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Investment in Terra Phuket Company Limited by third party, example business and investment agreements by Bangkok Law Online. Agreements used in Thailand practice, sample contracts, online contract drafting service in Thai and English by qualified business lawyers online.

THIS AGREEMENT (‘the Agreement’) is made on this [    ] day of [    ] 2010.

Between:

(1)    TERRA PHUKET COMPANY LIMITED a company incorporated under the laws of Thailand and whose registered address is 57/4 Moo 4 Kamala, Kathu District, Phuket province 83150 (hereinafter referred to as “TERRA PHUKET”)

and

(2)    (Mr/Mrs/Miss____________________________________(hereinafter referred to as the “Purchaser”) whose residential address is (__ ______ __ ___ ___________________________________)

WHEREAS TERRA PHUKET is a company incorporated under the laws of Thailand and  is  the registered legal owner of raw undeveloped land described below being the only asset of TERRA PHUKET;and

WHEREAS TERRA PHUKET has agreed to sell and the Purchaser has agreed to purchase, through a distribution of shares in TERRA PHUKET, a beneficial interest in any revenue derived by way of sale, lease or similar arrangement in respect of the land (‘Asset’); and

WHEREAS the Purchaser desires to acquire the said interest in TERRA PHUKET and its asset for the purpose of deriving revenue therefrom by way of sale, lease or similar arrangement; and

NOW THEREFORE THIS AGREEMENT WITNESSETH THAT IN CONSIDERATION of the promises and the covenants and agreements hereinafter contained, the parties hereto agree as follows:

INTERPRETATION

‘Asset’ means the raw undeveloped land described in detail in Schedule “A” and registered in the name of TERRA PHUKET Co., Ltd

‘Closing Date’ means the date of payment of the Purchase Price.

‘Government Taxes’ means land and property taxes as imposed by the Thai Revenue Department.

‘Investment’ means the Purchaser’s monetary investment in the Share Unit.

‘Operator’ means TERRA DEVELOPMENT Company Limited whose registered address is _______________________ Thailand.

‘Planning Fund’ means a separate dedicated bank account to be opened with a commercial bank in _________ and managed by the Operator.

‘Property’ means raw undeveloped land as described in detail in Schedule A.

‘Preference Share’ means a class of share(s) conferring preferential rights as to decision making and voting at general meetings over the holders of ordinary share capital of TERRA PHUKET. A maximum of 7 (SEVEN) votes attach to each 1 (ONE) preference share as set out in the Articles of Association of TERRA PHUKET attached hereto at Schedule ‘D” and incorporated herein by reference.

‘Owners’ means holders of Preferential Shares in TERRA PHUKET

‘Preference Share Unit’ means a unit of 1 (one) Preference Share at a price of …per 1 unit in TERRA PHUKET

‘TERRA PHUKET’S Share Unit holder' means TERRA PHUKET’ shareholders.


CONSIDERATION

1.    The Purchaser hereby agrees to purchase from TERRA PHUKET and TERRA PHUKET hereby agrees to sell to the Purchaser [____] preferential share unit(s) (‘Preference Share Unit’) in TERRA PHUKET representing [    ]units of TERRA PHUKET’S Asset; namely the Property.

2.    TERRA PHUKET’s Asset, being the Property, is described in detail at Schedule ‘A’ and  is limited to a plot of land, located  at[    ………        ] as evidenced by the sales literature included at Schedule ‘A’ hereto. TERRA PHUKET holds the land on behalf of and for the joint financial benefit of TERRA PHUKET’s holders of preferential shares hereinafter collectively referred to as ‘the Owners’.

3.    In consideration for the Purchaser’s investment in TERRA PHUKET’s Preference Share Unit(s), TERRA PHUKET agrees to grant to the Purchaser, through the sale of Preference Share Units pursuant to Clause 1 above, a beneficial interest in the revenue derived from the sale, lease or other arrangement in respect of the Asset (hereinafter collectively referred to as the “Asset”) described and evidenced at Schedule “A” to this document.

4.    The Purchase price for the Preference Share Unit shall be ___________(…..}________   payable on the  “Closing Date” to TERRA DEVELOPMENT Company Limited  by cashier’s cheque or bank transfer drawn in the favour of:

TERRA DEVELPMENT Company Limited
[            ]
[            ]
[            ]    

INTEREST IN THE ASSET

5.   TERRA PHUKET’ legal interest in the Asset shall be registered with the relevant Thai Land Department at the sole expense of TERRA PHUKET.

6.    The Purchaser’s interest in TERRA PHUKET shall be recorded in TERRA PHUKET’s corporate documentation and evidenced by the issue of a Share certificate in the format appended hereto in Schedule ‘B.’


WARRANTIES

7.    The Share Unit is sold by TERRA PHUKET in good faith with no representation or warranties by TERRA PHUKETor its Directors as to:

7.1    the management of any investments or return (if any) on investment;
7.2    the value of the Asset;
7.3    the zoning of the Asset.

8.    Notwithstanding clause 7 above, the Directors of TERRA PHUKET warrant the following:

8.1    they have authority to enter into this Agreement;
8.2    they will use best endeavors to manage the Purchasers’ Investment in the Preferential Share Unit(s) of TERRA PHUKET competently and to the best of their ability;
8.3    they will use their best endeavors to appoint competent and professional advisors, and/or agents to assist with the management of the Preference Share Unit, the Investment and the Asset;
8.4    they will exercise best efforts to mitigate any devaluation of the Asset;
8.5    they will not do anything or enter into any agreement, or transaction involving the Asset except with the approval of the Board of Directors;
8.6    title to the Asset will, throughout the period of this agreement or until the Asset is disposed of pursuant to clauses 15 and 16 below, remain registered with the [        ] Land Department under the name of TERRA XX Co., Ltd.
8.7    title to the Asset will, throughout the period of this Agreement, be free of any encumbrances including mortgages, liens and charges;
8.8    title to the Preference Share Unit shall be free and clear of all financial encumbrances.
 
FUTURE SALE OF THE SHARE UNIT AND ASSET

9    The Purchaser agrees that the following provisions shall govern any future sale of the Preference Share Unit and development of the Asset, which provisions shall constitute an agreement between the Purchaser, TERRA PHUKET and all other Owners from time to time.

10    The Purchaser hereby appoints TERRA DEVELOPMENT Company (‘DTC’) as the manager and operator (the “Operator”) of the Share Unit(s) and the Asset.  Owners holding, in the aggregate, share units representing a 60% or greater interest in the allocated preference shares of TERRA PHUKET shall have the right to terminate the appointment of the Operator and to appoint a new operator from time to time.  TERRA PHUKET shall, on behalf of the Purchaser, and together with the Purchaser appoint the Operator as its true and lawful attorney for such purposes including the provision of services as set out in clause 11 below in respect of the Asset upon such terms as the Operator shall deem advisable and collect from Owner(s) payments of service fees in the amounts set out in Schedule ‘C’ hereto.  All the service fees received by the Operator shall be applied towards payment of Government Taxes (as defined below).  If the service fees received by the Operator in a calendar year exceed Government Taxes the surplus shall be deposited to the Planning Fund and used to pay additional expenses incurred by the Operator on behalf of the Owners but only up to an amount equal to the surplus.  Any service fees that exceed Government Taxes and additional expenses incurred by the Operator on behalf of the owners shall be deposited to the Planning Fund.  

11.    ‘Services’ shall include land management, marketing and sales including the preparation of sales literature; investment management, administrative assistance including the preparation of all agreements and contracts, management of land development proposals; and submission of land development approvals including land allocation and building permit licenses.

12    “Government Taxes” shall be, in any given year, all land and property taxes including Local Development Tax pursuant to the Local Development Tax Act B.E. 2508 as assessed by the local Thai Revenue Department, as the case may be, against the Asset.  TERRA PHUKET, in its capacity as seller of the Asset and TDC as Operator, assume no liability for payments of land and property tax greater than Government Tax or any other tax, levy, liability or charge whatsoever related to the Asset.  If the amount of money held in the Planning Fund is insufficient to pay Government taxes, the payment of such tax is the joint responsibility of the Owners.  In the event of such a shortfall, the Operator will pay the deficiency from,  the proceeds distributable to the Owners upon sale of the Asset.

13    Any written, formal, bona fide proposal to develop the Asset  or an offer to purchase 100% of the allocated Share Units of TERRA PHUKET received by the Operator as agent for the Owners from a third party or conceived by the Operator (other than as may be prepared in connection with an application for development approval initiated by the Operator as provided below), shall be submitted by the Operator to all Owners, and if accepted by those Owners holding, in the aggregate, share units representing a 60% or greater interest in the allocated preference shares of TERRA PHUKET, will be binding upon all Owners.  Such proposal or offer shall form the basis of a development plan or share sale agreement which will be drawn up with the assistance of the Operator.  If the Operator determines in its sole discretion that it is advisable to seek development approval including Land Allocation and building permits for the Asset on behalf of the Owners, the Operator will pay the costs of seeking such approval out of  the Planning Fund.  If the cost of obtaining development approval exceeds the amount deposited in the Planning Fund, the Operator shall be able to request that the Owners holding units representing a 60% or greater interest in the allocated preference shares of TERRA PHUKET authorize the Operator to withhold from the proceeds of  sale of the Asset and reimburse itself for all additional costs paid by the Operator in obtaining development approval (which, if given by such Owners, shall be binding upon all Owners);

14    Those of the Owners holding in the aggregate share units representing a 60% or greater interest in TERRA PHUKET’ allocated preference shares shall have the right and authority to accept the Offer (such Owners to be hereafter referred to as the “Accepting Owners” for the purposes of this Clause 14 only), which acceptance shall be binding upon all of the Owners, subject only to the following right of first refusal (the “ROFR”).  Any one or more of the Owners who do not accept the Offer (all of the Owners who do not accept the Offer shall be hereinafter collectively referred to as the “Non-Accepting Owners”) shall have the right  (ROFR) (on a pro rata basis on the number of units owned by each Non-Accepting Owner) to purchase the units of the Accepting Owners, at the same price (on a per unit basis based on all of the units which form part of the Asset) and upon the same terms as contained in the Offer, which right shall be exercisable within a 14 day period from the date the Operator communicates to the Owners notice of the acceptance of the Offer by the Accepting Owners (those Non-Accepting Owners who exercise the ROFR shall be hereinafter collectively referred to as the “ROFR Owners”).  If the ROFR Owners exercise the ROFR, the remaining Non-Accepting Owners shall be under no obligation to exercise the ROFR.  If the ROFR is exercised, the Offer shall be deemed to have not been accepted and, subsequent to the purchase of the Preferential Share Units belonging to the other Owners by the ROFR Owners, this Agreement shall continue to be binding on the ROFR Owners, who shall collectively be the Owners as contemplated in this Agreement.  If the ROFR is not exercised, then the Non-Accepting Owners shall be deemed to have accepted the Offer and shall be required to sell their Preferential Share Units for the price and upon the terms and conditions contained in the Offer.

15    The Purchaser covenants and agrees  not to sell or otherwise dispose of the Preferential Share Unit unless the subsequent purchaser of the Preferential Share Unit shall agree in writing with TERRA PHUKET to be bound by all of the provisions of this Agreement, including but not limited to, clauses 10,11,12,13, 14, 15, 16 and 17 hereof as if it were the Purchaser hereunder.

16    No person shall obtain an interest in the Preference Share Unit or Asset without being bound by all of the provisions of this Agreement including, but not limited to, Clauses 10,11,12,13, 14, 15 and 16 hereof and the Direction and Power of Attorney incorporated herein at Clause 17 below, which shall not survive the closing of the transaction of purchase and sale of the Preference Share Unit by TERRA PHUKET to the Purchaser and shall not merge with the issuance to the Purchaser of title to the Preference Share Unit.  The Purchaser acknowledges and agrees that: (i) all of the provisions of this Agreement including, but not limited to, Clauses 10,11,12,13, 14, 15 and 16 hereof and the Direction and Power of Attorney incorporated herein at Clause 17 below, are for the benefit of the Operator and all of the Owners of the Share Units and are necessary for the orderly development of Asset of which the Preference Share Unit represents part; (ii) this document creates an interest in the Preference Shares of TERRA PHUKET; and (iii) the Preference Share Unit is hereby entrusted to the professional management  of the Operator  with the obligations contained herein including, but not limited to, the obligations contained in Clauses 10,11,12,13, 14, 15 and 16 hereof and the Direction and Power of Attorney incorporated herein at Clause 17 .

17.    The Purchaser grants to the Operator full and unconditional power to manage the Preference Share Unit(s) and the Asset pursuant to the terms of a Direction and Power of Attorney as set out herein:

17.1 The Purchaser acknowledges that the covenants and obligations between the parties set forth in Clauses 9 to 32 of this Agreement have been made for valuable consideration, the sufficiency and receipt whereof is hereby confirmed and acknowledged.

17.2    Effective as at the Closing Date, the Purchaser hereby irrevocably nominates, constitutes and appoints TERRA DEVELOPMENT CO., LTD. (“TDC”), the Operator, as the true and lawful attorney for the Purchaser to do all acts with respect to the matters contemplated by Clauses 9 to 32 of this Agreement, as fully and effectually as the Purchaser could do if personally performed, including without limitation, the preparation, execution and delivery, as agent and attorney for the Purchaser, of all documents, instruments and agreements pertaining to the sale, development, redevelopment, financing or refinancing  (with the exclusion of using the Asset as collateral for any financing) of the Preferential Share Unit , (each as defined in this Agreement) and its approval, execution and/or performance (as applicable) of each instrument or document required thereunder or in respect thereof or ancillary thereto as TDC, as the Operator, determines is in the best interests of the Owners of the Preferential Share Units and further including, without limitation, all authority required to prepare and file any and all Thai tax returns.  

17.3    The Purchaser confirms that the said appointment under Clause 17.2 above includes the power to substitute and appoint one or more attorney or attorneys under it or them, with the same or more limited powers, and the Purchaser hereby agrees and covenants for his or her heirs, executors, and administrators, successors and assigns, to allow, ratify and confirm the actions of the said attorney or attorneys and/or its substitutes between the time of his or her death or the revocation of the power as granted under clauses 17.2 and 17.3 hereof and the time of such death or revocation becoming known to said attorney, or such substitute or substitutes, and the Purchaser hereby further covenants and agrees to indemnify and save harmless each of the said attorney or attorneys and its substitutes  against any and all loss, cost, expense, claim or action whatsoever the same being incurred as a result of any such act performed or not performed whatsoever on behalf of the Purchaser as herein above contemplated.

 
18    The Purchaser further hereby authorizes the Operator to make any and all filings and/or remittances arising from the acquisition by each Purchaser of his or her respective interest in the Preferential Shares Unit(s) of TERRA PHUKET.

19    In executing this Agreement each Purchaser authorizes the Operator, on its behalf, to make any and all appointments of management agents, land agents, development agents, and/or managers of TDC as the Operator sees fit to discharge its obligations under this Agreement.

20    Except as expressly provided in  Clauses 1, 19 and 21 of this Agreement, neither TERRA PHUKET nor the Purchaser shall have any authority to act for or to commit the other.

MISCELLANEOUS

21.    Subject to the agency created pursuant to Clause 22 hereof, the Power of Attorney set out in Clause 17 above and for the purpose of Government Sales Tax, accounting and reporting, nothing contained or implied in this Clause or in any other clause of this Agreement shall constitute or be deemed to constitute a partnership, joint venture or agency between TERRA PHUKET and the Purchaser.  TERRA PHUKET and the Purchaser do not intend to create a partnership.

22.    The Purchaser hereby irrevocably appoints TERRA PHUKET, or any representative thereof, to act as its agent in the execution of all of the necessary documents for the transfer of the Share Unit to the Purchaser and the registration of the Purchaser as the owner of TERRA PHUKET’S shares, including, but not limited to any affidavits to be sworn by the Purchaser or its agent.

23.    All notices required hereunder shall be in writing and may be served either personally upon the parties or by mail addressed to the party at its last known address.

24.    This Agreement shall endure to the benefit of and be binding on the parties hereto and their respective successors, assigns, heirs, executors and administrators.

25.     All taxes, interest and rents shall be adjusted as of the Closing Date.

26.     If there is more than one party constituting the Purchaser, they shall all be bound jointly and severally by the terms, covenants and agreements contained therein on the part of the Purchaser.

27.    This Agreement embodies the entire understanding of the parties in respect of the matters contained or referred to in it and there are no promises, terms, conditions, or obligations oral or written express or implied other than those contained in this Agreement. The Purchaser irrevocably and unconditionally waives any right it may have to claim damages or to rescind this agreement for any misrepresentation whether or not contained in this agreement or for any breach of any warranty not contained in this Agreement unless the misrepresentation or warranty was made fraudulently.

28.    Except as expressly provided for in this Agreement no variation or amendment of this Agreement or oral promise or commitment related to it shall be valid unless committed to in writing and signed by or on behalf of both parties.

29.    The Purchaser acknowledges that TERRA PHUKET and its agents and representatives have made no representations as to the timing of sale or development of the Asset or the returns attainable by the Purchaser upon sale, lease or similar arrangement in respect of the Asset. The Purchaser acknowledges that they have been advised to consult with their advisors with specific reference to the risk factors inherent in a purchase of this nature.

30.    The headings to clauses are inserted for ease of reference only and shall not affect the construction of this Agreement.

31.    In this Agreement words expressed in any gender shall where the context so requires or permits include the other gender;
31.1    words importing persons shall include bodies corporate and partnerships and other incorporated bodies and vice versa;
31.2    words expressed in the singular shall where the context so requires or permits include the plural; and
31.3    where any party is more than one person:
31.3.1    that party’s obligations in this Agreement shall take effect as joint and several obligations;
31.3.2    anything in this Agreement which applies to that party shall apply to all of those persons collectively an each of them separately;
31.3.3    the benefits contained in this Agreement in favour of that party shall take effect as conferred in favour of all of those persons collectively and each of them separately;

32.    This Agreement shall be construed, interpreted in accordance with the English language which shall take precedence over any language translations in the construction of this Agreement

32.1    Notwithstanding Clause 32 above, he respective rights and obligations of the parties shall be governed by the laws of Thailand , and each party irrevocably and unconditionally submits to the exclusive jurisdiction of the courts of Thailand and all courts competent to hear appeals therefrom.


The Purchaser acknowledges that the terms and conditions of this Agreement have been explained to him by his own independent legal advisor and the Purchaser hereby unconditionally agrees to be bound by the terms and conditions as contained herein.

Dated this ___ day of _____________ 2010

Signed……………………………………………………                     
Purchaser


Unit Number: ………………………………………………

We, the Directors of TERRA PHUKET Co., Ltd, hereby accept the terms of this contract,

Signed on behalf of TERRA PHUKET COMPANY LIMITED

By:

…………………………………………………………………
(Authorized Director)