MEMORANDUM OF UNDERSTANDING – DEV-LANDOWNER-sample

DATED THIS……………,DAY OF ………20…………..

BETWEEN

……….SDN HHD

AND

AND

AND

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MEMORANLUM OF UNDERSTANDING
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 MEMORANDUM OF UNDERSTANDING-sample

WHEREAS

[A] …………………………….., a company incorporated in Malaysia with

an office at …………………………………. [hereinafter called "the
Company"].
[B] The Company has applied to the Registry of Companies for a
change of name to ……………………………………………
[C] The Company is desirous of leasing two [2] adjoining pieces of land
held under … measuring in area five [5] acres and …. measuring in
area five [5] acres both lands being situated in the Mukim of… in
the District of …. in …. [hereinafter called "the Land" which is more
particularly specified and described in the copy of the survey Plan
…. annexed hereto as the Schedule and marked in yellow].
[D] The Land is presently being registered by the relevant land
authority in the name of A [NRIC No. …] of … [hereinafter called
"A"] being the beneficial owner of the Land.
[E] The Land is further adjoined by another two [2] adjoining pieces of
land held under …. measuring in area five (5 ] acres and ….
measuring in area four [4] acres one [1] rood and twenty-seven [27]
poles both lands being situated in the Mukim of … in the District
of … in …. [hereinafter called "the Easement Land" which is more
particularly specified and described in the aforementioned copy of
the survey Plan …. annexed hereto as the Schedule and marked in
red].
[F] The Easement Land is also presently being registered by the
relevant land authority in the name of of B (NRIC No. …] of ….
[hereinafter called "B"] being the beneficial owner of the Easement
Land.
[G] … [NRIC No….] of … [hereinafter called "the Agent"] has
represented to the Company that he is able to and shall cause and
procure the lease of the Land by A to the Company for a period of
20 years on terms and conditions herein below set out [hereinafter
called "the Lease"].
[H] The Agent has further represented to the Company that he is also
able to cause and procure [i] the grant of easement rights in the
Easement Land by B to A for a period of 20 years [hereinafter
called "the Grant of Easement"] and [ii] the annual grant of a
licence to the Company for the occupation of a portion of the
Easement Land specified by B for a continuous period of 20 years
[hereinafter called "the Grant of Licence"] and the Agent has
represented to the Company that the Grant of Easement shall also
benefit the Company as lessee of the Land.
[I] In consideration of the Lease and the Grant of Easement and
Grant of Licence, the Company is desirous of [ i ] issuing and
allotting to A 250,000 ordinary shares of the Company valued at
RM1.00 par credited as fully paid-up and, [ii] to pay A royalty for
the extraction of granite of whatsoever nature from the Land in the
form and manner set out herein below.
[J] In consideration of the undertaking by the Agent to cause and
procure the Lease and the Grant of Easement and the Grant of
Licence the Company has granted and paid to A a loan amounting
to the sum of RM…. on the terms set out below.

NOW THE PARTIES AGREE to the following terms and conditions:-

1. CONSIDERATION
1.1 In consideration of the oral undertakings given by the Agent
to cause and procure the Lease and the Grant of Easement
and Grant of Licence the terms of which oral undertakings
are now expressly set out hereinbelow, the Company has,
subject to Clause 3.0 below, granted and paid to A a loan
amount of RM100,000.00 for the benefit of the Agent
[hereinafter called "the First Loan"] receipt whereof is hereby
expressly acknowledged by A and the Agent.
1.2 Subject to Clause 2.0 below, the parties hereto respectively
agree and undertake with each other that the consideration
for the arrangements herein shall be as follows:-
[a] the Company shall issue and allot to A … ordinary
shares cf RM1.00 par of the Company which shall be
credited as fully paid-up [hereinafter called "the Issue
Shares"];
[b] the Company shall pay A royalty calculated at the rate
of … [RM…] per cubic metre of such rock materials,
minerals and other materials as may be extracted by
the Company from the Land [hereinafter called "the
Extracted Products"];
[c] A hereby undertakes to grant the Lease to the
Company for a period of 20 years;
[d] B hereby undertakes to execute the Grant of Easement
to A for a period of 20 years and to undertake that the
Grant of Easement shall also benefit the Company as
lessee of the Land; and
[e] B further undertakes to execute the Grant of Licence
to the Company annually for the occupation of a
portion of the Easement Land specified by B for a
continuous period of 20 years for the purpose of
storing the Extracted Products.
 1.3 For the avoidance of doubt,
[a] where the Extracted Products are required by the
Company to be supplied in smaller dimensions of
specified fractions of one [1] cubic metre [hereinafter
called "Smaller Extracted Products"], then royalty shall
be paid on the total volume of such Smaller Extracted
Products calculated at the rate of … [RM…] per cubic
metre;
[b] no royalty shall be payable for Extracted Products
and/or Smaller Extracted Products of quality not
acceptable to the Company and/or its' customer;
[c] the royalty payable herein under shall fall due when,
and only when the volume of the Extracted Products
and/or Smaller Extracted Products could be
determined and shall be due and payable only on the
last business day of each calender month; and
[d] the royalty shall be paid by the Company to A or her
nominee in Ringgits [RM] at the selling exchange rate
of …. to Ringgit Malaysia[RM] fixed and publised by
Malayan Banking Berhad prevailing on the date on
which the royalty shall fall due and payable, that is to
say, on the last business day of each calendar month.

2. CONDITIONS PRECEDENT
2.1 The Lease and the Grant of Easement and Grant of Licence
and the consideration set out in Clause 1. 2 above and any
other provision herein in regard thereof his subject to [i] A
being the beneficial owner of the Land and the registration of
A as the registered proprietor of the Land; [ii] B being the
beneficial owner of the Easement Land and the registration
of B as the registered proprietor of the Easement Land; and
[iii] the delivery of copies of the certificates of title to the
Land and to the Easement Land respectively by the Agent or
A and B to the Company duly certified as true copies by an
Advocate and Solicitor or a Commissioner of Oaths.
2.2 Pursuant to Clause 2 .1 above, the Company may request
either the Agent and/or A and B to produce the original
certificates of title for purposes of verification by the
Company or its authorised representatives.
2.3 The Company has the discretion to make any document of
agreement in respect of the Lease or the Grant of Easement
and Grant of Licence subject to the terms set out in Clause
2.1 above.
3. TERMS OF THE LOAN AND ISSUANCE OF SHARES
3.1 A shall repay the First Loan free of any interest in full and
final satisfaction of the amount of Ringgit Malaysia …..
[RM….] in the following manner:
[a] the Company may deduct 30% of the total value of any
royalty payable to A for the Extracted Products; and
[b] subject to A being registered as a shareholder of the
Company, the Company may deduct 30% of the total
value of any dividends declared by the Company for
which she is entitled as shareholder
and in either case, upon the full and final satisfaction of the
First Loan sum no further deduction shall be made by the
Company. For the avoidance of doubt, A hereby expressly
consents to and authorises the Company to make such
deduction.

Notwithstanding any other provision to the contrary herein, if the Lease

or the Grant of Easement is not registered with the relevant land
authority or shall be terminated for any reason whatsoever, A shall be
obliged to immediately repay to the Company the Loan or such balance
amount of the First Loan still unpaid.

If, for any reason, the Lease or the Grant of Easement [i] cannot be
registered or [ii] are terminated prior to the completion of the 20-year
period of the Lease or the Grant of Easement after the Issue Shares have
been registered in the name of A or her nominees then A shall cause the
transfer in equal proportion of such number of Issue Shares as shall be
determined by the formula set out below [hereinafter called "Issued
Shares to be Transferred"], to the other shareholders of the Company:

Remaining
Issue Shares [250,000 shares] Years in Issue
Shares
_____________________________ X the 20-year = to be
Lease Term [20 years] Lease Term Transferred

4. THE LEASE AND GRANT OF EASEMENT AND GRANT OF

LICENCE

4.1 Subject to Clauses 21., 2.2 and 2.3 above,

 [a] B hereby agrees and undertakes to enter into an
detailed agreement for the Lease which shall
incorporate the following terms:
[i] the Lease shall have a term of 20 years;
[ii] the consideration for the Lease shall be [i] the
value of Ringgit Malaysia… [RM…] which shall
be paid by the Company by way of issuance and
allotment of 250,000 ordinary shares in the
Company valued at $1.00 par and credited as
fully paid-up and [ii] payment of royalty in the
manner and form set out in sub-clause 1.2[b]
and subject to sub-clause 1.3; and
[iii] under the Lease the Company may erect
structures on the Land, extract the Extracted
Products therein situated and conduct any other
activity for which relevant approvals have been
obtained from relevant authorities.
[b] B further agrees and undertakes to execute all
relevant documents and do all acts necessary to be
done to effect the registration of the Lease with the
relevant land authorities in compliance with Section
221 of the National Land Code and any other
applicable provision therein or other relevant statutes.
[c] B hereby agrees and undertakes to execute all relevant
documents and do all acts necessary to be done to
effect the registration of the Grant of Easement with
the relevant land authorities in compliance with
Section 286 of the National Land Code and any other
applicable provision therein or other statutes.
[d] B further agrees and undertakes to execute the
necessary documents for the Grant of Licence which
shall incorporate the following terms:
[i] the Grant of Licence shall be automatically
renewed annually for a total period of 20 years
without new consideration; and
[ii] the Company shall have quiet enjoyment of the
Easement Land as licensee during the
continuance in force of the Grant of Licence.

5. UNDERTAKING BY THE COMPANY

5.1 The Company hereby irrevocably undertakes to arrange a

loan in the sum of Ringgit Malaysia …. [RM….] from a
financial institution for the benefit of A [hereinafter called
"the Second Loan"].
5.2 The Company further and irrevocably undertakes that in the
event that the Company is unable to secure the Second Loan
from a financial institution within thirty [30] days from the
date of this Memorandum, the Company shall lend to A
along the Second Loan sum.
5.3 Pursuant to Clause 5.2 above, it is expressly agreed by A
along that the Second Loan sum shall be repaid in the
following manner:
[a] the Company may deduct 30% of the total value of any
royalty payable to A along for the Extracted Product;
and
[b] subject to A along being registered as a shareholder of
the Company, the Company may deduct 30% of the
total value of any dividends declared by the Company
for which she is entitled as shareholder and in either
case, upon the full and final satisfaction of the Second
Loan sum no further deduction shall be made by the
Company.
5.4 For the avoidance of doubt, it is agreed by A along and the
Company that the terms of Clause 5.3 above are rights given
to the Company in addition to and not in derogation of
similar rights given to the Company under Clause 3.1 above.
5.5 Pursuant to Clause 5.1 above, if the Company is able to
successfully arrange the Second Loan from a financial
institution in favour of A along then A along hereby agrees
that in the event that she defaults at any time in making any
payment required by the financial institution then the
Company shall have the absolute right to enter into
arrangements in her name and on her behalf with the
financial institution to pay any sum of money due to such
financial institution by way of the following sources:
[a] the Company may deduct 70% of the total value of any
royalty payable to A along for the Extracted Products;
and/or
[b] subject to A along being registered as a shareholder of
the Company, the Company may deduct 70% of the
total value of any dividends declared by the Company
for which she is entitled as shareholder
and in either case, upon the full and final satisfaction of the
Second Loan sum no further deduction shall be made by the
Company.
5.4 For the avoidance of doubt, it is agreed by A and the
Company that the terms of Clause 5.3 above are rights given
to the Company in addition to and not in derogation of
similar rights given to the Company under Clause 3.1 above.
 5.5 Pursuant to Clause 5.1 above, if the Company is able to
successfully arrange the Second Loan from a financial
institution in favour of A then A hereby agrees that in the
event that she defaults at any time in making any payment
required by the financial institution then the Company shall
have the absolute right to enter into arrangements in her
name and on her behalf with the financial institution to pay
any sum of money due to such financial institution by way of
the following sources:
[a] the Company may deduct 70% of the total value of any
royalty payable to A for the Extracted Products;
and/or
[b] subject to A being registered as a shareholder of the
Company, the Company may deduct 70% of the total
value of any dividends declared by the Company for
which she is entitled as shareholder and in either
case, upon the full and final satisfaction of any sums
due to the financial institution by A in respect of the
Second Loan sum no further deduction shall be made
by the Company provided always that the Company
may exercise this absolute right on a continuing basis
upon the occurence of any default in payment by A.

6. RIGHT OF FIRST REFUSAL

6.1 B hereby undertakes not to sell, transfer or dispose of the

Easement Land to a third party without first offering the
Easement Land to the Company at the same or higher of the
price offered by the third party and the valuation of the fair
market value of the Easement Land by a duly licenced valuer
registered under the Valuers, Appraisers and Estate Agents
Act 1981 appointed by the Company.
6.2 If the Company fails to accept the offer to buy the Easement
Land within 30 days from the date the offer was received by
the Company B shall be entitled to sell, transfer or dispose of
the Easement Land to such third party.
7. OTHER APPLICABLE TERM

7.1 For the avoidance of doubt, the obligations of each party

under Clause 1 and 3 shall service this Memorandum of
Understanding notwithstanding any failure to fulfill the
terms of the conditions precedent set out in Clause 2 above
or termination of the arrangements herein for any reason.
7.2 No failure to exercise or delay on the part of the Company in
exercising any right herein given or under general law shall
operate as waiver thereof.
7.3 Any written notice given by the Company to the Agent shall
be deemed to be given to A and B.
7.4 The headings to clauses are for easy reference only and shall
not to be taken into consideration in interpreting the terms
of this Memorandum.

Dated this…………….., day of ……………..20……..

____________________________ ______________________
for and on behalf of Name:
the Company NRIC No.:
Name: Address:
NRIC No.:
Position:

____________________________ ______________________
Name: Name:
NRIC No.: NRIC No.:
Address: Address: