Exhibit 10.7
MEMORANDUM OF UNDERSTANDING
ASIA PROPERTIES INC.
AND
NORTHBRIDGE COMMUNITIES LTD.
DATED 11 JUNE 1999
XXXXX & XXXXX
BANGKOK
THIS MEMORANDUM OF UNDERSTANDING IS MADE ON JUNE 11, 1999:
BETWEEN:
(1) ASIA PROPERTIES INC of 0000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000, XXX
("API"); and
(2) NORTHBRIDGE COMMUNITIES LTD. of 0xx Xxxxx, Xxxxxxxx Xxxxxxxx, 00 Xxxxx
Xxxxxxx Xxxx, Xxxxxxx 10500 ("NCL").
WHEREAS
API is a US listed company established to purchase property in Asia which will
merge with Asia Properties International Ltd. (API BVI), and all API
shareholders will receive shares in API BVI which will trade on the National
Quotations Bureau Pink Sheets (OTC market, USA);
NCL is a Thai company which owns shares in companies in Hong Kong, Thailand,
Cambodia and Vietnam engaged in the business of property development;
API wishes to purchase shares in the companies in Hong Kong, Thailand and
Cambodia as part of its property acquisition programme.
IT IS AGREED AS FOLLOWS:
1. DEFINITION
In this Memorandum of Understanding the following words shall have the following
meanings:
API(T) means Asia Properties International (Thailand) Limited a Thai company to
be incorporated the beneficial ownership of which will be owned by API BVI;
API BVI means Asia Properties International Ltd. a British Virgin Islands
company in the process of incorporation which will merge with API to become the
successor in business to API;
NCL THAI COMPANIES means ISE Ltd., Palanamai Ltd. and Keltic Ltd. being the Thai
companies in which NCL owns shares;
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NCL CAMBODIAN COMPANIES means NISC Ltd., KC Land Ltd. and Northbridge KC
Development Co.,s Ltd. being the Cambodian Companies in which NCL owns shares;
NMS means Northbridge Management Series (HK) Ltd., a Hong Kong company
beneficially owned entirely by NCL;
NCL GROUP means NMS, NCL Thai Companies and NCL Cambodian Companies.
2. PURCHASE AND SALE
(1) NCL agrees to sell and API or its designee agrees to purchase the
NCL Group in the following manner:
- NCL will transfer the issue share capital of the NCL Cambodian Companies
to NMS;
- NCL will transfer the issued share capital of the NCL Thai Companies to
API(T) and NMS in such proporation as is agreed;
- NCL will transfer the entire issued share capital of NMS to API BVI;
(2) The consideration for the purchase of NMS, the NCL Cambodian
Companies and the NCL Thai Companies shall be the issue of shares in API BVI on
completion;
(3) The value of the API BVI shares shall be US $5 per share;
(4) The number of shares to be issued shall be agreed between the
parties and based on an independent valuation report to be prepared by Xxxxxxx &
Xxxxxxxxx (Thailand) Limited at or around July 1, 1999 taking into account the
assets and liabilities of the NCL Thai Companies, the NCL Cambodian Companies
and NMS and the proportion of shares in each company that is be acquired.
3. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS
(1) NCL represents and warrants that all liabilities of the NCL Group
have been disclosed prior to the date of this Memorandum of Understanding in
writing. In the event of any undisclosed liabilities NCL shall adjust the
purchase price accordingly or repay API for any losses on an indemnity basis.
The sale and purchase agreement shall contain usual warranties and
representations.
(2) API represents and warrants that all liabilities of API have been
disclosed prior to the date of this Memorandum of Understanding in writing. In
the event of any undisclosed liabilities API shall adjust the purchase price
accordingly or repay NCL for any losses on an indemnity basis. The sale and
purchase agreement shall contain usual warranties and representations.
(3) NCL shall continue to negotiate to resolve the current dispute in
relation to the Northbridge Villas at Burapha and shall keep API fully informed
of such negotiations.
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(4) NCL shall at all times during the 24 month period from the date of
signing the Sale and Purchase Agreement keep API fully informed of its
intentions to sell any shares in API.
(5) NCL shall use its best endeavors to assist API with other parties
in NCL Group companies and employees of the NCL Group to obtain acknowledgement
and acceptance of the change of ownership and corporate structure.
(6) API shall use its best endeavors to raise US$15 million in new cash
within six (6) months of the signing of the Sale and Purchase Agreement, using a
share valuation not less than that set out in Clause 2(3).
4. MANAGEMENT OF NCL GROUP
The boards of directors of the companies within the NCL Group shall be
restructured so that API shall appoint directors proportionate to its interest
in the NCL Group.
5. MANAGEMENT OF API
The board of directors of API shall be restructured so that NCL shall appoint
directors proportionate to its interest in API.
6. FINANCING
NCL understands that API intends to initiate an ambitious Asian property
acquisition programme to raise funds to support future development programmes
for the properties to be acquired.
7. SALES
The current employees of NCL Group in Phnom Penh will continue to assist with
negotiations and the conclusion of contracts for those prospective buyers or
lessees of property in Cambodia for a period of up to 12 months from completion.
8. MASTER PLAN
NCL and API agree that there will be no material change to the Master Plans of
the properties within the NCL group both in Cambodia and Thailand.
9. ________
NCL grants API an option over the ____ property owned by NCL exercisable by NMS
at any time after completion at a price being open market value (as verified by
an independent valuer) or equivalent to an offer received by a third party
(Option Price). In the event NCL receives an offer to purchase from a third
party NMS shall have a first right of refusal for a 90 day period from the date
of the offer to purchase at the Option Price.
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10. POST EVENT TRANSACTION
API understands that negotiations are proceeding to sell interest in land and or
buildings at the Phnom Penh property for a G7 country Embassy property. It is
further understood that an offer to sell property has been made in the region of
US$13 Million. If this transaction takes place after the signing of the Sale
and Purchase Agreement, and within 6 months, API will grant a number of shares
to NCL equivalent to 90% of the transaction price, less the value of the
property sold and previously included in the initial valuation. An independent
valuer is to assess the value of the relevant property pre transaction. If the
event takes place after six months but before 12 months, API will grant a number
of shares equivalent to 60% of the transaction price. After 12 months, there
will be no grant of shares. Where there is a grant of shares, the shares will
be valued at the closing price on the day the transaction is completed.
11. DUE DILIGENCE
(1) API shall be permitted to conduct such due diligence on the NCL
Group and its assets as it considers prudent and NCL shall procure that API
shall have full access to all documents, record, properties and details of all
assets and liabilities. NCL shall also facilitate API or its representatives to
meet with any partners or employees of NCL and, where appropriate, access to all
government and regulatory authorities.
(2) NCL or individuals appointed by NCL shall be entitled to conduct
due diligence on behalf of NCL on API and to meet, inter alia, current
investors, broker dealers, market makers and relevant regulatory authorities.
12. AGREEMENTS
The parties shall use best endeavors to enter into a Sale and Purchase Agreement
and other related agreements, subject to shareholder and regulatory approval,
within 45 days after the signing of this MOU. The Sale and Purchase Agreement
shall contain normal terms and conditions and protections for both the Purchaser
(API) and the seller (NCL).
13. TERMINATION
NCL shall have the right to terminate this Memorandum of Understanding in the
event (i) the average closing price of API shares on the National Quotations
Bureau Pink Sheets (OTC Market, USA) shall for a period of not less than 7 days
prior to completion be less than US$4.50; or (ii) the average closing index of
the DOW Xxxxx All Share Index or the NASDAQ All Share Index shall for a period
of not less than 7 days prior to completion be less than 85% of the index o the
date of the signing of the MOU.
If at any time between the date of signing this MOU and closing there is any
material change in circumstances, which adversely affect the fundamental
understandings or spirit of this MOU, either party shall have the right to
terminate this MOU on fifteen (15) days prior written notice.
14. CONFIDENTIALITY
Each party shall keep the contents of this Memorandum of Understanding
Confidential provided that API shall be entitled to disclose the contents to the
extent that it shall be required to do so by any regulatory authority or in
connection with raising any capital raising or issue of new shares.
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IN WITNESS WHEREOF, this Agreement has been executed on the day and year first
above-written.
Signed by /s/ XXXXXXXX ST. XXXXXXXX
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for and on behalf of ( Xxxxxxxx St. Xxxxxxxx )
ASIA PROPERTIES INC.
in the presence of ----------------------------------
Signed by /s/ VORASIT POKACHAIYAPAT
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for and on behalf of
NORTHBRIDGE COMMUNITIES LTD.
in the presence of ----------------------------------
