MEMORANDUM OF UNDERSTANDING

This Memorandum of Understanding is entered into at ………………………… on this …………………….day of

…………November 2010.

By and Between

JP & S HOLDINGS LANKA (Pvt) Ltd , A company incorporated under the laws of …………….., acting in it’s
own account and/or for affiliated companies, and having it registered offices at
……………………………………………….. (hereinafter referred to as ‘the Joint Developer’) of the ONE PART.

AND

STATE ENGINEERING CORPORATION OF SRI LANKA .a corporation incorporated under the laws of the
……………………….. , acting in its own account and/or for affiliated companies, and having its registered
office at …………………….. (Hereinafter referred to as ‘the SEC’) of the OTHER PART.

Whereas, the Joint Developer whose project proposal/bid titled ‘Sand Mining SEC JPSH JV’ to primarily
dredge or mine offshore Sea Sand and Transport And Stockpile on the Land if accepted and approved by
the Government of Sri Lanka.

And whereas, State Engineering Corporation of Sri Lanka desirous of Sea Sand Mining and enter in to a
Joint Venture with the Joint Developer for implementation of the said Sea Sand Mining Business.

And whereas, in pursuance thereof the state Engineering Corporation of Sri Lanka have entered in to a
Memorandum of Understanding (MOU) with the Joint Developer.

And whereas in pursuance there of the Second party has expressed its interest to provide by way of a
sub Lease to the Joint Developer a location in the Sea as provided by Sri Lanka Low lying Land
Reclamation Development Corporation for the purpose of establishing and engaging in the Joint
venture Sea sand mining business in terms of the said business as approved by Government of the
Democratic Socialist Republic of Sri Lanka.

And whereas the The First Party shall obtain a location in the Sea from the Second Party as provided by
Sri Lanka Low lying Land Reclamation Development Corporation and shall at its discretion and under
and in terms of the ‘Sand Mining SEC JPSH JV’ business proposal if accepted and approved by the
Government of Democratic Socialist Republic of Sri Lanka make its own arrangement to establish the
said business and set up the premises and facilities at the Sea and adjoining Land in the shore.

And whereas the parties have agreed on the terms and conditions applicable to such understanding
between them and are desirous of setting out in writing the terms and conditions so agreed upon
between them as described under obligations hereunder.
NOW THIS MEMORANDUM OF UNDERSTANDING THEREFORE WITNESETH that for and in consideration
of each party hereto doing, observing performing and complying with the terms and conditions
contained in this memorandum of understanding to be done observed , performed and complied with
respectively by each party hereto hereby agree as follows.

OBJECTIVES

The objective of this MOU is to set forth the terms and conditions under which the party intend to co-
operate and participate jointly in this MOU for the sole purpose of submitting a bid to Sri Lanka Low
lying Land Reclamation Development Corporation initially and entering into mutually agreeable Sea
Sand Mining business in the event the bid is successful. The MOU shall cease if the bid is unsuccessful. If
the bid is successful then MOU shall cease only after all the contractual obligations have been fulfilled
as per the contract with the Sri Lanka Low lying Land Reclamation Development Corporation.

NAME OF THE JOINT VENTURE COMPANY

Name of the Joint Venture shall be ‘Sand Mining SEC JPSH JV’

FINACIAL RESPONSIBILITIES

These are described Under Obligations of each party

DURATION/ VALIDITY

This MOU shall become effective upon signing by the parties and shall be initially for submission of the
bid and for the period of validity of bid to be submitted to the Sri Lanka Low lying Land Reclamation
Development Corporation. However ,If the bid is successful then it shall not cease but be in force until
all the contractual obligations have been fulfilled as per the contract with the Sri Lanka Low lying Land
Reclamation Development Corporation.

DISPUTES

Any and all disputes arising in connection with this MOU shall be finally settled under the rules of
arbitration of the international Chamber of Commerce by one pr more arbitrators appointed in
accordance with the said rules. The arbitration procedure shall be in the English Language. Arbitration
shall be conducted in Colombo.

APPLICABLE LAW

The law of ………………….. shall govern this MOU and the parties hereto submit to the exclusive
jurisdiction of the laws Government of the Democratic Socialist Republic of Sri Lanka and the courts of
……………………………………..
MISCELLANEOUS

The parties may choose to enter into a Lease Agreement for the SEA sand mining Business.

This memorandum of Understanding while in force shall be construed for all purpose as binding
between the Parties hereto.

GENERAL

a) Partial Invalidity

Should any provision of this Memorandum of Understanding be held to be void, invalid or inoperative
the remaining provisions of this memorandum of understanding shall not be affected and shall continue
in effect and the invalid provision shall be deemed modified to the least degree necessary to remedy
such invalidity.

b) No Waiver

The failure of either party partially of fully exercise any right or the Waiver by either part of any breech
shall not prevent a subsequent of exercise of such right or be deemed a waiver of any subsequent
breech of the same or any other term of this memorandum of Understanding.

c) HEADINGS

The section Headings contained in this memorandum of understanding are for reference purpose only
and shall not be in any way affect the meaning or interpretation of this memorandum of understanding.

d) COUNTERPARTS

This memorandum of understanding may be executed in counterparts and each of which shall be
deemed and original and all of which together shall constitute one and the same document.

OBLIGATION OF THE FIRST PARTY- JP & S HOLDINGS LANKA PVT (LTD)

1. JP & S Holdings Lanka Pvt (LTD) shall nominate three(3) person to the Board of Directors of the
Joint Venture Company. One shall be nominated as the Deputy Chairman of the Joint Venture
company. It shall appoint a Deputy Finance Manager and the Deputy General Manager and
Quality Assurance Manager for the proposed Joint Venture Company.

2. Two persons shall be nominated to signing cheques in the Joint Venture Company. Every
cheque issued shall be signed by either of the said nominees along with an authorized person
of State Engineering Corporation Of Sri Lanka (SEC).

3. It Shall maintain Joint Account and maintain Joint Records of Transactions related to the sand
mining business of the Joint Venture Company. All Operational expenditure shall be met by the
 Joint venture in the following manner . The Joint Venture Company shall pay the relevant Taxes
from its business operations.

4. The JP & S Holdings Lanka Pvt (LTD) shall carry out all sand miming operations as per the
contract with Sri Lanka Low lying Land Reclamation Development Corporation in the event the
joint venture succeeds in the bid. And as further explained hereunder

5. Shall provide and maintain the necessary Dredging equipment necessary pipe work etc.

6. The Dredger shall dredge the sea sand from agreed locations transport them to approved
location near the shore and pump them to the stock piles.

7. The stock piles shall be maintained as per approved methodology.

8. Material dredged from different location shall be stock piled in a manner that materials are
traceable to the dredging location.

9. The company shall maintain a Quality Management System for the entire business. The System
shall confirm top ISO 9001:2008

10. Dredging shall be carried out in approved location corresponding to relevant monsoons and the
dredger shall be move from one location to the other at no additional cost.

11. Quantities dredged shall conform to the mining license granted by the Geological Survey and
Mines Bureau of Sri Lanka

12. All operations shall be carried out in an environmentally friendly manner and comply with the
an approved mitigation methodology.

13. Records of mined sand and volumes of stock piles and material sold shall be jointly kept in
State Engineering Corporation.
14. Mined sand shall not be sold to other parties.

15. JP & S Holdings Lanka Pvt (LTD) Shall meet the capital, operational, maintenance, any
replacement cost etc of all sea side and land side matters relevant to the sand mining business
except as mentioned under obligation of State Engineering Corporation of Sri Lanka.
16. Employees of the company JP & S Holdings Lanka Pvt (LTD) shall comply with all laws
regulation, Acts etc of the Democratic Socialist Republic of Sri Lanka.

17. All property of the Joint Venture Company including all Plants & Machinery, Equipment, Tools,
etc shall be duly insured. 3rd party insurance shall also be done.

18. Workmen compensation shall be provided for all employees of JP & S Holdings Lanka Pvt (LTD)
as per the workmen compensation ordinance in the case of local employees.

19. Labour regulations as per the Department of the Labour Sri Lanka shall be complied in the case
of labour employed from Sri Lanka.

20. Profits shall be shared based on the Audited Statement of Accounts (as per Sri Lanka
Accounting Procedure) according to the proportion 51% to 49% respectively for SEC and JP &
S Holdings Lanka Pvt (LTD).

21. JP & S Holdings Lanka Pvt (LTD) shall train the local staff with regard to operating the
equipment and all other operations to the satisfaction of SEC.

22. JP & S Holdings Lanka Pvt (LTD) shall abide by all safety regulations applicable to the sand
mining business.

23. JP & S Holdings Lanka Pvt (LTD) shall be responsible for meeting the sea sand demand agreed
upon. In the event of not meeting the demand such losses of income to the Joint Venture
Company shall be deducted from the JP & S Holdings Lanka Pvt (LTD) profit. In the event of
Joint Venture Company making a loss in an year the above said losses will be added to the loss
of JP & S Holdings Lanka Pvt (LTD).

24. All expenditure/investment met by both parties shall be agreed between the parties by their
finance managers and joint account shall be kept and will be considered as
expenditure/investment of the business

25. The joint venture company shall abide by all regulations of Sri Lanka applicable a joint venture
company incorporated by the Sri Lanka.

26. JP & S Holdings Lanka Pvt (LTD) shall be jointly and severally liable for the completion of the
project (according to the conditions of contract ) for completion of the scope of project in the
event a contract is awarded to the Joint Venture company by Sri Lanka Low Lying Land
Reclamation Development Corporation
 27 All expenditure by SEC shall be met by the Joint Venture Company. Further 20 % of all
cumulative expenditure of SEC shall be computed and paid to SEC by the Joint Venture company
as head office overheads of SEC.

28 JP & S Holdings Lanka Pvt (LTD) shall be liable to pay to the SEC all expenditure and other losses
SEC has incurred in the event it fails to jointly carry out with SEC the contract with Sri Lanka Low
lying Land Reclamation Development Corporation in the event it is successful in the bid submitted
to Sri Lanka Low lying Land Reclamation Development Corporation.

NAME OF THE JOINT VENTURE COMPANY

OBLIGATION OF THE SECOND PARTY – STATE ENGINEERING

CORPORATION OF SRI LANKA (SEC)

1. State Engineering Corporation of Sri Lanka (SEC) shall nominate three(3) person to the Board of
Directors of the Joint Venture Company. One shall be nominated as the Chairman of the Joint
Venture company. It shall appoint a Finance Manager and the General Manager and Deputy
Quality Assurance Manager for the proposed Joint Venture Company.

2. Two persons shall be nominated to signing cheques in the Joint Venture Company. Every cheque
issued shall be signed by either of the said nominees along with an authorized person of JP & S
Holdings Lanka Pvt (LTD).

3. It Shall maintain Joint Account and maintain Joint Records of Transactions related to the sand
mining business of the Joint Venture Company. All Operational expenditure shall be met by the
Joint venture in the following manner . The Joint Venture Company shall pay the relevant Taxes
from its business operations.

4. SEC will employee 75% of managerial and skilled staff requirement for the joint venture locally.
All unskilled labour shall be from Sri Lanka and SEC shall employ them

5. The SEC will attend to all legal matters connected to incorporation of the Joint Venture Company
and Registration etc.

6. SEC will attend for matters in obtaining all relevant tax concessions etc from the Inland Revenue
Department, Department of Finance, etc.

7. SEC will facilitate to all matters pertaining to clearance of any imported item required for the
Joint Venture based on Proforma Invoice, Letters of Credits, Shipping Documents etc.
 8. SEC shall be responsible for providing all the site offices and other offices required for operation
of the business.

9. SEC shall be responsible for providing all local transport required for the business.

10. SEC shall be responsible for facilitating and arrangement of accommodation for JP & S Holdings
Lanka Pvt (LTD) staff and expatriate staff employed. The expenditure for the same shall be met
by JP & S Holdings Lanka Pvt (LTD).

11. All expenditure/investment met by both parties shall be agreed between the parties by their
finance managers in the company and a Joint Account shall be maintained and records of same
will be considered as expenditure/investment of the business.

12. The joint Venture company shall abide by all regulations of Sri Lanka applicable to a Joint
Venture Company incorporated and registered in Sri Lanka.

13. Sri Lanka Low lying Land Reclamation Development Corporation of Sri Lanka shall provide to the
Parties the location/s in the sea for sand mining purposes as approved by the Government of
Democratic Socialist Republic of Sri Lanka in the event the bid submitted by the Joint Venture is
successful. Further, Sri Lanka Low lying Land Reclamation Development Corporation shall also
provide to the Parties the location/s in the shore and land required for land side operations in
the said sea sand mining business as approved by the Government of Democratic Socialist
Republic of Sri Lanka in the event the bid submitted by the Joint Venture is successful.

In witness whereof the parties hereto have caused this MOU to be executed by their duly authorized
representatives the day and year first above written.

For and on behalf of

For and on behalf of
JP & S Holdings Lanka Pvt (LTD)
State Engineering Corporation of Sri
(Joint Developer) - First Party Lanka
(SEC) – Second Party

Director

Chairman