Document:

Exhibit 4.16

DESIGNATION OF THE
SERIES C PARTNERSHIP PREFERRED UNITS OF

AFFORDABLE RESIDENTIAL COMMUNITIES LP

1.             Number
of Units and Designation. A series of
Partnership Preferred Units of Affordable Residential Communities LP (the “Partnership”) is hereby designated as Series C
Partnership Preferred Units (“Series C PPUs”)
and the number of Series C PPUs constituting such series shall be 705,688.

2.             Definitions. Capitalized terms used and not otherwise defined herein
shall have the meanings assigned thereto in the First Amended and Restated
Agreement of Limited Partnership of the Partnership, dated as of February 11,
2004, as amended, supplemented or restated from time to time (the “Agreement”), as modified by this Designation of the Series C
Partnership Preferred Units of the Partnership (this “Designation”)
and the defined terms used herein. The following term shall have the meaning
ascribed below:

“Assignee” shall mean a Person to whom one or more
Partnership Units have been Transferred in a manner permitted under the
Agreement, but who has not become a Substituted Limited Partner, and who has
the rights set forth in Section 11.5 of the Agreement.

3.             Ranking. Any class or series of Partnership Units of the
Partnership shall be deemed to rank:

a.             prior
or senior to the Series C PPUs as to the payment of distributions and as
to distributions of assets upon liquidation, dissolution or winding up, if the
holders of such class or series shall be entitled to the receipt of
distributions and of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or priority to the holders of Series C
PPUs (the Partnership Units referred to in this paragraph, including without
limitation the Series A Cumulative Redeemable Preferred Units of Limited
Partnership, being hereinafter referred to, collectively, as “Senior Partnership Units”);

b.             on
parity with the Series C PPUs as to the payment of distributions and as to
distribution of assets upon liquidation, dissolution or winding up, whether or
not the distribution rates, distribution payment dates or redemption or
liquidation prices per unit or other denomination thereof be different from
those of the Series C PPUs, if the holders of such class or series of
Partnership Units and the Series C PPUs shall be entitled to the receipt
of distributions and of amounts distributable upon liquidation, dissolution or
winding up in proportion to their respective amounts of accrued and unpaid
distributions per unit or other denomination or liquidation preferences,
without preference or priority one over the other (the Partnership Units
referred to in this paragraph, including without limitation the Series B
Partnership Preferred Units and the Series D Partnership Preferred Units
of the Partnership, being hereinafter referred to, collectively, as “Parity Partnership Units”); and

c.             junior
to the Series C PPUs as to the payment of distributions and as to the
distribution of assets upon liquidation, dissolution or winding up, if (i) such
class or series of Partnership Units shall be Partnership Common Units, or (ii) the
holders of Series C PPUs otherwise shall be entitled to receipt of
distributions or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or priority to the holders of
such class or series of Partnership Units (the Partnership Units referred to in
clauses (i) and (ii) of this paragraph being hereinafter referred to,
collectively, as “Junior Partnership Units”).

4.             Quarterly Cash
Distributions.

a.             Holders
of Series C PPUs will be entitled to receive, when and as declared by the
General Partner, quarterly cash distributions at the rate of 6.25% per annum of
the Series C Liquidation Preference (as defined in Section 5.a.
hereof). Any such distributions will be cumulative from the date of original
issue, whether or not in any distribution period or periods such distributions
have been declared, and shall be payable quarterly on July 30, October 30,
January 30 and April 30 of each year (or, if not a Business Day, the
next succeeding Business Day) (each a “Distribution Payment Date”),
commencing on the first such date occurring after the date of original issue.
If the Series C PPUs are 

issued on any day other
than a Distribution Payment Date, the first distribution payable on such Series C
PPUs will be prorated for the portion of the quarterly period that such Series C
PPUs are outstanding on the basis of twelve 30-day months and a 360-day year.
Distributions will be payable in arrears to Holders as they appear on the
records of the Partnership at the close of business on the July 15, October 15,
January 15 or April 15, as the case may be, immediately preceding
each Distribution Payment Date. Holders of Series C PPUs will not be
entitled to receive any distributions in excess of the cumulative quarterly
cash distributions on the Series C PPUs specified herein. No interest, or
sum of money in lieu of interest, shall be payable in respect of any
distribution payment or payments on the Series C PPUs that may be in
arrears. Holders of any Series C PPUs that are issued after the date of
original issuance will be entitled to receive distributions calculated in the
manner set forth in this Section 4.a. from the date of issue of such Series C
PPUs.

b.             When
distributions are not paid in full upon the Series C PPUs or any Parity
Partnership Units, or a sum sufficient for such payment is not set apart, all
distributions declared upon the Series C PPUs and any Parity Partnership
Units shall be declared ratably in proportion to the respective amounts of
distributions accumulated and unpaid on the Series C PPUs and accumulated
and unpaid on such Parity Partnership Units (which shall not include any
accumulation in respect of unpaid distributions for prior distribution periods
if such Parity Partnership Units do not have a cumulative distribution). Except
as set forth in the preceding sentence, unless distributions on the Series C
PPUs equal to the full amount of accumulated and unpaid distributions have been
or contemporaneously are declared and paid, or declared and a sum sufficient
for the payment thereof has been or contemporaneously is set apart for such
payment, for all past distribution periods and the then current distribution
period, no distributions shall be declared or paid or set apart for payment by
the Partnership with respect to any Parity Partnership Units.

c.             Unless
full cumulative distributions (including all accumulated, accrued and unpaid
distributions) on the Series C PPUs have been declared and paid, or
declared and set apart for payment, for all past distribution periods and the
then current distribution period, no distributions (other than distributions
paid in Junior Partnership Units or options, warrants or rights to subscribe
for or purchase Junior Partnership Units or by the General Partner in REIT
Shares) may be declared or paid or set apart for payment by the Partnership and
no other distribution of cash or other property may be declared or made,
directly or indirectly, by the Partnership with respect to any Junior
Partnership Units, nor shall any Junior Partnership Units be redeemed,
purchased or otherwise acquired for any consideration (or any monies be paid to
or made available for a sinking fund for the redemption of any such Junior
Partnership Units), directly or indirectly, by the Partnership (except by
conversion into or exchange for Junior Partnership Units or REIT Shares, or
options, warrants or rights to subscribe for or purchase Junior Partnership
Units), nor shall any other cash or other property be paid or distributed to or
for the benefit of holders of Junior Partnership Units.

d.             Notwithstanding
the foregoing provisions of this Section 4, the Partnership shall not be
prohibited from (i) declaring or paying or setting apart for payment any
distribution on any Parity Partnership Units or (ii) redeeming, purchasing
or otherwise acquiring any Parity Partnership Units, in each case, if such
declaration, payment, redemption, purchase or other acquisition is necessary to
maintain the General Partner’s qualification as a REIT.

5.             Liquidation Preference.

a.             Upon
any voluntary or involuntary liquidation, dissolution or winding up of the
Partnership, before any distribution by the Partnership shall be made to or set
apart for the holders of any Junior Partnership Units, to the extent possible
and in accordance with Section 13.2 of the Agreement, the holders of Series C
PPUs shall be entitled to receive a liquidation preference per Series C
PPU equal to the sum of (i) $25.00 per unit (the “Series C
Liquidation Preference”), plus (ii) all accumulated, 

 2
 

accrued and unpaid
distributions (whether or not earned or declared) to and including the date of
final distribution to such holders ((i) and (ii), together, the “Series C Liquidating Proceeds”); but such holders will
not be entitled to any further payment. Until all holders of the Series C
PPUs have been paid the Series C Liquidating Proceeds in full, no
distribution of the Partnership will be made to any holder of Junior
Partnership Units upon the liquidation, dissolution or winding up of the
Partnership.

b.             If,
upon any liquidation, dissolution or winding up of the Partnership, the assets
of the Partnership, or proceeds thereof, distributable among the holders of Series C
PPUs and any Parity Partnership Units shall be insufficient to pay in full the Series C
Liquidating Proceeds and liquidating payments on any Parity Partnership Units,
such assets, or the proceeds thereof, shall be distributed among the holders of
Series C PPUs and any such Parity Partnership Units ratably in the same
proportion as the respective amounts that would be payable on such Series C
PPUs and any such Parity Partnership Units if all amounts payable thereon were
paid in full.

c.             Upon
any liquidation, dissolution or winding up of the Partnership, after all
distributions shall have been made in full to the holders of Series C PPUs
and any Parity Partnership Units to enable them to receive their respective
liquidation preferences, any Junior Partnership Units shall be entitled to receive
any and all assets remaining to be paid or distributed, and the holders of the Series C
PPUs and any Parity Partnership Units shall not be entitled to share therein.

6.             Redemption at the Option
of the Partnership.

a.             Right of Optional Redemption.   The Series C PPUs
may not be redeemed prior to the fifth (5th) anniversary of the issuance date
of such Series C PPUs. On or after such date, the Partnership shall have
the right to redeem the Series C PPUs, in whole or in part, at any time or
from time to time, upon not less than thirty (30) nor more than sixty (60) days
written notice, at a redemption price per Series C PPU, payable in cash,
equal to (i) the Series C Liquidation Preference, plus (ii) all
accumulated, accrued and unpaid distributions (whether or not earned or
declared) to and including the date of redemption ((i) and (ii), together,
the “Series C Redemption Price”). If
fewer than all of the outstanding Series C PPUs are to be redeemed, the Series C
PPUs to be redeemed shall be selected pro rata (as nearly as practicable
without creating fractional units).

b.             Procedures for Redemption.

(i)            Notice
of redemption will be (A) faxed, and (B) mailed by the Partnership,
by certified mail, postage prepaid, not less than thirty (30) nor more than
sixty (60) days prior to the redemption date, addressed to the respective
Holders of the Series C PPUs at their respective addresses as they appear
on the records of the Partnership. No failure to give or defect in such notice
shall affect the validity of the proceedings for the redemption of any Series C
PPUs except as to any holder to whom such notice was defective or not given. In
addition to any information required by law, each such notice shall state: (1) the
redemption date, (2) the Series C Redemption Price, (3) the
aggregate number of Series C PPUs to be redeemed and if fewer than all of
the outstanding Series C PPUs are to be redeemed, the number of Series C
PPUs to be redeemed held by such holder, which number shall equal such holder’s
pro rata share (based on the percentage of the aggregate number of outstanding Series C
PPUs the total number of Series C PPUs held by such holder represents) of
the aggregate number of Series C PPUs to be redeemed, (4) the place
or places where the Series C PPUs are to be surrendered for payment of the
Series C Redemption Price, (5) that distributions on the Series C
PPUs to be redeemed will cease to accumulate on such redemption date and (6) that
payment of the Series C Redemption Price will be made upon presentation
and surrender of such Series C PPUs.

(ii)           If
the Partnership gives a notice of redemption in respect of Series C PPUs
then, by 12:00 noon, New York City time, on the redemption date, the
Partnership will pay such Series C 

 3
 

Redemption Price to the
holders of the Series C PPUs upon surrender of the Series C PPUs by
such holders at the place designated in the notice of redemption. If fewer than
all Series C PPUs evidenced by any certificate are being redeemed, a new
certificate shall be issued upon surrender of the certificate evidencing all Series C
PPUs, evidencing the unredeemed Series C PPUs without cost to the holder
thereof. On and after the date of redemption, distributions will cease to
accumulate on the Series C PPUs or portions thereof called for redemption,
unless the Partnership defaults in the payment thereof. If any date fixed for
redemption of Series C PPUs is not a Business Day, then payment of the Series C
Redemption Price payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay) except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date fixed for
redemption. If payment of the Series C Redemption Price is improperly
withheld or refused and not paid by the Partnership, distributions on such Series C
PPUs will continue to accumulate from the original redemption date to the date
of payment, in which case the actual payment date will be considered the date
fixed for redemption for purposes of calculating the applicable Series C
Redemption Price.

7.             Redemption at the Option
of the Holder.

a.             Right to Redemption.

(i)            At any time after the later of (A) the
two-and-one-half year anniversary of the date of issuance of such Series C
PPUs and (B) January 1, 2007, any Holder (any such Holder, a “Series C Redeeming Party”) of Series C PPUs shall
have the right (subject to the terms and conditions set forth herein) to
require the Partnership to redeem (a “Series C Redemption”)
all or a portion of the Series C PPUs held by such Holder (such Series C
PPUs being hereafter “Series C Redeemed
Units”) in exchange for (1) one-eighth of such Series C
Redeeming Party’s Series C Redeemed Units (as nearly as practicable
without creating fractional units) for cash in an amount per Series C PPU
equal to the Series C Liquidating Proceeds, payable on the Series C
Redemption Date (as defined below), and (2) such Series C Redeeming
Party’s remaining Series C Redeemed Units by delivery to the Series C
Redeeming Party on the Series C Redemption Date of a negotiable note
(subject to standard transfer restrictions applicable to securities not registered
under the Securities Act), bearing interest at a rate of 7% per annum (the “Note”),
with a principal amount equal to the aggregate Series C Liquidating
Proceeds for the Series C Redeemed Units to which this clause (2) applies
(the original principal amount of the Note, the “Series C
Principal Amount”), payable in such amounts (expressed as a
percentage of the Series C Principal Amount) and on such dates as follows:

	
  Date that is the Following

  Number of Days Following
such Series C Redemption Date

  	
   

  	
  Percentage of the
Series C
Principal Amount

  	
   

  
	
  91st day

  	
   

  	
  14-2/7

  	
  %

  
	
  181st day

  	
   

  	
  14-2/7

  	
  %

  
	
  271st day

  	
   

  	
  14-2/7

  	
  %

  
	
  361st day

  	
   

  	
  14-2/7

  	
  %

  
	
  451st day

  	
   

  	
  14-2/7

  	
  %

  
	
  541st day

  	
   

  	
  14-2/7

  	
  %

  
	
  631st day

  	
   

  	
  14-2/7

  	
  %

  

 

On each date on which a portion of the Series C
Principal Amount becomes due and payable, the then-accrued and unpaid interest
pursuant to the Note shall become due and payable.

 4
 

Any Series C Redemption shall be exercised
pursuant to a Series C Redemption Notice (as defined below) delivered to
the General Partner by such Series C Redeeming Party when exercising the Series C
Redemption right. The Partnership’s obligation to effect a Series C
Redemption, however, shall not arise or be binding against the Partnership (1) until
and unless there has been a Series C Declination (as defined below) and (2) before
the Business Day following the Series C Cut-Off Date (as defined below).
Regardless of the binding or non-binding nature of a pending Series C
Redemption, a Series C Redeeming Party shall have no right to receive
distributions with respect to any Series C Redeemed Units (other than the
cash amounts payable pursuant to this paragraph) paid after delivery of the Series C
Redemption Notice, whether or not the record date for such distribution
precedes or coincides with such delivery of the Series C Redemption
Notice. A “Series C Redemption Notice” shall
mean a notice in the form of Annex I to this Designation.

Notwithstanding the foregoing, upon notice to a Series C
Redeeming Party delivered by the Partnership on or before the close of business
on the Series C Cut-Off Date, the Partnership may redeem all or any
portion of such Series C Redeeming Party’s Series C Redeemed Units on
the Series C Redemption Date for cash in an amount per Series C PPU
equal to the Series C Liquidating Proceeds.

Any cash amount payable pursuant to this Section 7.a.(i) shall
be delivered as a certified check payable to the Series C Redeeming Party
or, in the General Partner’s sole and absolute discretion, in immediately
available funds.

(ii)           Notwithstanding
the provisions of Section 7.a.(i) hereof, on or before the close of
business on the Series C Cut-Off Date, the General Partner may, in its
sole and absolute discretion but subject to the Ownership Limit and the
transfer restrictions and other limitations of the Charter, elect to acquire
some or all of the Series C Redeemed Units from the Series C
Redeeming Party (such percentage being referred to as the “Series C
Applicable Percentage”) in exchange for a number of authorized but previously
unissued REIT Shares equal to (A) the Series C Liquidating Proceeds
multiplied by the aggregate number of such Series C Redeemed Units to be
acquired by the General Partner, (B) divided by the Value of a REIT Share
determined as of the Business Day preceding the Series C Redemption Date
(rounded down to the nearest whole number of REIT Shares). If the General
Partner so elects, on any Series C Redemption Date the Series C
Redeeming Party shall sell the Series C Applicable Percentage of the Series C
Redeemed Units to the General Partner in exchange for (A) the aggregate
number of REIT Shares exchangeable therefor and (B) cash in an amount
(rounded to the nearest whole cent) equal to the Value of a REIT Share
determined as of the Business Day preceding the Series C Redemption Date
multiplied by the fraction of a REIT Share such Series C Redeeming Party
would otherwise be entitled to receive pursuant to the first sentence of this
subparagraph (ii) but for the terminal parenthetical of such sentence. The
Series C Redeeming Party shall submit (A) such information,
certification or affidavit as the General Partner may reasonably require in
connection with the application of the Ownership Limit and other restrictions
and limitations of the Charter to any such acquisition and (B) such
written representations, investment letters, legal opinions or other
instruments necessary, in the General Partner’s view, to effect compliance with
the Securities Act. In the event of an election to purchase any Series C
Redeemed Units by the General Partner pursuant to this Section 7.a.(ii),
the Series C Redeeming Party shall no longer have the right to cause the
Partnership to effect a Series C 

 5
 

Redemption of those Series C
Redeemed Units to be so purchased, and, upon notice to the Series C
Redeeming Party by the General Partner, given on or before the close of
business on the Series C Cut-Off Date, that the General Partner has
elected to acquire some or all of the Series C Redeemed Units pursuant to
this Section 7.a.(ii), the obligation of the Partnership to effect a Series C
Redemption of the Series C Redeemed Units as to which the General Partner’s
notice relates shall not accrue or arise. The REIT Shares issuable by the
General Partner pursuant to this Section 7.a.(ii) shall be delivered
by the General Partner as duly authorized, validly issued, fully paid and
non-assessable REIT Shares free of any pledge, lien, encumbrance or
restriction, other than the Ownership Limit and other restrictions provided in
the Charter and the Bylaws of the General Partner.

Notwithstanding anything in this Section 7 to the
contrary, the General Partner may not exchange REIT Shares for Series C
Redeemed Units pursuant to Section 7.a.(ii) unless the REIT Shares to
be so issued will be issued pursuant to a registration statement (the “Series C Issuance Registration Statement”) on an
appropriate form filed with and declared effective by the SEC.

(iii)          In connection with a Series C Issuance
Registration Statement pursuant to Section 7.a.(ii) hereof the
General Partner will use commercially reasonable efforts to:

(A)          prepare
and file with the SEC such amendments and supplements to the Series C
Issuance Registration Statement as may be necessary to comply with the
provisions of the Securities Act with respect to the issuance by the General
Partner of REIT Shares pursuant to Section 7.a.(ii) hereof;

(B)           at
any time, and from time to time, in its sole discretion prepare and file with
the SEC such amendments and supplements to the Series C Issuance Registration
Statement, or an additional Series C Issuance Registration Statement, as
may be necessary to register such additional REIT Shares that may become
issuable pursuant to Section 7.a.(ii) hereof;

(C)           cause
all REIT Shares registered as described herein to be listed, at or promptly
following the time of issuance, on each securities exchange or quoted on each
quotation service, if any, on which REIT Shares of the same class as the REIT
Shares are then listed or quoted;

(D)          provide
a transfer agent and registrar for all REIT Shares registered pursuant to the
Series C Issuance Registration Statement; and

(E)           promptly
comply with all applicable rules and regulations of the SEC or state “blue
sky” or other securities laws with respect to any Series C Registration Statement.

b.             Procedure for Redemption.

(i)            In
the event that the General Partner declines or fails to exercise its purchase
rights for any Series C Redeemed Units pursuant to
Section 7.a.(ii) hereof following receipt of a Series C
Redemption Notice (a “Series C Declination”),
the General Partner shall give notice of such Series C Declination to the
Series C Redeeming Party on or before the close of business on the fifth
(5th) Business
Day after the General Partner’s receipt of the applicable Series C Redemption
Notice (each such Business Day, a “Series C Cut-Off Date”).
The failure of the General Partner to give notice of such Series C
Declination by the close of business on the applicable Series C Cut-Off
Date shall itself constitute a Series C Declination.

(ii)           Notwithstanding
the provisions of Section 7.a. hereof, no Series C Redeeming Party
shall have any rights under this Designation that would otherwise be prohibited
under the Charter with respect to the Ownership Limit. To the extent that any
attempted acquisition of Series C Redeemed Units by the General Partner
pursuant to Section 7.a.(ii) hereof would be in violation of this
Section 7.b.(ii), it shall be null and void ab initio, and the
Series C Redeeming Party shall not acquire any rights or economic
interests in REIT Shares otherwise issuable by the General Partner under
Section 7.a.(ii) hereof.

 6

 

(iii)          The “Series C Redemption
Date” applicable to the redemption of any Series C PPUs subject
to a Series C Redemption Notice shall be the tenth (10th) Business Day
after the receipt by the General Partner of such Series C Redemption
Notice; provided, however,
that if the General Partner has elected under Section 7.a.(ii) to
exchange REIT Shares for some or all of the Series C Redeemed Units, then
the Series C Redemption Date, as well as the closing of a Series C
Redemption pursuant to this Section 7, with respect to such Series C
Redeemed Units, may be deferred, in the General Partner’s sole and absolute
discretion, for such time (but in any event not more than ninety (90) days in
the aggregate) as may reasonably be required to effect, if applicable, (A) compliance
with the Securities Act or other law (including, but not limited to, (1) state
“blue sky” or other securities laws and (2) the expiration or termination
of the applicable waiting period, if any, under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended) and (B) satisfaction or waiver of
other commercially reasonable and customary closing conditions and requirements
for a transaction of such nature. With respect to the Series C Redeemed
Units for which the General Partner has not elected under Section 7.a.(ii) to
exchange REIT Shares for such Series C Redeemed Units, the Series C
Redemption Date shall not be deferred and the redemption by the Partnership of
such Series C Redeemed Units shall occur on the tenth (10th) Business Day after the receipt by the
General Partner of such Series C Redemption Notice.

(iv)          Notwithstanding
the provisions of Section 7.a. hereof, the General Partner shall not,
under any circumstances, acquire Series C Redeemed Units in exchange for
REIT Shares if such exchange would be prohibited under the Charter.

(v)           Notwithstanding
anything herein to the contrary (but subject to Section 7.b.(ii) hereof),
with respect to any acquisition of Series C Redeemed Units pursuant to
this Section 7:

(A)          All
Series C PPUs acquired by the General Partner pursuant to Section 7.a.(ii) hereof
shall automatically, and without further action required, be converted into and
deemed to be a General Partner Interest comprised of a number of Partnership
Common Units equal to the number of REIT Shares issued in exchange for the Series C
PPUs so acquired.

(B)           Subject
to the Ownership Limit, no Series C Redeeming Party may effect a Series C
Redemption for less than four thousand (4,000) Series C PPUs or, if such Series C
Redeeming Party holds (as a Limited Partner or, economically, as an Assignee)
less than four thousand (4,000) Series C PPUs, all of the Series C
PPUs held by such Series C Redeeming Party.

(C)           Each
Series C Redeeming Party (1) may effect a Series C Redemption
only once in each fiscal quarter of a Twelve-Month Period, unless otherwise
permitted by the General Partner, in its sole and absolute discretion, and (2) may
not effect a Series C Redemption during the period after the record date
immediately preceding any Distribution Payment Date for distributions upon Series C
PPUs and before the record date established by the General Partner for a
distribution to its stockholders of some or all of its portion of any
Partnership distribution.

(D)          The
consummation of a Series C Redemption pursuant to Section 7.a. hereof
shall be subject, if applicable, to the expiration or termination of the
applicable waiting period, if any, under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.

(E)           A
Series C Redeeming Party shall continue to own (subject, in the case of an
Assignee, to the provision of Section 11.5 of the Agreement) all Series C
Redeemed Units, and be treated as a Limited Partner or an Assignee, as
applicable, with respect to such 

 7
 

 

Series C Redeemed
Units for all purposes of this Designation and the Agreement, until such Series C
Redeemed Units are either paid for by the Partnership pursuant to Section 7.a.(i) hereof
(whether in cash or cash and securities) or transferred to the General Partner
and paid for, by the issuance of REIT Shares, pursuant to Section 7.a.(ii) hereof
on the applicable Series C Redemption Date. Until the Series C
Redemption Date with respect to such Series C Redeemed Units and an
acquisition of the Series C Redeemed Units by the General Partner pursuant
to Section 7.a.(ii) hereof, the Series C Redeeming Party shall
have no rights as a stockholder of the General Partner with respect to the REIT
Shares issuable in connection with such acquisition.

(vi)          In
connection with an exercise of Series C Redemption rights pursuant to this
Section 7, a Series C Redeeming Party shall submit the following to
the General Partner, in addition to the Series C Redemption Notice:

(A)          A
written affidavit, dated the same date as the Series C Redemption Notice, (1) disclosing
the actual and constructive ownership, as determined for purposes of Code
Sections 856(a)(6) and 856(h), of REIT Shares by (x) such Series C
Redeeming Party and (y) any Related Party and (2) representing that,
giving effect to the acquisition of all such Series C Redeemed Units by
the General Partner pursuant to Section 7.a.(ii) hereof, neither the Series C
Redeeming Party nor any Related Party will own REIT Shares in excess of the
Ownership Limit;

(B)           A
written representation that neither the Series C Redeeming Party nor any
Related Party has any intention to acquire any additional REIT Shares prior to
the Series C Redemption Date for such Series C PPUs; and

(C)           An
undertaking to certify, at and as a condition to the closing of the Series C
Redemption on the applicable Series C Redemption Date in the event of a Series C
Redemption by the General Partner pursuant to Section 7.a.(ii) hereof,
that either (1) the actual and constructive ownership of REIT Shares by
the Series C Redeeming Party and any Related Party remain unchanged from
that disclosed in the affidavit required by Section 7.b.(vi)(A) hereof
or (2) after giving effect to such Series C Redemption, neither the Series C
Redeeming Party nor any Related Party shall own REIT Shares in violation of the
Ownership Limit.

8.             Status
of Reacquired Units. All Series C
PPUs which shall have been issued and reacquired in any manner by the
Partnership (but not the General Partner) shall be deemed cancelled and no
longer outstanding.

9.             General. The ownership of the Series C PPUs shall be evidenced
by one or more certificates in the form of Annex II hereto. The General Partner
shall amend Exhibit A to the Agreement from time to time to the extent
necessary to reflect accurately the issuance of, and subsequent redemption, or
any other event having an effect on the ownership of, the Series C PPUs.

10.          Allocations
of Income and Loss. This Section 10
of this Designation shall apply to Series C PPUs notwithstanding anything
to the contrary in Section 6.2 of the Agreement (but with regard to the
remainder of Article VI of the Agreement). For each taxable year, each
holder of Series C PPUs shall be allocated Net Income and Net Loss of the
Partnership as follows.

Net Income shall
be allocated as follows:

(a)           first,
to the extent of the aggregate amount of Net Losses in excess of the aggregate
amount of Net Income, each as previously allocated pursuant to this Section 10;
and

 8
 

 

(b)           second,
among each series of Partnership Units to the extent of and in proportion to
the aggregate amount of cash distributed with respect to the quarter pursuant
to Article V of the Agreement and Section 4 of this Designation. All
such cash distributions are to be treated as advances against the distributive
share of income to be allocated under this subparagraph pursuant to Section 1.731-1(a)(1)(ii) of
the Regulations.

Net Loss shall be
allocated as follows:

(a)           first,
to the extent of and in proportion to the positive Capital Account balance of
each holder of Partnership Common Units; and

(b)           second,
among each series of Partnership Preferred Units to the extent of and in
proportion to the aggregate positive Capital Account balance of such series
over the aggregate positive Capital Account balance of all series of
Partnership Preferred Units.

Nonrecourse Deductions shall be allocated in the same
manner as Net Income for the taxable year.

Any such amounts of Net Income, Net Loss and
Nonrecourse Deductions of the Partnership allocated to Series C PPUs shall
be further allocated to each Holder of Series C PPUs in proportion to its
respective Percentage Interest in such series.

To the extent that the number of Partnership Units in
a series changes during each taxable year, such allocations shall be made based
upon the weighted average of the number of Partnership Units outstanding in
each series during such taxable year unless in the opinion of counsel to the
Partnership, another method of allocation is required by the Code and
Regulations.

Notwithstanding the foregoing, Section 6.3.C of
the Agreement shall apply upon any liquidation, dissolution or winding up of
the Partnership, if after tentatively making allocations pursuant to the
foregoing provisions of this Section 10 and the payment of the Series C
Liquidating Proceeds to the holders of Series C PPUs pursuant to Section 5
of this Designation, the Capital Account balance of each such holder of such Series C
PPUs is not zero, items of gross income or gross loss shall first be made to
the holders of such Series C PPUs in an amount sufficient such that after
all allocations pursuant to this Section 10 and payment of Series C
Liquidating Proceeds, the Capital Account balance of each such holder of such Series C
PPUs is zero.

11.          Tax Matters.

a.             Maintenance of Non-Recourse Indebtedness. Until the later of
(i) January 1, 2007 and (ii) the date that all Series C
PPUs issued on the date of original issue of the Series C PPUs have been
redeemed or otherwise acquired by the Partnership pursuant to Section 6 or
Section 7 hereof, the Partnership shall maintain non-recourse indebtedness
(as defined in Treasury Regulation § 1.752-1(a)(2)) on the Real Estate (as
defined in the Contribution Agreement, executed on May 3, 2004 and with an
effective date of May 5, 2004, by and between D.A.M. Master Entity, L.P.,
a Pennsylvania limited partnership, and the Partnership (the “D.A.M.
Contribution Agreement”)) in an amount equal to or greater than the amount of
the outstanding principal balance of the Assumed Debt (as defined in the D.A.M.
Contribution Agreement) as of the Closing Date (as defined in the D.A.M.
Contribution Agreement), whether or not the Partnership assumes or prepays the
Assumed Debt. Excess Nonrecourse Liabilities with respect to the Real Estate
shall be allocated under Section 6.3.D of the Agreement so that, to the
extent possible, the amount of Nonrecourse Liabilities allocated to any Holder
of Series C PPUs remains constant.

b.             Restrictions on Sale of the Property. Until the earlier of (i) January 1,
2007 and (ii) the date that all Series C PPUs issued on the date of
original issue of the Series C PPUs have been redeemed or otherwise
acquired by the Partnership pursuant to Section 6 or Section 7
hereof, the Partnership shall not sell or otherwise voluntarily dispose of for
consideration (other than to the General Partner or a Subsidiary 

 9
 

 

of the Partnership) all
or any portion of the Property, except for any transaction not subject to
taxation under the Code (including, but not limited to, an exchange under Section 1031
of the Code).

c.             Traditional Allocation Method. The Partnership will utilize
the “traditional method” with respect to all allocations pursuant to Section 704(c) of
the Code relating to the Real Estate (as defined above), unless another
allocation method is requested by holders of a majority of the Series C
PPUs then outstanding.

12.          No Sinking
Fund. No sinking fund shall be
established for the retirement or redemption of Series C PPUs.

13.          Voting Rights.

a.             Holders
of the Series C PPUs will not have any voting rights or right to consent
to any matter requiring the consent or approval of the Limited Partners, except
as provided by applicable law and Article XIV of the Agreement and as set
forth in Section 13.b. of this Designation below and except that the
Partnership shall not consummate a Common Unit Recapitalization without the
prior written approval (such approval not to be unreasonably withheld) of
holders of at least 50% in aggregate Liquidation Preference of the outstanding Series C
PPUs. For purposes of this Section 13.a., the term “Common Unit
Recapitalization” means a transaction, or series of related
transactions, pursuant to which any of the Partnership Interests represented by
Junior Partnership Units outstanding immediately prior to such transaction(s) is
converted, automatically, by operation of law or at the election of holders
thereof, into Partnership Interests represented by Parity Partnership Units or
Senior Partnership Units outstanding immediately following the consummation of
such transaction(s), or pursuant to which there is issued to any holder of
Junior Partnership Units by way of exchange, distribution or similar
transaction in respect of such Junior Partnership Units, any Parity Partnership
Units or Senior Partnership Units.

b.             So
long as any Series C PPUs are outstanding, in addition to any other vote
or consent of partners required by law or by the Agreement, the affirmative
vote or consent of holders of at least 50% in aggregate Liquidation Preference
of the outstanding Series C PPUs will be necessary for effecting any
amendment of any of the provisions of this Designation that materially and
adversely affects the rights or preferences of the holders of the Series C
PPUs. Except as provided in Section 13.a., the creation or issuance of any
class or series of Partnership Units, including, without limitation, any
Partnership Units that may have rights junior to, on a parity with, or senior
or superior to the Series C PPUs, will not be deemed to have a material
adverse effect on the rights or preferences of the holders of Series C
PPUs. With respect to the exercise of the above described voting rights, each Series C
PPU will have one (1) vote per Partnership Preferred Unit.

14.          Restrictions
on Transfer. Series C
PPUs are subject to the same restrictions on transfer applicable to Partnership
Interests, as set forth in Article XI of the Agreement; provided, however,
that the General Partner of the Partnership will consent to a transfer
permitted under Section 5.4 of that certain Contribution Agreement
executed on May 3, 2004 and with an effective date of May 5, 2004, by
and between D.A.M. Master Entity, L.P., and the Partnership and will not
require an opinion of counsel, as set forth in Section 11.3.D of the
Agreement so long as the other terms and conditions set forth in Section 11.3
thereof are satisfied.

 10Exhibit 10.18

SHARE
SALE AND PURCHASE AGREEMENT

between

PREBOLA NR 293 AB

under change of name to

ALG HOLDING AB

(as Purchaser)

and

BLYTH WHOLESALE HOLDINGS, INC.

(as Seller)

August 14, 2006

 

 

Linnégatan 18

Box 5719

SE-114 87 Stockholm

Tel: +46-8-566 177 00

Fax: +46-8-566 177 99

 

Table of Defined Terms

	
  Defined Term

  	
   

  	
  Article

  
	
  BHBV

  	
   

  	
  Preamble (D)

  
	
  BHBV Note

  	
   

  	
  Preamble (D)

  
	
  Breach

  	
   

  	
  6.1

  
	
  Cash Pool

  	
   

  	
  4.1.5

  
	
  Closing

  	
   

  	
  3.1

  
	
  Closing Confirmation

  	
   

  	
  3.5

  
	
  Company

  	
   

  	
  Preamble (A)

  
	
  Confidential Information

  	
   

  	
  8.4

  
	
  Damages

  	
   

  	
  6.1

  
	
  Encumbrance

  	
   

  	
  4.1.2 (c)

  
	
  Exclusive Distribution Agreement

  	
   

  	
  3.3 (c)

  
	
  Group

  	
   

  	
  Preamble (B)

  
	
  Group Companies

  	
   

  	
  Preamble (B)

  
	
  Intercompany Loan

  	
   

  	
  Preamble (C)

  
	
  Jan Bengtsson Guarantee

  	
   

  	
  2.4 (a) (iii)

  
	
  License Agreements

  	
   

  	
  3.3

  
	
  Loan Note I

  	
   

  	
  Preamble (C)

  
	
  Loan Note II

  	
   

  	
  Preamble (C)

  
	
  Loan Note III

  	
   

  	
  Preamble (C)

  
	
  Loan Note IV

  	
   

  	
  Preamble (C)

  
	
  Loan Notes

  	
   

  	
  Preamble (C)

  
	
  Loan Note I-III Transfer Agreement

  	
   

  	
  1.3

  
	
  Loan Note IV Transfer Agreement

  	
   

  	
  1.4

  
	
   

  	
   

  	
   

  
	
  Purchase Price

  	
   

  	
  2.1

  
	
  Purchaser

  	
   

  	
  Preamble (1)

  
	
  Purchaser’s Closing Documents

  	
   

  	
  5.1.1 (b)

  
	
  Purchaser’s Representations

  	
   

  	
  5.1

  
	
  Relevant Taxes

  	
   

  	
  7.4

  
	
  Seller

  	
   

  	
  Preamble (2)

  
	
  Seller’s Beneficiaries

  	
   

  	
  6.9

  
	
  Seller’s Closing Documents

  	
   

  	
  4.1.3 (b)

  
	
  Seller’s Representations

  	
   

  	
  4.1

  
	
  Share

  	
   

  	
  Preamble (A)

  
	
  Share Transfer Agreement

  	
   

  	
  1.2

  
	
  Tibia Guarantee I

  	
   

  	
  2.4 (a)(i)

  
	
  Tibia Guarantee II

  	
   

  	
  2.4 (a)(ii)

  

 

 2
 

 

Table of Schedules

	
  Schedule

  	
   

  	
  Title

  
	
  Schedule B

  	
   

  	
  Subsidiaries

  
	
  Schedule C

  	
   

  	
  Draft Loan Notes I-IV

  
	
  Schedule 1.4

  	
   

  	
  Draft BHBV Note

  
	
  Schedule 2.3 (i)

  	
   

  	
  Draft Promissory Note 2.3 (i)

  
	
  Schedule 2.3
  (ii)

  	
   

  	
  Draft Promissory Note 2.3 (ii)

  
	
  Schedule 3.3(b)
  (i)

  	
   

  	
  Ambria Trademark License Agreement

  
	
  Schedule 3.3 (b)
  (ii)

  	
   

  	
  Gies Patent License Agreement

  
	
  Schedule 3.3 (c)

  	
   

  	
  Exclusive Distribution Agreement

  
	
  Schedule 4.1.2
  (i)

  	
   

  	
  Commercial Register Extract

  
	
  Schedule 4.1.2
  (c)

  	
   

  	
  Title To Shares

  
	
  Schedule 4.1.4
  (a)

  	
   

  	
  Annual Reports 2005

  
	
  Schedule 4.1.4
  (b)

  	
   

  	
  Interim reports 30 June 2006

  
	
  Schedule 4.1.5

  	
   

  	
  Settlement of Cash Pool

  

 

 3
 

 

THIS
SHARE SALE AND PURCHASE AGREEMENT is made on this 14th day of
August 2006 (the “Agreement”) between

(1)           PREBOLA NR
293 AB under change of name to ALG HOLDING AB, a
corporation organized and existing under the laws of Sweden with its registered
office at c/o Midway Holding AB, P O Box 4241, SE-203 13 Malmö, Sweden (“Purchaser”); and

(2)           BLYTH
WHOLESALE HOLDINGS, INC., a corporation organized and existing under
the laws of Delaware, United States of America, with its principal place of
business at One East Weaver Street, Greenwich, CT 06831 USA (“Seller”)

WHEREAS:

(A)          Seller is the legal and beneficial owner of
the entire issued share capital of Blyth HomeScents International GmbH, a
corporation organized and existing under the laws of the Federal German
Republic with its registered office and principal place of business at Beim
Zeugamt 8, Glinde, Germany (the “Company”). Such
share capital consists of one share with the nominal amount of EUR 25,000 (the “Share”).

(B)           The Company directly or indirectly owns the
total issued share capital of the Subsidiaries as shown in Schedule
B (the Company and the Subsidiaries are sometimes referred to
collectively as the “Group” or as “Group Companies”).

(C)           Seller has an inter-company loan to the
Company in an aggregate principal amount of EUR 6,600,000 (the “Intercompany Loan”). The Intercompany Loan is currently
evidenced by a Loan Agreement and Note dated December 14, 2000, with three
amendments since then extending the time for payment, which shall be replaced
so that by Closing, the Intercompany Loan shall be evidenced by four (4) loan
notes (the “Loan Notes”) in the amounts of (i)
EUR 1,300,000 (“Loan Note I”), (ii) EUR 2,000,000
(“Loan Note II”), (iii) EUR 2,300,000 (“Loan Note III”) and (iv) EUR 1,000,000 (“Loan Note IV”), respectively. Drafts of the Loan Notes are
attached hereto as Schedule C.

(D)          The Company’s indirect
subsidiary, Gies Kerzen GmbH., has an outstanding obligation of EUR 4,000,000
which Seller’s subsidiary Blyth Holding BV (“BHBV”)
will pay at Closing in return for execution by Purchaser of a note to BHBV (the
“BHBV Note”) in exchange for such payment
by BHBV.

(E)           Seller and Purchaser
have agreed that Seller shall sell to Purchaser and Purchaser shall purchase
from Seller the Share and the rights of Seller under the Loan Notes, all for
the consideration and on the terms and subject to the conditions contained in
this Agreement.

 4
 

 

THEREFORE IT IS HEREBY AGREED as follows:

ARTICLE 1

SALE AND TRANSFER OF THE
SHARE AND INTERCOMPANY LOAN

1.1           Sale and Purchase.
Seller hereby, subject to the terms and conditions of this Agreement, sells the
Share and the Loan Notes I – III to Purchaser, and Purchaser hereby, subject to
the terms and conditions of this Agreement, purchases the Share, and the Loan
Notes I – III from Seller, together with all rights attaching to them, free of
any Encumbrances.

1.2           Transfer of the
Share. At Closing, Seller shall transfer to Purchaser the Share by virtue
of a notarially-recorded share transfer agreement in accordance with German law
(the “Share Transfer Agreement”).

1.3           Transfer
of Loan Notes. At Closing, Seller shall transfer to Purchaser, subject to
the occurrence of the Closing, the Loan Notes I, II and III by virtue of a
written transfer agreement (the “Loan Note I-III Transfer
Agreement”).

1.4           Execution
of the BHBV Note. At Closing Seller shall cause BHBV to pay an outstanding
debt of the Company’s subsidiary, Gies Kerzen GmbH. in the amount of EUR
4,000,000 and Purchaser shall execute and deliver to BHBV the BHBV Note
attached hereto in draft form as Schedule 1.4.

1.5           Conversion of Loan
Note IV into Capital Reserve. At Closing, Seller shall transfer to the
Company, subject to the occurrence of the Closing, Loan Note IV by virtue of a
written transfer agreement (the “Loan Note IV Transfer
Agreement”). As a result of such transfer the loan represented by
Loan Note IV will cease to exist. The transfer shall be made as a contribution
by Seller to the Company’s capital reserve within the meaning of Section 272(2)
No. 4 of the German Commercial Code (Handelsgesetzbuch – HGB).

ARTICLE 2

PURCHASE PRICE FOR THE
SHARE AND THE LOAN NOTES

2.1           Purchase Price for
the Share. The purchase price for the Share (the “Purchase
Price”) shall be a fixed amount of EUR 15,000,000 payable at
Closing.

2.2           Purchase Price for
Loan Note I. The purchase price for Loan Note I shall be the principal
amount of EUR 1,300,000 (plus an amount equal to EUR 743.42 multiplied by the
number of calendar days from and including August 1, 2006 until the Closing,
representing accrued interest on the Intercompany Loan) and shall be payable at
Closing.

2.3           Purchase Price for
Loan Note II and III. The purchase price for Loan Note II and III shall be
the principal amounts of said loan notes, and shall be satisfied at Closing by
Purchaser executing and delivering to Seller the promissory notes attached
hereto in draft form as Schedules 2.3(i) and
2.3(ii).

 5
 

 

2.4           Security for
Promissory Notes. In order to secure Seller’s claim under the promissory
notes referred to in Article 2.3, Purchaser shall at the Closing

(a)           provide to Seller

(i)            a joint and several
guarantee, as for its own debt (proprieborgen)
of Tibia Konsult AB securing any payment claims of the holder of the promissory
note attached hereto in draft form as Schedule 2.3(i) up to a maximum
amount of 50% of all amounts payable under that promissory note, in the form
set forth thereon (the “Tibia Guarantee I”);

(ii)           a joint and several
guarantee, as for its own debt (proprieborgen)
of Tibia Konsult AB securing any payment claims of the holder of the promissory
note attached hereto in draft form as Schedule 2.3(ii) up to a maximum
amount of 25% of all amounts payable under that promissory note, in the form
set forth thereon (the “Tibia Guarantee II”);
and

(iii)          a joint and several
guarantee, as for its own debt (proprieborgen)
of Jan Bengtsson/Company securing any payment claims of the holder of the
promissory note attached hereto in draft form as Schedule 2.3(ii) up to
a maximum amount of 25% of all amounts payable under that promissory note, in
the form set forth thereon (the “Jan Bengtsson Guarantee”);
and

(b)           pledge with effect as
of the Closing to Seller all of Purchaser’s right and title in the Loan Note II
and the Loan Note III, in accordance with Swedish Law and deliver to the Seller
Loan Notes II and III and duly notify the Company as Borrower thereunder of the
pledge.

2.5           Covenants of
Purchaser. As long as the promissory notes referred to in Article 2.3 and
the BHBV Note are outstanding, the Purchaser shall (i) ensure that the Company
will not pay dividends in excess of EUR 1,000,000 annually and (ii) provide the
Seller with quarterly and annual consolidated financial statements within one
month after each calendar quarter or year respectively.

ARTICLE 3

CLOSING

3.1           Closing. Closing
(the “Closing”) shall take place in Hamburg,
Germany (at an office to be mutually agreed between the Parties) on August 17,
2006 at 10:00 a.m. or at such other place and time as shall be mutually agreed
between the Parties.

3.2           Purchaser’s Closing
Obligations. At Closing, Purchaser shall, unless waived by Seller in whole
or in part in writing,

(a)           pay to Seller the
Purchase Price set forth in Article 2.1,

(b)           pay to Seller the
purchase price set forth in Article 2.2,

 6
 

 

(c)           deliver to Seller the
executed two promissory notes referred to in Article 2.3 and to Seller as
receipt agent for BHBV the BHBV Note, and

(d)           execute and deliver to
Seller the pledge of Loan Notes II and III referred to in Section 2.4(b)

(e)           cause to be executed
and delivered to Seller

(i)            the Tibia Guarantee I;

(ii)           the Tibia Guarantee II;
and

(iii)          the Jan Bengtsson
Guarantee.

3.3           Seller’s
Closing Obligations. At Closing

(a)           Seller shall execute,
and shall cause the Company to execute, the Loan Note IV Transfer Agreement as
set forth in Article 1.4;

(b)           Seller shall execute,
and shall cause the relevant Group Companies to execute, license agreements for
the cross-licensing of intellectual property, in the form of Schedule 3.3(b)(i) and 3.3(b)(ii) (the
“License Agreements”);

(c)           Seller shall cause Gies Kerzen GmbH and Colony Gifts Corporation, Ltd.,
to execute an exclusive distribution agreement in the form of the draft
attached as Schedule 3.3 (c) (the “Exclusive Distribution Agreement”);

(d)           Seller shall cause BHBV
to pay the outstanding debt of Gies Kerzen GmbH in the amount of EUR 4,000,000;

(e)           Seller shall cause the Company to execute Loan Notes I-IV; and

(f)            Seller shall deliver Loan Notes I-III to
Purchaser and Loan Note IV to the Company.

3.4           Seller’s
and Purchaser’s Joint Closing Obligations. At Closing Seller and Purchaser
shall execute

(i)            the
Share Transfer Agreement as set forth in Article 1.2; and

(ii)           the Loan Note I-III Transfer Agreement as set forth in Article 1.3.

3.5           Payments. The payments pursuant to Article 3.2 (a) and (b) shall be made
to the bank account(s) specified by Seller for this purpose in writing in
immediately available funds free of any bank charges.

3.6           Closing
Confirmation. When all obligations of the Parties set forth in Article 3.2
and 3.3 have either been fulfilled (including receipt by Seller of the payments
referred to in Article 3.2 (a) and (b)) or fulfillment has been waived by the
respective other Party, the

 7
 

 

Closing has
occurred. Seller and Purchaser shall confirm such occurrence in a written
document to be jointly executed in duplicates (the “Closing Confirmation”).

3.7           Withdrawal. In
the event that the Closing has not occurred within thirty (30) business days of
the date of this Agreement, either Party may withdraw from this Agreement by
written notice to the other Party, unless a closing obligation which is not
fulfilled or waived is within the control of the Party seeking to
withdraw.  The withdrawal shall leave any
statutory claims for the non-fulfillment of any Party’s closing obligations
unaffected.

ARTICLE 4

REPRESENTATIONS OF SELLER

4.1           Representations.
Seller hereby represents to Purchaser that each of the following statements (“Seller’s Representations”) are true and correct at the date
of this Agreement and on the Closing:

4.1.1        Organisation

(a)           The Company and the
Subsidiaries are duly organised and validly existing under the laws of the
place of their incorporation and have the requisite corporate power and
authority to own, lease and operate their assets and properties and to carry on
their business as it is now being conducted.

(b)           No resolution,
decision, order or petition to dissolve or liquidate any of the Group Companies
has been issued, adopted or applied for, no proceedings for bankruptcy or
suspension of payments of any of the Group Companies have been commenced, no
receiver has been appointed for any of the Group Companies or any of their
assets and no attachment has been made on any of the assets of any of the Group
Companies.

4.1.2        Capitalisation

(a)           The
issued share capital of the Company consists of the Share as set forth in
Recital (A).

(b)           The
authorised, issued and paid up capital of each of the Subsidiaries is correctly
reflected in Schedule B.

(c)           Except
as described in Schedule 4.1.2 (c),
the Share is legally and beneficially owned by Seller, free from any mortgage,
assignment of receivables, debenture, lien, charge, pledge, title retention,
right to acquire, security interest, option, right of first refusal, usufruct
or limited right and any other encumbrance, attachment or condition whatsoever
(“Encumbrance”).

(d)           Except
as described in Schedule 4.1.2 (c),
all shares in the Subsidiaries are legally and beneficially owned by the Group
Companies as described in Schedule B,
free from any Encumbrance.

 8
 

 

(e)           No
depositary receipts have been issued for the Share.

(f)            Seller
has the power to sell and to transfer the Share to Purchaser as contemplated by
this Agreement.

(g)           The
Share is validly issued, fully paid and non-assessable and not subject to, or
issued in violation of, any pre-emptive rights.

(h)           Except
as described in Schedule 4.1.2 (c), all of the shares in the Subsidiaries are
validly issued, fully paid and non-assessable and not subject to, or issued in
violation of, any pre-emptive rights.

(i)            The
Company is duly registered with the Commercial Register and the extract
regarding the Company attached as Schedule 4.1.2 (i)
is correct. No shareholders resolutions regarding issues which require
registration in the Commercial Register have been adopted which are not yet
registered.

(j)            The
right to receive dividends or distributions of any kind (whether payable now or
in the future) on the Share and the shares in the Subsidiaries has not been
disposed of. No one, with the exception of Seller or any Group Companies which
are shareholders of other Group Companies, has any right to distributions
arising out of the profit, reserves or liquidation balance and/or any other distributions
of any Group Companies. Neither Seller nor any of Seller’s Affiliates has
received any dividend or any distribution in kind (whether payable now or in
the future) from any Group Company after December 31, 2005.

(k)           There
are no outstanding subscriptions, options, calls, contracts, commitments,
understandings, restrictions, arrangements, rights or warrants, including any
right of conversion or exchange under any outstanding security, instrument or
other agreement, obligating the Company to issue, deliver or sell, or cause to
be issued, delivered or sold, or otherwise to become outstanding, additional
shares in the capital of any of the Group Companies or obligating any of the
Group Companies to grant, extend or enter into any such agreement or commitment.

(l)            There
are no voting trusts, proxies or other agreements or understandings with
respect to the voting of any shares in the capital of any of the Group Companies.
There are no unexecuted resolutions of the general meeting of shareholders of
any of the Group Companies providing for the issuance of shares in the capital
of any of the Group Companies or the grant of options or other rights to
acquire shares in the capital of any of the Group Companies.

4.1.3        Authorisation;
Non-Contravention; Approvals

(a)           Seller is a corporation
duly organized and validly existing under the laws of Delaware, United States
of America.

 9
 

 

(b)           Seller has full power
and authority, corporate and otherwise, (i) to enter into this Agreement and
each other agreement, instrument or document referred to in this Agreement to
which Seller is a party or which Seller is otherwise required to execute at or
prior to the Closing pursuant to the Agreement (collectively the “Seller’s Closing Documents”), (ii) to perform its respective
obligations under the Seller’s Closing Documents and (iii) to consummate the
transactions contemplated by the Seller’s Closing Documents. The execution by
Seller of the Seller’s Closing Documents, the performance by Seller of its
respective obligations thereunder and the consummation by Seller of the
transactions contemplated thereby have been duly and validly authorized by all
necessary corporate action on the part of Seller. Seller has duly executed the
Agreement, and the Agreement constitutes, and each of the other Seller’s
Closing Documents will upon execution thereof constitute, the valid and legally
binding agreement of Seller, enforceable against Seller in accordance with its
terms.

(c)           The execution of the
Agreement by Seller does not violate, conflict with or result in a breach of
any provision of, or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under, or result in the
termination of, or accelerate the performance required by, or result in a right
of termination or acceleration under, or result in the creation of any Encumbrance
upon any of the properties or assets of Seller under any of the terms,
conditions or provisions of (i) the Articles of Association or similar
documents governing Seller, (ii) any statute, law, ordinance, rule, regulation,
judgement, decree, order, injunction, writ, permit or license of any court or governmental
authority applicable to Seller, or (iii) any note, bond, mortgage, indenture,
deed of trust, license, franchise, permit, concession, contract, lease or other
instrument, obligation or agreement of any kind to which Seller is now a party
or by which Seller may be bound.

(d)           No declaration, filing
or registration with, notice to, authorisation or consent or approval of, any
court, governmental or regulatory body or authority or any other person is
necessary in connection with (i) the execution of any Seller’s Closing Document
by Seller or (ii) the consummation by Seller or the Company of any of the
transactions contemplated thereby.

4.1.4        Financial Statements

(a)           The consolidated annual
report for the Group for the year ended December 31, 2005 and the annual
reports for each of the Group Companies for the year ended December 31, 2005,
as attached as Schedule 4.1.4 (a),
have been prepared in accordance with applicable laws and generally accepted
accounting principles (applied on a consistent basis) in the respective
jurisdictions of each of the Group Companies and they give a true and fair view
of the financial position and results of the operations of the Group and of
each of the Group Companies as of December 31, 2005.

(b)           The consolidated
interim report for the Group and the interim reports for each of the Group
Companies as of June 30, 2006, as attached as Schedule
4.1.4 (b), have been prepared in accordance with applicable laws
and generally accepted

 10
 

 

accounting
principles (applied on a consistent basis) in the respective jurisdictions of
each of the Group Companies.

4.1.5       Cash Pool. The cash pooling arrangements
between the Group Companies on the one side and Seller or any legal entities
controlled by, controlling or under common control with Seller (“Seller ́s Affiliates”) on the other side (the “Cash Pool”) will be terminated prior to Closing as
described in Schedule 4.1.5, and all Group
Companies ́ balances to and from the Cash Pool will be settled prior to Closing.

4.2           No Other
Representations or Warranties. No representations, warranties, assurances
or other statements relating to the business of the Group Companies, their
assets and liabilities and their earnings, financial position and prospects are
given by or on behalf of Seller or any Seller’s Affiliates other than the
Seller’s Representations. Therefore, in all respects not specifically addressed
by the Seller’s Representations, Purchaser accepts the Share and the Group
Companies in the condition in which they are on the date of the Closing. Without
limiting the generality of the foregoing, Purchaser hereby acknowledges that
neither Seller nor Seller’s Affiliates have made any representations, warranties,
assurances or other statements, and shall therefore not be held liable, with respect
to any projections, estimates or budgets of future revenues, earnings, cash
flows or other financial parameters of the Group Companies or any other
circumstances affecting the assets, liabilities, earnings, financial position
or prospects of the Group Companies in the future.

4.3           Knowledge of
Purchaser. Seller shall be responsible for the representations given in
this Article 4 irrespective of what the Purchaser or any representative of
Purchaser actually knew or could have known at the signing of this Agreement or
at Closing and no such knowledge shall affect Purchaser’s right to make a claim
for any Breach.

ARTICLE 5

REPRESENTATIONS OF PURCHASER

5.1           Representations.
Purchaser hereby represents to Seller that each of the following statements (“Purchaser’s Representations”) are true and correct at the
date of this Agreement as well as at Closing:

5.1.1        Authorization; No
Contravention; Approvals

(a)           Purchaser is a
corporation, duly organized and validly existing under laws of Sweden.

(b)           Purchaser has full power and authority, corporate and otherwise, (i)
to enter into this Agreement and each other agreement, instrument or document referred
to in this Agreement to which Purchaser is a party or which Purchaser is
otherwise required to execute at or prior to the Closing pursuant to the
Agreement (collectively the “Purchaser’s Closing
Documents”), (ii) to perform its respective obligations under the
Purchaser’s Closing Documents and (iii) to consummate the transactions
contemplated by the Purchaser’s Closing Documents. The execution by Purchaser
of the Purchaser’s Closing Documents, the performance

 11

 

by Purchaser of
its respective obligations thereunder and the consummation by Purchaser of the
transactions contemplated thereby have been duly and validly authorized by all
necessary corporate action on the part of Purchaser. Purchaser has duly
executed the Agreement, and the Agreement constitutes, and each of the other
Purchaser’s Closing Documents will upon execution thereof constitute, the valid
and legally binding agreement of Purchaser, enforceable against Purchaser in
accordance with its terms.

(c)           The execution of the
Agreement by Purchaser does not violate, conflict with or result in a breach of
any provision of, or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under, or result in the termination
of, or accelerate the performance required by, or result in a right of
termination or acceleration under, or result in the creation of any Encumbrance
upon any of the properties or assets of Purchaser under any of the terms,
conditions or provisions of (i) the Articles of Association or similar
documents governing Purchaser, (ii) any statute, law, ordinance, rule,
regulation, judgement, decree, order, injunction, writ, permit or license of
any court or governmental authority applicable to Purchaser or (iii) any note,
bond, mortgage, indenture, deed of trust, license, franchise, permit,
concession, contract, lease or other instrument, obligation or agreement of any
kind to which Purchaser is now a party or by which Purchaser may be bound.

(d)          Except for any
requirements resulting from circumstances in the sphere of Seller, no
declaration, filing or registration with, notice to, authorisation or consent
or approval of, any court, governmental or regulatory body or authority or any
other person is necessary in connection with (i) the execution of any Purchaser’s
Closing Document by Purchaser or (ii) the consummation by Purchaser of any of
the transactions contemplated thereby.

5.1.2        Financial Means.
Purchaser has the financial means necessary to meet its obligations hereunder.

ARTICLE 6

REMEDIES FOR BREACHES

6.1          Breach.
In the event of a breach by Seller of any of Seller’s Representations (a “Breach”), Seller shall reimburse and hold harmless either
Purchaser or the pertinent Group Company (at the option of Purchaser) for all
damages, losses, reasonable costs and expenses (“Damages”)
suffered by Purchaser or the pertinent Group Company as a result of the Breach.
The Parties agree that the Damages shall include the amount necessary to put
Purchaser – or at the option of Purchaser, the pertinent Group Company – in a
position similar to the position Purchaser or the Group Company would have been
in without the Breach.

6.2          Maximum
Recovery. The maximum amount which the Purchaser may recover for any Breach
shall in no event exceed 50 % of the Purchase Price.

6.3          Threshold. The
Seller shall have no liability in respect of any claim for a Breach unless the
aggregate amount of all such claims exceeds the sum of EUR 500,000 in which
case

 12
 

 

(subject to the
other provisions of this Article 6) the entire amount of all such claims shall
be payable.

6.4          Events After Closing.
No claim by Purchaser for any Breach shall arise to the extent that the claim
arises as a result of (i) any change in the accounting principles applied by
the Group subsequent to Closing, or (ii) any changes in applicable laws or
regulations after Closing, or (iii) a new interpretation of existing laws by a
court or other public authority in a judgment or decision published after
Closing.

6.5           Obligations of
Purchaser. If after the Closing Purchaser or any Group Company becomes
aware of any circumstances which give a reasonably likely indication of the
existence of a Breach, Purchaser shall without unreasonable delay notify Seller
thereof, thereby stating in reasonable detail the nature of the alleged Breach
and the reasonably foreseeable magnitude of Damages, if any. Purchaser shall
provide, and shall cause the Group Companies to provide, Seller with all
reasonably requested information regarding the Breach and the Damages, and
shall take, and shall cause the Group Companies to take, any action reasonably
required by Seller to remedy the Breach or mitigate the Damages, provided that
Seller shall be obligated to indemnify Purchaser and the Group Companies for
any Damages caused by such action. Without Seller’s prior written consent
(which shall not be unreasonably withheld or delayed) Purchaser shall not make
or take, and shall cause the Group Companies not to make or take, any
statements or other action which would adversely affect Seller’s possibilities
to remedy the Breach or reduce the Damages.

6.6           Exclusions. No
claim by Purchaser for any Breach shall rise to the extent that

(i)            either
Purchaser or the Group Companies have caused or aggravated the Breach or the
Damages;

(ii)           the
Damages are recovered or could with reasonable efforts have been recovered from
a third party, including under an insurance policy;

(iii)          the circumstances giving rise to the Breach
have resulted or will result in a tax or other benefit to the Purchaser or the
Group Companies; or

(iv)          Purchaser has failed to
comply with its obligations set forth in Article 6.5, unless such
non-compliance has not limited or prejudiced Seller’s options to avoid or mitigate
the damages in any manner.

6.7           Repayment. Any
payment under this Article 6 shall be deemed to be a partial repayment of the
Purchase Price.

6.8          Time Limitations.
All claims of Purchaser for any Breach shall be time-barred (verjähren) on the first anniversary of the date of the
Closing, except for the warranties in Section 4.1.2(c) and (d), which shall be
time-barred (verjähren) on the third
anniversary of the date of the Closing.

6.9          Exclusion of Other
Claims. The remedies which Purchaser may have against Seller for any Breach
shall solely be governed by this Agreement and shall be the exclusive

 13
 

 

remedies available
to Purchaser. Without limiting the generality of the preceding sentence, any
right of Purchaser to lower the Purchase Price or rescind this Agreement or to
require the winding up of the transaction contemplated hereunder on any other
legal basis, any claims for breach of pre-contractual obligations, or ancillary
obligations, except claims for willful deceit, are hereby expressly excluded
and waived by Purchaser. The provisions in this Section 6.9 shall be for the
benefit of Seller, Seller’s Affiliates and Seller’s and Seller’s Affiliates’
directors, officers, employees, consultants or advisers (together “Seller’s Beneficiaries”).

ARTICLE 7

FURTHER OBLIGATIONS

7.1            No
Action and Indemnification of Seller’s Beneficiaries. Purchaser shall (i)
procure that after the Closing neither Purchaser nor any Group Company nor any
third party as legal successor in respect of any claims of Purchaser or any
Group Company will raise any claim or take any other action against Seller or
any Seller’s Beneficiary resulting from or otherwise related to any acts or
failures to act of Seller as shareholder of the Company, (ii) procure that
after the Closing to the extent legally possible the Group Companies shall
discharge and waive any such claims against Seller or any Seller’s Beneficiary,
and (iii) indemnify and hold harmless the Seller and Seller’s Beneficiaries
against any such claims.

7.2           Announcements.
The Parties undertake that prior to Closing and thereafter they will not (save
as required by law, including the regulations of the Securities and Exchange
Commission with respect to public disclosure of the entry into this agreement
and the pro forma effect of this transaction on
the financial statements of Blyth, Inc.) make any announcement in connection
with this Agreement, unless Seller and Purchaser shall have given their written
consent to such announcement (which consent may not be unreasonably withheld
and may be given either generally or in a specific case or cases and may be
subject to conditions).

7.3          Discontinuation of
Use of Name. Purchaser shall procure that as soon as possible, but in any
event after one month after the date of Closing, the Group Companies shall discontinue
to use the word “Blyth” as part of their firm names. Purchaser shall procure
that all actions reasonably necessary to ensure such discontinuation will be
taken without undue delay, including, without limitation, the adoption of
shareholder and other resolutions or other actions necessary to eliminate such
words from firm and corporate names and the removal of such words from
stationery, promotional material, websites, buildings or other fixtures.
Purchaser shall procure that the Group Companies shall not use firm names which
are similar to the name “Blyth”.

7.4          Indemnification
Against Certain Taxes. Subject to the other provisions of this Article 7.4,
Seller shall indemnify and hold harmless Purchaser or, at the election of Purchaser,
the Group Companies from and against 85 % of the amount of any non-appealable
taxes for taxable periods ending on or before the date of Closing resulting
from any challenges by the tax authorities from intercompany charges made by
Seller or Seller’s Affiliates to the Group Companies for intercompany sales
and/or services (“Relevant Taxes”),
to the extent that such Relevant Taxes (i) have not been paid on or prior to
the

 14
 

 

date of the
Closing Date, (ii) have not been accrued for in the financial statements of the
Group Companies as of June 30, 2006 and (iii) exceed a deductible amount of EUR
100,000. Seller’s obligation to indemnify and hold harmless shall be subject to
full compliance by Purchaser with the following obligations:

(i)            Purchaser shall
retain, and cause the Group Companies to retain, all books, records,
documentation and other information relating to the Group Companies that may be
relevant in connection with Relevant Taxes. At Seller’s request, Purchaser
shall furnish, and shall cause the Group Companies to furnish, to Seller all such
information.

(ii)            Purchaser shall file,
or cause the Group Companies to file, in a due and timely manner all tax
returns relevant for any Relevant Taxes. As long as Seller can be held liable
under this Article 7.4 Purchaser shall, at Seller’s request, forward any such
tax returns at least ten (10) business days prior to filing to Seller for
review and comments and shall take Seller’s comments into due consideration.

(iii)          Purchaser shall (a)
keep, and cause the Group Companies to keep, Seller fully informed of any tax
audits or other proceedings which may give rise to a claim under this Article
7.4, and (b) provide, and cause the Group Companies to provide, to Seller the
reasonable opportunity to participate in such audits or other proceedings and
all information and assistance reasonably required by Seller to evaluate such
audits or other proceedings and a possible liability of Seller under this
Article 7.4 arising therefrom.

(iv)          Purchaser shall (a)
provide, and cause the Group Companies to provide, Seller with full control of
any dispute with any tax authorities relating to Relevant Taxes, (b) take, and
cause the Group Companies to take, any action reasonably required by Seller
with respect to such disputes and (c) not make or take, and cause the Group Companies
not to make or take, without Seller’s prior written consent Purchaser (which
shall not be unreasonably withheld or delayed), any settlement,
acknowledgement, other statement or other action which would adversely affect
the position of Seller, Purchaser or the Group Companies in respect of the such
disputes. Seller shall be obligated to indemnify Purchaser and the Group
Companies for any Damages caused by Seller or any representative of Seller or
by any action taken by Purchaser or any Group Company at the request of Seller.

Seller’s
obligation to indemnify and hold harmless Purchaser under this Article 7.4
shall be excluded if and to the extent that (x) the Group Companies are
entitled to any benefits by refund, set-off or reduction of taxes as the result
of an adjustment or payment giving rise to a claim for indemnification against
Relevant Taxes or (y) the Relevant Taxes result from any change in the
accounting and taxation principles or practices of the Group Companies
(including methods of submitting tax returns) introduced after the Closing.

 15
 

 

ARTICLE 8

CONFIDENTIAL
INFORMATION

8.1           Non-Disclosure.
The Parties undertake that (i) they shall treat as strictly confidential all
Confidential Information received or obtained by them or their employees, agents
or advisers as a result of entering into or performing this Agreement,
including information relating to the provisions of this Agreement, the
negotiations leading up to this Agreement, the subject matter of this Agreement
or the business or affairs of each of the Parties or any member of their group,
and (ii) subject to the provisions of Article 8.2, they will not at any time
hereafter make use of or disclose or divulge to any person any such
Confidential Information and shall use their best endeavours to prevent the publication
or disclosure of any such information.

8.2           General
Exceptions. The restrictions contained in Article 8.1 shall not apply so as
to prevent the Parties from making any disclosure required by law or by any
securities exchange (including the regulations of the Securities and Exchange
Commission with respect to public disclosure of the entry into this agreement
and the pro forma effect of this transaction on
the financial statements of Blyth, Inc.) or supervisory or regulatory or governmental
body pursuant to rules to which the relevant Party is subject or from making
any disclosure to any professional adviser for the purposes of obtaining advice
(provided always that the provisions of this Article shall apply to and the
Parties shall procure that they apply to, and are observed in relation to, the
use or disclosure by such professional adviser of the information provided to
him) nor shall the restrictions apply in respect of any information which comes
into the public domain otherwise than by a breach of this Article by the
Parties.

8.3           Purchaser
Exception. After Closing, the restrictions contained in Article 8.1 shall
not apply to Purchaser to the extent that they relate to any Confidential
Information related to the Group Companies.

8.4           Confidential
Information. “Confidential Information”
means any and all data and information relating to the Group Companies and/or
to the business and affairs of a Party that may be provided, orally, in writing
or digitally, to the other Party.

ARTICLE 9

COOPERATION AND RELATED
MATTERS

9.1           Other Intercompany
Services. The Parties are in agreement, and shall procure, that as of the
Closing any other intercompany services rendered by Seller or Seller’s Affiliates
to the Group Companies on the one side shall be discontinued and any underlying
agreements shall be terminated with effect as of the Closing. Purchaser shall
procure that any charges for pre-Closing services (e.g. property insurance
charges, management charges, Global Sourcing allocations etc.) outstanding on
the date of the Closing will be paid by the Group Companies when due.

9.2           Cooperation in Tax
and Financial Matters. Purchaser and Seller shall cooperate fully, as and
to the extent reasonably requested in writing by Purchaser or Seller, in connection
with the preparation and filing of tax returns and any audit or other
proceeding with

 16
 

 

respect to taxes
and the preparation of financial statements and any audit thereof. Such
cooperation shall include the prompt signing of any returns, amended returns,
claims or other documents necessary for the other party to accurately and
timely satisfy its United States, state and/or foreign tax reporting
obligations. Such cooperation shall also include the prompt provision of
financial records and information which are relevant to any tax reporting
obligations of the other party or preparation of financial statements.
Purchaser shall make its and the relevant Group Company’s employees (or other
delegates and advisors) available on a mutually convenient basis to the other
party in order to provide additional information and explanation of any
material provided hereunder. Moreover, Purchaser shall use its best efforts to
deliver a final set of financial statements as of the Closing with respect to
the Group within four (4) weeks after Closing.

9.3           Shanghai China
Sourcing Office. Purchaser shall promptly reimburse, or shall cause any of
the Group Companies to promptly reimburse, Blyth Asia, Ltd., a Hong Kong
company, for charges incurred on behalf of any of the Group Companies during
the period from the date of Closing through August 31, 2006.

9.4           Employment Matters.
Purchaser shall cause Liljeholmens Stearinfabriks AB to continue to provide
payroll and other employment related services (as such are currently being provided)
to the three employees who are working for PartyLite Trading OY and resident in
Sweden until September 1, 2006, and Seller agrees to cause PartyLite Trading OY
to reimburse Liljeholmens for such services in accordance with past practices.
Seller shall cause PartyLite Trading OY or any other of Seller ́s Affiliates to
employ the three employees in question from September 1, 2006 and shall bear
all costs and expenses related to the transfer of said employees as well as all
costs and expenses related to their employment from and after September 1,
2006.

ARTICLE 10

GOVERNING LAW AND ARBITRATION

10.1         Governing Law.
This Agreement shall be governed by and construed in accordance with the laws
of Sweden.

10.2         Arbitration. Any
dispute, controversy or claim arising out of or in connection with this
contract, or the breach, termination or invalidity thereof, shall be settled by
arbitration in accordance with the Rules of the Arbitration Institute of the
Stockholm Chamber of Commerce. The place of arbitration shall be Stockholm,
Sweden. The arbitral procedure shall be conducted in the English language. The
arbitral tribunal shall decide according to the rules of law. Consolidation of
the arbitral proceedings with other arbitral proceedings is excluded.

 17
 

 

ARTICLE 11

MISCELLANEOUS

11.1         Schedules.
All Schedules to this Agreement constitute a part of this Agreement.

11.2         Costs.
Each Party shall pay its own costs and disbursements of and incidental to this
Agreement and the sale and purchase of the Share, provided that all costs
associated with the notarial recording of the Share Transfer Agreement shall be
borne by Purchaser.

11.3         Waiver.
No failure or delay by any Party in exercising any right, power or remedy under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of the same preclude any further exercise thereof or the
exercise of any other right, power or remedy. Without limiting the foregoing,
no waiver by any Party of any breach by the other Party of any provision hereof
shall be deemed to be a waiver of any subsequent breach of that or any other
provision hereof.

11.4         Assignment;
No Third Party Rights. The benefit of this Agreement, or any agreement or
document entered into pursuant to this Agreement, may not be assigned by a
Party, unless with the prior written consent of the other Party. Except where
set forth otherwise in this Agreement, this Agreement shall not grant any
rights to, and is not intended to operate for, the benefit of any third
parties, including the Group Companies.

11.5         Entire
Agreement. This Agreement (together with any documents referred to herein
or executed contemporaneously or at Closing by the Parties in connection
herewith) constitutes the whole agreement between the Parties and supersedes
any previous agreements or arrangements between them relating to the subject
matter of this Agreement, including but not limited to the e-mail proposal
dated June 27, 2006, the letter counteroffer dated June 29, 2006 and the e-mail
reply dated July 6, 2006.

11.6         Amendments.
No amendments of this Agreement (including amendments to this Section 11.6)
shall be effective unless made in writing and executed by the Parties.

11.7         Headings.
The headings in this Agreement are inserted for convenience only and shall not
affect the interpretation of this Agreement.

11.8         Exclusion
of Remedies. Except as provided otherwise herein, no Party shall be entitled
(i) to set-off any rights and claims it may have against any rights or claims
any other Party may have under this Agreement, or (ii) to refuse to perform any
obligation it may have under this Agreement on the grounds that it has a right
of retention, unless the rights or claims of the relevant Party claiming a
right of set-off or retention have been acknowledged in writing by the relevant
other Party or have been confirmed by final decision of a competent court or
arbitration court.

11.9         Severability.
If any provision or part of a provision of this Agreement shall be, or be found
by any authority or court of competent jurisdiction to be, invalid or unenforceable,
such invalidity or unenforceability shall not affect the other provisions or
parts of such provisions of this Agreement, all of which shall remain in full
force and effect. In such case, the Parties agree to recognize and give effect
to such valid and enforceable

 18
 

 

provision or provisions which correspond as closely as possible with
the commercial intent of the Parties.

Remainder of page
intentionally left blank.

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  PREBOLA NR 293 AB under change of

  name to ALG HOLDING AB

  	
   

  	
  BLYTH WHOLESALE HOLDINGS,

  INC.

  
	
  by:

  	
   

  	
  by:

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Acting as:

  	
   

  	
   

  	
   

  	
  Acting as:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  

 

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