Termination of sales contract

Alta Capital Partners SCA, which entered into a contract with AS Kalev on 20
Sep 2007 for the sale of shares in the AS Kalev subsidiaries AS Kalev Chocolate
Factory, AS Kalev Jõhvi Tootmine, AS Kalev Paide Tootmine, AS Valmetek Invest,
AS Vilma and OÜ Maiasmokk, failed to pay the purchase price subject to payment
for the shares by the agreed-upon due date - 30 May. For this reason, the
seller did not transfer to the buyer the shares in the companies that were the
object of the contract of sale. 

In accordance to the contract of sale of shares signed on 20 September 2007, AS
Kalev was obliged to transfer the shares in these foodstuff industry
subsidiaries to the buyer after payment of the purchase price, provided that
preconditions set forth in the contract were fulfilled. 
After all of the preconditions were duly fulfilled by AS Kalev by 20 February
2008, the parties entered into an additional agreement whereby they set 31
March 2008 as the completion date for the transaction and the buyer paid
93,879,600 kroons (6 million euros) of the purchase price as a prepayment to
the seller. 
On 31 May 2008 the seller and buyer signed a memorandum of completion of the
transaction. In this memorandum of completion, the parties specified the final
purchase price of the AS Kalev subsidiaries as 660,273,005 kroons (42,199,136
euros) which the buyer obliged to pay to the seller by 30 May 2008. 

According to the assessment of the buyer, unfavourable developments on the
stock and credit markets did not allow the buyer to pay the purchase price,
notwithstanding that the parties postponed the transaction completion date
compared to the initial agreement, in good faith, at the request of the buyer. 

As the buyer did not pay the purchase price in full by the transaction
completion date, AS Kalev considers the sale contract terminated. 

AS Kalev CEO Oliver Kruuda: “It is in any case regrettable that the sale
contract was not realized. We fulfilled all of the terms and conditions of the
contract and gave the buyer repeated extensions for finding the financing
necessary to pay the purchase price. Unfortunately it emerged that despite the
efforts on the part of the buyer, the purchase price was not received by AS
Kalev by the due date. AS Kalev acknowledges the intent of the buyer to comply
with its contractual obligations and is prepared to work with the buyer in
every respect during 2008 in the field of the foodstuffs industry.” According
to Kruuda, the termination of the contract will allow AS Kalev to commence
negotiations with other possible interest parties whose approaches have thus
far been rejected in connection with the exclusive buyer's rights given to Alta
Capital Partners. 

According to the initial agreement between the parties, the buyer will pay AS
Kalev 140,819,400 million kroons (9 million euros) in compensation for losses
and expenses due to the postponement and cancellation of the transaction. Of
this compensation amount, 93,879,600 kroons (6 million euros) will be offset by
the prepayment paid by the buyer and the remaining 46,939,800 kroons (3 million
euros) is to be paid by the buyer to the seller by the end of 2008. 
AS Kalev appreciates the fact that the buyer is prepared to reach a reasonable
agreement with regard to compensation of losses, as protracted and costly
judicial disputes in this matter are certainly not in the interests of AS
Kalev's shareholders or the parties to the transaction. 

The situation will not result in material changes in the everyday economic
activity of AS Kalev's subsidiaries. Kalev will continue operating in all of
its current fields of activity: production and sale of foodstuffs, real estate
development and management, and the media. The company plans to develop its
fields of activity dynamically. 

(See also the following AS Kalev's press releases: “Kalev to transfer shares”
and “Resolutions of ordinary general shareholder's meeting”, 20.09.2007; “Date
of completion of the share sales transaction”, 29.02.2008; and “Share sales
transaction completion procedures”, 31.03.2008 ). 


Allan Viirma
Head of the legal service
688 6616