

 

This Agreement has been entered into by the Parties on the date first above written.