Memorandum of Understanding

MEMORANDUM OF UNDERSTANDING

This MEMORANDUM OF UNDERSTANDING(“MOU”) is made at ____________ on this the ______ day of ____________ 2008:

BETWEEN

COMPANY 1., a company duly registered under the relevant Companies Act having its registered office ………………………….. hereinafter referred to as “Company 1”,  (which expression wherever the context so permits, shall mean and include its successors-in-interest, legal representatives, administrators and assignees) of the FIRST PART;

AND

COMPANY2., a Private Company limited by shares and incorporated under the Companies Act, 1913 having its registered office at address___________,  represented by its Managing Director, Mr. X hereinafter referred to as “Mr. H” (which expression wherever the context so permits, shall include successors-in-interest, legal representatives, administrators and assignees) on the SECOND PART.

WHEREAS:

A.     Company 1 is the owner and in possession of the land measuring more or less 67.06 Kathas, more particularly described in Schedule – A and land measuring more or less 89.19 Kathas more particularly described in Schedule – B both located at address__________  in the city and District of Chittagong,  (collectively hereinafter referred to as the “Scheduled Lands”);

B.     Company 1 intends to develop a 20 storied commercial complex on the Schedule A land and a 20 storied apartment complex on the Schedule B land (collectively referred to as the “Buildings”) as a center of excellence to be located, constructed and implemented in Address___________, Bangladesh, pursuant to and in terms of the schematic concept guided by the rules of Chittagong Development Authority (“CDA”) for construction of the Buildings (hereinafter referred to as the “Project”);

C.     In order to implement the Project, Company 1 has proposed to enter into an arrangement with Mr. H whereby Mr. H shall design and draw the required drawings in relation to the Project, manage the construction works of the constructors and manage the sales and marketing of the Project. Mr. H has accepted the proposal of Company 1 and agreed to provide the said services to Company 1.

D.     The Parties hereto have agreed to enter into this MOU under which the Parties agree to carry out their respective functions for management, implementation, cost and expenses of theProject.

NOW, THEREFORE, THE PARTIES HERETO WITNESSETH AS FOLLOWS:

1.      That the Buildings are to be developed/constructed under the supervision and management of Mr. H after obtaining prior permission and approval of CDA and/or any other concerned authorities of the plan for the implementation of the Project.

2.      That Company 1 will provide required finance to bear the total project expenditures including promotional cost for smooth and timely completion of the Project.

3.      That Mr. H shall be responsible for providing services in three different sectors for development and sales of the Buildings to Company 1 in relation to the Project:

i. Design and Drawing:

The Design and Drawing will be undertaken by renowned architect(s) who has/have at least ____ years of experience in the relevant field. The Design and Drawings shall include the following works:

a.       Master planning;

b.      Schematic sketches ;

c.       Zone analysis drawing;

d.      Architectural drawing;

e.       Architectural working drawing;

f.        Electro-mechanical drawing;

g.       Plumbing drawing;

h.       Site Model;

i.         Detailed Model;

j.        3-D Animation etc.

ii. Construction management:

The construction management will be methodically undertaken for creation of an international standard complex by expert professional(s) who has/have at least 20 years of experience in the relevant field. The Construction Management shall include the following works:

a.       Tendering

b.      Construction works supervision;

c.       Quality assurance;

d.      Maintaining time schedule;

e.       Materials selection;

f.        Billing management;

g.       Payment recommendation;

h.       Contractors performance evaluation and implementation of corrective measures;

i.         Construction works safety management;

j.        Logistical management and

k.      Supply chain management (supervision of construction materials procurement).

And also for the necessary implementation of the Project, Company 2 shall:

i.         develop a realistic construction strategy based on the local circumstances and available resources;

ii.         short list the various contractors based on experiences, resources and financial track records;

iii.         analyse and negotiate all the documents/papers relating to the open bidding;

iv.         prepare the execution budget of the Project and financial forecast for the Project;

v.         prepare all execution plan, method of statement and construction projects;

vi.         assess performance and monitor productivity, quality assurance and safety of the contractors;

vii.         execute and manage the site development works;

viii.         prepare claims, scope, change of authorisation and progress payment application and approve the same on behalf of Company 1;

ix.         carry out any other scope of works related to the successful completion of the Project.

iii. Marketing & Sales Management:

Company 2 shall undertake to carry out sales and marketing communications with innovative ideas under its exquisite brand name of “____” to sell the various shop space/apartments/office space/car parking space at the best prices. The high profile marketing team having 25 years of experience in the field of real-estate business planning, sales and marketing management will be deployed to achieve the profitability objective of the landowner/­promoter(s) of this Project.

The Marketing and Sales Management includes the following works:

a.       Formulating marketing strategy to achieve target

b.      Outlining promotional tools and game plan

c.       Setting promotional plan and action plan

d.      Management of all marketing communications

e.       Selling of the various floor spaces of the Buildings at the premium prices

f.        Structuring recovery team for smooth collection of sales proceeds

g.       Collection of all sales proceeds and

h.       All kinds of documentation and communication with purchasers.

It may be noted here that sales and proceeds from sales will be directly received from the purchasers by the appointed representative of Company 1 for which Company 2 will provide all necessary co-operation for smooth collection of sales proceeds.

4.      That the Project is expected to be completed within 42-months from the date of approval of the plan for the Project by CDA and other concerned government authorities subject to required finance provided by Company 1; however, on force majeure or circumstances beyond control of Company 2 like riot, civil commotion, act of God, natural calamity, strike, uncertain situation due to any unforeseen event or events, the construction work may be stalled forcing delay in completion.  Company 2 shall ensure effective, efficient and the highest professional and international standard performance in all the works and services necessary for the implementation of the Project.

5.      That Company 2 will sell spaces of the Buildings after approval of plan by CDA and other concerned government authorities at the prevailing market rate. The projected rate for the various spaces are as follows:

6.      That, as per schematic concept guided by CDA rules for construction and as per conceptual planning considering 20-storied commercial building and residential complex of having approximate built-up area of 11,31,131 sft. of construction, the gross profit margin, after financial analysis and forecasting, has been projected at approximate Tk 1,07,00,00,000.00 (Taka one hundred seven crore) only but this profit margin may change depending on floor heights of the buildings and available total built­ up area of construction during final design.

7.      That Company 1 shall provide all the required finance necessary for timely and proper completion of the Project except the following:

i.      overhead expenditures for officers and staff salaries of marketing personnel;

ii.      personnel engaged for construction supervision,

iii.      office rent and its related expenditures for running marketing and sales office.

The cost for above services will be borne by Mr. H.

8.    That Company 1 shall pay the following service charges to Mr. H for the services as mentioned in the clause no.3:

9.      That the total service charges as mentioned in the clause no. 9 will be disbursed in 56(fifty six) months as follows:

10.  Each Party hereto warrants and represents that:

i.             has the corporate power and authority and all corporate authorisation necessary to enter into this MOU and to perform all the obligations contained herein.

ii.            The execution, delivery and performance of this MOU and the consummation of the transactions contemplated hereby do not and will not conflict with or result in any breach of any of the provisions of

i)                    the Memorandum and Articles of Association of the party;

ii)                   any indenture,  lease, loan agreement or other agreement or instrument;

iii)                 any law, statute, rule or regulation or order, judgement or decree to which the party is subject, the result of which shall invalidate this transaction.

12.  That Company 1 hereby declared that the Scheduled Lands are totally free from all encumbrances and from any kind of litigation etc., and there is no dispute regarding the title and the same is not the subject matter of any suit or case of any court of law to the best of their knowledge;

13.  That Company 1 shall invite for open bidding for construction work required for the implementation of the Project and both the parties agreed that the subsidiaries of Company 2 shall be able to participate in the said bidding for the construction work relating to the Project.

14.  This MOU shall within 14(fourteen) days of execution of the same be replaced by a comprehensive Agreement detailing more specific terms after completion of the digital survey of the Scheduled Lands by Mr. H for final design and prompt execution of the Project.

15.  The construction, validity and performance of this MOU shall be governed in all respects by the laws of the People’s Republic of Bangladesh.

16.   That any dispute, controversy or claim arising under this MOU or related thereto shall, insofar as is possible, be settled amicably by the Parties.  The Parties agree to negotiate in good faith to settle any such disputes.

17.  This MOU is effective from the date of execution hereof.

IN WITNESS WHEREOF, THE PARTIES HAVE CAUSED THIS MOU TO BE EXECUTED BY THEIR DULY AUTHORIZED REPRESENTATIVES AS OF THE DAY AND YEAR FIRST WRITTEN ABOVE.

Drafted by:

For: “The Lawyers & Jurists”

M.L.Hotel Tower Ltd,208,Shahid Syed Nazrul Islam Sarani,

Bijoy Nagar, Dhaka-1000.

www.lawyersnjurists.com