RECOMMENDATION BY LINDEX BOARD

2.1

The Recommendation

Having evaluated the terms and conditions of the Offer the Board of Directors of Lindex has unanimously decided to recommend that holders of Lindex Shares accept the Offer and tender their shares on the terms and conditions of the Offer. The Board of Directors of Lindex undertakes to publish its complete recommendation substantially in the form attached as Appendix 2 hereto (the

“Recommendation”) immediately after the publication of the Offer Announcement.

2.2

Withdrawal of the Recommendation

2.2.1

Fiduciary duties

Subject to the provisions set out or referred to in Section 2.2.2, the Board of Directors of Lindex may, at any time prior to the Closing Date, withdraw, modify or change the Recommendation, if the Board of Directors of Lindex determines in good faith after taking advice from reputable external legal counsel with a proven track-record of international public tender offers, and after consultation with Stockmann, that failure to so withdraw, modify or change the Recommendation would cause the Board of Directors of Lindex to breach its fiduciary duties to Lindex and Lindex’s shareholders under Swedish Law (“Fiduciary Duties”).

2.2.2

Superior Offer

In the event of a Superior Offer (as defined below), the Board of Directors of Lindex may at any time prior to the Closing Date, withdraw, modify or change the Recommendation if (and only if) prior to such withdrawal, modification or change:

(a) Lindex and/or the Board of Directors of Lindex shall have complied with the obligations set out in Section 3.5 below; and

(b) a public tender offer for the Lindex Shares has been published or the Board of Directors of Lindex has received a written offer from a third party which, in the reasonable opinion of the Board of Directors of Lindex, is serious and feasible and where the third party offers to purchase all of the shares in Lindex for a consideration and at other terms and conditions which, judged as a whole, in the reasonable opinion of the Board of Directors of Lindex, after having obtained independent written advice from reputable financial advisor and external legal counsel which both have a proven track-record from international public tender offers (a copy of which advice shall be provided to Stockmann), are more favorable to Lindex’s shareholders than the Offer and for which financing, to the extent required, is then or can reasonably be expected to be ensured (the

“Superior Offer”); and

(c) the Board of Directors of Lindex has, to the extent permitted by Swedish law and stock exchange regulations, provided Stockmann (i) with a reasonable opportunity to negotiate with the Board of Directors of Lindex about matters arising from the Superior Offer; and (ii) five (5) banking days from the date of Stockmann having received a written notice of the Superior Offer containing information set forth in Section 3.5(c) below, to enhance the Offer (the “Enhance Period”); and (d) upon expiry of the Enhance Period, the Board of Directors of Lindex, comparing the

consideration and other terms and conditions (including the availability of financing) of the Superior Offer with the Offer (as it may be enhanced), reasonably and in good faith considers that it would no longer be in the best interest of the shareholders of Lindex to accept the Offer.

Should Stockmann enhance the Offer so as to, in the reasonable opinion of the Board of Directors of Lindex, be at least equally favorable to Lindex and the Lindex shareholders as the Superior Offer, the Board of Directors of Lindex shall confirm and uphold the Recommendation for the Offer, as enhanced.

3.

UNDERTAKINGS

3.1

Consultation undertaking regarding the Public Re-Cap Transaction

Lindex undertakes to consult with Stockmann with regard to the implementation and execution of the Public Re-cap Transaction in order not to frustrate the Offer.

3.2

Reasonable best efforts

Each of the Parties agrees to use its reasonable best efforts to do, or cause to be done, and to assist and co-operate with the other Party in doing, all things necessary or advisable to complete in the most expeditious manner practicable, the transactions contemplated by this Agreement, including:

(a) the making of all necessary registrations and filings with governmental entities, stock exchanges and regulatory authorities (including, without limitation, competition authorities) and the taking of any actions as may be necessary to obtain necessary waivers, consents and approvals from, or to avoid an action or proceeding by, such authorities;

(b) the obtaining of all necessary consents, approvals or waivers from third parties; and

(c) the execution and/or delivery of any additional instruments necessary to consummate the transactions contemplated herein, and to fully carry out the purposes of this Agreement.

The Parties shall co-operate and consult with each other in connection with the making of all such filings, including providing copies of all pertaining documents to the non-filing Party and their respective advisors prior to filing.

3.3

Conduct of business pending the closing As between the Signing Date and the Closing Date:

(a) Lindex undertakes to, and shall cause each of its subsidiaries to conduct their respective business in the ordinary course of business consistent with past practice and in all cases based on good and prudent business judgment; and

(b) without limiting the generality of the foregoing, Lindex undertakes to, and shall cause each of its subsidiaries to undertake to refrain from making or implementing:

(i) any material changes in its business (including without limitation terminating key employees or initiating changes in suppliers, distributors or other material business relationships) or corporate structure unless such change may reasonably be deemed to serve the purpose of the Offer; and/or

(ii) any material investments or divestments outside the ordinary course of business; and/or

(iii) any proposal for change of its Articles of Association, by-laws or other constituting documents or any material change to its accounting principles or practices; and/or

(iv) any decision or proposal concerning or constituting distribution of dividends or other funds from Lindex and/or a change in the number of shares in or share capital of Lindex or its subsidiaries, including without limitation by reclassification, recapitalisation, stock split, combination or issuance of any shares or securities convertible into or exchangeable for shares in Lindex or in its subsidiaries; and/or

(v) a material non-mandatory increase outside the ordinary course of business in the current or future compensation or other benefits in any manner whatsoever (including without limitation by way of synthetic options, bonus, insurance, severance or pension arrangements) of each of the persons employed by or serving Lindex or its subsidiaries.

3.4

Access to information

Upon Stockmann’s request, Lindex undertakes to use its reasonable best efforts to:

(a) provide Stockmann with any information and documents relating to Lindex and its subsidiaries that Stockmann may reasonably need to prepare (i) the filings and registrations (and any necessary amendments or supplements to such filings and registrations, as the case may be) referred to in Section 3.2(a) above and (ii) the offer document (and possible other offer documentation) to be published in connection with the Offer; and

(b) request Lindex’s auditors to verify and approve the information on Lindex contained in the offer document and to prepare a statement of such verification to be included in the offer document.

3.5

No solicitation of competing transactions, no frustration

Lindex undertakes, and shall cause its officers, directors, employees and representatives (including, for the avoidance of doubt, any financial and other external advisors) to undertake, as between the Signing Date and the Closing Date:

(a) not to, directly or indirectly, solicit or encourage any oral or written proposal, offer or indication of interest that could reasonably be expected to lead to any Superior Offer or to other transaction, including without limitation sale of assets or businesses or any other extraordinary corporate transaction, that could constitute or result in any competing transaction or otherwise harm or hinder the completion of the Offer (“Competing Proposal”);

(b) not to, directly or indirectly, contribute to or promote the progress of any Competing Proposal in any way whatsoever, including without limitation by discussing or negotiating of a Competing Proposal or giving any information to any persons, e.g. representatives or advisors, or entities presenting or advocating any Competing Proposal (all the aforementioned measures collectively “Promoting Measures”), except if (and only if) the Board of Directors of Lindex (i) considers that refraining from the Promoting Measures contemplated would be contrary to the Fiduciary Duties or the Takeover Rules, and such position is taken in good faith after having taken advice from reputable external legal counsel with a proven track-record of international public tender offers; (ii) does not take any other Promoting Measures than those necessary for the fulfillment of the Fiduciary Duties or for compliance with the Takeover Rules; and (iii) keeps Stockmann reasonably informed about the outcome and progress of the Promoting Measures on a continuous basis; and

(c) not to, directly or indirectly, undertake any other action that may prejudice or frustrate the Offer.

For the avoidance of doubt, nothing in this Section 3.5 shall be deemed to limit in any way whatsoever the obligations of Lindex under Section 2.2.

3.6

Due diligence review

In order to assess the Offer, Stockmann has been given the opportunity to conduct a limited financial, business and legal due diligence review on Lindex. Subject to any applicable limitations under the Takeover Rules, Stockmann will, during the period between the date of the Offer Announcement and the Closing Date, have the right to carry out any further due diligence review that is reasonably necessary to assess whether the conditions to completion of the Offer have been met.

Lindex hereby confirms that it has not provided Stockmann with any price-sensitive information regarding Lindex that has not been made public prior to the signing of this Agreement.

3.7

Notice of certain events

Each Party shall, without delay, notify the other Party if it becomes aware of an event, change or circumstance that could or can reasonably be expected to result in a Material Adverse Change (as defined in the terms and conditions of the Offer attached as Appendix 2 hereto) or that could delay or impede the Party’s ability to consummate the transactions contemplated by this Agreement or to fulfill its obligations set forth in this Agreement.

In case of a potential Material Adverse Change, Lindex shall, in accordance with Section 3.6 above, provide Stockmann with all information reasonably needed to determine the existence of an actual or potential Material Adverse Change.

3.8

Public announcements

The Parties shall in all cases consult with each other before issuing any press release or otherwise making any public statements with respect to this Agreement or any transactions contemplated hereunder and shall not issue any such press release or make any such public statement without the other Party’s prior written approval, unless required to do so by law or relevant stock exchange regulations.

3.9

Retention plan

Stockmann intends to agree on certain retention arrangements with certain key employees of Lindex for purposes of retaining such employees following the completion of the Offer. Lindex Board of Directors is aware of and supports this. After the Closing Date, Stockmann shall cause Lindex to adopt such retention arrangements and to comply with the terms and conditions thereof.

4.

TERM

This Agreement enters into force upon the signing by the Parties and remains in force until the Closing Date or until Stockmann’s public announcement to withdraw the Offer, whichever occurs earlier, whereupon it shall terminate with immediate effect. Sections 3.8, 4, 5 and 6 shall remain in full force and effect notwithstanding any such termination.

In document ERBJUDANDE TILL AKTIEÄGARNA I AB LINDEX (PUBL) (Page 58-61)