MEMORANDUM OF AGREEMENT
This
agreement is made by and between:
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1.
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ROYAL
INVEST INTERNATIONAL CORPORATION a publicly traded corporation
trading on
the Over the Counter ("OTC") under the symbol RIIC, incorporated
in the
United States of America in the State of Delaware with its registered
office located at 000 Xxxx Xxxx Xxxx, 0xx. floor, Westport, Xxxxxxxxxxx
00000, XXX, and/or Royal Invest Europe B.V both legally and separately
represented by Royal Invest International Corporations's CEO Xx.
Xxxxx
Xxxxxxxxx hereafter referred to as
"BUYER"
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2.
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R.I.G.
INVESTMENTS LIMITED (registered office: XX-Xxxxxxx 0 X.X. 0000
Xxxxxxxx
Xxxxxx, Trade Registry No.: HE 159858; represented by: Andri Athanasiuos
managing director) Hereafter referred to as
"SELLER"
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For
purposes of this agreement BUYER and SELLER are collectively referred to
as
"PARTIES" and individually referred to as a "PARTY".
Whereas:
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1.
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Parties
desire to confirm the intermediate outcome of the negotiations
which have
taken place from January 2007 till to date by means of this
agreement;
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2.
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Parties
reached verbal agreement as the beginning of July 2007 on the sale
and
purchase of 100 per cent of the Shares of GLACIER Gazdasagi Tanacsado
es
Szolgaltato Korlatolt Felelossegu Tarsasag (hereinafter "the PROJECT
COMPANY") (registered office: 1024 Budapest, Xxx Xxxxx u. 19. registered
by the Metropolitan Court as Court of Registry under company reg.
no.
00-00-000000 with a nominal value of HUF 1,058,000,000 (that is
one
billion fifty-eight million Hungarian
forints);
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3.
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The
Project Company (GLACIER) holds the title to the following real
estates;
such title being - with the exceptions listed below - free from
litigation, encumbrances or
claims:
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a.
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real
estate registered under lot no. 40988/43 in the 10th district of
Budapest
with an area of 14,037 square
meters
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b.
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real
estate registered under lot no. 40988/44 in the 10th district of
Budapest
with an area of 52,303 square
meters
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c.
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real
estate registered under lot no. 40988/45 in the 10th district of
Budapest
with an area of 10,564 square
meters
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d.
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real
estate registered under lot no. 40988/46 in the 10th district of
Budapest
with an area of 16,269 square
meters
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e.
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real
estate registered under lot no. 40988/47 in the 10th district of
Budapest
with an area of 18,807 square
meters
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(hereinafter
"The PROPERTIES")
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2
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4.
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The
Real Estates are located at Jaszberenyi ut 38-72., 1106 Budapest.
The Real
Estates are jointly and severally burdened with the general facility
mortgage registered - by decision no. 69463/4/2007/00.00.00. -
in the name
of CIB Kozep-Europai Bank Zrt. (szekhelye: 1027 Budapest, Xxxxx
utca
4-14.) as beneficiary up to the amount of HUF 3,000,000,000 (that
is three
billion Hungarian forints) as well as by a purchase option right
valid
until February 5, 2012, registered by decision no.
69463/4/2007/00.00.00.
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5.
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The
terms of this agreement may revised and updated due to the outcome
of due
diligence reviews and legal
research.
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6.
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This
Memorandum of Agreement replaces all former verbal and written
documents
between Parties.
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Therefore:
In
consideration of the potential undertakings and future covenants set forth
in
this agreement "PARTIES" agree as follows:
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1.
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The
"BUYER" will acquire the PROPERTIES for the amount of 15.000.000
Euro
(fifteen-million) excluding transfer costs. Transfer costs are
to be paid
for by the "BUYER". This transaction will be confirmed by "PARTIES"
by
means of a formal purchase agreement The terms of the agreed acquisition
will be more particularly set forth in one or more purchase agreements
and
one or more definitive agreements (collectively the definitive
agreements)
to be mutually agreed upon by the "PARTIES". Under the condition
of due
diligence, the PROPERTIES will be purchased through the purchase
of the
shares in the PROJECT COMPANY a corporation which fully owns the
PROPERTIES. SELLER will guarantee the gross rental income to the
amount as
per the moment of the final
acquisition,
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2.
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The
BUYER intends to fund the purchase by obtaining a bank loan of
at least €
12.000.000 (twelve million euro). The remainder of the purchase
price
partially be paid in cash and in shares. The latter amount will
be limited
to € 1.500.000 and paid in shares of the BUYER'S company common stock
delivered in certificates bearing seller's or designated names
with a
lock-up period of 24 months upon issue at an agreed share price
of 1,25 US
Dollar.
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3.
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The
parties will negotiate the terms and begin preparation of the Definitive
Agreements mat will govern all the above mentioned agreed items.
To the
extent appropriate for transactions of this type and size, the
Definitive
Agreements will contain but not limited to customary representations,
warranties, covenants, indemnities and other agreements of the
parties.
Parties reached agreement that instead of the delivery of the PROPERTIES
directly, BUYER directly and/or through a subsidiary under its
contrail
acquires all shares in the PROJECT COMPANY on basis of a balance
sheet
dated September 30, 2007 subject to audit review. The BUYER
has
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no
obligation to refinance the current (mortgage) loans taken up by the PROJECT
COMPANY.
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4.
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The
Definitive Agreements shall include customary conditions precedent
generally applicable to an acquisition of the nature and size of
the
transactions contemplated by this Agreement, each of which must
be
satisfied prior to the consummation of the transactions contemplated
thereby. In general, the closing of the proposed acquisition and
the
obligations of each party under the Definitive Agreements will
be subject
to the satisfaction of the conditions precedent, which shall include
but
not be limited to:
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(a) Satisfactory
Results of Due Diligence
The
satisfactory completion of due diligence investigation and acquisition audit
by
BUYER (as provided in paragraph 6) showing that the assets of SELLER and
any
actual or contingent liabilities against those assets, and the prospective
business operations by SELLER or SELLER'S business are substantially the
same as
currently understood by BUYER as of the date of this Agreement (determined
without regard to any documents which BUYER or any party may have previously
delivered to BUYER).
(b) Compliance
Satisfactory
determination that the acquisition and prospective business operations by
BUYER
of SELLER'S business will comply with all applicable laws and regulations,
including antitrust and competition laws.
(c) Consents
and Approvals
The
approval and consent of the Definitive Agreements by the respective Boards
of
BUYER and SELLER and the receipt of the consents and approvals from all
governmental entities, utility providers, railways, material vendors, lenders,
landlords, customers, and other parties which are necessary or appropriate
to
the acquisition of the prospective business operation by BUYER, and the receipt
of all necessary governmental approvals including the expiration or termination
of all required waiting periods.
(d) Absence
of Material Litigation or Adverse Change
There
must be no pending or threatened material claims or litigation involving
SELLER,
and no material adverse change in the business prospects of BUYER operating
SELLER'S business.
(e) Delivery
of Legal Opinions
Customary
legal opinions must be delivered, the content of which shall be mutually
agreed
upon.
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(f) Delivery
of Assessment reports
Customary
assessment reports relating to the PROPERTIES must be delivered, the content
of
which shall be mutually agreed upon.
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5.
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From
the date of acceptance by the parties of the terms of this Agreement,
until the negotiations are terminated as provided in paragraph
12 of this
Agreement, SELLER will give BUYER and BUYER'S management personnel,
legal
counsel, accountants, and technical and financial advisors, full
access
and opportunity to inspect, investigate and audit the books, records,
contracts, and other documents of SELLER as it relates to PROJECT
COMPANY'S business and all of PROJECT COMPANY'S assets and liabilities
(actual or contingent), including, without limitation, inspecting
PROJECT
COMPANY'S PROPERTIES and conducting additional environmental inspections
of property and reviewing financial records, contracts, operating
plans,
and other business records, for the purposes of evaluating issues
related
to the operation of PROJECT COMPANY'S business. SELLER further
agrees to
provide BUYER with such additional information as may be reasonably
requested pertaining to PROJECT COMPANY'S business and assets to
the
extent reasonably necessary to complete the Definitive
Agreements.
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6.
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Notifications.
Every notice and other communication that has to be or can be served
based
on the present agreement shall be served in writing and can be
considered
fulfilled if sent personally or as registered mail by post
(acknowledgement of receipt required) or via telefax and addressed
as
follows:
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(i) for
the Seller:
Recipient: Xxxxxx
Xxxxx, authorized representative
1024 Budapest, Xxx Xxxxx u. 19.
Telephone: x00
0000000
Fax:
x00
0000000
(ii) for
the Purchaser:
Recipient: Royal
Invest Development & Services B.V.
Xxxxx Xxxxxxxx, authorized representative
Xxxxxxx 0, 0000 XX Xxxxxxxxx
Telephone
: x00
00 0000000
Fax:
x00000000000
and/or
other recipient and/or address specified by those mentioned above in a notice
delivered in accordance with clause 3.4. Any notice or communication is to
be
considered as delivered on the day of receipt based on what is shown on the
notice of receipt.
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7.
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By
their signature below, each party agrees to keep in strict confidence
all
information regarding the terms of the proposed acquisition of
the
Operations, except to the extent BUYER must disclose information
to
lenders and equity partners to obtain financing and due to US Security
Exchange Control Regulations. If this proposal is terminated as
provided
in paragraph 10, each party upon request will promptly return to
the other
party all documents, contracts, records, or other information received
by
it that disclose or embody confidential information of the other
party.
BUYER agrees to keep all material and information provided to it,
under
paragraph five above, confidential and to promptly return the same
to
SELLER upon termination of this Agreement. The provisions of this
paragraph shall survive termination of the agreements set form
in
paragraphs 7-12.
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8.
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No
party will make any public disclosure or issue any press releases
pertaining to the existence of this Agreement or to the proposed
acquisition and sale between the parties without having first obtained
the
consent of the other parties, except for communications with employees,
customers, suppliers, governmental agencies, and other groups as
may be
legally required or necessary or appropriate (i.e., any securities
filings
or notices), and which are not inconsistent with the prompt consummation
of the transactions contemplated in this Agreement. The provisions
of this
paragraph shall survive termination of the agreements set forth
in
paragraphs 7-12.
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9.
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Except
for breach of any confidentiality provisions hereof, no party to
this
Agreement shall have any liability to any other party for any liabilities,
losses, damages (whether special, incidental or consequential),
costs, or
expenses incurred by the party in the event the negotiations among
the
parties are terminated as provided in paragraph 8. Except to the
extent
otherwise provided in any Definitive Agreement entered into by
the
parties, each party shall be solely responsible for its own expenses,
legal fees and consulting fees related to the negotiations described
in
this Agreement, whether or not any of the transactions contemplated
in
this Agreement are
consummated.
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10.
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This
Agreement assumes the Parties to sign the intended Definitive Agreements
based on the results of previous negotiations and the previous
good
constructive talks no later than on November 30th, 2007. The final
payment
obligations taken up by BUYER in the Definitive Agreements are
settled no
later than on December 31st, 2007. The negotiations shall only
fail if a
confident cooperation can no longer be ensured. Such a situation
may not
be caused intentionally by any of the Parties. The Parties do have
the
intention to sign the intended Definitive Agreements. The failure
of the
negotiations shall be announced in writing by a Party who shall
also
specify the reasons. This Party shall be entitled to convene a
new
negotiation meeting within two weeks in order to eliminate the
grounds for
failure and/or to claim damages on basis of the current status
of
negotiations - whereby this Party proofs that the reasons for the
failure
of the negotiations are not due to this Party and/or the other
Party has
no material evidence on failure due to issues arising from the
due
diligence review whereby one of the Parties can not guarantee adequately
to the other Party that the PROJECT COMPANY'S business is substantially
the same as currently understood by
BUYER.
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11.
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Parties
agree that neither of them nor any of their affiliates will pursue,
solicit or discuss any opportunities for any party other than to
acquire
or otherwise control the PROJECT COMPANY'S business until this
Agreement
is terminated by Parties or mutually by Parties or any of the events
in
paragraph 10 do not occur by the dates stated and Parties in writing
that
they are pursuing other buyers for the PROJECT COMPANY'S
business.
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12.
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This
Agreement shall be governed by, and construed and interpreted under
the
laws of The Netherlands.
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BUYER
referred to this Agreement acknowledges the terms and conditions hereof,
and
agrees to be bound by the clauses included in this document,
Royal
Invest International Corp. (BUYER)
Represented
by Xxxxx Xxxxxxxxx
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Signature:
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/s/
Xxxxx Xxxxxxxxx
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Date:
September 7, 2007
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SELLER
referred to this Agreement acknowledges the terms and conditions hereof,
and
agrees to be bound by the clauses included in this document,
R.I.G.
INVESTMENTS LIMITED (SELLER)
Represented
by proxy
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Signature:
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/s/
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Date:
September 7, 2007
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