CLS HOLDINGS PLC

Prospectus regarding listing of SEK 300,000,000 senior unsecured bonds

STIBOR + 3.75 per cent 2011/2016

The date of this Prospectus is 4 July 2011

Important information This prospectus (the “Prospectus”) has been issued by CLS Holdings plc (the “Company” or “CLS” and together with its consolidated subsidiaries, the “Group”) due to the Company’s application for listing of the bonds (the “Bonds”) issued on 27 April 2011 under the Company’s bond loan of SEK 300,000,000 with an annual interest of STIBOR + 3.75 per cent (the “Bond loan”) on the Corporate Bonds List at NASDAQ OMX Stockholm AB (“NASDAQ OMX Stockholm”). Carnegie Investment Bank AB (publ) (“Carnegie”) has acted as the Company’s financial adviser in connection with the issuance and listing of the Bonds. With the exception of the Financial Information (as defined herein) which has been incorporated by reference to this Prospectus, no other information in the Prospectus has been reviewed or audited by the Company’s auditors. This Prospectus has been prepared in accordance with the provisions in the Financial Instruments Trading Act (1991:980) (Sw. lag (1991:980) om handel med finansiella instrument) (the “Trading Act”) and the Commission Regulation (EC) No. 809/2004 of 29 April 2004 implementing Directive 2003/71/EC of the European Parliament and of the Council. The Prospectus has been approved and registered by the Swedish Financial Supervisory Authority (Sw. Finansinspektionen) (the “SFSA”) pursuant to the provisions of Chapter 2, Sections 25 and 26 of the Trading Act. Approval and registration by the SFSA does not imply that the SFSA guarantees that the factual information provided in the Prospectus is correct or complete. This Prospectus has been prepared in order for the Bonds to be listed at NASDAQ OMX Stockholm and does not in any part constitute an offer by the Company to subscribe or purchase the Bonds or any other securities. The Bonds have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may be subject to U.S. tax law requirements. Subject to certain exemptions, the Bonds may not be offered, sold or delivered within the United States of America or to, or for the account or benefit of, U.S. persons. The Prospectus is made available electronically on the websites of the SFSA (www.fi.se) and CLS (www.clsholdings.com). Printed copies of the Prospectus can be obtained from the Company. The Prospectus, including documents incorporated by reference, contains “forward-looking statements” made by CLS’s Board of Directors (the “Board of Directors”) based on the Board of Directors’ knowledge about the current conditions regarding CLS, the market and the surrounding world. The reader should observe that “forward-looking statements” are always associated with uncertainty. An investment in the Bonds is associated with risk and risk taking. A prospective investor is encouraged to carefully study the Prospectus before investing, in particular the section “Risk Factors”. Certain figures included in this Prospectus have been subject to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be the sum of the figures that precede them. Any dispute arising under this Prospectus shall be governed by Swedish law and shall be settled exclusively by a Swedish court of law. Words and definitions used in this Prospectus have the same meaning as in the section “Terms and conditions of the Bonds” unless otherwise stated. In this Prospectus, all references to:

● the “Agent” or “CorpNordic” are to “CorpNordic Sweden AB”;

● the “Board of Directors” are to CLS’s board of directors;

● “Euroclear” are to Euroclear Sweden AB, the central securities depository of the Bonds;

● “GBP” or “£” are to the British pound, the currency in Great Britain;

● the “Group” are to CLS and its consolidated subsidiaries;

● “Holders” are to the holders of the Bonds; and

● “Swedish Krona”, “Swedish Kronor” or “SEK” are to the lawful currency of Sweden.

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Table of contents Summary 4 Sammanfattning 8 Risk factors 12 Responsibility for the Prospectus and declaration by the Board of Directors 16 Selected consolidated Financial Information 17 Business and operations of CLS 19 Board of Directors, management and auditors 21 Share capital and ownership structure 25 Legal matters and miscellaneous information 26 Terms and conditions of the Bonds 29 Addresses 48

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Summary This summary does not claim to be complete and should be seen as an introduction to the Prospectus. It does not contain all of the information that prospective investors should consider before deciding to invest in the Bonds and any such decision should be based on an assessment of the content of the Prospectus as a whole. Investors who take legal actions based on the information in the Prospectus may be required to pay for the cost of translating the Prospectus. A person may be held responsible for the information that is included in or omitted from the summary only if the summary or the translation is misleading or inaccurate in relation to other parts of the Prospectus. Issuer: .........................................................................CLS Holdings plc, a limited liability company

registered in England and Wales, registration number 2714781 with registered address: 86 Bondway, London SW8 1SF, incorporated on 14 May 1992 and listed on the London Stock Exchange on 27 May 1994.

Business and operations: ..........................................The Company’s main activity is in commercial real estate across four European regions: London, France, Germany and Sweden. The Company’s core focus is in providing well-managed, cost-effective offices and commercial real estate for tenants. The Company aims to hold, develop and refurbish its property investments to obtain long-term asset growth. As at 31 December 2010, CLS’s directly held investment portfolio was valued at GBP 876.9 million.

ISIN: ...........................................................................SE0003918093.

Listing at NASDAQ OMX Stockholm:....................The Company has applied for listing of the bonds on the Corporate Bonds List at NASDAQ OMX Stockholm. The first day of trading is expected to be 5 July 2011.

Issued amount:...........................................................SEK 300,000,000.

Interest Rate: .............................................................STIBOR + 3.75 %.

Denomination: ...........................................................SEK 10,000.

Issue Date: .................................................................. 27 April 2011.

Redemption Date: ...................................................... 27 April 2016, or such earlier date that may be the case pursuant to Clause 7.2 (Early Redemption upon a Change of Control), Clause 7.3 (Early Redemption by the Company) or Clause 11 (Acceleration of the Bonds) in the Terms and Conditions of the Bonds.

Interest Payment Dates:............................................ 31 March, 30 June, 30 September and 31 December each year and the Redemption Date. The first Interest Payment Date will be 30 June 2011.

Undertakings: ............................................................The Company has undertaken to ensure, inter alia, that:

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• the Group maintains an Interest Coverage Ratio of minimum 1.40:1.00; • as long as any Bond remains outstanding, the Group maintains an Equity Ratio of a minimum of 22.5 per cent at all times; • it does not (i) pay any dividend on shares, (ii) repurchase shares, (iii) redeem share capital or other restricted equity with repayment to shareholders, or (iv) make other similar distributions to shareholders if such dividend or distribution to shareholders results in the Group having less than £250,000,000 of Equity; • the Company’s obligations under the Terms and Conditions of the Bonds at all times rank at least pari passu with all other senior unsecured obligations of the Company, other than obligations which have mandatorily preference by law; • neither the Company nor any Subsidiary (as

defined in the Terms and Conditions of the Bonds) will grant any loans, credits, guarantees or similar to any third party not being a member of the Group, other than in the ordinary course of business.

For a complete description of the Company’s undertakings, see the section “Terms and Conditions of the Bonds—Undertakings”.

Early Redemption: ....................................................Each Holder has a right to call for Early Redemption of the Bonds held by it upon the occurrence of certain changes in ownership of the Company or if the Company’s shares are de-listed.

The Company may redeem all, but not less than all, Bonds on any Banking Day (as defined in the Terms and Conditions of the Bonds) falling after the second anniversary of the Issue Date.

Registration on Euroclear account: .........................The Bonds are registered on behalf of the Holders on a Euroclear account. Payment of interest and principal will be made by Euroclear.

Tax aspects:................................................................Euroclear or the Swedish nominee (in case of nominee registered securities) withholds preliminary tax, at present 30 per cent, on interest paid in cash to individuals who are resident in Sweden for tax purposes.

Issuing Agent: ............................................................Carnegie Investment Bank AB.

Agent: .........................................................................CorpNordic Sweden AB.

Governing law: ..........................................................The Bonds are governed by and construed in accordance with Swedish law. The courts of Sweden have jurisdiction in relation to any dispute arising out

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of or in connection with the Bonds with the District Court of Stockholm as the court of first instance.

Risk factors: ...............................................................A number of factors affect and may affect the performance and financial position of the Company and ultimately its ability to make interest payments and payments of principal under the Bonds. Some of these factors are described in the section “Risk factors” under the following headings.

Risks related to CLS include, but are not limited to the following:

• Rental incomes and development of rents • CLS’s rental revenues will depend upon the financial stability of its tenants • Credit risk • Financing and liquidity risk • Interest rate risk • Currency risk • Real estate acquisitions • CLS may not be able to secure suitable locations for development • The real estate book values and appraisals may not accurately reflect the market value of CLS’s properties • Changes in laws could adversely affect CLS’s properties • Environmental problems are possible and can be costly • Insurance may not cover all losses relating to CLS’s properties • Influence by major shareholders

Risks related to the Bonds include, but are not limited to the following:

• Credit risk • Clearing and settlement in Euroclear • Subordination • There is currently no active trading market for the Bonds

Board of Directors, management and auditor ........Sten A Mörtstedt, Executive Chairman

E Henry Klotz, Executive Vice Chairman

Richard J S Tice, Chief Executive Officer

John H Whiteley, Chief Financial Officer

Malcolm C Cooper, non-Executive Director

Joseph A Crawley, non-Executive Director

Christopher P Jarvis, non-Executive Director

H O Thomas Lundqvist, non-Executive Director

Jennica Mörtstedt, non-Executive Director

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Thomas J Thomson, non-Executive Director Deloitte LLP is the Company’s auditors with Mark Goodey, Senior Statutory Auditor, as auditor in charge.

Major shareholders ...................................................The Sten Mortstedt’s Family & Charity Trust owns

more than 50 per cent of the issued share capital of CLS.

Summary of financial information

Income Statement Data in Brief

For the year ended 31

December 2010 2009 (in millions of GBP) Group Revenue............................................................................................... 79.1 76.3 Costs ............................................................................................................... (30.3) (30.3) Operating profit .............................................................................................. 88.2 41.5 Profit before tax.............................................................................................. 70.9 18.5 Profit for the year .......................................................................................... 60.1 17.4 Total comprehensive income for the year.................................................. 57.2 18.6

Balance Sheet Data in brief

For the year ended 31

December 2010 2009 (in millions of GPB) Non-current assets ......................................................................................... 1,018.6 944.2 Current assets................................................................................................. 59.8 80.7 Total assets ................................................................................................... 1,078.4 1,024.9 Equity............................................................................................................. 357.2 309.0 Non-current liabilities.................................................................................... (598.1) (551.6) Current liabilities ........................................................................................... (123.1) (164.3) Total equity and liabilities .......................................................................... 1,078.4 1,024.9

Key Figures

As at and for the year ended 31 December

2010 2009 Equity ratio (%)............................................................................................. 33.1 29.3 Mortgage ratio (%)........................................................................................ 67.2 72.9 Interest coverage ratio................................................................................... 2.7x 2.1x Lettable space year end (square metre) ........................................................ 407,742 388,381 Vacancy rate year end (%)............................................................................ 4.3 4.5 Book value properties (per square metre)..................................................... 2,151 2,093 Rental income (GBP per average square metre) .......................................... 156 159 Yield based on average book value properties (%) ...................................... 7.1 7.2

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Sammanfattning Följande avsnitt utgör en översättning av avsnittet ”Summary” ovan. Översättningen har upprättats mot bakgrund av bestämmelserna i 2 kap. 21 § lagen (1991:980) om handel med finansiella instrument och Finansinspektionens beslut i ärende 11-4648, enligt vilket Prospektet får upprättas på engelska med en svenskspråkig prospektsammanfattning. Denna sammanfattning är inte fullständig och ska ses som en introduktion till Prospektet. Sammanfattningen innehåller inte all den information som en potentiell investerare bör ta hänsyn till innan ett beslut fattas om en investering i Obligationerna och ett sådant beslut ska grundas på en bedömning av Prospektet i dess helhet. Investerare som väcker talan vid domstol med anledning av informationen i Prospektet kan bli tvungna att svara för kostnaden för att översätta prospektet. En person får göras ansvarig för uppgifter som ingår eller saknas i sammanfattningen endast om sammanfattningen eller översättningen är vilseledande eller felaktig i förhållande till de andra delarna av Prospektet. Emittent: ....................................................................CLS Holdings plc, ett publikt aktiebolag registrerat i

England och Wales, registreringsnummer 2714781, med registrerad adress: 86 Bondway, London SW8 1SF, registrerat den 14 maj 1992 och noterat på London Stock Exchange den 27 maj 1994.

Verksamhet: ..............................................................Bolagets huvudsakliga verksamhet är inom kommersiella fastigheter i fyra Europeiska regioner: London, Frankrike, Tyskland och Sverige. Bolagets huvudsakliga fokus är att erbjuda sina hyresgäster väl skötta och kostnadseffektiva kontor och kommersiella lokaler. Bolagets målsättning är att äga, utveckla och renovera sina fastigheter för att uppnå långsiktig värdeökning. Per den 31 december 2010 värderades CLS direktägda investeringsportfölj till 876,9 miljoner GBP.

ISIN: ...........................................................................SE0003918093.

Inregistrering vid NASDAQ OMX Stockholm: ......Bolaget har ansökt om inregistrering av obligationerna på företagsobligationslistan vid NASDAQ OMX Stockholm. Första handelsdagen förväntas bli den 5 juli 2011.

Lånebelopp: ............................................................... 300 000 000 SEK.

Räntesats: ...................................................................STIBOR + 3,75 %.

Nominellt belopp: ...................................................... 10 000 SEK.

Utgivningsdag: ........................................................... 27 april 2011.

Inlösendag: ................................................................. 27 april 2016, eller vid sådan tidigare tidpunkt som kan bli fallet i enlighet med paragraf 7.2 (Early Redemption upon a Change of Control), paragraf 7.3 (Early Redemption by the Company) eller paragraf 11 (Acceleration of the Bonds) i Villkoren för Obligationerna.

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Ränteförfallodag:....................................................... 31 mars, 30 juni, 30 september och 31 december varje år samt Inlösendagen. Den första Ränteförfallodagen är 30 juni 2011.

Åtaganden: .................................................................Bolaget har åtagit sig att tillse bland annat att: • Koncernen bibehåller en räntetäckningsgrad om minst 1,40:1,00; • Koncernen, så länge det finns utestående Obligationer, bibehåller en soliditet om minst 22,5 %; • det inte (i) betalar någon utdelning på aktier, (ii) återköper aktier, (iii) minskar aktiekapitalet eller annat bundet eget kapital för återbetalning till aktieägare eller (iv) genomför andra liknande värdeöverföringar till aktieägare om sådan utdelning eller värdeöverföring resulterar i att Koncernen har ett eget kapital understigande 250 000 000 GBP; • Bolagets förpliktelser enligt Villkoren för Obligationerna vid alla tidpunkter rankas minst pari passu med krav från alla dess andra oprioriterade borgenärer, med undantag för sådana som har prioritet enligt lag; • varken Bolaget eller något av dess dotterbolag (i

enlighet med definitionen av ”Subsidiary” i Villkoren för Obligationerna) utger några lån, krediter, garantier eller liknande till någon tredje part som inte är en del av Koncernen, annat än sådant som ryms inom den löpande verksamheten.

För en fullständig redogörelse över samtliga Bolagets åtaganden i samband med Obligationerna, se vidare avsnittet ”Terms and conditions of the Bonds– Undertakings”.

Förtida Inlösen: .........................................................Varje innehavare har rätt att påkalla Förtida Inlösen av innehavda Obligationer vid vissa ägarmässiga förändringar i Bolaget eller om Bolagets aktier avnoteras.

Bolaget äger rätt att lösa in samtliga Obligationer, dock ej färre än samtliga, på endera bankdag (i enlighet med definitionen av ”Banking Day” i Villkoren för Obligationerna) som infaller senare än två år efter Utgivningsdagen.

Euroclear-registrering: .............................................Obligationerna är registrerade på respektive innehavares Euroclearkonto (VP-konto). Betalning av ränta och kapitalbelopp kommer att göras av Euroclear.

Skattemässiga överväganden: ..................................Euroclear eller förvaltare (vid förvaltarregistrerade värdepapper) innehåller preliminärskatt, för

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närvarande 30 procent, på utbetald ränta till fysisk person som är bosatt och skattskyldig i Sverige.

Emissionsinstitut: ......................................................Carnegie Investment Bank AB.

Agent: .........................................................................CorpNordic Sweden AB.

Tillämplig lag:............................................................Obligationerna är underkastade och skall tolkas i enlighet med svensk rätt. Eventuella tvister eller anspråk i anledning av Obligationerna ska avgöras i svensk domstol med Stockholms tingsrätt som första instans.

Riskfaktorer:..............................................................Ett antal faktorer kan påverka Bolagets resultat och finansiella ställning och i slutändan dess förmåga att betala ränta och kapitalbelopp i enlighet med Villkoren för Obligationerna. Exempel på dessa finns återgivna under avsnittet ”Riskfaktorer” under följande rubriker.

Risker relaterade till CLS inkluderar men är inte begränsade till följande:

• Hyresinkomster och ränteutveckling • CLS hyresintäkter är beroende av dess hyresgästers finansiella stabilitet • Kreditrisk • Finansierings- och likviditetsrisk • Ränterisk • Valutarisk • Fastighetsförvärv • Det är inte säkert att CLS kan finna lämpliga

fastigheter för nyinvesteringar • Det är inte säkert att fastigheternas

bokföringsmässiga värde och värderingar motsvarar fastigheternas marknadsvärde

• Lagändringar skulle kunna ha en väsentlig negativ inverkan på CLS fastigheter • Miljöproblem kan uppstå och kan vara kostsamma • Det är inte säkert att försäkringar täcker alla

förluster relaterade till fastigheterna • Inflytande från större aktieägare

Risker relaterade till Obligationerna inkluderar men är inte begränsade till följande:

• Kreditrisk • Clearing och uppgörelse i Euroclears system • Efterställande • Det saknas för tillfället en aktiv marknad för

handel med Obligationerna

Styrelse, ledning och revisor .....................................Sten A Mörtstedt, Ordförande

E Henry Klotz, Vice ordförande

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Richard J S Tice, Verkställande direktör

John H Whiteley, Finansdirektör

Malcolm C Cooper, ledamot

Joseph A Crawley, ledamot

Christopher P Jarvis, ledamot

H O Thomas Lundqvist, ledamot

Jennica Mörtstedt, ledamot

Thomas J Thomson, ledamot Deloitte LLP är Bolagets revisorer med Mark Goodey (Senior Statutory Auditor) som huvudansvarig revisor.

Större aktieägare .......................................................Sten Mortstedts Family & Charity Trust äger mer än

50 procent av samtliga aktier i CLS.

Sammanfattning av finansiell information

Resultaträkningar i sammandrag Per den 31 december 2010 2009 (i miljoner GBP) Koncernens intäkter ...................................................................................... 79,1 76,3 Kostnader ...................................................................................................... (30,3) (30,3) Rörelseresultat .............................................................................................. 88,2 41,5 Resultat före skatt ......................................................................................... 70,9 18,5 Årets resultat ................................................................................................. 60,1 17,4 Årets totalresultat ....................................................................................... 57,2 18,6

Balansräkningar i sammandrag Per den 31 december 2010 2009 (i miljoner GBP) Anläggningstillgångar ................................................................................... 1 018,6 944,2 Omsättningstillgångar ................................................................................... 59,8 80,7 Totala tillgångar .......................................................................................... 1 078,4 1 024,9 Eget kapital .................................................................................................... 357,2 309,0 Långfristiga skulder....................................................................................... (598,1) (551,6) Kortfristiga skulder........................................................................................ (123,1) (164,3) Totalt eget kapital och skulder................................................................... 1 078,4 1 024,9

Nyckeltal Per den 31 december 2010 2009 Soliditet (%) .................................................................................................. 33,1 29,3 Fastigheternas belåningsgrad (%) ................................................................. 67,2 72,9 Räntetäckningsgrad ....................................................................................... 2,7x 2,1x Uthyrningsbar yta vid årsskiftet (m2) ........................................................... 407 742 388 381 Andel icke uthyrt (%).................................................................................... 4,3 4,5 Fastigheternas bokföringsmässiga värde (per m2)........................................ 2 151 2 093 Hyresintäkter (GBP per genomsnittlig m2) .................................................. 156 159 Avkastning baserat på fastigheternas genomsnittliga bokföringsmässiga värde (%) ....................................................................................................... 7,1 7,2

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Risk factors Investments in bonds are always associated with risks, including the risk of a potential loss of the entire investment. A number of factors affect and may affect the performance and financial position of CLS (including those beyond CLS’s control) and ultimately CLS’s ability to make interest payments and payments of principal on final maturity. In this Section, such risk factors considered to be of material significance are presented and discussed, including general risks associated to CLS’s operations as well as the main risks associated with the Bond as a financial instrument. The risk factors are not presented in any order of priority, nor is the outline exhaustive. The purpose of this risk assessment is to describe the risks associated with CLS’s operations and thus the Company’s ability to meet its commitments in accordance with the terms and conditions of the Bonds. A prospective investor should carefully consider the risk factors described hereafter as well as all other information in this Prospectus before investing in the Bonds. Furthermore, an investor must, solely or with financial and other advisers, consider the information in the prospectus and the general financial situation from an individual perspective. An investor should have enough knowledge to make a fair assessment of the risk factors as well as the economic capacity to bear these risks. Further risk factors that are currently not known, or that are currently not considered significant, could also affect CLS’s future operations, results and financial position and therefore also the Company’s ability to meet its commitments in accordance with the Terms and Conditions of the Bonds. Risks related to CLS Rental incomes and development of rents The Company’s income is affected by the long-term demand for office locations and other premises, the properties’ occupancy rate and rents. Rents and vacancies are affected by, among other things, the growth in the economy, the production of new buildings, changes in infrastructure, employment and demographic factors. Economic growth is expected to result in an increased demand for office locations and other premises, fewer vacancies, increase in production and a potential for increased market rents. Stagnation is expected to have the opposite effect. A decrease in rental incomes may have a negative effect on the Company’s results and cash flow and as a consequence may affect the Company’s ability to fulfil its obligations under the Bonds. CLS’s rental revenues will depend upon the financial stability of its tenants The financial stability of CLS’s tenants may affect the Company’s financial performance. Tenant defaults could result in a significant reduction in rental revenues, which could require CLS to contribute additional capital or obtain alternative financing to meet obligations under any financing arrangements relating to such properties. In addition, the costs and time involved in enforcing rights under a lease with a defaulting tenant, including eviction and re-leasing costs, may be significant. The financial stability of tenants may change over time. Any adverse change in the tenants’ financial condition may negatively affect the value of property in which such tenants lease space with reduced rental income from such property potentially negatively affecting the Company’s ability to fulfil its obligations under the Bonds. Credit risk Credit risk consists primarily of the risk that an opposing party does not fulfil its commitments regarding the payment of rent or the settlement when purchasing a property. CLS depends on the rents paid by its tenants. If a tenant does not pay its rents or otherwise fails to fulfil its commitments towards CLS, the Company’s results could be negatively affected and could therefore affect the Company’s ability to fulfil its obligations under the Bonds.

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Financing and liquidity risk CLS may need additional capital to acquire properties or to refinance its existing credit facilities. Although CLS has relationships with approximately 20 banks there is no guarantee that CLS will be able to obtain additional financing on terms and conditions acceptable to CLS. CLS’s credit agreements with the banks typically contain covenants stipulating a maximum loan to value and a minimum interest cover. They also typically contain remedies which can be followed to rectify any breach, such as a partial loan repayment or deposit of cash. Loans under the credit agreements are usually taken out by a single purpose vehicle and all loans are on a non-recourse basis to the rest of the Group. Default of the obligations under, or breach of the financial covenants in, CLS’s credit agreements could have a material adverse effect on CLS’s financial condition and could adversely affect CLS’s ability to obtain additional financing, if necessary. Such default could also trigger the cross-default provision in the Terms and Conditions of the Bonds and, eventually lead to the termination of the Bonds. Consequently, a default under CLS’s credit facilities or the inability to obtain additional capital on terms and conditions acceptable to CLS may affect the Company’s ability to fulfil its obligations under the Bonds or even lead to the Bonds being terminated. Interest rate risk The Company is exposed to interest rate risk primarily through its floating interest rate borrowing. CLS aims to manage its interest rate exposure through interest rate swaps and caps and through borrowing at fixed rates. Interest rates are sensitive to numerous factors beyond CLS’s control, and an increase in interest rates could have an adverse effect on the Company’s business, results of operations and financial condition and consequently the Company’s ability to fulfil its obligations under the Bonds. Currency risk Although CLS’s reporting is in GBP, the Company operates in different countries and currencies. The difference between the value of a property and the amount of the financing is generally unhedged. Currency fluctuations may negatively affect CLS’s financial condition and consequently the Company’s ability to fulfil its obligations under the Bonds. Real estate acquisitions Real estate acquisitions are a part of the Company’s business operations and may be subject to certain risks. When acquiring real estate the risks include, among other things, future vacancies, the tenants’ ability to pay rent, environmental conditions and technical defects. It is therefore of great importance that the Group has the competence required for real estate acquisitions and that external expertise is used when necessary. Acquisitions of properties in which significant vacancies arise or unforeseeable expenditure occurs may affect the Company’s ability to fulfil its obligations under the Bonds. CLS may not be able to secure suitable locations for development The choice of suitable locations for the construction of commercial developments is an important factor in the success of individual projects and in their respective value. Ideally, these sites should be located: (i) within or near to a city centre, with well-developed transportation infrastructure in close proximity; or (ii) within local areas with sufficient population to support the development. If the Company is not able to find sites in the target cities which meet these criteria, either at all or at viable prices, this may materially adversely affect the Company’s business, results of operations and financial condition and consequently the Company’s ability to fulfil its obligations under the Bonds. The real estate book values and appraisals may not accurately reflect the market value of CLS’s properties The real estate book values and appraisals referred to in this Prospectus are made on the basis of certain assumptions and as at specified dates, and there can be no assurances that these figures accurately reflect

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the market value of the Group’s properties at all or as at any other date. In addition, certain assumptions and valuation models were used in the preparation of the appraisals, and the use of different assumptions or valuation models would likely produce different valuation results. Therefore, the book values and appraised market values included herein should not be taken as an indication of the proceeds that could be achieved in the sale of any of the Group’s properties. A decline in valuation or discrepancy between the valuation and the market price may affect the Company’s results of operations and financial condition and thereby its ability to fulfil its obligations under the Bonds. Changes in laws could adversely affect CLS’s properties Various laws and regulations, including fire and safety requirements, environmental regulations, land use restrictions and taxes affect CLS’s properties. If properties do not comply with the requirements of these laws and regulations, CLS may incur governmental or civil fines. New or amended laws, rules, regulations or ordinances could require significant unanticipated expenditure or impose restrictions on the development, construction or sale of properties. Such laws, rules, regulations or ordinances may also adversely affect CLS’s ability to operate or resell properties. Any of such circumstances may have an adverse effect on the Company’s business, results of operations and financial condition and consequently the Company’s ability to fulfil its obligations under the Bonds. Environmental problems are possible and can be costly

National and local laws and regulations relating to the protection of the environment may require a current or previous owner or operator of real estate to investigate and clean up hazardous or toxic substances or petroleum product releases at or affecting property. The owner or operator may have to pay a governmental entity or third party for property damage and for investigation and clean-up costs incurred by such party in connection with the contamination. These laws typically impose clean-up responsibility and liability on the party which caused the contamination of the site. Obligations imposed on CLS to remedy any environmental liabilities or defects could materially adversely affect its business, results of operations and financial condition and thereby its ability to fulfil its obligations under the Bonds. Insurance may not cover all losses relating to CLS’s properties

The Company’s real estate assets could suffer physical damage caused by fire or other causes, resulting in losses (including loss of rent) which may not be fully compensated by insurance. In addition, there are certain types of losses, generally of a catastrophic nature, such as earthquakes, floods, hurricanes, terrorism or acts of war, for which insurance may not be available or which are not economically insurable. Inflation, changes in legislation, environmental considerations and other factors may also result in insurance proceeds being insufficient to repair or replace a property if it is damaged or destroyed. Should an uninsured loss or a loss in excess of received claim amounts occur, CLS could lose capital invested in the affected property as well as anticipated future revenue from that property. In addition, CLS could be liable to repair damage caused by uninsured risks. Losses that are not covered by insurance may have a material adverse effect on the Company’s business, results of operations and financial condition and consequently the Company’s ability to fulfil its obligations under the Bonds. Influence by major shareholders The Sten Mortstedt’s Family & Charity Trust owns more than 50 per cent of all shares in CLS. This means that the Sten Mortstedt’s Family & Charity Trust is able to practice influence over CLS at General Shareholders’ Meetings. There is no assurance that the interest of a major owner will not influence decisions that could have a negative effect for the Holders.

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Risks related to the Bonds Each potential investor in the Bonds must determine the suitability of that investment in light of its own circumstances. In particular, each potential investor should:

● have sufficient knowledge and experience to make a meaningful evaluation of the Bonds, the merits and risks of investing in the Bonds and the information contained in this Prospectus;

● have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its own particular financial situation, an investment in the Bonds and the impact such investment will have on its overall investment portfolio;

● have sufficient financial resources and liquidity to bear all of the risks of an investment in the Bonds;

● thoroughly understand the terms of the Bonds; and

● be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for economic, interest rate and other factors that may affect its investment and its ability to bear the applicable risks.

Credit risk

As a credit risk of the Bonds, a potential investor should assess credit risks associated with the Company as well as the credit risk of the Bonds. As a credit risks associated with the Company, events that undermine the creditworthiness of the Company should be considered. If CLS’s financial position should decline, there is a risk that the Company will not be able to fulfil its obligations under the Bonds. A decrease in the Company’s creditworthiness could also mean a decrease in the market value of the Bonds. Clearing and settlement in Euroclear Sweden

The Bonds will be registered on behalf of the investors with a central securities depository - currently Euroclear Sweden’s clearing system - and, therefore, no physical notes are or will be issued. Clearing and settlement of trading in the Bonds, as well as coupon payments, will be made through the Euroclear system. Consequently, investors are dependent on the functioning of Euroclear Sweden’s clearing system. Subordination

The Bonds constitute unconditional, unsecured and unsubordinated obligations of the Company. If the Company should be wound up (whether the liquidation is voluntary or not), the claims of all secured creditors and other creditors having priority by operation of law or contract will be paid ahead of the Holders. Accordingly, liquidation could result in a material adverse effect for investors. There is currently no active trading market for the Bonds

The Bonds are new securities which may not be widely distributed and for which there is currently no active trading market. Following the listing of the Bonds, they may trade at a discount to the nominal value, depending upon the market for similar securities, general economic conditions and the financial condition of the Company. There can be no assurance that a liquid market will develop for the Bonds, that Holders will be able to sell their Bonds, or that such Holders will be able to sell their Bonds for a price that reflects their value.

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Responsibility for the Prospectus and declaration by the Board of Directors

On 27 April 2011, the Company issued the Bonds referred to in this Prospectus in accordance with authorisation given by its Board of Directors. The Prospectus is issued for the purpose of the application for the Bonds to be listed on the Corporate Bonds List at NASDAQ OMX Stockholm. The Prospectus is issued pursuant to the provisions in Chapter 2, Sections 25 and 26 of the Trading Act and the Commission Regulation (EC) No 809/2004 of 29 April 2004 implementing Directive 2003/71/EC of the European Parliament and of the Council. The Company is responsible for the information contained in the Prospectus. It is hereby declared that the Company has taken all reasonable care to ensure that the information in this Prospectus is, to the best of the Company’s knowledge, in accordance with the actual circumstances and contains no omission likely to affect its meaning. All information in the Prospectus claimed to be from third parties has been presented correctly and, to the best of the Company’s knowledge and judgment in respect of other information presented by the third party, no information has been left out that could make the presented information incorrect or misleading. Only under the circumstances and to the extent that it is necessary do the members of the Board of Directors also assume any responsibility for the information contained in the Prospectus. It is hereby declared that the Board of Directors has taken all reasonable care to ensure that the information in the Prospectus is, to the best of the Board of Directors’ knowledge, in accordance with the actual circumstances and contains no omission likely to affect its meaning.

London 4 July 2011

CLS Holdings plc The Board of Directors

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Selected consolidated Financial Information The selected consolidated financial information presented below has been derived from CLS’s audited consolidated annual reports and accounts as at and for the years ended 31 December 2010 and 2009 including the notes thereto (the “Financial Information”), prepared in accordance with International Financial Reporting Standards (“IFRS”) and interpretations of these standards as adopted by the European Union. The summarised financial information below should be read in conjunction with CLS’s Financial Information which is incorporated by reference to this Prospectus. Income Statement Data

For the year ended 31

December 2010 2009 (in millions of GBP) Continuing Operations

Group Revenue................................................................................................ 79.1 76.3 Costs, of which ................................................................................................ (30.3) (30.3)

Service charges and similar expenses......................................................... (15.1) (14.8) Administration expenses ............................................................................. (9.6) (9.4) Other expenses ............................................................................................ (2.2) (3.3) Central administration costs........................................................................ (3.4) (2.8)

48.8 46.0 Net movements on revaluation of investment properties................................ 30.1 (6.7) Net gain on sale of corporate bonds and other investments............................ 9.3 1.9 Profit on sale of investment properties............................................................ - 0.3

Operating profit ................................................................................................. 88.2 41.5 Net finance costs.............................................................................................. (25.0) (25.5) Share of profit or associates after tax .............................................................. 7.7 2.5

Profit before tax.................................................................................................. 70.9 18.5 Taxation ........................................................................................................... (10.8) (1.1)

Profit for the year............................................................................................... 60.1 17.4 Other comprehensive income

Foreign exchange differences.......................................................................... 1.1 (9.5) Fair value gains on corporate bonds and other investments ........................... 3.1 12.5 Fair value (gains)/losses taken to the income statement on disposal of

corporate bonds and other investments....................................................... (8.5) 1.0 Deferred tax on net fair value gains on corporate bonds and other

investments ................................................................................................. 1.8 (3.2) Share of other comprehensive income of associates....................................... (0.4) 0.4

Total comprehensive income for the year ....................................................... 57.2 18.6

Profit attributable to:

Owners of the Company.................................................................................. 60.1 17.5 Non-controlling interests ................................................................................. - (0.1)

Profit for the year............................................................................................... 60.1 17.4

Total comprehensive income attributable to:

Owners of the Company.................................................................................. 57.2 18.7 Non-controlling interests ................................................................................. - (0.1)

Total comprehensive income for the year ....................................................... 57.2 18.6

Earnings per share from continuing operations attributable to the

owners of the Company during the year(1) Basic ................................................................................................................ 127.1 36.4 Diluted ............................................................................................................. 127.1 36.4

___________ (1) Pence per share.

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Balance Sheet Data

For the year ended 31

December 2010 2009 (in millions of GPB) Non-current assets

Investment properties ...................................................................................... 876.9 813.0 Property, plant and equipment ........................................................................ 2.6 2.5 Intangible assets............................................................................................... 1.1 1.1 Investments in associates ................................................................................ 40.6 40.9 Other investments............................................................................................ 81.6 73.9 Derivative financial instruments ..................................................................... 4.6 0.1 Deferred tax ..................................................................................................... 11.2 12.7

1,018.6 944.2 Current assets

Trade and other receivables............................................................................. 11.5 10.4 Cash and cash equivalents ............................................................................... 48.3 70.3

59.8 80.7

Total assets .......................................................................................................... 1,078.4 1,024.9 Current liabilities

Trade and other payables................................................................................. (31.8) (30.1) Current tax ....................................................................................................... (5.3) (5.0) Derivative financial instruments ..................................................................... (1.0) (15.7) Borrowings, including finance leases.............................................................. (85.0) (113.5)

(123.1) (164.3) Non-current liabilities

Deferred tax ..................................................................................................... (74.5) (72.3) Borrowings, including finance leases.............................................................. (504.3) (479.3) Derivative financial instruments ..................................................................... (19.3) -

(598.1) (551.6) Total liabilities .................................................................................................... (721.2) (715.9)

Net assets ............................................................................................................. 357.2 309.0

EQUITY Capital and reserves attributable to the owners of the Company

Share capital..................................................................................................... 12.9 13.3 Share premium account ................................................................................... 71.5 70.5 Other reserves .................................................................................................. 102.5 105.0 Retained earnings ............................................................................................ 171.6 121.5

358.5 310.3 Non-controlling interests ................................................................................... (1.3) (1.3)

Total equity ......................................................................................................... 357.2 309.0

Key Figures

As at and for the year ended

31 December 2010 2009 Equity ratio (%).................................................................................................... 33.1 29.3 Adjusted equity ratio (%)..................................................................................... 39.4 36.4 Mortgage ratio (%)............................................................................................... 67.2 72.9 Interest coverage ratio .......................................................................................... 2.7x 2.1x Lettable space year end (square metre)................................................................ 407,742 388,381 Vacancy rate year end (%) ................................................................................... 4.3 4.5 Book value properties (per square metre)............................................................ 2,151 2,093 Rental income (GBP per average square metre).................................................. 156 159 Yield based on average book value properties (%) ............................................. 7.1 7.2

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Business and operations of CLS

Company background CLS is a commercial property investment company incorporated on 14 May 1992 with investments initially concentrating mainly on high yielding office properties in central, western and south-west London. The Company has been listed on the Main list on the London Stock Exchange since 27 May 1994. Business The Company’s main activity is in commercial real estate across four European regions: London, France, Germany and Sweden. The Company’s core focus is in providing well-managed, cost-effective offices and commercial real estate for tenants. CLS aims to hold, develop and refurbish its property investments to obtain long-term asset growth. As at 31 December 2010, CLS’s directly held investment portfolio was valued at GBP 876.9 million. London As at 31 December 2010, the London portfolio represented 40 per cent of the Company’s property interests with a value of GBP 375.0 million divided in 28 properties with an aggregate lettable area of 127,700 square metres. As at 31 December 2010, the London portfolio had a strong tenant profile with 53 per cent by rental value let to government tenants, and 29 per cent to major corporations. The income had a weighted average lease term of 10.1 years, or 9.6 years to the first break. France As at 31 December 2010, the French portfolio was valued at GBP 248.7 million, which represented 27 per cent of the Company’s property interests. As at 31 December 2010, the French portfolio contained 26 properties of a total of 96,500 square metres and had 171 tenants. 21 per cent of the French portfolio was let to government tenants, most tenancies were of the traditional French 3:6:9 year duration, and the weighted average lease length at 31 December 2010 was 5.9 years, or 3.1 years to the first break. Germany As at 31 December 2010, the German portfolio was valued at GBP 196.5 million, being 21 per cent of the Company’s property interests. The German portfolio contained 16 properties and comprised 138,000 square metres of lettable space with 83 tenants on a weighted average lease term of 9.6 years, or 9.3 years to the first break. 18 per cent of the contracted rent was from government tenants. Sweden As at 31 December 2010, the Company’s Swedish property interests comprised two elements which together represented 12 per cent of the Company’s property interests. CLS has mainly two large real estate exposures in Sweden. The first one is the wholly owned 45,500 square metres of offices in Vänersborg, near Gothenburg, called Vänerparken, which was valued at GBP 56.7 million as at 31 December 2010. The local municipality has leased 91 per cent of this space until 2015 and 2019, respectively, subject to annual indexation. CLS’s second exposure is the 29.9 per cent stake in the property company Catena AB, listed on NASDAQ OMX Stockholm. Other investments The Company has a corporate bond portfolio, which is part of the Company’s long-term investment strategy in parallel with the ownership of long-term investment properties. At 31 December 2010, there were 30 different bonds held in the portfolio, spread across four different sectors – insurance, banks,

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industrials, and other – and with a coupon yield of 8.29 per cent by year end 2010. This portfolio is actively monitored by the Company’s in house team and external advisers. The Company also owns 48.3 per cent of an unquoted property company, Bulgarian Land Development Plc, holding predominantly residential property assets in Bulgaria. Market overview The Company currently holds properties in London, France, Germany and Sweden. London is expected to continue to outperform the rest of the UK commercial property market. In London, banks are pushing hard to resolve issues on property-related debt, and this provides CLS with new investment opportunities. The availability of new bank debt remains the weakest of the four markets in which CLS operates. In France, bank debt is in plentiful supply, the property investment market is strong and tenant demand is solid.

In Germany, the supply of bank debt remains good, and investment activity has recovered from low volumes in 2009 with indications of economic growth in Germany leading to higher inflation. The Company’s activity in the German investment market for 2011 is likely to be mainly tenant-led through pre-lettings for new developments.

Of the four markets in which the Company operates, Sweden remains the most expensive on a like-for-like basis, in part fuelled by readily available bank debt. Also, interest rates are being increased in Sweden in order to control the fast growing economy.

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Board of Directors, management and auditors Board of Directors and management Sten A Mörtstedt Sten Mörtstedt is Executive Chairman of the Board of Directors and established CLS in 1987. Mr. Mörtstedt has been Executive Chairman since the Company was listed on the London Stock Exchange in 1994.

In 1968, Mr. Mörtstedt was appointed Managing Director of the Mörtstedt family property company, Citadellet AB, which was listed on NASDAQ OMX Stockholm (previously the Stockholm Stock Exchange) in 1981. Mr. Mörtstedt has been involved in establishing and running property interests in the UK, Sweden and France since 1977 and has also been active in a number of other investment areas.

E Henry Klotz Henry Klotz was appointed Executive Vice Chairman of the Board of Directors on 1 January 2011, having previously been Chief Executive Officer from May 2008. He joined the Group in 1999 with responsibility for the management of the Swedish operation and more recently was involved in the setting up of the German division and sourcing new business opportunities for the Group. He is a qualified engineer and economist.

On behalf of CLS, Mr. Klotz is also Non-Executive Chairman of Catena AB, Non-Executive Chairman of Bulgarian Land Development Plc, and a Non-Executive Director of Note AB.

Richard J S Tice

Richard Tice was appointed Chief Executive Officer on 1 January 2011, having joined the Company in 2010 as Deputy Chief Executive Officer. He has over 20 years’ experience in the property sector and was Managing Partner of Tisun Capital Partners LLP, a boutique firm specializing in real estate debt. From 1991 to 2006 he was joint CEO of the Sunley Group plc, prior to which he spent four years with a listed property developer, London Metropolitan plc. For three years until October 2009, he was a non-executive director and ultimately Chairman of AIM-listed South African Property Opportunities Plc.

John H Whiteley

John Whiteley is Chief Financial Officer and joined the Company in 2009. Mr. Whiteley was previously Finance Officer at Doughty Hanson & Co Real Estate, and for ten years was Finance Director of Great Portland Estates plc, a company listed on the London Stock Exchange. He is a Fellow of the Institute of Chartered Accountants and spent nine years with Ernst & Young, after qualifying as an accountant with Spicer & Pegler.

Malcolm C Cooper Malcolm Cooper is non-Executive Director and joined the Board of Directors in 2007. Mr. Cooper is the Senior Independent Director and Chairman of the Audit Committee. He is Global Tax & Treasury Director of National Grid plc where he has worked for various predecessor companies since 1991. Previously he worked for Andersen Consulting. He has a first in pure mathematics from Warwick University, is a qualified accountant and is a member of the Association of Corporate Treasurers.

Joseph A Crawley Joseph Crawley is a non-Executive Director and joined the Board of Directors in 2008. Mr. Crawley is a member of the Remuneration Committee. He is Chief Executive of Kitewood Estates Limited, a property investment and development company active in London and south-east England, and has over 20 years’

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experience of the central London property market. He was previously employed by CLS for a number of years and was involved in the development of the Spring Gardens site.

Christopher P Jarvis Christopher Jarvis is a non-Executive Director and joined the Board of Directors in 2008. Mr. Jarvis is a member of the Audit Committee. He has an M.A. from Cambridge University and is a Partner of Jarvis & Partners, a boutique real estate consultancy which he established in Berlin in 1994. Previously he was Managing Director of Richard Ellis Germany where he established the firm’s Frankfurt and Berlin offices. His firm has acted as development partner for the HRO Group in Germany. H O Thomas Lundqvist Thomas Lundqvist is a non-Executive Director and joined the Board of Directors in 1990. Mr. Lundqvist is Chairman of the Remuneration Committee and a member of the Audit Committee. Between 1990 and 1995, Mr. Lundqvist was Finance Director of CLS, after which he became a Non-Executive Director. He was Vice Chairman from 24 November 2009 until 1 January 2011. Prior to joining CLS, Mr. Lundqvist worked for the ASEA-Brown Boveri Group (ABB) and from 1983 for Svenska Finans International, part of Svenska Handelsbanken Group, where he was a member of the board of directors.

Jennica Mörtstedt Jennica Mörstedt is a non-Executive Director and joined the Board in May 2010. Ms. Mörtstedt is the daughter of Bengt Mörtstedt, a founding member and major shareholder in CLS. Ms. Mörtstedt has eight years’ experience in the hotel industry and has a degree in International Business and Hospitality from Ecole Hotèliere de Lausanne, Switzerland.

Thomas J Thomson Thomas Thomson is a non-Executive Director and joined the Board of Directors in 2001 as Executive Vice Chairman and Acting Chief Executive. Mr. Thomson was made Chief Executive in 2004. He became a Non-Executive Director in 2006 and served as Non-Executive Vice Chairman from 2006 to 2009 and Company Secretary from 1983 to 2001 and from 2008 to 2009. He is a qualified solicitor and joined the Group as General Counsel in 1994, having been a partner with Taylor Walton Solicitors for many years. Auditors At the Annual General Meeting held 18 April 2011, Deloitte LLP, Chartered Accountants, 2 New Street Square, London, EC4A 3BZ, U.K., was reappointed as the Company’s auditors up until the conclusion of the next Annual General Meeting with Mark Goodey, Senior Statutory Auditor, as auditor in charge. The Financial Information incorporated in this Prospectus by reference has been audited by Deloitte LLP, independent accountants, as stated in their reports therein. Other information regarding the Board, management and auditors Conflicts of interest None of the members of the Board of Directors or management has a private interest that may be in conflict with the interest of CLS. Many members of the Board of Directors and management are, however, likely to have financial interests in the Company through their holdings of shares in CLS. Corporate governance The principal corporate governance rules which applied to UK companies listed on the London Stock Exchange in 2010 were those set out in the Combined Code on Corporate Governance as updated by the Financial Reporting Council (“FRC”) in June 2008 (the “Code”), the UK FSA Listing Rules and the UK FSA’s Disclosure and Transparency Rules.

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On 1 January 2011, the UK Corporate Governance Code (the “New Code”) replaced the Code as the applicable source of corporate governance recommendations for the Company. The New Code contains a number of additional requirements applicable to FTSE 350 companies. The Board of Directors intends to adopt a number of these new requirements. However, the Company is not a constituent of the FTSE 350 and these requirements are therefore not binding on CLS. During 2010, the Company did not completely comply with the Code and did make the following deviations: • As Thomas Lundqvist was deemed not to be independent, the composition of the Audit Committee did

not comply with the recommendation contained in C.3.1 of the Code (C.3.1 of the New Code). The Committee considered that Mr. Lundqvist’s experience and detailed knowledge of the Company greatly assisted the Committee when making decisions within its remit.

• As both Thomas Lundqvist and Joseph Crawley were deemed not to be independent, the Company did

not comply with the composition of the Remuneration Committee recommended in provision B.2.1 of the Code (D.2.1 of the New Code). However, Mr. Lundqvist’s experience and detailed knowledge of the Company and Mr. Crawley’s experience in the real estate sector greatly assisted the Committee when making decisions within its remit.

• As the Company did not set up a separate Nomination Committee, it did not comply with the provision

A.4.1 of the Code (B.2.1 of the New Code). Due to the size and nature of the Company, the Board decided that this function was better carried out by the Executive Chairman and other Directors, Non-Executive and Executive, as appropriate for each appointment.

Committees of the Board of Directors The Audit Committee The principal duties of the Audit Committee are to review the half yearly and annual financial reports before their submission to the Board of Directors and to consider any matters raised by the auditor. The Committee also reviews the Interim Management Statements of the Company and the independence and objectivity of the auditor, taking into account relevant professional and regulatory requirements and the relationship with the auditor as a whole. The terms of reference of the Committee reflect current best practice, including authority to: • recommend the appointment, re-appointment and removal of the external auditor; • ensure the objectivity and independence of the auditor including occasions when, in accordance with

the specific policy, non-audit services are provided, by monitoring fees and letters of engagement; and • ensure appropriate “whistle-blowing” arrangements are in place. The Audit Committee consists of three board members, Malcolm Cooper as Chairman, Thomas Lundqvist and Christopher Jarvis. The Remuneration Committee The Remuneration Committee considers the employment and performance of individual Executive Directors and determines their terms of service and remuneration in the context of business and personal performance. It also has authority to grant options under the Company’s Executive Share Options Scheme and Company Share Option Plan. The composition of the Committee is kept under annual review by the Board. The Remuneration Committee consists of two board members, Thomas Lundqvist as Chairman and Joseph Crawley.

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Office address for the Board of Directors and management The business address for all Directors and management is: CLS Holdings plc 86 Bondway London SW8 1SF United Kingdom

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Share capital and ownership structure Share capital The Company has one class of shares. Each share entitles one vote at Shareholders’ Meetings and carries equal rights to the Company’s assets and profits. As of the date of this Prospectus, the share capital of CLS amounts to GBP 12,597,501.25 divided into 50,390,005 shares, of which 4,793,000 are currently held by the Company as treasury shares. The total number of shares in issue excluding treasury shares and therefore the total number of voting rights in the Company is 45,597,005. Ownership structure The table below sets out the ownership structure of the Company as of 17 May 2011.

Principal shareholders No. of shares Percentage

Sten Mortstedt’s Family & Charity Trust 24,292,983 53.28

Bengt Mörtstedt 3,430,701 7.52

F&C Asset Management plc 2,395,908 5.25

AVI Focused European Value Fund 1,390,832 3.05

Shareholders’ agreements To the best of the Company’s knowledge, no shareholders’ agreements or equivalent agreements exist between shareholders in CLS with the objective of creating a joint influence over the Company. To the best of the Company’s knowledge, there are no agreements or equivalent arrangements that may lead to a change in control over the Company.

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Legal matters and miscellaneous information Legal structure CLS is the parent company in the Group which is principally involved in the investment, management and development of commercial properties, and in other investments. The Group’s principal operations are carried out in the United Kingdom, France, Germany and Sweden. The Company is a limited liability company registered in England and Wales, registration number 2714781, of registered address: 86 Bondway, London SW8 1SF. The Company was incorporated on 14 May 1992 and listed on the London Stock Exchange on 27 May 1994. The Company conducts its business under the laws of the United Kingdom. The Company’s wholly owned principal subsidiaries are set out in the table below. The principal activity of each of these subsidiaries is property investment, apart from Coventry House Limited and Museion Förvaltnings AB whose principal activities are to act as investment companies. Subsidiary Incorporated Adlershofer Sàrl Luxembourg Apex Tower Limited United Kingdom Coventry House Limited United Kingdom Frères Peugeot SCI France Great West House Limited United Kingdom Grossglockner Sàrl Luxembourg Ingrove Limited United Kingdom Kapellen Sàrl Luxembourg Museion Förvaltnings AB Sweden Naropere Sàrl Luxembourg New Printing House Square Limited United Kingdom Spring Gardens Limited United Kingdom Vänerparken Property Investment KB Sweden Vauxhall Cross Limited United Kingdom

The Bonds and listing The Bonds are denominated in SEK and the ISIN code is SE0003918093. The Bonds have been issued under Swedish law. The Bonds are registered in the account-based system of Euroclear Sweden. This means that the Bonds are registered on behalf of the Holders on an account or custodian account with Euroclear Sweden and no physical notes are or will be issued. Payment of principal and interest will be made through Euroclear Sweden whose address is, P.O. Box 191, SE-101 23 Stockholm, phone number +46 8 402 90 00. The Bonds may be transferred without restriction. The Company has applied for listing of the Bonds on the Corporate Bonds List at NASDAQ OMX Stockholm. The first day of trading is expected to be 5 July 2011. The Terms and Conditions of the Bonds are governed by Swedish law. The courts of Sweden have jurisdiction in relation to any dispute arising out of or in connection with the Terms and Conditions, with the District Court of Stockholm as the court of first instance. Financial advisor and Agent Carnegie has acted as the Company’s financial advisor in connection with the issuance of the Bonds and has received compensation for its services. Carnegie has also provided financial advice in connection with the application for admittance to trading of the Bonds on NASDAQ OMX Stockholm. No additional compensation has been paid for services related to the application for the Bonds to be admitted to trading. The Agent, CorpNordic, is the Swedish subsidiary in the Nordic CorpNordic Group with headquarters in Denmark. CorpNordic is entitled to compensation from the Company for its services as Agent.

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Carnegie acts as Issuing Agent for the Bond issue but may in the future also provide additional services to the Company. The Agent acts primarily in the interest of the Holders and can in some circumstances represent the Holders in relation to the Company, even though its compensation is paid by CLS. It cannot be ruled out that conflicts of interest may arise as a result of the above. Material agreements Due to the nature of the Company’s business and the contractual relationships created in the Company’s ordinary course of business, the Company has not, outside the ordinary course of business, entered into any agreements with a single counterparty or affiliated counterparties which may affect the Company’s ability to fulfil its obligations under the Bonds. Legal and arbitration proceedings CLS is not, and has not been, party to any legal or arbitration proceedings during the last twelve months which may have, or have had, a significant effect on the Company’s financial condition or result of operations, nor are there any such proceedings pending or expected. Tax considerations There is no tax deduction at source (i.e. by the Company) with regard to payments under the Bonds. Euroclear Sweden or the Swedish nominee (in the case of nominee registered securities) withholds preliminary tax, at present 30 per cent, on interest paid in cash to individuals who are resident in Sweden for tax purposes. Depending on each Holder’s individual tax situation, the final tax may exceed or be less than the preliminary tax withheld by Euroclear or the Swedish nominee, which can result in additional payments to or from the relevant tax authority. Each investor is recommended to consult a tax advisor for information as to the tax consequences of an investment in the Bonds, relating to their particular circumstances. The tax rate and other tax rules may be subject to change during the term of the Bonds. Articles of Association The current Articles of Association of CLS was adopted on 11 May 2010. The Articles of Association are available for review on the Company’s website (www.clsholdings.com) and at the Company’s head office in London. Investments No significant investments have been made by CLS since the publication of the annual report for 2010 and the Company has made no firm commitments regarding future investments. Recent trends In London, banks are pushing hard to resolve issues on property-related debt, and this provides CLS with new investment opportunities. The availability of new bank debt remains the weakest of the four markets in which CLS operates. In France, bank debt is in plentiful supply, the property investment market is strong and tenant demand is solid. There are indications of economic growth in Germany leading to higher inflation, and in Sweden interest rates are being increased in order to control the fast growing economy.

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Other events No significant negative changes of the Company’s prospects or financial condition have occurred between the publication of the annual report for 2010 and the completion of this Prospectus. Documents incorporated by reference Investors should read all information which is incorporated in the Prospectus by reference. The information set forth below shall be regarded as incorporated by reference to and, thus, form part of this Prospectus. Information Source Audited consolidated financial statements, notes and information regarding accounting principles for the financial year 2010

Annual report 2010, page 39-81

Auditors report for 2010 Annual report 2010, page 38 and 73 Audited consolidated financial statements, notes and information regarding accounting principles for the financial year 2009

Annual report 2009, page 36-84

Auditors report for 2009 Annual report 2009, page 35 and 76

The Financial Information as well as the Articles of Association of the Company are available at the Company’s head office in London, on business days between regular office hours, and in digital format at the Company’s website (www.clsholdings.com).

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Terms and conditions of the Bonds

1. DEFINITIONS

“£” means the British pound, the currency in Great Britain.

“Account Operator” means a bank or other party duly authorized as an account operator pursuant to the Swedish Financial Instruments Accounts Act (Lag (1998:1479) om kontoföring av finansiella instrument) and with which a Holder has opened a VP Account in respect of the Bonds.

“Adjusted Nominal Amount” means the total outstanding Nominal Amount of the Bonds not held by the Company or any person or persons who, directly or indirectly, have decisive influence over the Company, or over whom the Company, directly or indirectly, has decisive influence, in each case from time to time.

“Agent” means CorpNordic Sweden AB, Swedish reg. no. 556625-5476, or any other agent which from time to time represents the Holders pursuant to these Terms and Conditions.

“Associates Profit” means Group share of profit of associates after tax in accordance with IFRS.

“Banking Day” means a day which is not a Sunday or other public holiday or which, in respect of payments of promissory notes, is not equal to a public holiday in Sweden.

“Bond” means a debt instrument of the type set forth in Chapter 1, Section 3 of the Swedish Financial Instruments Accounts Act (Lag (1998:1479) om kontoföring av finansiella instrument) and which has been issued by the Company pursuant to these Terms and Conditions.

“Cash and Cash Equivalents” means (i) according to IFRS, the Company’s cash at bank and in hand and short-term bank deposits, excluding cash deposits which are restricted by a third-party charge and (ii) Government-issued bonds held by the Company and with a minimum AAA credit rating (or corresponding credit rating).

“Change of control” means (i) the Company’s shares cease to be listed on a regulated market, (ii) a change of ownership in the Company resulting in a person or entity, excluding Sten Mörtstedt, any Related Party to Sten Mörtstedt or the Trust (individually or as a group), directly or indirectly, obtaining control of more than 50 per cent of the shares in the Company, or (iii) any person or entity directly or indirectly obtaining control of more than 90 per cent of the shares in the Company.

“Company” means CLS Holdings plc, reg. no. 2714781, a company incorporated under the laws of England and Wales whose registered office is at 86 Bondway, London, SW8 1SF, United Kingdom.

“Costs” means the Group’s costs from continuing operations in accordance with IFRS.

“CSD” means, from time to time, the Company’s central securities depository and registrar in respect of the Bonds, currently being Euroclear Sweden AB (formerly VPC AB), a company organised under the laws of Sweden with reg. no. 556112-8074, Box 191, SE-101 23 Stockholm.

“Director” means any board member or member of the senior management of the Company.

“Early Redemption” shall have the meaning ascribed to it in Clause 7.2.1.

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“Early Redemption Date” shall have the meaning ascribed to it in Clause 7.2.3.

“Equity” means the aggregate book value of the Group’s total equity in accordance with IFRS.

“Equity Ratio” means Equity in relation to Total Assets.

“Event of Default” means any of the events or circumstances specified in Clause 11.1.

“Exchange” means the securities exchange, regulated market or other marketplace for securities, on which the Bonds are listed, or where the Company has applied for listing of the Bonds.

“Financial Indebtedness” means (i) moneys borrowed (including any convertible debt instruments, notes, bonds or other similar instruments), (ii) hire, lease, or purchase contract which would, in accordance with IFRS, be treated as indebtedness, (iii) factoring (other than any receivables sold or discounted on a non-recourse basis), (iv) other arrangements having the commercial effect of a borrowing, (v) the marked-to-market value of derivative transactions entered into in connection with protection against or benefit from fluctuation in any rate or price, (vi) counter-indemnity obligations in respect of a guarantee or any other instrument issued by a bank or financial institution and (vii) (without double counting) liabilities in respect of guarantees or indemnities for any of the obligations referred to in items (i) to (vi) above.

“Financial Statements” means the audited consolidated annual financial statements of the Group for any financial year, prepared in accordance with IFRS, such statements to include an income statement, balance sheet, cash flow statement and business review.

“Gross Profit” means Group Revenues plus Associates Profit less Costs.

“Group” means the Company and the Subsidiaries, and a “Group Company” means the Company or any of the Subsidiaries.

“Group Revenues” means Group revenues from continuing operations in accordance with IFRS.

“Holder” means a person who is registered on a VP Account as a holder of or otherwise entitled to receive payment in respect of a Bond.

“Holders’ Meeting” shall have the meaning ascribed to it in Clause 12.1.

“IFRS” means the generally accepted accounting practice and principles applicable to the business the Company conducts, currently International Financial Reporting Standards.

“Interest Determination Date” means the second (2nd) Banking Day prior to each Interest Period.

“Interest Coverage Ratio” means Gross Profit in relation to Net Finance Costs.

“Interest Payment Date” means 31 March, 30 June, 30 September and 31 December each year and the Redemption Date (subject to any adjustments pursuant to Clause 8.2). The first Interest Payment Date will be 30 June 2011.

“Interest Period” means each period beginning on (but excluding) the Issue Date or any Interest Payment Date and ending on (and including) the next Interest Payment Date.

“Interest Rate” means 3 months STIBOR plus a margin of 3.75 per cent.

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“Interim Management Statements” means the Interim Management Statements of the Company prepared for the first and the third quarter each year.

“Interim Reports” means the unaudited half-year reports of the Company prepared in accordance with IFRS, such reports to include an income statement, balance sheet, cash flow statement and management commentary.

“Issue Date” means 27 April 2011.

“Issuing Agent” means Carnegie Investment Bank AB (publ), a company organised under the laws of Sweden with reg. no. 516406-0138, 103 38 Stockholm, or any other bank or an Issuing Agent that the Company from time to time appoints to manage certain tasks in accordance with the legislation, rules and regulations applicable to and/or issued by the CSD that are in force and effect from time to time.

“Material Adverse Effect” means a material adverse effect on (a) the business, financial condition or operations of the Company and/or the Group taken as a whole, (b) the Company’s ability to perform and comply with its payment obligations under these Terms and Conditions, or (c) the validity or enforceability of these Terms and Conditions.

“Net Finance Costs” means the aggregate of interest expense payable on bank, debenture or other loans, plus the amortisation of issue costs of loans, less interest income, for the Group in accordance with IFRS, and shall, for the avoidance of doubt, exclude any foreign exchange variances and movement in fair value of derivative financial instruments.

“Nominal Amount” shall have the meaning ascribed to it in Clause 2.1.

“Qualified Majority” shall have the meaning ascribed to it in Clause 12.3.

“Quarter Date” means 31 March, 30 June, 30 September and 31 December each year.

“Record Date” shall have the meaning ascribed to it in Clause 8 (Payments of principal and interest).

“Redemption Date” means 27 April 2016 or such earlier date that may be the case pursuant to Clause 7.2 (Early Redemption upon a Change of Control), Clause 7.3 (Early Redemption by the Company) or Clause 11 (Acceleration of the Bonds).

“Related Party” means:

• a company owned directly or indirectly by Sten Mörtstedt;

• a spouse or a person with whom Sten Mörtstedt is living or a child or grandchild to Sten Mörtstedt or any company owned directly or indirectly by any of the above; and

• a company owned directly or indirectly by the Trust.

“Report Date” means the end of the respective reporting period for which the Company is preparing Interim Reports.

“SEK” means the Swedish krona, the currency in Sweden.

“STIBOR” means the interest rate which, as of approximately 11.00 a.m. (Stockholm time) on the relevant Interest Determination Date, is displayed on Reuter’s page “SIOR” (or any other system or other page which replaces the mentioned system or page) or, if the relevant rate does not

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appear, in each case as determined by the Agent acting reasonably (a) the average of four Nordic commercial banks’ (as determined by the Agent acting reasonably) quoted lending rates in the Stockholm interbank market or, if only one or no such quote exists (for the avoidance of doubt – item (a) shall apply if two to four such quotes exist), (b) such interest rate which, according to the Agent’s opinion acting reasonably, corresponds to the interest rates offered by Swedish commercial banks, in each case for the lending of SEK 100,000,000 for the applicable period in the Stockholm interbank market.

“Subsidiary” means any legal entity (whether incorporated or not) of which the Company at any time, directly or indirectly, owns or controls more than 50 per cent of the shares or votes, controls the appointment of more than 50 per cent of the board members or otherwise has control over.

“Terms and Conditions” means these Terms and Conditions including, where applicable, the Bonds.

“Total Assets” means the aggregate book value of the Group’s total assets in accordance with IFRS.

“Trust” means the Sten Mortstedt’s Family & Charity Trust.

“VP Account” means a securities account (account for shares and other securities (avstämningskonto) according to the Swedish Financial Instruments Accounts Act (Lag (1998:1479) om kontoföring av finansiella instrument), currently a Euroclear account.

2. THE BONDS AND OBLIGATION TO PAY

2.1 The aggregate amount of the Bonds will be in an amount up to SEK 300,000,000 (three hundred millions) and will be represented by the Bonds, each with a nominal amount of SEK 10,000 (ten thousand) or full multiples thereof (the “Nominal Amount”).

2.2 The Company undertakes, pursuant to these Terms and Conditions, to repay the Bonds, to pay interest and to otherwise act in accordance with these Terms and Conditions.

2.3 The net proceeds of the Bonds shall be employed for general corporate purposes of the Group.

3. STATUS OF THE BONDS

The Bonds constitute unconditional, unsecured and unsubordinated obligations of the Company.

4. REGISTRATION OF BONDS

4.1 The Bonds will be registered on behalf of the Holders on VP Accounts and no physical notes will be issued. Requests for registration measures relating to the Bonds shall be directed to an Account Operator. Any person who, as a result of assignment, pledge, provisions of the Swedish Children and Parents Code (Föräldrabalken (1949:381)), conditions of a will or a deed of gift or otherwise, has acquired a right to receive payments in respect of a Bond shall register its entitlement to receive payment.

4.2 The Company and the Agent shall be entitled to obtain information from the register (skuldbok) kept by the CSD in respect of the Bonds. At the request of the Agent, the Company shall request and provide such information to the Agent.

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5. LISTING

5.1 The Company shall no later than 30 September 2011 apply for listing of the Bonds on NASDAQ OMX Stockholm.

5.2 If the Bonds are listed, the Company will use all efforts to obtain and maintain such listing as long as any Bond is outstanding, however no longer than up to and including the last day on which trading in the Bonds on the Exchange, according to the regulations applied by the Exchange and the CSD at such date, can reasonably take place prior to the Redemption Date.

6. INTEREST

6.1 From (but excluding) the Issue Date to and including the Redemption Date, the Bonds bear interest on their outstanding Nominal Amount at the Interest Rate. Such interest will be payable quarterly or for the relevant Interest Period (as the case may be) in arrears on each Interest Payment Date. Interest shall, in relation to a specific Interest Period, be calculated on the basis of the actual number of days in that Interest Period divided by 360 and otherwise in accordance with Clause 6.2.

6.2 If, due to the existence of an obstacle referred to in Clause 19.1 it is not possible to determine the Interest Rate for an Interest Period, the Interest Rate for the preceding Interest Period shall apply. As soon as the obstacle has been removed, the Interest Rate shall be determined for the current Interest Period, which shall apply from the second (2nd) Banking Day of such determination until (and including) the end of the current Interest Period.

7. REDEMPTION AND PURCHASE

7.1 Redemption at maturity

The Company shall redeem all outstanding Bonds at the Nominal Amount on the Redemption Date.

7.2 Early Redemption upon a Change of Control

7.2.1 Upon the occurrence of a Change of Control, each Holder shall have a right to call for an early redemption (“Early Redemption”) of the Bonds held by it.

7.2.2 The call for Early Redemption must be submitted within thirty (30) days after the Company has given notification to the Holders of a Change of Control. Such notification shall be given as soon as possible after a Change of Control has taken place. The call for Early Redemption shall be made in writing in accordance with Clause 15 (Notices).

7.2.3 The Company shall redeem all Bonds subject to Early Redemption on the date occurring fifteen (15) Banking Days following the date when the Company received the call for Early Redemption (“Early Redemption Date”), provided that the relevant Holder’s Bonds have been blocked for further transfer not later than on the fifth (5th) Banking Day preceding the Early Redemption Date. Each Bond shall be redeemed at the Nominal Amount together with accrued interest thereon from the preceding Interest Payment Date (or, if such date has not occurred, the Issue Date) up to (and including) the relevant Early Redemption Date.

7.3 Early Redemption by the Company

7.3.1 The Company may redeem all, but not less than all, Bonds on any Banking Day falling after the second (2nd) anniversary of the Issue Date by giving the Holders notice in accordance with Clause 15 (Notices) not less than thirty (30) days and not more than sixty (60) days prior to the

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proposed Early Redemption. The notice shall be irrevocable and state the relevant date for Early Redemption and the relevant Record Date. Each Bond shall be redeemed at an early redemption amount equal to:

7.3.2 (a) 104.00 per cent of the Nominal Amount, if Early Redemption occurs during the period from the second (2nd) anniversary of the Issue Date up to and including the third (3rd) anniversary of the Issue Date;

7.3.3 (b) 102.50 per cent of the Nominal Amount, if Early Redemption occurs during the period from the third (3rd) anniversary of the Issue Date up to and including the fourth (4th) anniversary of the Issue Date; and

7.3.4 (c) 101.00 per cent of the Nominal Amount, if Early Redemption occurs during the period from the fourth (4th) anniversary of the Issue Date up to the Redemption Date.

7.3.5 In addition, the Company shall pay accrued interest from the latest Interest Payment Date up to (and including) the relevant date for Early Redemption.

7.3.6 Upon each and every occurrence of an event as set forth in item (b) in the definition of “STIBOR”, the Company may redeem all, but not less than all, Bonds on any Banking Day falling after such event by giving the Holders notice in accordance with Clause 15 (Notices) on the date occurring at the latest twenty (20) Banking Days following such event. The notice shall be irrevocable and state the relevant date for Early Redemption and the relevant Record Date. Each Bond shall be redeemed at the Nominal Amount together with accrued interest thereon from the preceding Interest Payment Date (or, if such date has not occurred, the Issue Date) up to (and including) the relevant date for Early Redemption.

7.4 Purchases

Subject to applicable law, the Company may at any time purchase Bonds on the market or in any other way. The Bonds held by the Company may at the Company’s discretion be retained, sold or cancelled by the Company.

8. PAYMENTS OF PRINCIPAL AND INTEREST

8.1 Payment of principal and interest shall be made to those who are Holders on the fifth (5th) Banking Day prior to the respective due date or on such other Banking Day, which is closer to the due date, and which is generally applied on the Swedish bond market (the “Record Date”).

8.2 Except as otherwise provided in these Terms and Conditions, if a payment is due on a day which is not a Banking Day, the due date for that payment shall instead be the following Banking Day. If the extension of the due date would mean that the payment is due in the following calendar month, then the due date for the payment shall be the preceding Banking Day.

8.3 If a Holder is registered with an Account Operator, principal and interest shall be deposited on a designated bank account effected by the CSD on the relevant due date. In other cases, payments will be transferred by the CSD to the Holder at the address registered with the CSD on the Record Date.

8.4 Should the CSD not be able to effect the payment in accordance with Clause 8.3 due to a delay caused by the Company or due to another obstacle, the CSD will effect such payment to any person who was a Holder on the Record Date as soon as possible after the relevant obstacle has been removed.

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8.5 In the event that the Company is not able to effect payment on a due date due to the existence of an obstacle for the CSD referred to in Clause 19.1, it may postpone the payment until the obstacle has been removed.

8.6 If a person to whom payment has been made in accordance with this Clause 8 was not entitled to receive such payment, the Company and the CSD shall nevertheless be deemed to have fulfilled their respective obligations, provided that the Company and/or the CSD was unaware that such payment was made to a person not entitled to receive it and provided that the Company and/or the CSD, as applicable, acted with reasonable care.

8.7 If both the principal amount and interest are due and payable and the available funds are insufficient to discharge all the amounts due and payable, the available funds shall initially cover payment of interest and, secondly, payment of the principal amount.

9. DEFAULT INTEREST

9.1 If the Company makes a late payment of any amount due, the Company shall, for the period commencing on the date such payment was due and ending on the date of actual payment, pay default interest on the overdue amount at a rate corresponding to the average of one week STIBOR during the delay plus two (2) percentage units. STIBOR shall be determined on the first Banking Day of each week during the delay. Default interest shall, however, subject to Clause 9.2 below, never amount to less than the Interest Rate plus two percentage units. Accrued default interest shall not be capitalized.

9.2 If the delay is due to an existence of an obstacle for the Agent or the CSD, as referred to in Clause 19.1, no default interest shall be payable by the Company.

10. UNDERTAKINGS

10.1 Information Undertakings

10.1.1 As long as any Bond remains outstanding, the Company undertakes to:

(a) immediately inform the Agent of any Event of Default as well as of any circumstances likely to lead to an Event of Default;

(b) immediately inform the Agent of a Change of Control as well as of any circumstances likely to lead to a Change of Control;

(c) promptly upon becoming aware of them, send the Agent such relevant details of any (i) material litigations, arbitrations or administrative proceedings which have been initiated by or against any Group Company and which is likely to constitute a Material Adverse Effect and (ii) other events which have occurred or may occur and which is likely to constitute a Material Adverse Effect;

(d) inform the Agent if the Company intends to sell or dispose of all or a substantial part of its assets or operations, or change the nature of its business, in each case if it is likely to constitute a Material Adverse Effect;

(e) prepare Financial Statements and Interim Reports and make them available on its website (alternatively by sending them to the Agent) as soon as they become available, however, for Financial Statements not later than four (4) months after the end of the financial year and for Interim Reports not later than two (2) months after the Report Date;

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(f) prepare Interim Management Statements and make them available on its website (alternatively by sending them to the Agent) as soon as they become available, however not later than three (3) months after each applicable Quarter Date; and

(g) provide such information about the Company’s financial condition as the Agent may reasonably request.

10.1.2 At the request of the Agent, the Company shall provide the documents and information necessary to enable the Agent to carry out its rights and duties pursuant to these Terms and Conditions, as well as to comply with laws and regulations applicable to the appointment.

10.1.3 The Company shall, within ten (10) Banking Days from announcement of Interim Reports or Interim Management Statements, as the case may be, confirm to the Agent in writing that the Company is in compliance with the covenants and undertakings in Clause 10 (Undertakings). Such confirmation shall be undertaken in a separate compliance certificate in the form set out in Schedule 1, signed by any Director. In the event of non-compliance, the compliance certificate shall describe the non-compliance, the reasons therefore as well as the steps taken by the Company and its contemplated steps in order to rectify the non-compliance.

10.1.4 The Company’s obligation to provide information pursuant to these Terms and Conditions shall apply to the extent it is not contrary to laws, rules or regulations applicable to the Company or a Group Company as a consequence of such entity’s shares or instruments of debt being listed on an Exchange.

10.2 General Undertakings

As long as any Bond remains outstanding, the Company is bound by the following undertakings.

10.2.1 Pari passu ranking

The Company undertakes to ensure that the Company’s obligations under these Terms and Conditions shall at all times rank at least pari passu with all other senior unsecured obligations of the Company, other than obligations which have mandatorily preference by law.

10.2.2 Mergers

The Company undertakes not to initiate any merger or other business combination or corporate reorganization involving consolidating the assets and obligations of the Company with any other companies or entities if such transaction would constitute a Material Adverse Effect.

10.2.3 De-mergers

The Company undertakes not to initiate any de-merger or other corporate reorganization involving splitting the Company into two or more separate companies or entities, if such transaction would constitute a Material Adverse Effect.

10.2.4 Continuation of business

(a) The Company undertakes not to cease to operate its business, and undertakes to ensure that the Group (taken as a whole) will not cease to operate its business.

(b) The Company shall ensure that no material change is made to the general nature or scope of the business of the Group (taken as a whole) as conducted on the Issue Date which is likely to have a Material Adverse Effect and for the avoidance of doubt the Group can carry out existing business in new geographical markets.

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10.2.5 Disposal of business

The Company undertakes not to, and undertakes to ensure that no Subsidiary will, sell or otherwise dispose of all or a substantial part of the Group’s assets or operations to a person other than a Group Company, unless

(a) the transaction (considering other transactions and arrangements with the same person(s)) is carried out based on fair market value, on terms and conditions customary for such transactions; and

(b) such transaction would not constitute a Material Adverse Effect.

10.2.6 Intra-group transactions

The Company shall ensure that all transactions between Group Companies comply with all material applicable corporate laws.

10.2.7 Transactions with shareholders, directors and affiliated companies

The Company shall cause all transactions between any Group Company and (i) any shareholder thereof not part of the Group, (ii) any director or senior member of management in any Group Company, (iii) any company in which any Group Company holds more than ten (10) per cent of the shares, or (iv) any company, person or entity controlled by or affiliated with any of the foregoing, to comply with all material applicable corporate laws, to be entered into on commercial terms and not to be less favourable to the Group Company than would have prevailed in an arms’ length transaction with a third party (in each case when considering other transactions and arrangements with the same person(s)).

10.2.8 Dividend

The Company undertakes not to (i) pay any dividend on shares, (ii) repurchase shares, (iii) redeem share capital or other restricted equity with repayment to shareholders, or (iv) make other similar distributions to shareholders if such dividend or distribution to shareholders results in the Group having less than £250,000,000 of Equity.

10.2.9 Corporate status

The Company shall not change its corporate status.

10.2.10 Compliance with laws

The Company shall, and shall ensure that all Group Companies will, operate its business in accordance with acknowledged, careful and sound practices in all material aspects and comply in all material respects with all applicable laws and regulations from time to time (including any environmental laws and regulations).

10.2.11 Taxes

The Company shall pay any stamp duty and other public fees in connection with the Bonds, but not in respect of trading in the secondary market, except to the extent it is required to do so by applicable laws, and shall deduct at source any applicable withholding tax in respect of payments thereunder as required by law.

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10.2.12 Loans, credits and guarantees

The Company undertakes not to, and undertakes to ensure that no Subsidiary will grant any loans, credits, guarantees or similar to any third party not being a member of the Group, other than in the ordinary course of business.

10.3 Financial Covenants

10.3.1 Interest Coverage Ratio

The Company shall ensure that the Group on each Quarter Date maintains an Interest Coverage Ratio of minimum 1.40:1.00, measured on a historical 12 month rolling basis.

10.3.2 Equity Ratio

As long as any Bond remains outstanding, the Company shall ensure that the Group maintains an Equity Ratio of a minimum of 22.5 per cent at all times.

10.3.3 Calculation adjustment

In the event that IFRS changes, and no longer recognises or requires market value adjustments when calculating the book value of the properties, Equity and Total Assets shall (for the purposes of the calculation set out in Clause 10.3.2 above) nevertheless be adjusted to take into account such market values as if IFRS was still applicable as per the Issue Date.

10.4 Waiver of undertakings

In addition to Clause 16 (Amendments of the Terms and Conditions), the Agent is entitled to, on behalf of the Holders, waive, partly or in full, the provisions in this Clause 10 (Undertakings) if satisfactory collateral or other security arrangements of the Company, in the Agent’s reasonable discretion, is provided in respect of the Company’s proper discharge of its obligations under the Bonds.

11. ACCELERATION OF THE BONDS

11.1 Each of the events or circumstances set out in this Clause 11.1 is an Event of Default. Upon the occurrence of an Event of Default and for as long as such Event of Default is continuing, the Agent may in accordance with this Clause 11, on behalf of the Holders, declare the Bonds, including accrued interest and expenses, to be in default and due for immediate payment or at such time as the Agent determines (such later date not being a date falling later than the Redemption Date).

11.1.1 Non-payment

The Company fails to fulfil any payment obligation under these Terms and Conditions when due, unless:

(a) in the opinion of the Agent acting reasonably, it is obvious that such failure will be remedied and payment in full is made within five (5) Banking Days following the original due date; or

(b) such failure is caused by administrative or technical error and payment is made within five (5) Banking Days of its original due date.

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11.1.2 Breach of other obligations

The Company fails to duly perform any covenant or obligation pursuant to these Terms and Conditions, or otherwise breaches such obligations unless, in the opinion of the Agent acting reasonably, it is obvious that such failure will be remedied and is remedied within ten (10) Banking Days after notice thereof is given to the Company by the Agent.

11.1.3 Cross default

(a) Any Financial Indebtedness of the Company or any Subsidiary is not paid when due, including any relevant grace period.

(b) Any Financial Indebtedness of the Company or any Subsidiary is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described).

(c) Any commitment for any Financial Indebtedness of the Company or any Subsidiary is cancelled or suspended by a creditor as a result of an event of default (however described).

(d) Any creditor becomes entitled to declare any Financial Indebtedness of the Company or any Subsidiary due and payable prior to its specified maturity as a result of an event of default (however described).

(e) No Event of Default will occur under this Clause 11.1.3 if (i) the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness under paragraphs (a) to (d) above does not exceed £8,500,000, or the equivalent thereof in other currencies, or (ii) the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness under paragraphs (a) to (d) exceed £8,500,000, or the equivalent thereof in other currencies, but the Company within ten (10) Banking Days from the applicable event under (a) to (d) supplies satisfactory evidence to the Agent (acting reasonably) that it is holding Cash and Cash Equivalents amounting to the higher of two (2) times the defaulting amount (including the £8,500,000, or the equivalent thereof in other currencies) and an amount corresponding to the aggregate outstanding Nominal Amount of the Bonds in SEK, or the equivalent thereof in other currencies.

11.1.4 Insolvency

The Company or any Subsidiary (however, with regard to Subsidiaries only to the extent it is likely to constitute a Material Adverse Effect):

(a) suspends making payments or, in relation to which indebtedness a moratorium is declared or winds-up or dissolves other than through a solvent liquidation or reorganization;

(b) is subject to composition or a similar arrangement with any creditor, having an adverse effect on the Company’s ability to perform its payment obligations hereunder;

(c) is subject to liquidation (other than in respect of a solvent liquidation), bankruptcy proceedings, company reorganization or similar proceedings; or

(d) is subject to enforcement of any security over any of its assets.

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save in relation to any winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within fourteen (14) days of commencement or, if earlier, the date on which it is advertised.

11.1.5 Creditors’ process

Any expropriation, attachment, confiscation or other similar execution affects a substantial part of the assets of the Company or any Subsidiary (however, with regard to Subsidiaries only to the extent it is likely to constitute a Material Adverse Effect).

11.1.6 Illegality

It is or becomes unlawful for the Company to fulfil or perform any of its obligations under these Terms and Conditions.

11.1.7 Litigation

There is any current, pending or threatened claim, litigation, arbitration or administrative proceeding against any Group Company which, if adversely determined, is likely to constitute a Material Adverse Effect.

11.1.8 Material Adverse Effect

Any other event or series of events occurs in relation to any Group Company which is likely to constitute a Material Adverse Effect.

11.2 No Event of Default will occur under Clauses 11.1.2 - 11.1.3, 11.1.4 (save where the relevant event of insolvency under clause 11.1.4 relates to the Company) or 11.1.5-11.1.8 if collateral in Cash and Cash Equivalents (or other collateral of the Company to the Agent’s satisfaction, acting reasonably) is provided (to the satisfaction of the Agent, acting reasonably) in respect of the Company’s proper discharge of its obligations under the Bonds amounting to no less than the aggregate outstanding amount of the Bonds including 3 months’ accrued interest. From the date of notification from the Company that the relevant event under Clause 11.1.2-11.1.8 is no longer continuing, the Agent shall, within three (3) Banking Days, release the said collateral to the Company.

11.3 The Company is obliged to inform the Agent immediately if any circumstance of the type specified in Clause 11.1 occurs. Should the Agent not receive such information, the Agent is entitled to assume that no such circumstance exists or can be expected to occur provided that the Agent does not have knowledge of such circumstance. At the request of the Agent, the Company shall within five (5) Banking Days provide the Agent with a certificate regarding the circumstances dealt with in Clause 11.1. The Company shall further provide the Agent with such details as the Agent may request regarding any circumstances referred to in Clause 11.1 and, at the request of the Agent, provide all documents that may be of significance in the application of this Clause.

11.4 If the Agent has been notified by the Company or otherwise has determined (acting reasonably) that an Event of Default has occurred and is continuing, the Agent shall consider, within a maximum of ten (10) Banking Days of the day of notification or determination, if the Bonds shall be terminated. If the Agent has decided not to terminate the Bonds, the Agent shall, at the earliest possible date, notify the Holders of the availability of the termination right and obtain the Holders opinion hereof according to the provisions in Clause 12 (Holders’ Meeting).

11.5 If the Holders resolve on a Holders’ Meeting to terminate the Bonds, or if such termination is demanded by Holders holding Bonds representing at least one half of the Adjusted Nominal

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Amount, the Agent shall promptly declare the Bonds terminated. If the relevant Event of Default according to the Agent’s appraisal has ceased before the declaration of termination, the Agent is not liable to execute it. The Agent shall in such case, at the earliest possible date, notify the Holders that the relevant Event of Default has ceased to exist. If the Holders, without prior solicitation from the Agent or the Company, have passed a resolution in accordance with all relevant provisions in Clause 12 (Holders’ Meeting) and to the effect that the Bonds shall be terminated in accordance with all relevant provisions of this Clause 11, the Agent shall promptly execute such request accordingly. The Agent is, however, not obliged to take action if the Agent considers (acting reasonably) that an Event of Default is not continuing or the resolution by the Holders has not been validly passed, unless the relevant Holders in writing have undertaken to hold the Agent indemnified and have provided sufficient security for the obligation, at the Agent’s sole discretion.

12. HOLDERS’ MEETING

12.1 Each of the Company or the Agent can at any time call for a holders’ meeting or demand a procedure in writing among the Holders (the “Holders’ Meeting”). Holders representing at least ten (10) per cent of the then total outstanding Nominal Amount may demand that such call is made. Such demand shall be made in writing to the Company and the Agent and include (i) information regarding the issues that shall be discussed and (ii) documentation which indicates the holding of the relevant Holders. If the Agent establishes that such demand has been received in due order the Agent shall, within twenty (20) Banking Days from receipt of such demand, convene to a Holders’ Meeting. However, the Agent is not imposed with such an obligation if, according to the Agent (acing reasonably), (a) the proposal must be approved by the Company and the Company informs the Agent that it will not give such approval, (b) the proposal is conflicting with applicable laws or (c) it appears highly unlikely that the Holders’ Meeting will decide in accordance with the proposal in view of previous Holders’ Meetings.

12.2 Notice shall be sent to the Holders and the Agent or, as the case may be, the Company in accordance with Clause 15 (Notices) below and shall be sent not later than ten (10) Banking Days and not earlier than thirty (30) Banking Days prior to the meeting or the last day for replies. The notice shall include (i) the time of the meeting or the last day for replies, (ii) the place for the meeting or address for replies, (iii) the agenda for the meeting, (iv) information regarding which day a Holder shall be registered as owner or, in the case of nominee registration and such possibility is provided by the CSD, is entitled to vote in the register of the CSD and (v) other relevant information required for a Holder to attend the meeting. The Company or, if the Agent is convening, the Agent shall determine the contents of the notice and provide, in writing or electronically, a proxy form or, in the case of a procedure in writing, a decision form with the relevant alternatives for resolution.

12.3 A resolution is passed by means of voting at a Holders’ meeting (or, in the case of a procedure in writing, through calculation by the Agent of the replies), at which each Holder entitled to vote shall have one (1) vote per SEK one (1) of the aggregate Nominal Amount of the Bonds held. A Holder must vote in the same manner for all Bonds held. However, a representative which represents different Holders may vote differently for different Holders. Bonds held by any Group company shall not entitle any voting right and shall not be considered when calculating if necessary majority has been achieved in accordance with these Terms and Conditions. The resolution of the Holders shall be the opinion which represents the majority of the Adjusted Nominal Amount for the Bonds represented at the meeting. In respect of the issues below the following qualified majority is required among the votes cast and the answers received in order for a resolution to be validly passed (“Qualified Majority”):

(a) two thirds when (1) one of the conditions in Clause 10 is waived or (2) a condition in Clauses 10 and 11 is amended, subject to (b) below;

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(b) three quarters when (1) the principal amount, interest rate or interest amount which shall be paid by the Company is reduced, (2) any amendment of any redemption day for principal or interest amount is made and (3) any amendment of the conditions in this Clause 12.3 is made.

If the number of votes are equal the opinion which is most beneficial for the Holders, according to the chairman of the meeting (or, in the case of a procedure in writing, the Agent) will prevail.

12.4 A quorum exists where (i) Holders representing at least one-fifth of the aggregate outstanding Adjusted Nominal Amount attend the meeting (or, in the case of a procedure in writing, provide replies), or (ii) where any decision requiring a Qualified Majority is at issue, Holders representing at least one-half of the aggregate outstanding Adjusted Nominal Amount attend the meeting (or, in the case of a procedure in writing, provide answers). If a quorum is not achieved within fifteen (15) minutes from the fixed time (or, in the case of a procedure in writing, through received answers at the end of the time for replies), the meeting shall be adjourned (or, in the case of a procedure in writing, the time for replies shall be extended) to the tenth Banking Day thereafter. Notice containing information regarding time and place for a continued meeting (or, in the case of a procedure in writing, information regarding extended time for replies) shall promptly be provided to the Holders in accordance with Clause 15 (Notices). At a continued meeting (or, in the case of a procedure in writing, at a new calculation) a resolution can be passed through an ordinary resolution (or, if required in accordance with Clause 12.3 above, through Qualified Majority) by Holders entitled to vote irrespective of the share of Bonds represented.

12.5 The Company, the Holders and the Agent may attend the meeting along with their respective representatives, counsels and assistants. The meeting can decide that further individuals may attend. The meeting is opened by an attendee appointed by the Company (or, if such person has not been appointed, a present person appointed by the Agent) and the meeting shall be chaired by such person until present and represented Holders have appointed a chairman for the meeting. The chairman shall arrange for minutes to be kept with respect to the meeting in which Holders entitled to vote and other persons attending the meeting shall be listed. The minutes shall further reflect the discussions at the meeting, the results of the voting and the resolutions passed. The minutes shall be signed by the chairman and by at least one person appointed to verify the minutes. In the case of a procedure in writing, the Agent shall calculate the votes cast and prepare the minutes in respect of the calculation. The Agent may request for further information and clarifications but is not obliged to do so and may disregard unclear or illegible answers. The Agent shall disregard answers which do not follow listed alternatives or answers where voting rights do not appear in the material provided by the Holder or the CSD. The Company may attend the calculation. The minutes shall be completed promptly and be held available for the Holders at the Company and the Agent.

12.6 If the Company and the Agent deem it appropriate, a meeting may be combined with a possibility for Holders to provide answers in accordance with a written resolution form as an alternative to being present or being represented at a meeting.

12.7 A resolution that has been passed at a duly convened and held meeting, or a procedure in writing, is binding to all Holders irrespective of them being present or being represented at the meeting, or if they have participated in the procedure in writing and irrespective of how and if they have voted.

12.8 The Company shall bear all costs for the Company and the Agent in connection with a meeting or a procedure in writing, irrespective of who has initiated the meeting or the procedure.

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13. THE AGENT

13.1 The Agent’s obligations are exhaustively regulated herein. For the avoidance of any doubt, the Agent has no obligation to monitor the Company’s financial standing or its fulfilment of obligations and liabilities, other than as expressly set forth herein.

13.2 The Agent shall not be bound to account to any Holder for any sum received by it for its own account.

13.3 For the avoidance of any doubt, the Agent is not obliged to do or omit to do anything if it would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.

13.4 The Agent shall not be liable for any action taken by it under these Terms and Conditions, unless directly caused by its gross negligence or wilful misconduct.

13.5 Even without a separate authorization from the Holders, the Agent, or a person appointed by the Agent, is empowered to represent the Holders against the Company in accordance with these provisions in every matter concerning the Bonds, whether or not in court or before an executive authority (including any legal or arbitration proceeding relating to the perfection, preservation, protection or enforcement of the Bonds). Each Holder shall immediately upon request by the Agent provide the Agent with any such documents, including a written power of attorney (in form and substance to the Agent’s satisfaction), which the Agent deems necessary for the purpose of carrying out its duties under these Terms and Conditions. The Agent is under no obligation to represent a Holder which does not comply with such request of the Agent. Even though the Agent is entitled to represent the Holders, the Agent is not obliged to take action unless explicitly expressed in these Terms and Conditions.

13.6 The Agent may rely on any representation, notice or document believed by it to be genuine, correct and appropriately authorized and any statement made by a director, authorized signatory or employee of any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify.

13.7 The Agent may assume that no Event of Default has occurred, unless it has actual knowledge thereof or has received notice to the contrary.

13.8 In relation to these Terms and Conditions, the Agent may act through its personnel and agents. The Agent may further engage, pay for and rely on the advice or services of any lawyers, accountants or other experts. The reasonable and proper costs for such third party advice shall be borne by the Company. In acting as Agent for the Holders, the Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments. If information is received by another division or department of the Agent, it may be treated as confidential to that division or department and the Agent may reasonably not be deemed to have received it.

13.9 Without affecting the responsibility of the Company for information supplied by it or on its behalf in connection with these Terms and Conditions, by acquiring a Bond each Holder confirms to the Agent that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with these Terms and Conditions.

13.10 The Agent shall be reimbursed by the Company for acting as Agent in accordance with these Terms and Conditions provided the relevant costs and expenses are reasonable and proper. If the Agent, based on good reasons, believes that the Company is or will become insolvent the Agent is entitled to reserve reasonable remuneration from Holders for its continued work in accordance

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with these Terms and Conditions, save that the Agent shall make the arrangements stated in Clause 11.5 without having received remuneration or being indemnified by the Holders. If the Agent notifies the Holders that it will not take further actions, each Holder may independently represent its holding of Bonds in relation to the Company without having to observe the provisions in Clauses 11 (Acceleration of the Bonds) and Clause 13.5.

14. REPLACEMENT OF AGENT AND ISSUING AGENT

14.1 The Agent may not resign as Agent or transfer its position as Agent, unless the Company has given its prior written consent, not to be unreasonably withheld, save where the Agent is obliged to resign or transfer its position as Agent by operation of law or regulation or where the Company has, in a material way, failed to fulfil its obligations towards the Agent under these Terms and Conditions and does not, within a reasonable time, remedy such failure after the Agent has made the Company aware thereof in writing. No resignation by the Agent shall however take effect until a new Agent has been appointed by the Company. If the Company has not appointed a new Agent within thirty (30) days after the Agent has given the Company notice of its resignation, the Agent has the right to appoint a new Agent. When a new Agent has been appointed, the resigning Agent shall bear no responsibility for acts or omissions during the time after the replacement of the Agent but shall continue to enjoy the rights under these Terms and Conditions (to the extent that such rights have occurred prior to the date of resignation). The Agent’s successor, the Company, the Issuing Agent and the Holders shall have the same rights and obligations among themselves as they would have had if such successor would have been the original Agent.

14.2 The Issuing Agent may resign as Issuing Agent and/or transfer its position as Issuing Agent at any time, provided that the Company has given its prior written consent, not to be unreasonably withheld, and provided further that no resignation by the Issuing Agent shall take effect until a new Issuing Agent has been appointed by the Company. If the Company has not appointed a new Issuing Agent within thirty (30) days after the Issuing Agent has given the Company notice of its resignation, the Issuing Agent has the right to appoint a new Issuing Agent. When a new Issuing Agent has been appointed, the resigning Issuing Agent shall bear no responsibility for acts or omissions during the time after the replacement of the Issuing Agent but shall continue to enjoy the rights under these Terms and Conditions (to the extent that such rights have occurred prior to the date of resignation). The Issuing Agent’s successor, the Company, the Agent and the Holders shall have the same rights and obligations among themselves as they would have had if such successor would have been the original Issuing Agent.

14.3 If the Agent or the Issuing Agent is subject to bankruptcy or financial reconstruction according to law or regulations from a supervising authority, the Company shall immediately appoint a new Agent or Issuing Agent which immediately shall replace the present Agent or Issuing Agent as Agent or Issuing Agent in accordance with these Terms and Conditions. The Company may also appoint a new Agent which immediately shall replace the present Agent, if the Agent has, in a material way, failed to fulfil its obligations under these Terms and Conditions and does not, within a reasonable time, remedy such failure after the Company has made the Agent aware thereof in writing.

15. NOTICES

15.1 Notices from the Company or the Agent to a Holder shall be given to the Holder at its address as registered with the CSD. The notice shall be considered as received by the Holder three Banking Days after it has been dispatched.

15.2 Notices (including requests for Holders’ Meetings) shall be given to the Agent at the following address, or any substitute addresses notified to the Holders and the Company:

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CorpNordic Sweden AB P.O. Box 16285 103 25 Stockholm

15.3 Notices from the Holders or the Agent shall be given to the Company (with copies to the Agent) at

the following address, or any substitute address notified to the Holders and the Agent:

CLS Holdings plc Att: Chief Executive Officer 86 Bondway, London, SW8 1SF United Kingdom

16. AMENDMENTS OF THE TERMS AND CONDITIONS

16.1 Subject to Clause 16.2, the Company and the Agent, acting on behalf of the Holders, may agree to amend these Terms and Conditions provided that:

(c) such amendment, in the opinion of the Agent, does not adversely affect the rights and interests of the Holders under these Terms and Conditions in any material respect; or

(d) such amendment is of a formal, minor or technical nature or is made to correct a clear and manifest error; or

(e) such amendment has been duly approved by a Holders’ Meeting or by Holders holding Bonds representing at least half of the Adjusted Nominal Amount.

16.2 The Agent and the Company may, however, not agree to amendments if such amendments relate to matters that would require a Qualified Majority at a Holders’ Meeting, unless such matter has been duly approved by a Holders’ Meeting or by Holders holding Bonds representing at least two thirds of the Adjusted Nominal Amount in matters dealt with in 12.3 (a) and at least three quarters of the Adjusted Nominal Amount in matters dealt with in 12.3 (b).

16.3 Amendments of these Terms and Conditions shall be notified without delay by the Company in accordance with Clause 15 (Notices), setting out the date from which such amendments will be effective.

17. PRESCRIPTION

17.1 The right to receive payment in respect of principal and interest on the Bonds will become void, in respect of principal, ten years from the relevant Redemption Date and, in respect of interest, three years from the relevant Interest Payment Date on which interest was due. The funds set aside for payment and barred by the limitation period (preskriptionstid) shall belong to the Company.

17.2 If the above prescription period has been duly interrupted in accordance with the Swedish Act on Limitations (Preskriptionslagen (1981:130)), a new ten-year period, in respect of principal, and a three-year period, in respect of interest payments, runs from such day as follows from the application of the Swedish Act on Limitations (Preskriptionslagen (1981:130)).

18. NOMINEE REGISTRATION

In respect of Bonds registered with a nominee in accordance with the Swedish Financial Instruments Accounts Act (Lag (1998:1479) om kontoföring av finansiella instrument), the nominee shall, for the purpose of these Terms and Conditions, be regarded as the Holder (subject to the provisions regarding voting rights of the Holders in Clause 12 (Holders’ Meeting)).

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19. LIMITATION OF LIABILITY

19.1 None of the Agent, the Issuing Agent or the CSD shall have liability for any damage arising out of any Swedish or foreign legal enactment, or any measure undertaken by a Swedish or foreign public authority, or war, strike, lockout, boycott, blockade or any other similar circumstance. The reservation in respect of strikes, lockouts, boycotts and blockades applies even if any of the Agent or the CSD takes such measures, or is subject to such measures.

19.2 Any damage that may arise shall not be indemnified by the Agent if it has acted in accordance with these Terms and Conditions or if it, in its capacity as Agent, acted in accordance with the decisions resolved at a Holders’ Meeting in accordance with Clause 12 (Holders’ Meeting).

19.3 Any damage that may arise in other cases shall not be indemnified by any of the Agent, the Issuing Agent or the CSD if it has observed normal care. None of the Agent, the Issuing Agent or the CSD shall in any case be held responsible for any indirect damage.

19.4 Should there be an obstacle as described in Clause 19.1 for any of the Agent, the Issuing Agent or the CSD to take any action in compliance with these Terms and Conditions, such action may be postponed until the obstacle has been removed.

19.5 The provisions in this Clause 19 apply unless they are inconsistent with the provisions of the Swedish Financial Instruments Accounts Act (Lag (1998:1479) om kontoföring av finansiella instrument) which provisions shall prevail.

20. GOVERNING LAW AND JURISDICTION

20.1 These Terms and Conditions shall be governed by and construed in accordance with Swedish law.

20.2 The courts of Sweden shall have jurisdiction in relation to any dispute arising out of or in connection with these Terms and Conditions. The District Court of Stockholm shall be the court of first instance.

_______________

We hereby certify that the above Terms and Conditions are binding upon the Company.

14 April 2011

CLS HOLDINGS PLC

___________________

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Schedule 1

Form of Compliance Certificate

To: [●] as Agent From: CLS Holdings plc Dated: [●] 20 [●] Dear Sirs, We refer to the terms and conditions for the loan of senior unsecured bonds maximum SEK 300,000,000 STIBOR + 3.75% 2011/2016 issued by CLS Holdings plc (the “Terms and Conditions”) as well as to the Agent Agreement and any supplementary agreements thereto (jointly the “Agent’s Terms and Conditions”). Under said Agent’s Terms and Conditions, we are required to issue this Compliance Certificate to you. (Capitalized terms used and not defined herein shall have the meaning ascribed to them in the Agent’s Terms and Conditions.)

1. We confirm that we are in compliance with the undertakings in Clause 10 in the Terms and Conditions.

2. We confirm that no Event of Default is has taken place since the issuance of the previous Compliance Certificate, that no Event of Default is continuing and that no situation of Event of Default is impending or, to the best of our knowledge, likely to occur within the period until the next Compliance Certificate. [Alternatively: provide details of any situation of Event of Default that has occurred, that is continuing or that is impending and what measures have been and are taken in light thereof].

For CLS Holdings plc:

_________________________________ [Name in print], [Director]

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Addresses Issuer CLS Holdings plc 86 Bondway London SW8 1SF United Kingdom Tel: +44 (0)20 7582 7766 Email: enquiries@clsholdings.com Financial advisor Carnegie Investment Bank AB SE-103 38 Stockholm Sweden Tel: +46 (0)8 676 88 00 Agent CorpNordic Sweden AB PO Box 162 85 103 25 Stockholm Sweden Tel: +46 (0)8 402 72 00 Email: sweden@corpnordic.com CSD Euroclear Sweden AB Regeringsgatan 65 SE-103 97 Stockholm Tel: +46 8 402 90 00 Legal advisor White & Case Advokat AB Box 5573 114 85 Stockholm Sweden