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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) August 20, 1999
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CROWN NORTHCORP, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-22936 22-3172740
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
1251 Dublin Road, Columbus, Ohio 43215
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (614) 488-1169
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Not Applicable
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(Former name or former address, if changed since last report.)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Effective August 20, 1999, Crown NorthCorp, Inc. sold its interests in HMR
Sweden, L.L.C., Catella/Crown NorthCorp Joint Venture AB and a related asset
management contract for total consideration of approximately $3,500,000 cash.
The principle followed in determining the consideration was arm's length
negotiation. The sale represents the disposition of substantially all of the
company's European Operations.
Catella/Crown NorthCorp Joint Venture AB ("CCJV"), in which the company had a
50% ownership interest, entered into an agreement to manage for Telereit Holding
AB a portfolio of assets in Sweden. Effective August 20, Crown sold its
interests in CCJV for approximately $30,000 to Catella Boardroom Consulting AB,
the holder of the remaining ownership interest.
In conjunction with placing the Telereit transaction and entering into the asset
management agreement, the company in 1998 made an equity investment in Telereit
Holding through HMR Sweden, L.L.C., an affiliate of Harbert Management
Corporation. HMR Sweden, in turn, invested in Telereit Holding. Effective August
20, HMR Sweden transferred to Crown, in complete redemption of Crown's interests
in HMR, those shares and owner's debt representing Crown's equity investment in
Telereit Holding. Crown sold those shares and owner's debt to Catella Holding AB
for $3,470,000 cash. From the proceeds of sale, the company repaid MarRay
Investments, LLC, an affiliate of Harbert, $979,754 in satisfaction of
indebtedness the company incurred in conjunction with its investment in
Telereit. The company also paid Harbert from the proceeds the sum of $726,000 in
satisfaction of the company's obligations to Harbert under a certain payment of
fees agreement entered into between Harbert and a subsidiary of the Crown in
consideration of Harbert's investment in Telereit and the loan from MarRay.
Additionally, as a result of the sale to Catella Holding, Crown is no longer
liable for approximately $625,000 of Telereit's obligations under a credit
facility; letters of credit issued by a bank securing Crown's liability have
been terminated and returned.
The carrying value of the interests sold was approximately $2,800,000 at June
30, 1999.
The company had entered into an agreement on May 13, 1999 to sell the assets
described above to affiliates of Harbert. Catella Boardroom and Catella Holding
acquired the assets from Crown pursuant to a right of first refusal. In
conjunction with the closing of the sales on August 20, the company and the
Harbert affiliates terminated their May 13 agreement.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired
Not applicable
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(b) Pro Forma Financial Information
Crown has determined that it is impracticable to provide the required pro forma
financial statements with this Report. The company will file such pro forma
financial statements by amendment to this Report or otherwise as soon as
practicable but no later than November 7, 1999.
(c) Exhibits
1. Purchase and sale agreement between Crown NorthCorp, Inc.
and Catella Boardroom Consulting AB.
2. Purchase and sale agreement between Crown NorthCorp, Inc. and Catella
Holding AB.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
CROWN NORTHCORP, INC.
September 7, 1999 By: /s/ Stephen W. Brown
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Stephen W. Brown
Secretary
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INDEX TO EXHIBITS
1. Purchase and sale agreement between Crown NorthCorp, Inc. and Catella
Boardroom Consulting AB.
2. Purchase and sale agreement between Crown NorthCorp, Inc. and Catella
Holding AB.
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EXHIBIT 1
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AGREEMENT
BETWEEN:
(A) Crown NorthCorp, Inc. a corporation incorporated under the laws of the
State of Delaware (the `Seller') and
(B) Catella Boardroom Consulting AB (the `Buyer').
SALE OF SHARES
1.1 The Seller sells and the Buyer buys the Shares on the terms set out
herein.
1.2 The `Shares' shall mean all shares in Catella/Crown NorthCorp Joint
Venture AB (company registration number 556556-3367) (the `Company'),
representing 50% (fifty per cent) of the share capital and votes in the
Company and all of the Seller's holding in the Company.
1.3 The Seller shall on the date of this Agreement, subject only to the
payment of the Purchase Price in accordance with Clause 3.2, deliver to
the Buyer all share certificates pertaining to the Shares.
2. WARRANTIES
The Seller makes and the Buyer relies on no warranties whatsoever in
respect of the Shares or the Company, except that the Seller warrants that
it has full and unencumbered title to the Shares and that it may pass such
title to the Buyer.
3. PURCHASE PRICE
3.1 The Purchase Price shall be SEK 250,000, representing the nominal amount
of the Shares. The Purchase Price shall be paid by using the attached
wiring instructions.
3.2 The Buyer shall, subject only to the delivery of the share certificates
pertaining to the Shares, pay the Purchase Price to the Seller; and the
Buyer shall not be obliged to pay the Purchase Price until the Buyer has
received physical possession of the share certificates pertaining to the
Shares endorsed in blank or endorsed to the Buyer.
4. CHOICE OF LAW
This Agreement shall be governed by Swedish law.
5. ARBITRATION
5.1 Any dispute, controversy or claim arising out of or in connection with
this Agreement, or the breach, termination or invalidity thereof, shall be
settled by arbitration in
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accordance with the Rules of the Arbitration Institute of the Stockholm
Chamber of Commerce. The arbitral tribunal shall be composed of three
arbitrators, all appointed by the Institute.
5.2 The place of arbitration shall be Stockholm.
5.3 The language to be used in the arbitral proceedings shall be English.
6. SIMULTANEOUS TRANSACTIONS
The parties hereto acknowledge and agree that the sale of the Shares
contemplated hereby and the sale of the Shares contemplated by that certain
Agreement dated the date hereof between the Seller and Catella Holding AB shall
occur as part of one simultaneous closing, it being understood that no portion
of such closing shall be deemed to occur unless all portions of such closing
shall have occurred.
Stockholm August 18 1999
Crown NorthCorp Inc Catella Boardrom Consulting AB
/s/ Ronald E. Roark /s/ Per Lekvall
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Chairman and Chief Managing Director
Executive Officer
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EXHIBIT 2
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AGREEMENT
BETWEEN:
(A) Crown NorthCorp, Inc., a corporation incorporated under the laws of the
State of Delaware (the `Seller') and
(B) Catella Holding AB (the `Buyer').
1. SALE OF SHARES
1.1 The Seller sells and the Buyer buys the Shares on the terms set out
herein.
1.2 The `Shares' shall mean (i) 9,594 class A shares in Telereit Holding AB
(company registration number 556556-2815) (the `Company'), representing
1.862707 % of the share capital and 2.651049 % of the votes in the
Company; (ii) SEK 9,021,924.88 Senior Owner's Debt; and (iii) SEK
9,115,775.21 Junior Owner's Debt. `Senior Owner's Debt' and `Junior
Owner's Debt' shall have the meaning ascribed to such terms in the
shareholders' agreement entered into between the Seller, Pyramid
Acquisitions, B.V. (a company incorporated under the laws of The
Netherlands), Deutsche Bank, AG (a company incorporated under the laws of
Germany), Forsakringsbolaget SPP, omsesidigt (company registration number
502014-6865) and E. Ohman J:or Real Estate Fund No. I AB (company
registration number 556537-3127) on 2 November 1998 in respect of their
respective shareholdings in the Company.
1.3 The Seller shall on the date of this Agreement, subject only to the
payment of the Purchase Price in accordance with Clause 3.2, deliver to
the Buyer (i) share certificates pertaining to the shares of the Company
to be assigned hereunder and (ii) debt instruments issued by the Company
in respect of the portions of Senior Owner's Debt and Junior Owners Debt
to be assigned hereunder.
2. WARRANTIES AND REPRESENTATIONS; ACKNOWLEDGEMENTS; UNDERTAKINGS
2.1 The Seller makes and the Buyer relies on the following warranties and
representations respect of the Shares or the Company:
(i) the Seller has full and unencumbered title to the Shares;
(ii) the Seller may pass full title to the Buyer free of any liens or
other encumbrances; and
(iii) the Seller is not aware of any legal or factual circumstances or
other information that could negatively affect the value of the
Shares, the Senior Owner's Debt or the Junior Owner's Debt.
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2.2 The Seller confirms and acknowledges that, upon the full payment of the
Purchase Price on the terms and conditions set out herein,
(i) it does not have any claim, action or suit and
(ii) will not put forward any claim, action or suit,
whether in contract, quasi-contract, tort, delict or quasi-delict or
howsoever described or howsoever arising, against the Buyer or any of the
Buyer's subsidiaries in respect of the Payment of Fees Agreement, this
Agreement or Purchase and Sale Agreement or any other agreement, deed or
instrument--howsoever described--contemplateD (whether explicitly or by
implication) by or in the Payment of Fees Agreement, this Agreement or
Purchase and Sale Agreement or in respect of any transaction contemplated
(whether explicitly or by implication) thereby or therein (whereby the
`Payment of Fees Agreement' shall mean that certain payment of fees
agreement dated 27 August 1998 made between Crown NorthCorp Euro A/S, a
company incorporated under the laws of the Kingdom of Denmark, and Harbert
Management Corporation ('HMC'), a corporation incorporated under the laws
of the State of Alabama; and the `Purchase and Sale Agreement' shall mean
that certain purchase and sale agreement between Crown NorthCorp Euro A/S,
HMC International, LLC, a limited liability dated 13 May 1999 company
incorporated under the laws of the State of Delaware, MarRay Investment,
LLC, a limited liability company incorporated under the laws of the State
of Delaware ('MarRay'), and Crown NorthCorp).
2.3 The Seller undertakes:
(i) to cause Crown NorthCorp Euro A/S to execute a letter addressed to
the Buyer, in which Crown NorthCorp Euro A/S undertakes commitments
substantially in the form of the Seller's commitments pursuant to
Clause 2.2;
(ii) to ensure that Crown NorthCorp Euro A/S duly honours its the
commitments referred to in paragraph (i); and
(iii) to effect the termination of that certain purchase and sale
agreement date May 13, 1999 among Harbert Management International,
LLC, MarRay, Seller and
Crown NorthCorp Euro A/S.
3. PURCHASE PRICE
3.1 The total Purchase Price for the Shares (as defined in Clause 1.2) shall
be USD 3,470,000.
3.2 The Buyer shall, subject only to the delivery of (i) share certificates
pertaining to the shares of the Company to be assigned hereunder and (ii)
debt instruments issued by the Company in respect of the portions of
Senior Owner's Debt and Junior Owner's Debt to be assigned hereunder, pay
the Purchase Price to the Seller as specified in this Clause 3.2; and the
Buyer shall not be obliged to pay the Purchase Price until the Buyer has
received physical possession of the share certificates pertaining to the
shares of the Company and the debt instruments pertaining to the relevant
portions of the Senior
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Owner's Debt and the Junior Owner's Debt endorsed in blank or endorsed to
the Buyer. The Purchase Price shall be paid as set out in the attached
wire instructions; (x) USD 1,764,246 to the Seller, (y) USD 726,000 to HMC
and (z) USD 979,754 to MarRay.
4. BUYER'S UNDERTAKING
With respect to the two Risk Participation Agreements dated August 27,
1998 between Seller and Bankers Trust Company ("BT") on the one hand and
between Seller and Deutsche Bank AG, London Branch ("DB") on the other
hand (collectively, the "RPAs"), Buyer undertakes either to assume
Seller's obligations under the RPAs or to enter into new agreements with
BT and DB to replace the RPAs such that, in either case, Seller is
released from the RPAs and BT and DB return to Seller the letters of
credit collateralizing Seller's obligations under the RPAs.
5. CHOICE OF LAW
This Agreement shall be governed by Swedish law.
6. ARBITRATION
6.1 Any dispute, controversy or claim arising out of or in connection with
this Agreement, 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 arbitral tribunal
shall be composed of three arbitrators, all appointed by the Institute.
6.2 The place of arbitration shall be Stockholm.
6.3 The language to be used in the arbitral proceedings shall be English.
7. SIMULTANEOUS TRANSACTIONS
The parties hereto acknowledge and agree that the sale of shares contemplated
hereby and the sale of shares contemplated by that certain Agreement dated the
date hereof between the Seller and Catella Boardroom Consulting AB shall occur
as part of one simultaneous closing, it being understood that no portion of such
closing shall be deemed to occur unless all portions of such closing shall have
occurred.
Stockholm August 18 1999
Crown NorthCorp, Inc. Catella Holding AB
/s/ Ronald E. Roark /s/ Johan Bjorklund
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Chairman and Chief Chief Financial Officer
Executive
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