Exhibit 10.96
CROWN EUROPEAN HOLDINGS LTD
AND
AB GRUNDSTENEN 101666
(UNDER CHANGE OF NAME TO
NIAM RETAIL HOLDING AB)
SHARE TRANSFER AGREEMENT REGARDING
CROWN FASTIGHETER AB
ADVOKATFIRMAN XXXXX KB
XXXXXXXXXXXXX 00 - XXX 0000
XX-00000 XXXXXXXXX - XXXXXX
TEL: x0000000000
TELEFAX: x00 0 000 00 00
xxx.xxxxx.xx
TABLE OF CONTENTS
1 Definitions......................................................................................... 1
2 Sale and Purchase................................................................................... 4
3 Purchase Price...................................................................................... 4
4 Conditions Precedent................................................................................ 6
5 Closing............................................................................................. 6
6 Representations and Warranties of the Seller........................................................ 8
6.1 Corporate Existence and Power............................................................... 8
6.2 Corporate Authorisation and Non-Contravention............................................... 8
6.3 Capitalisation and Title.................................................................... 9
6.4 Records..................................................................................... 9
6.5 Accounts and business....................................................................... 9
6.6 Compliance with Law and Permits............................................................. 9
6.7 Assets and Liabilities...................................................................... 9
6.8 Loans and Other Financial Facilities........................................................ 10
6.9 Properties.................................................................................. 10
6.10 Leases...................................................................................... 10
6.11 Insurance................................................................................... 11
6.12 Litigation.................................................................................. 11
6.13 Taxes....................................................................................... 11
6.14 Agreements.................................................................................. 12
6.15 Environmental Matters....................................................................... 12
6.16 No other Warranties......................................................................... 12
7 Representations and Warranties of the Buyer......................................................... 13
8 Covenants of the Seller............................................................................. 13
9 Covenants of the Buyer.............................................................................. 14
10 Indemnification..................................................................................... 14
10.1 Indemnification............................................................................. 14
10.2 Limitation of Liability..................................................................... 14
10.3 Third Party Claims and Recovery............................................................. 16
10.4 Specific Indemnities........................................................................ 17
11 Closing Accounts.................................................................................... 18
12 Confidentiality..................................................................................... 19
13 Announcements....................................................................................... 19
14 Costs............................................................................................... 19
15 Entire Agreement.................................................................................... 19
16 Amendments and Waivers.............................................................................. 20
17 Notices............................................................................................. 20
18 Assignments......................................................................................... 21
19 Interpretation...................................................................................... 21
20 Partial Invalidity.................................................................................. 21
21 Governing Law and Disputes.......................................................................... 21
APPENDICES:
Appendix A The Properties
Appendix B Accounts
Appendix C Data Room Documents
Appendix X Xxxxxx Reports
Appendix E Lease Agreements
Appendix 3.3 Pro Forma Balance Sheet
Appendix 6.4.1 Articles of Association, Share Registers etc.
Appendix 6.8.1 Loans
Appendix 6.9.2 Extracts from the Land Register
Appendix 6.9.7 Approved Inspections
Appendix 6.10.3 Tenant Improvements
Appendix 6.10.4 Rent Roll
Appendix 6.10.5 Terminated Lease Agreements
Appendix 6.12 Litigation
Appendix 6.13.5 Deducted VAT
Appendix 6.14 Agreements
SHARE TRANSFER AGREEMENT
This Share Transfer Agreement (this "AGREEMENT") is made on ____ May 2005
BETWEEN:
(1) CROWN EUROPEAN HOLDINGS LTD, Reg. No.4731205, a company duly incorporated
and organised under the laws of England and Wales, having its registered
office at Xxxxx Xxxxx, Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxx, XX0 0XX, Xxxxxxx
(the "SELLER"); and
(2) AB GRUNDSTENEN 101666 (UNDER CHANGE OF NAME TO NIAM RETAIL HOLDING AB),
Reg. No. 556660-1133, x/x Xxxx, Xxx 0000, XX-000 00 Xxxxxxxxx, Xxxxxx (the
"BUYER").
WHEREAS:
(A) The Seller owns all shares in Crown Fastigheter AB, Reg. No. 556639-2188,
a company duly incorporated and organised under the laws of Sweden, having
its principal office at Solna Torg 13, 171 45 Solna, Sweden (the
"COMPANY") with a share capital of SEK 100,000 divided into 1,000 shares
with a nominal value of SEK 100 each (the "SHARES").
(B) The Company's main assets are the properties listed in APPENDIX A (the
"PROPERTIES", each of them a "PROPERTY").
(C) The Buyer desires to purchase all of the Shares and thereby indirectly all
of the Properties.
(D) The Seller agrees to sell and the Buyer agrees to purchase the Shares on
the terms and conditions set out in this Agreement.
IT IS AGREED as follows:
1 DEFINITIONS
1.1 In this Agreement, the following definitions are used:
"ACCOUNTING PRINCIPLES" means the accounting principles which are in
accordance with Swedish law and generally accepted accounting principles
in Sweden, applied by the Company on a consistent basis and consistent
with those used in the preparation of the Accounts and the annual accounts
for previous years;
"ACCOUNTS" means the audited balance sheet and the audited profit and loss
account of the Company for the financial year ended on the Accounts Date,
attached as APPENDIX B;
"ACCOUNTS DATE" means 31 December 2004;
"ACTUAL PROFIT" is defined in Section 3.3;
"AGREED MARKET VALUE" means SEK 720,000,000;
"AGREEMENT" means this Share Transfer Agreement, including all the
appendices attached to it;
"ASSET MANAGEMENT AGREEMENT" shall have the meaning ascribed to it in
Section 10.4.1;
"AUDITOR" means the external auditor of the Company;
"BUSINESS DAY" means a day when banks are open for general banking
business in Sweden, England and Denmark;
"BUYER" has the meaning ascribed to it in Section (2) of the introductory
paragraph of this Agreement;
"CLAIM" means a claim made by the Buyer against the Seller in respect of a
breach of any of the Warranties;
"CLOSING" means the completion of the transactions contemplated by this
Agreement;
"CLOSING ACCOUNTS" shall have the meaning ascribed to it in Section 11;
"CLOSING DATE" means 30 June 2005;
"COMPANY" has the meaning ascribed to it in Section (A) of the Whereas
Section;
"CONFIDENTIAL INFORMATION" means any and all information of any kind or
nature whatsoever, whether written or oral, including, without limitation,
financial information, trade secrets, tenant lists and other information,
regarding the Buyer, the Seller or the Company which is not known to the
general public;
"DATA ROOM DOCUMENTS" means the documents made available to the Buyer and
its advisors containing technical, environmental, commercial, accounting,
financial and legal information relating to the Company and the
Properties, as listed in APPENDIX C;
"DETERMINATION DATE" shall have the meaning ascribed to it in Section 3.6;
"DIRECTORS" means the board members, the deputy board member, and the
managing director of the Company as at the Closing Date;
"DRAFT CLOSING ACCOUNTS" shall have the meaning ascribed to it in Section
10;
"ENCUMBRANCE" means any mortgage, pledge lien or other similar security
interest;
"ENVIRONMENTAL LAWS" means all and any applicable laws and regulations and
judgments, orders and any other measures imposed by any government or
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statutory or regulatory body with regard to health and safety, workplace
exposure or the pollution or the protection of the environment;
"ESTIMATED PROFIT" is defined in Section 3.3;
"XXXXXX REPORTS" means the environmental reports attached hereto as
APPENDIX D;
"LEASE AGREEMENTS" means all lease agreements (Sw. hyresavtal) relating to
the Properties, listed in APPENDIX E;
"LOANS" is defined in Section 6.8.1 and further described in Appendix
6.8.1;
"LOSS" means all direct losses, damages or expenses (including loss of
rent, rental supplements (Sw. hyrestillagg) and reasonable legal fees, but
excluding any other indirect and consequential damages, losses or
expenses), resulting from a breach of any of the Warranties made by the
Seller pursuant to this Agreement;
"MATERIAL ADVERSE AFFECT" means any material adverse effect on the
condition (financial or otherwise), business, assets or properties,
liabilities or result of operations of the Company;
"PARTY" means the Seller or the Buyer, and "PARTIES" means the Seller and
the Buyer, collectively;
"PERSON" means any individual, firm, company, corporation or other
corporate body, government, state or agency of a state or any joint
venture, trust, association or partnership (general or limited), whether
or not incorporated, and whether or not its owners enjoy limited
liability, and any other legal entity;
"PROPERTIES" and "PROPERTY" have the meanings ascribed to them in Section
(B) of the Whereas Section;
"PURCHASE PRICE" shall have the meaning ascribed to it in Section 3.1;
"SEK" means the currency Swedish kronor;
"SELLER" has the meaning ascribed to it in Section (1) of the introductory
paragraph of this Agreement;
"SELLER'S KNOWLEDGE" or any similar expression shall mean the knowledge of
Xxxx Xxxxxxx, Xx Xxxxxxxx, Xxxxx Xxxxxxx, Xxxxx Back, Mats Holgersson and
Bernt-Xxxx Xxxxxx;
"SHAREHOLDER LOAN" means the shareholder loan further specified in
Appendix 6.8.1;
"SHARES" has the meaning ascribed to it in Section (A) of the Whereas
Section;
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"STATUTORY BOOKS" means the shareholders' register and minutes from
shareholders' meetings and board meetings;
"TAXES" means all direct and indirect taxes and charges, social security
fees, fees, duties and other assessments (including but not limited to any
income tax, whether actual or deemed), sales tax, use tax, transfer tax,
transaction tax, investment tax, capital tax, real property tax, gift tax,
value added tax, withholding tax, employment tax, asset holding tax or
registration tax, preliminary tax under the Swedish Tax Payment Act
(1997:483) (Sw. skattebetalningslagen) and deferred taxes, wherever
arising, together with any interest, penalties, residual tax charges or
addition to tax;
"THIRD PARTY CLAIM" means any claim by a third party (including tax and
other authorities) against the Company or in relation to the Properties or
any of them; and
"WARRANTIES" means the representations and warranties of the Seller set
out in Section 6.
1.2 In this Agreement, save where the context otherwise requires, words in the
singular shall include the plural, and vice versa.
2 SALE AND PURCHASE
2.1 Upon the terms and subject to the conditions set out in this Agreement,
the Seller agrees to sell and the Buyer agrees to purchase the Shares,
together with all rights attached to them.
2.2 The Shares shall be transferred to the Buyer on the Closing Date, free and
clear from any Encumbrances.
3 PURCHASE PRICE
3.1 The purchase price for the Shares amounts to SEK 156,000,000 (the
"PURCHASE PRICE") and is based on the Agreed Market Value and the
Company's other assets and liabilities as at the Accounts Date and has
been calculated as set out below.
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Agreed Market Value 720,000,000
+/- Shareholders' equity less the book value
of the properties at the Accounts Date -585,558,000
+ 72 % of untaxed reserves at the
Accounts Date 27,509,000
- 72 % of unamortised prepaid financing
costs at the Accounts Date -4,794,000
- Agreed costs for future repairs (kSek 4,511)
of which provision in part has been made
in the Accounts (kSEK 2,354) - 1,157,000
PURCHASE PRICE 156,000,000
3.2 It has been determined that for certain Properties, the Company has
historically recorded too high depreciation for tax purposes. As a
consequence, the Parties have agreed that the Seller shall procure that
the Company prior to the Closing Date shall file a correction of prior
year's tax returns. This will result in a cash payment to the tax
authorities of approximately SEK 1,000,000. As this reduces both the cash
balance and the deferred tax liability, the Parties agree that this should
not impact on the Purchase Price. Notwithstanding the above, the Seller
undertakes to indemnify the Buyer with (i) fifty (50) per cent of any cash
payment up to SEK 1,500,000 required to be made by the Company as a result
of the correction, and (ii) with one hundred (100) per cent of any such
cash payment in excess of SEK 1,500,000.
3.3 The Purchase Price has been determined based on the Accounts at the
Accounts Date, even though Closing will take place on the Closing Date.
The Parties agree that the Buyer shall benefit from the income generated
by the Company between 1 January 2005 and the Closing Date. The Seller has
estimated the profit before tax for that period to be at least SEK
6,300,000 (the "ESTIMATED PROFIT") as calculated in accordance with the
principles in Section 3.1 above and as set forth in APPENDIX 3.3. For the
avoidance of doubt, the Seller shall reimburse the Company with 72 per
cent of the shortfall should the Estimated Profit be less than the actual
profit before tax of the Company from 1 January 2005 to the Closing Date
(as derived from the Closing Accounts, the "ACTUAL PROFIT"), such payment
shall be made no later than seven (7) Business Days following the
Determination Date as defined in Section 3.6 below.
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3.4 The Purchase Price shall be paid on the Closing Date in accordance with
Section 5.3 (a).
3.5 The Buyer shall on the Closing Date procure that the Company repays the
Loans.
3.6 The Actual Profit shall be established when the Closing Accounts have been
agreed or finally determined pursuant to Section 11 below (the
"DETERMINATION DATE").
4 CONDITIONS PRECEDENT
4.1 This Agreement is conditional upon that:
(a) no breach of any Warranty causing a Loss to the Buyer or the Company
of a gross amount of SEK 36,500,000 shall have occurred on or prior
to the Closing Date,
(b) no Material Adverse Effect shall have occurred on or prior to the
Closing Date, and
(c) no litigation, action, suit or other proceeding (excluding, however,
litigation, actions, suits or other proceedings initiated by the
Buyer or any affiliate to the Buyer) shall be pending against the
Seller, the Company or in relation to the Properties at the Closing
Date where an unfavourable judgement, decree or order would prevent
or make the completion of the transactions contemplated in this
Agreement unlawful.
4.2 This Agreement and the transactions contemplated hereby may be terminated
by the Buyer, if any of the conditions precedent in Section 4.1 above has
not been fulfilled, or waived by the Buyer, on or prior to the Closing
Date, in which case all obligations of the Parties under this Agreement
shall terminate without further liability whatsoever of any Party to
another and each Party will pay all its own costs and expenses. The
provisions of Sections 12 (Confidentiality), 13 (Announcements) and 21
(Governing Law and Disputes) shall survive any termination of this
Agreement.
5 CLOSING
5.1 Closing shall take place at the offices of Advokatfirman Xxxxx KB at
Xxxxxxxxxxxxx 00, Xxxxxxxxx at 09.30 am on the Closing Date.
5.2 At Closing the Seller shall:
(a) in exchange for the payment of the Purchase Price, transfer the
Shares and deliver to the Buyer all the share certificates
representing the Shares, duly endorsed to the Buyer, together with
any pertaining dividend coupons;
(b) deliver to the Buyer the Company's shareholders' register,
evidencing that the Buyer has been duly entered as the owner of the
Shares;
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(c) deliver to the Buyer all mortgage certificates (Sw. pantbrev) and
procure that the mortgage deeds pledged as security for the Loans
are released by the relevant pledgee and delivered to the Buyer;
(d) deliver to the Buyer the Company's Statutory Books;
(e) confirm in writing to the Buyer that all documentation relating to
the Properties such as lease agreements in the original, drawings,
maps and building permits is in the possession of the Company;
(f) ensure that all Directors retire from their respective offices and
that each such Director acknowledging in writing that he has
resigned as a Director of the Company, and that he has no claims
against the Buyer or the Company for compensation or otherwise;
(g) cause the Auditor to resign and also confirming that he has no
claims against the Company;
(h) cause the Company to issue a power of attorney enabling the persons
appointed by the Buyer to sign for and on behalf of the Company
until new signatories have been duly registered (to the extent
requested by the Buyer and necessary in order for such persons to
represent the Company);
(i) in exchange for the repayment of the Loans deliver to the Buyer
evidence of a complete release of the Company from all obligations
and liabilities relating to the Loans issued by the lenders in
writing in a format reasonably acceptable to the Buyer;
(j) procure that the lender releases and provides the Buyer with all
assets that have been pledged for the Loans (mortgage deeds, pledged
bank accounts, shares etc.) as well as deliver to the Buyer a
written confirmation from the lender that all of the Company's
pledged assets have been released and are free of any Encumbrances
as of the Closing Date; and
(k) deliver to the Buyer documents evidencing the authority for Xxxxxx
Xxxxx to execute the guarantee on behalf of Crown Northcorp, Inc in
form and substance reasonably satisfactory to the Buyer.
5.3 Subject to the conditions precedent in Section 4.1 above being fulfilled
or waived by the Buyer, at Closing, the Buyer shall:
(a) pay the Purchase Price with same day value to such bank account as
instructed by the Buyer not less than four (4) Business Days prior
to the Closing Date;
(b) procure that the Company repays the Loans in accordance with Section
3.3 above; and
(c) procure that an extraordinary shareholders' meeting in the Company
is held at which a new board of directors and auditors are elected.
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5.4 If the Buyer does not fulfil any of its obligations under Sections 5.3 (a)
- (b) above and this is not due to the Seller, the Seller shall be
entitled to terminate the Agreement and claim damages.
6 REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller makes the following representations and warranties, all of
which are made as at the date hereof and the Closing Date, unless
otherwise expressly stated.
6.1 CORPORATE EXISTENCE AND POWER
6.1.1 The Company is duly incorporated and validly existing under the laws of
Sweden, and the Seller has the requisite power and authority to enter into
and perform its obligations under this Agreement and any other document or
instrument delivered in connection with this Agreement. The Company have
full corporate power and all necessary licences, permits and
authorisations to carry on the businesses as now conducted and to own,
lease and operate the Properties necessary in connection therewith.
6.1.2 The Company has not filed (or have had filed against it) any petition for
its winding-up, is not insolvent and have not made any assignment in
favour of its creditors, nor has any petition for receivership or any
administrative order been presented in respect of the Company. The Company
has not initiated any proceedings with respect to a compromise or
arrangement with its creditors or for the dissolution, liquidation or
reorganisation of the Company or the winding-up or cessation of the
business of the Company. No receiver or administrative receiver or
liquidator has been appointed in respect of the Company or any of its
material assets.
6.2 CORPORATE AUTHORISATION AND NON-CONTRAVENTION
6.2.1 This Agreement and the performance by the Seller of its obligations under
it have been duly authorised by all necessary corporate action on part of
the Seller, and this Agreement will, when executed, constitute valid and
binding obligations of the Seller in accordance with its terms.
6.2.2 The execution and performance by the Seller of this Agreement or any other
documents to be executed under it, do not and will not (i) result in a
breach of any provision of the articles of association or any provision of
any other constitutional document of the Seller, (ii) result in any breach
of any resolution adopted by the shareholders or board of directors of the
Seller, (iii) require any consent by the members of the Seller, or any
class of them, which has not been unconditionally and irrevocably
obtained, or (iv) result in a breach of any applicable law order,
judgement or decree of any court or governmental agency or of any
agreement to which the Seller is a party or by which the Seller is bound.
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6.3 CAPITALISATION AND TITLE
6.3.1 The Seller lawfully owns and has good and transferable title to the
Shares. As of the Closing Date, the Shares are free and clear from any
Encumbrances and there is no agreement to create any Encumbrance over any
such shares.
6.3.2 There are no outstanding subscriptions, options or similar rights relating
to the Shares and no securities giving a right to conversion into, or any
agreement or arrangement which accords to any Person the right to acquire,
shares in the Company.
6.4 RECORDS
6.4.1 Copies of the Company's articles of association, shareholders' registers
and certificates of registration are attached as APPENDIX 6.4.1, and all
such copies are true, accurate, up-to-date and complete, and reflect the
present status of the Company.
6.4.2 The Company has in its possession all company documents, registration
documents, Statutory Books, bookkeeping records for the Company's business
activities and all other documents that are necessary for the running of
the Company's business or which are required by law. These documents are
complete, correct and stored in a suitable manner. There are no
registrations of changes pending with the relevant authorities.
6.4.3 All information and documents required by applicable law to be filed with
the Swedish Companies Registration Office (Sw: Bolagsverket) and any other
authority in respect of the Company and the Properties have been duly and
timely filed (including registration for VAT).
6.5 ACCOUNTS AND BUSINESS
6.5.1 The Accounts and the annual report for 2003, have been prepared in
accordance with the Accounting Principles and give a true and fair view of
the financial position and results of the operations of the Company as of
the Accounts Date.
6.5.2 The Company has not made or declared any dividend or distribution to the
Seller or any of its affiliates since the Accounts Date.
6.6 COMPLIANCE WITH LAW AND PERMITS
The Company is in all material respects in compliance with applicable laws
and regulations concerning the Company, the Properties and the Company's
business.
6.7 ASSETS AND LIABILITIES
The Company has not made any guarantees or similar undertakings which are
not evident from this Agreement or from the Accounts.
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6.8 LOANS AND OTHER FINANCIAL FACILITIES
6.8.1 Details of all loans and other financial facilities available to the
Company as per the date of this Agreement are set out in APPENDIX 6.8.1
(the "LOANS").
6.8.2 The Company does not have any financial indebtedness other than the
Loans.
6.9 PROPERTIES
6.9.1 The Company lawfully owns and has registered title (Sw. lagfart) to the
Properties and all objects on the Properties (excluding objects owned by
tenants that are used in the business of the tenants) that may constitute
property, building or industrial appurtenances and fixtures (Sw.
fastighets-, byggnads-xxxxx industritillbehor) under law are owned by
the Company and, accordingly, are included in the transfer under this
Agreement.
6.9.2 The Properties are not encumbered by any mortgages, registrations,
easements, usufructs, liens or other encumbrances other than those set
forth in this Agreement or in the extract from the Land Register (Sw.
FDS-utdrag), APPENDIX 6.9.2.
6.9.3 As of the Closing Date, the mortgage certificates issued in respect of
the Properties are not pledged.
6.9.4 All constructions on the Properties have been carried out in accordance
with building permits (Sw. bygglov), applicable zoning plans (Sw.
detaljplan).
6.9.5 The Properties are, to the Seller's Knowledge, used in accordance with
building permits, applicable laws and zoning plans and other binding
decisions issued by public authorities.
6.9.6 No injunctions or similar orders have been issued by courts of law or
public authorities concerning the Properties and, to the Seller's
Knowledge, no such injunctions or orders are expected concerning the
Properties.
6.9.7 Mandatory ventilation, (Sw. obligatorisk ventilationskontroll, OVK),
fire, elevator and electricity inspections have been carried out
concerning all buildings on the Properties and all remarks and comments
that have to be remedied by law, if any, have been remedied and
certificates of approved inspections have been received, APPENDIX 6.9.7.
6.9.8 All fees for the Properties in respect of water and sewerage grid
connection costs, district heating connection grid costs, electricity
grid connection costs, street costs and similar utilities, have been
paid.
6.9.9 None of the Properties are subject to expropriation or any similar
proceeding and to the Seller's Knowledge, no plans for such proceedings
exist and no preliminary steps for such proceedings have been taken.
6.10 LEASES
6.10.1 The Lease Agreements constitute all lease agreements on the Properties
and they are valid and binding.
6.10.2 Each of the agreements evidencing the Lease Agreements contains all terms
and conditions relating to such Lease Agreement, and except for normal
property care-
10
taking measures in accordance with the relevant Lease Agreement, no
undertakings have been made in relation to tenants in addition to what is
included in the Lease Agreements.
6.10.3 Except as set out in APPENDIX 6.10.3, the Company has no outstanding
obligations in relation to tenant improvements or in any other respect to
any tenant with respect to the Properties and the Company has in all
respects complied with its undertakings under the Lease Agreements.
6.10.4 The rent and service charges charged for the second quarter 2005 are set
out in APPENDIX 6.10.4 and such charges are charged in accordance with
law and the Lease Agreements.
6.10.5 No other Lease Agreements than those listed in APPENDIX 6.10.5 have been
terminated (whether for vacation or renegotiation of the terms and
conditions).
6.11 INSURANCE
6.11.1 The Company maintain full value insurance (Sw. fullvardesforsakring) with
reputable insurers covering the Properties and the Company's business is
covered by customary insurance protection (including loss of profits and
liability insurance). The Company's insurance coverage will be in force
for at least 30 Business Days from the Closing Date.
6.11.2 No claims have been made and no claim is outstanding under any of the
Company's insurance policies and to the Seller's Knowledge, there are no
circumstances which would make any such insurance policy void or
voidable.
6.12 LITIGATION
Except as set out in APPENDIX 6.12, the Company is not involved in any
litigation, administrative or arbitration proceeding including
proceedings before any regional rent tribunal, or otherwise involved in
any dispute with respect to the Properties and no such proceeding is
pending and, to the Seller's Knowledge, there exist no fact or
circumstance pertaining to the period prior to the Closing Date which may
give rise to such dispute.
6.13 TAXES
6.13.1 The Company has since 1 May 2003 filed the required tax returns and other
returns and reports with the appropriate tax authorities and no such
filing contains, subject to Section 3.2, any material misstatement or
omits any statement of any material fact.
6.13.2 There are no tax audits pending with respect to the Company.
6.13.3 All Taxes assessed to or due related to the Properties or the Company
relating to any period between 1 May 2003 and ending on or prior to the
Closing Date have been fully paid by the Company to the appropriate tax
authority or reserved for in the books of the Company. The Company is not
in default in respect of Taxes for any year or part thereof of the
Company's taxable years until the Closing Date.
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6.13.4 There are no additional Taxes required to be paid or accounted for in
respect of the period between 1 May 2003 and the Closing Date which are
not included or reflected in the Accounts and there are no stamp duty
(Sw. stampelskatt) that have been postponed and that may become payable
in the future.
6.13.5 The documents comparable with invoices, APPENDIX 6.13.5, with information
about deducted value added tax related to investments (Sw. ny-, till-
xxxxx ombyggnad) made on the Properties as per 31 December 2004, as
defined in Chapter 8 a, Section 15 of the VAT regulation (Sw.
mervardesskattelag (1994:200)) are correct.
6.14 AGREEMENTS
6.14.1 All agreements of the Company have been disclosed to the Buyer in the
Data Room Documents and are listed in APPENDIX 6.14. Each such agreement
is valid and binding in accordance with the terms and conditions which
are evident from its wording. As per the date of this Agreement, no
material agreement of the Company has been terminated.
6.14.2 The Company has not entered into any other agreements with the Seller or
any of its affiliates than the Shareholder Loan and the Asset Management
Agreement, and following Closing, neither the Seller nor any of its
affiliates will have any claims on or rights against the Company.
6.15 ENVIRONMENTAL MATTERS
6.15.1 The Company has in all material respects complied with Environmental Laws
with respect to the Properties and the Company's business.
6.15.2 To the Seller's Knowledge and except as set out in the Xxxxxx Reports,
the land, ground water and buildings on the Properties are not
contaminated and do not contain any substances considered hazardous
(according to current scientific knowledge) to such extent that,
according to Environmental Laws in force at the Closing Date, costs are
or may be incurred by the Buyer or the Company, or an obligation for the
Buyer or the Company exists or may arise to carry out, any investigation,
monitoring, treatment, remediation, or other similar measures (Sw.
efterbehandlingsatgarder).
6.16 NO OTHER WARRANTIES
6.16.1 The Buyer agrees that the Seller has made no, and the Buyer has not
relied on any, express or implied, representation or warranty regarding
the Shares or the Company other than the Warranties and other
undertakings contained in this Agreement and no action or omission by the
Seller or the Company shall be construed as implying any representation
or warranty.
6.16.2 The Seller has given the Buyer and its professional advisors the
opportunity to inspect the Properties and to review the Due Diligence
Documents. The Parties therefore agree that the Seller's liability for
defects in relation to the Shares is exclusively governed by the
Warranties in this Section 6 and that the Seller shall
12
have no liability for defects under the Sale of Goods Act (Sw. Koplagen
(1990:931)) or under any statute, law or legal principle. With the
exception of what is expressly warranted in this Section 6 or as set out
otherwise in this Agreement, the Buyer hereby waives all claims against
the Seller with respect to each and every type of defects in the Shares
and the Properties including legal defects (Sw. rattsliga fel), defects
regarding rights of disposition (Sw. radighetsfel) and latent defects (Sw.
dolda fel).
7 REPRESENTATIONS AND WARRANTIES OF THE BUYER
7.1 The Buyer is duly incorporated and validly existing under the laws of the
jurisdiction in which the Buyer was incorporated and has the requisite
power and authority to enter into, and the funds necessary to perform,
this Agreement and any other undertaking to be executed by the Buyer
pursuant to this Agreement.
7.2 This Agreement and any other documents to be executed by the Buyer
pursuant to this Agreement and the performance by the Buyer of its
obligations under them, have been duly authorised by all necessary
corporate action on the part of the Buyer, and this Agreement, and any
other documents to be executed by the Buyer pursuant to this Agreement,
will, when executed, constitute valid and binding obligations of the Buyer
in accordance with their respective terms.
7.3 The execution and performance by the Buyer of this Agreement or any other
documents to be executed under it, do not and will not (i) result in a
breach of any provision of the articles of association or any provision of
any other constitutional document of the Buyer, (ii) result in any breach
of any resolution adopted by the shareholders or board of directors of the
Buyer, (iii) require any consent by the members of the Buyer, or any class
of them, which has not been unconditionally and irrevocably obtained, or
(iv) result in a breach of any applicable law order, judgement or decree
of any court or governmental agency or of any agreement to which the Buyer
is a party or by which the Buyer is bound.
8 COVENANTS OF THE SELLER
8.1 During the period between the date hereof and the Closing Date, the Seller
shall not and shall procure that, except with express prior written
consent from the Buyer:
(a) the Company shall not issue or repay any share capital or issue any
debt instrument;
(b) the Company shall not declare or pay any dividend, group
contribution or make any other distribution to the Seller or any
other Person;
(c) the Company shall not amend its articles of association and shall
not pass any resolution in shareholders' meetings (other than any
resolution constituting ordinary business conducted at an annual
shareholders' meeting or as required in connection with this
Agreement);
(d) the Company shall not create any Encumbrance over the Company or any
of the Properties;
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(e) the Company shall not sell, transfer or otherwise dispose of any of
its assets;
(f) the Company shall not incur any material liability related to the
Properties or, in the case of the Company, any indebtedness; and
(g) the Company shall not agree or commit to do any of the foregoing.
8.2 The Seller undertakes, from the date hereof until the Closing Date, to
ensure that the Company conducts its business in accordance with past
practices and maintain and preserve its business organisations as going
concerns and maintain its business relationships with third parties.
Unless otherwise agreed in writing, the Seller shall procure that the
Company does not terminate or amend any of the Lease Agreements or enters
into any new lease agreements or otherwise adopt important decisions with
respect to the Company or the Properties.
8.3 The Data Room Documents are complete and correct and there are no
material facts or circumstances relating to the Company or the
Properties, which have not been disclosed to the Buyer and which may have
an adverse effect on the condition, value or use of the Properties or the
Company or that may reasonably be expected to influence the decision of
the Buyer to purchase the Shares on the terms of this Agreement.
9 COVENANTS OF THE BUYER
Subject to approval of the Auditor, the Buyer undertakes to cause those
Directors who retire in connection with this transaction to be granted
discharge from liability for their administration until the Closing Date
(or the earlier date of their retirement) at the next annual
shareholders' meeting of the Company.
10 INDEMNIFICATION
10.1 INDEMNIFICATION
Subject to Section 10.2 below, the Seller shall indemnify the Buyer for
any Loss resulting from a breach of any of the Warranties made by the
Seller pursuant to this Agreement. Any such indemnification shall be made
through a reduction/repayment of the Purchase Price (which for the
purposes of this Section 10 shall include the Loans) and/or damages. No
other remedies shall be available to the Buyer.
10.2 LIMITATION OF LIABILITY
10.2.1 The Buyer shall not be entitled to indemnification unless the aggregated
amount of all Losses, subject to any restrictions made under this Section
10, exceeds SEK 3,500,000 in which case the full amount and not only the
excess shall be payable. For the purposes hereof no individual Loss which
is less than SEK 100,000 shall be taken into account (where more than one
breach of warranty based on the same or essentially the same circumstance
shall be deemed to be an individual Loss).
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10.2.2 No Claim shall entitle the Buyer to indemnification unless notice in
writing of any such Claim, accompanied by reasonable particulars thereof
specifying the nature of the Claim and, as far as practicable, the amount
of the Claim, has been given to the Seller no later than 12 months after
the Closing Date, except that Claims with reference to warranties in
Section 6.13 above may be made within three (3) months from the date the
relevant Taxes have been finally determined, without any further
possibility of appeal, by the relevant Tax Authority or court. Claims
under the warranty in Sections 6.1, 6.2, 6.3 and 6.9.1 shall not be
subject to any limitations in time and not to the thresholds in Section
10.2.1 above.
10.2.3 The aggregate of the liability of the Seller in respect of all Claims
shall in no event exceed SEK 72,500,000.
10.2.4 For the purposes of this Agreement, a liability, which is contingent,
shall not constitute a Loss unless and until such contingent liability
becomes an actual liability and is due and payable. For the avoidance of
doubt, a claim timely notified is preserved regardless of the contingent
or unquantifiable nature of such claim at the time of notice.
10.2.5 If and to the extent any Loss is a tax deductible item for the Company or
the Buyer during the year when the Loss arises, or during the following
two years, or relates to an untaxed reserve, the recoverable Loss shall
be reduced by an amount equivalent to the Loss multiplied by the actual
corporate tax rate applicable during the relevant fiscal year.
10.2.6 The Buyer shall not be entitled to make any Claim to the extent that a
provision or allowance for the matter of the Loss (whether as a specific
reserve or as a general reserve) has been made in the Closing Accounts or
the same is otherwise taken account of or reflected in the Closing
Accounts.
10.2.7 No Claim may be made if the Claim is based on facts or circumstances
which are evident from the Data Room Documents, or which were otherwise
known to the Buyer prior to the date of this Agreement. For the purposes
hereof, the Buyer's knowledge in relation to the warranties in Sections
6.10.2 and 6.10.5 shall not be affected by references in minutes from
board meetings of the Company unless (i) in relation to the warranty in
Section 6.10.2, the Buyer has been provided with written evidence that
the lease agreement has been amended in accordance with what was
mentioned in the board minutes and (ii) in relation to the warranty in
Section 6.10.5, the lease agreement has been listed in Appendix 6.10.5.
10.2.8 No liability shall arise if and to the extent that any Claim
(a) occurs as a result of the passing of any legislation not in force on
the Closing Date, or which takes effect retrospectively, or occurs as
a result of any increase in the tax rate in force on the Closing Date
or any change in generally established practice of the relevant tax
authorities;
(b) is recoverable under an insurance policy or which would have been
recoverable had the insurance protection level of the Company, which
existed at the Closing Date, been continued; or
15
(c) would not have arisen but for an act, omission or transaction carried
out by the Buyer, or Persons deriving title from the Buyer or the
Company after the Closing Date, except for an act, omission or
transaction in the ordinary course of business of the Company.
10.3 THIRD PARTY CLAIMS AND RECOVERY
10.3.1 In the case of the Buyer or the Company becoming aware of a Third Party
Claim, which could result in a Claim, the Buyer shall, either itself, or
shall procure that the Company shall:
(a) as soon as reasonably practicable after the Buyer or the Company (as
the case may be) became aware of the Third Party Claim, give written
notice of it to the Seller;
(b) not make any admission of liability, agree to settle or compromise
with any person, body or authority in relation to it, without
obtaining the prior written consent of the Seller, which consent
shall not be unreasonably withheld or delayed;
(c) have due regard to the Seller's interest in disputing, compromising
or defending such Claim; and
(d) give the Seller, or the Seller's duly authorised representatives
free of charge, the assistance and the information reasonably
necessary to enable the Seller, or the Seller's duly authorised
representatives, to examine the basis of any potential Third Party
Claim.
10.3.2 If a Third Party Claim that could lead to a Claim should come to the
knowledge of the Buyer or the Company, the Buyer shall, upon the Seller's
written request, afford the Seller, at its own expense, the right to
dispute and defend such Third Party Claim in the name of the Company;
provided, however, that the Buyer or the Company shall have a right to
refuse the aforementioned should it concern a claim from the tenant in
the Lease Agreements in which case the Buyer shall consult with the
Seller before taking any actions. The Seller shall confirm to the Buyer
in writing within 30 days from making a written request as per the above
whether the Seller wishes to use this right. If such written confirmation
is received, the Buyer shall ensure that the Company will grant to the
Seller all authorisations and all assistance reasonably necessary to
enable the Seller to dispute and defend any such Claim. Should the Buyer
not afford the Seller the right to dispute and defend such Third Party
Claim, except for the above-mentioned situation when the Buyer may so
refuse, the potential Claim arising as a result of such Third Party Claim
shall be deemed waived by the Buyer.
10.3.3 If the Seller makes any payment to the Buyer as a settlement of a Claim
and the Buyer or the Company have the right to recover from any third
party any amount that has formed the basis of the Claim, the Buyer shall
promptly and without request from the Seller assign that right to the
Seller, however not exceeding the amount paid by the Seller to the Buyer.
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10.4 SPECIFIC INDEMNITIES
10.4.1 The Seller shall, at its own cost, procure that the agreements regarding
asset management between the Company, the Seller and Crown Mortgage
Management Ltd. dated in May 2003 not disclosed to the Buyer (the "ASSET
MANAGEMENT AGREEMENT") has been terminated as per the Closing Date
without any cost, remaining obligations or liabilities of the Company and
that the Asset Management Agreement and the operation of it by the
parties thereto will not result in any tax consequences or other negative
consequences for the Company or the Buyer. Hence, the Seller shall
without any limitations indemnify and hold the Buyer and the Company
harmless from and against all liabilities, costs, claims, losses,
damages, and expenses resulting from, arising out of or relating to the
Asset Management Agreement.
10.4.2 The Seller shall, at its own cost, use its best efforts to procure that
all employees of the Company have been transferred to Lagrummet December
1040 AB (under proposed change of name to Crown Property Management AB)
as per the Closing Date without any cost, remaining obligations or
liabilities of the Company in relation to the employees or any third
party and that the said transfer of the employees will not result in any
tax consequences or other negative consequences for the Company or the
Buyer. Hence, the Seller shall without any limitations indemnify and hold
the Buyer and the Company harmless from and against all liabilities,
costs, claims, losses, damages, and expenses resulting from, arising out
of or relating to the transfer of the employees from the Company to
Lagrummet December 1040 AB (under proposed change of name to Crown
Property Management AB) including but not limited to any costs in
relation to the employees that the Company may have should the transfer
of employees as contemplated by this Clause 10.4.2 be delayed beyond the
Closing Date. Should any of the Company's employees refuse a transfer to
Lagrummet December 1040 AB (under proposed change of name to Crown
Property Management AB), the Buyer undertakes to procure that the Company
terminates such employee's employment with the Company after having
consulted with the Seller.
10.4.3 The Seller warrants that there are no outstanding obligations or
liabilities of the Company in relation to previous divestment of
properties, including historically deducted input VAT relating to any
such property (Sw. jamkningsskyldighet), or other assets made by the
Company and that there are no warranty obligations and similar
undertakings or obligations to repay any amounts for which the Company
have been liable outstanding. Hence, the Seller shall without any
limitations indemnify and hold the Buyer and the Company harmless from
and against all liabilities, costs, claims, losses, damages, and expenses
resulting from, arising out of or relating to any such obligations,
liabilities or undertakings. The Seller's obligations under this Section
10.4.3 expires 24 months from the Closing Date after which date no claim
may be made by the Buyer.
10.4.4 The Sellers undertake to procure that Company registers its title (Sw.
lagfart) to any of the Properties which the Company does not have
registered title to on the date of this Agreement. Hence, the Seller
shall without any limitations indemnify and hold the Buyer and the
Company harmless from and against all liabilities,
17
costs, claims, losses, damages, and expenses resulting from, arising out
of or relating to the registration of title to such properties.
11 CLOSING ACCOUNTS
11.1 As soon as reasonably practicable and by no later than thirty (30)
Business Days from the Closing Date, the Seller shall in consultation with
the Company prepare and deliver to the Buyer accounts of the Company as at
the Closing Date for purposes of establishing the Actual Profit (the
"DRAFT CLOSING ACCOUNTS").
11.2 The Draft Closing Accounts shall be prepared in accordance with the
Accounting Principles. Notwithstanding the foregoing, the Parties have
agreed that when preparing the Draft Closing Accounts the following shall
apply:
(i) the Properties (or any of them) shall be subject to depreciation
(Sw. avskrivning) with the same percentage as applied in the
Accounts, however no write-down (Sw. nedskrivning) shall be made;
(ii) any profit or loss impact of the Company's unamortised prepaid
financing cost at the Accounts Date shall not be reflected in the
Draft Closing Accounts (already adjusted for when determining the
Purchase Price);
(iii) any prepayment fees, accrued commitment fees or other costs and fees
(including any cost for early termination of existing interest swap
agreements) payable due to the prepayment of the Loans at Closing
shall not be reflected in the Draft Closing Accounts; and
(iv) no environmental liability shall be reflected in the Draft Closing
Accounts.
11.3 Within thirty (30) Business Days from delivery of the Draft Closing
Accounts, the Buyer shall notify the Seller in writing of any item or
items that would impact the Actual Profit together with the reasons
therefore and a list of proposed adjustments. If, by the expiry of such
thirty Business Day period, no such notice is received by the Seller or
the Buyer have notified the Seller that there are no items they wish to
notify, the Draft Closing Accounts shall constitute the Closing Accounts
for the purposes of this Agreement.
11.4 If notice is received by the Seller that there are items in dispute under
Section 11.3 above, the Seller and the Buyer shall attempt to agree in
writing the item or items disputed by the Buyer. If such item or items are
not agreed in writing within ninety (90) Business Days from the Closing
Date, the item or items shall be determined by:
(a) such independent firm of reputable chartered accountants as the
Parties may agree in writing; or
(b) failing agreement on the identity of the firm of chartered
accountants within a further seven (7) Business Days from the expiry
of the 90 Business Days referred to above, such firm of chartered
accountants shall be appointed for this purpose by the Stockholm
Chamber of Commerce.
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11.5 The Draft Closing Accounts, adjusted to reflect the item or items as
agreed between the Seller and the Buyer in writing or as determined by the
accountants appointed under Section 11.4 above constitute the Closing
Accounts for the purposes of this Agreement.
11.6 The Parties shall be entitled to all information, reasonable assistance
and access to books, records of account, documents, files and papers and
information stored electronically of the Company which they reasonably
require for the purposes of this Section 11.
12 CONFIDENTIALITY
Each Party undertakes not to use or disclose any Confidential Information
unless (i) required to do so by law or pursuant to any order of court or
other competent authority or tribunal (ii) required to do so by any
applicable stock exchange regulations or the regulations of any other
recognised market place (iii) such disclosure has been consented to by the
other Party in writing (such consent not to be unreasonably withheld) or
(iv) to its professional advisers (who are bound to such party by a duty
of confidentiality which applies to any information disclosed) or (v) its
investors. The Buyer shall have a right to place this Agreement at the
disposal of interested parties and their advisers in connection with a
future transfer of any of the Properties or the Company (provided they are
bound by customary confidentiality undertakings). If a Party becomes
required, in circumstances contemplated by (i) or (ii) to disclose any
information, the disclosing Party shall use its reasonable endeavours to
consult with the other Party prior to any such disclosure.
13 ANNOUNCEMENTS
All press releases, public announcements or public relations activities by
the Parties with regard to this Agreement or the transactions contemplated
by it shall be mutually approved by the Parties in advance of such release
or announcement.
14 COSTS
Each Party shall pay its own costs and expenses in connection with the
preparation for and completion of the transactions contemplated by this
Agreement, including but not limited to all fees and expenses of its own
representatives, agents, brokers, legal and financial advisers and
authorities and no such costs or expenses shall be charged to or paid by
the Company.
15 ENTIRE AGREEMENT
Each of the Parties to this Agreement confirms that this Agreement
represents the entire understanding and constitutes the whole agreement
between the Parties in relation to its subject matter and supersedes all
prior agreements, covenants, arrangements, communications, representations
or warranties, whether oral or
19
written, by any officer, agent, employee or representative of either of
the Parties, or the Company.
16 AMENDMENTS AND WAIVERS
This Agreement may only be amended by an instrument in writing duly
executed by the Parties. No change, termination, modification or waiver of
any provision, term or condition of this Agreement shall be binding on the
Parties, unless it is made in writing.
17 NOTICES
17.1 All notices, requests, demands, approvals, waivers and other
communications required or permitted under this Agreement must be in
writing in the English language and shall be deemed to have been received
by a Party when:
(a) delivered by post, unless actually received earlier, on the third
Business Day after posting, if posted within Sweden, or the fifth
Business Day, if posted to or from a place outside Sweden;
(b) delivered by hand, on the day of delivery;
(c) delivered by fax, on the day of dispatch if supported by a written
confirmation from the sender's fax machine that the message has been
properly transmitted.
17.2 All such notices and communications shall be addressed as set out below or
to such other addresses as may be given by written notice in accordance
with this Section.
If to the Seller: Crown European Holdings Ltd
Attention: Xxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxx Xxxxxx,
Xxxxxxx, Xxxxxxx XX0 0XX
Xxxxxxx
Fax No. + 00 0000 000 000
With a copy to: Advokatfirman Xxxxx KB
Att: Xxxxxxx Xxxxxxxx
Xxx 0000
000 00 Xxxxxxxxx
Xxxxxx
Fax No. + 00 0 000 00 00
and
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Crown Asset Management AB
Xxx 0000
000 00 Xxxxxxxxx
Xxxxxx
Fax No. x00 0 000 00 00
If to the Buyer: AB Grundstenen 101666
X/x XXXX
Xxxxxxxxx: Xxxxx Xxxxx
Xxx 0000
XX-000 00 Xxxxxxxxx, Xxxxxx
Fax No. + 00 0 000 00 00
18 ASSIGNMENTS
This Agreement shall be binding upon and inure to the benefit of the
successors of the Parties but shall not be assignable by any of the
Parties without the prior written consent of the other Party.
19 INTERPRETATION
The headings in this Agreement are for convenience only and shall not
affect the interpretation of any provision of this Agreement.
20 PARTIAL INVALIDITY
If any provision of this Agreement or the application of it shall be
declared or deemed void, invalid or unenforceable in whole or in part for
any reason, the Parties shall amend this Agreement as shall be necessary
to give effect to the spirit of this Agreement as far as possible. If the
Parties fail to amend this Agreement, the provision, which is void,
invalid or unenforceable, shall be deleted and the remaining provisions of
this Agreement shall continue in full force and effect.
21 GOVERNING LAW AND DISPUTES
21.1 This Agreement shall be governed by and construed in accordance with the
laws of Sweden.
21.2 Any dispute, controversy or claim arising out of, or in connection with,
this Agreement, or the breach, termination or invalidity of the Agreement,
shall be settled by arbitration in accordance with the Rules of the
Arbitration Institute of the Stockholm Chamber of Commerce.
21.3 The place of arbitration shall be Stockholm, Sweden.
21.4 The language to be used in the arbitral proceedings shall be Swedish.
21.5 The Parties undertake and agree that all arbitral proceedings conducted
with reference to this arbitration clause will be kept strictly
confidential. This
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confidentiality undertaking shall cover all information disclosed in the
course of such arbitral proceedings, as well as any decision or award that
is made or declared during the proceedings. Information covered by this
confidentiality undertaking may not, in any form, be disclosed to a third
party without the written consent of all Parties hereto. Notwithstanding
the foregoing, a Party shall not be prevented from disclosing such
information in order to secure its interests against the other Party
(including collecting its award) in connection with a dispute or if
required to do so by law, any applicable stock exchange regulations or the
regulations of any other recognised market place.
------------------------
This Agreement has been duly executed in three original copies, of which each of
the Parties has taken one copy and Crown Northcorp, Inc. has taken one copy.
Stockholm, 25 May 2005
CROWN EUROPEAN HOLDINGS LTD AB GRUNDSTENEN 101666
(UNDER CHANGE OF NAME TO NIAM RETAIL HOLDING AB)
/s/ Xxxxxx X. Xxxxx /s/ Xxxxx Xxxxx
------------------- ------------------------
BY: Director BY:
Crown NorthCorp, Inc., as ultimate parent company of Crown European Holdings
Ltd, hereby guarantees as for its own debt (Sw. sasom for egen skuld) the due
and punctual fulfilment of all of Crown European Holdings Ltd's obligations
under the Agreement up to an amount not exceeding SEK 72,500,000. This guarantee
will expire twelve (12) months from the Closing Date. Section 21 of the
Agreement shall apply to this guarantee.
CROWN NORTHCORP, INC.
/s/ Xxxxxx X. Xxxxx
--------------------
BY: Xxxxxx X. Xxxxx, Vice Chairman
and Chief Executive Officer
22