CONSTRUCTION AGREEMENT
AN AGREEMENT made this day of 20
Between
….. SDN BHD (Company No. …) formerly known as … Sdn Bhd (“Developer”) a private limited company incorporated in Malaysia and having its registered office at …..;
And
…. (Company No. …) (“Contractor”) a public limited company incorporated in Malaysia and having its registered office at ….
WHEREAS :-
By a letter dated …., the State Authority approved an application for alienation made by …….. (“PKNS”), a statutory body incorporated under the …. and having its head office at ….. in relation to all that parcel of land measuring approximately … acres located in the … (“Project Land”). A copy of the location plan of the Project Land is annexed hereto as Schedule 1. Copies of the letter of approval dated …. and subsequent letters relevant to the approval are annexed hereto as Schedule II.
By a joint venture agreement (“JVA”) dated … entered into between PKNS and … (Company No. …) (“Irama”), a company incorporated in Malaysia and having its registered office at …, PKNS and Irama agreed, inter alia, that :
each of them shall subscribe for such number of ordinary shares in the capital of the Developer such that PKNS shall hold 30% and Irama shall hold 70% of the enlarged issued and paid-up capital in the Developer upon the terms and conditions therein set out. Irama, as the beneficial owner of the entire issued and paid-up capital of the Developer, shall cause the Developer to issue and allot such number of ordinary shares in the Developer to PKNS and Irama as agreed;
PKNS shall sell and PKNS and Irama shall cause the Developer to purchase a portion of the Project Land measuring in area approximately …. acres (‘Part of the Project Land”) for the consideration set out in the sale and purchase agreement annexed thereto; and
PKNS and Irama shall cause the Developer to carry out the development of the Development Land in accordance with the terms and conditions set out in the JVA.
Pursuant to the JVA and by a sale and purchase agreement (“SPA”) dated …. entered into between PKNS and the Developer, PKNS agreed to sell and the Developer agreed to purchase the Part of the Project Land upon the terms and conditions therein appearing.
The approval of the Appropriate Authorities for the change of land use and the subdivison of the Development Land in accordance with the layout plan (“Layout Plan”) have been obtained and copies of the same are annexed hereto as Schedule III. The issue documents of title for each of the individual units of the Part of the Project Land have yet to be issued by the Appropriate Authorities and the premium in relation to the aforesaid approval has yet to be paid to the Appropriate Authorities.
As beneficial owner of the Development Land, the Developer has by a Deed of Assignment (“DA”) dated …, assigned in favour of …. (“AMMBB”), a company incorporated in Malaysia and having its registered office at …., as the security agent for the syndicated lenders in relation to a syndicated loan facility of RM….. granted in favour of the Developer, all the Developer’s rights title and interests in and under the Part of the Project Land.
The Developer is desirous of developing and constructing on a portion of the Part of the Project Land more particularly delineated in the Layout Plan (“Development Land”), …. units of bungalow houses (collectively referred to as “Buildings”) on the Development Land (“Housing Development”).
The Contractor has at the request of the Developer, agreed to undertake, carry out and complete the Housing Development for the consideration and upon the terms and conditions hereunder stated.
NOW IT IS HEREBY AGREED as follows:
1. DEFINITIONS
1.1 In this Agreement, unless the context otherwise requires, the following words and expressions shall have the following meanings:-
“Act”means the Housing Developers (Control and Licensing) Act, 1966;
“AMMBB”means …., a company incorporated in Malaysia and having its registered office at …;
“Appropriate means all Federal, State and local
“Authorities” Government statutory bodies and other authorities and bodies having jurisdiction from time to time and at any time over the approval of all development and building plans, the development and construction of the infrastructure and buildings, the issue of permits and certificates of fitness for occupation of buildings and the transfer and dealings with land;
“Architects”means the architects to be appointed by the Contractor for the Housing Development and includes such other architects appointed by the Contractor to succeed or replace those appointed;
“Buildings”means the …..units of bungalow houses;
“Building Plans”means the plans for the Buildings to be prepared by the Contractor referred to in Clause 3.3;
“Commencement Date”means the date of commencement of the construction of the Buildings referred to in Clause 3.4;
“Consideration”means the consideration which the Contractor is entitled to in the form referred to in Clause 4;
“Consultants”means the Architects and engineers, surveyors and other consultants to be engaged by the Contractor for the Housing Development;
“Contractor’s Funds”means the proceeds from the sale of the Contractor’s Units referred to in Clause 7.5 (a);
“Contractor’s Units”means such number of the Buildings as delineated in in the Layout Plan and referred to in Clause 4.1;
“Contractor’s S& P”means the sale and purchase agreements to be entered into by the Developer for the sale of the Contractor’s Units referred to in Clause 7.3(a);
“Controller of Housing”means the controller of housing appointed under Section 4 of the Act;
“DA”means the deed of assignment dated …., assigned in favour of AMMBB referred to in Recital E, a copy of which is attached herewith;
“Developer’s Units”means such number of the Buildings as delineated in in the Layout Plan and referred to in Clause 4.2;
“Development Land”means a portion of the Part of the Project Land more particularly delineated in the Layout Plan annexed hereto as Schedule III;
“HDA Account”means the bank account to be opened and maintained by the Developer referred to in Clause 7.5(a);
“Housing Development”means the construction and completion of the Housing Development Land referred to in Recital F;
“Housing Developmentmeans the costs required for completion of the
“Completion Costs”Housing Development to be determined in the manner set out in Clause 8.3 (c);
“Infrastructure”means all infrastructure, including roads, driveways, culverts, water mains, sewerage plants, telephone reticulation and landscaping serving and/or relating to the Housing Development within the boundaries of the Development Land and in accordance with the requirements of the Appropriate Authorities;
“Infrastructure Plans”means the plans for the Infrastructure submitted by the Developer to and approved by the Appropriate Authorities;
“Irama”means … Sdn Bhd (Company No. ..) a company incorporated in Malaysia and having its registered office at …;
“JVA”means the joint venture agreement dated …. entered into between PKNS and Irama;
“Land Premium”means the premium payable to the Appropriate Authorities for the approval of the change in the category of land use and the subdivision of the Development Land;
“Main Spine Road”means the main spine road more particularly shown shaded in green in the layout plan annexed hereto as Schedule III;
“Party”means the Contractor or the Developer and “Parties” means both Contractor and the Developer;
“PKNS”means …., a statutory body incorporated under the Selangor State Development Corporation Enactment, 1964 and having its head office at ……;
“Project Land”means all that parcel of land measuring approximately ….. acres located in the …. referred to Recital A;
“Security Deposit”means the sum of RM…… to be paid by the Contractor to the Developer as provided in Clause 5.1;
“SPA”means the sale and purchase agreement dated …. entered into between PKNS and the Developer referred to in Recital C; and
“Specifications”means the specifications for the Buildings and the Infrastructure referred to in Clause 3.1.
1.2 In this Agreement, unless there be something in the subject or context inconsistent herewith, words importing the singular or the masculine gender only include the plural number or the feminine/neuter gender and words importing persons include corporations and the expressions “Developer”, “Contractor”, “PKNS” and “Irama” include their respective successors in title.
2. AGREEMENT
2.1 Responsibilities of Parties
It is agreed that the Housing Development shall be implemented in the manner following:-
(a) the Developer shall make available the relevant parcels of the Development Land for the construction of the Buildings thereon and shall be responsible for the payment of the Land Premium to the Appropriate Authorities; and
(b) the Contractor shall for the consideration herein under stated, undertake, carry out and complete the Housing Development including the Infrastructure (other than the ….) at the cost of the Contractor in the manner and upon the terms and conditions herein under stated.
3. HOUSING DEVELOPMENT
3.1 Specifications
The specifications for the Buildings and the Infrastructure are more specifically described in Schedule IV.
3.2 Consultants/Sub-Contractors
The Contractor confirms the appointment of the consultants currently retained by the Developer, namely …… Sdn Bhd for the purpose of completing the Infrastructure and shall appoint such other consultants and/or sub-contractors as the Contractor shall deem necessary in relation to the construction of the Housing Development (collectively, referred to as “Consultants/Sub-Contractors”). The Contractor shall be solely responsible for all costs of the Consultants/Contractors incurred in relation to the Housing Development.
3.3 Building Plans & Submissions
The Contractor shall be responsible for and shall within 90 days from the date of this Agreement prepare or cause the preparation of the Building Plans for the Buildings in accordance with the Specifications and deliver copies thereof to the Developer who shall within 14 days thereof give its approval or make such suggestions for amendments as are reasonable, in which event the Contractor shall take all appropriate steps to amend the Building Plans and redeliver the same to the Developer for its approval. Any amended plans shall be redelivered within 10 days of receiving the Developer’s suggestions (if any) and the Developer shall within 10 days thereof give its approval or make such further suggestions for amendments;
The Contractor shall upon the Developer giving its approval to the Building Plans as prepared or as amended submit such Building Plans to the Appropriate Authorities for approval within 14 days from the date such Building Plans are approved and signed by the Developer and shall thereafter take all steps and do all things necessary to expeditiously obtain the approval of the Appropriate Authorities;
The Developer confirms that all relevant approvals for the construction of the Infrastructure have been obtained from the Appropriate Authorities; and
The Developer shall endeavour to obtain, within 3 months from the date of the Developer’s receipt of the Appropriate Authorities’ approval in relation to the Building Plans, from the Appropriate Authorities, an advertising permit in relation to the Housing Development. For the purpose of this Agreement, in the event that the Developer fails to obtain the said advertising permit within the stipulated period, the Parties hereby agree that the Completion Date, as referred to in Clause 3.5 shall be correspondingly extended by a period calculated from the date of expiry of the above stipulated period till the date the Developer obtains the advertising permit.
3.4 Commencement
The Contractor shall commence construction works in respect of the Developer’s Units within NINETY (90) days from the date of obtainment of the advertisement and sale permit from the Ministry of Housing.
3.5 Completion
Subject to Clause 3.3 (d), the Contractor shall ensure the completion of the construction of the Housing Development (“Completion Date”) on or before the expiry of twenty four (24) months from the respective Commencement Date.
For the purpose of this clause Completion means the completion of building works of the Buildings and the Infrastructure relating to or in support of the Buildings and the delivery of vacant possession of such Buildings.
4. CONSIDERATION
4.1 Contractor’s Units
In consideration of the Contractor undertaking carrying out and completing the Housing Development in the manner herein provided, the Contractor shall be entitled to such number of the Buildings equivalent to 59% thereof, which units are to be selected through a process of balloting (hereinafter collectively referred to as “the Contractor’s Units”) and to pay or to receive the cash adjustment referred to in Clause 4.3 upon completion. On or before the Completion Date, provided that the relevant Contractor’s Unit(s) have been redeemed in accordance with Clause 6.1(d), the Developer shall; (i) transfer or if individual titles to each of the Contractor’s Units have not been issued, assign the Developer’s interests in the Contractor’s Units to the Contractor or its nominee and/or (ii) if the Developer has, at the request of the Contractor, entered into the Contractor’s S & P in respect of any of such of the Contractor’s Units, assign to the Contractor the proceeds arising from such of the Contractor’s S& P.
4.2 Developer’s Units
The Parties hereto have, prior to the execution of this Agreement agreed to the allocation of such number of Buidings equivalent to 41% thereof to the Developer, which units are to be selected through a process of balloting (hereinafter collectively referred to as “the Developer’s Units”) and to pay or to receive the cash adjustment referred to in Clause 4.3.
4.3 Adjustment in Cash
It is agreed that * the Developer / Contractor shall pay to the Contractor / Developer a sum to be decided between the Parties calculated on the basis of Ringgit Malaysia…. (RM…) only per square foot as the adjustment cost of the land and in respect of the building cost a sum to be arrived at using the following formula i.e. No. of Unit (or percentage point if part unit) x … square feet x list price. The adjusted consideration shall be payable following the allocation of the Contractor’s Units as aforesaid in Clause 4.1, such payment to be made on the respective Completion Date.
4.4 Bumiputra Reservation
The Contractor and the Developer shall be responsible, on a basis proportionate to the percentages of the Contractor’s Units and the Developer’s Units as aforesaid in Clauses 4.1 and 4.2, in complying with the condition usually imposed by the Appropriate Authorities and/or PKNS in respect of reservation of Buildings for sale to Bumiputras.
5. CONTRACTOR’S COVENANTS
5.1 The Contractor shall:-
(a) Costs, fees, etc,
be responsible for and bear all costs of the development, construction and completion of the Housing Development including the cost of Consultants and payment of all fees and dues to the Appropriate Authorities save and except for the payment of the Land Premium and other contributions which are payable to any authority in respect of major Infrastructure works not envisaged in relation to the Housing Development. For the purpose of this Agreement, the Parties hereto agree that it shall be a condition precedent that the Developer shall have obtained from AMMBB, its written confirmation that it is aware of this Agreement;
(b) Consultants/Sub-Contractors
be responsible for all fees and costs and expenses payable to the Consultants/Sub-Contractors and shall direct the Consultants/Sub-Contractors to respond to such questions and observations that the Developer may ask of or make to the Consultants/Sub-Contractors from time to time;
(c) Building Plans and Submission
ensure that the covenants of the Contractor in Clause 3.3. are duly observed;
(d) Construction Works on Buildings
ensure that the Buildings are constructed in a good and workmanlike manner in accordance with the Building Plans approved by the Appropriate Authorities and the Specifications;
(e) Construction Works on Infrastructure
ensure that the Infrastructure other than the Main Spine Road is constructed in a good and workmanlike manner in accordance with the Infrastructure Plans approved by the Appropriate Authorities and the Specifications. The Infrastructure shall include the construction of substations required by the Appropriate Authorities to serve the Housing Development.
(f) Costs & Expenses in Connection with Facilities & Amenities
bear all costs and expenses charged by the Appropriate Authorities in connection with the provision of the facilities and amenities including but not limited to street lighting (other than that of the Main Spine Road) and on completion of the Infrastructure do everything possible within its power to have the same taken over and maintained by the Appropriate Authorities;
(G) Water, Electricity & Sewerage Mains
lay or cause to be laid all necessary water, electricity and sewerage mains, gas piping (if any) and internal telephone trunking and cabling to serve each of the Buildings and to apply or cause the application for the connection of internal water, electricity and sewerage mains of the Appropriate Authorities;
(H) Compliance with relevant Acts
comply with the provisions of all relevant Acts, Ordinances or Enactment and with all regulations or by-laws for the time being in force and affecting the Housing Development and the giving of all notices to and issue of all requisite sanctions by the Appropriate Authorities in respect of the Housing Development and generally comply with all building and other regulations of such Appropriate Authorities;
(I) Certificate of Fitness for Occupation
upon the completion of the construction of the Housing Development, to cause the Architects to expeditiously submit the relevant application/s, subject to the Developer signing the application/s when requested to do so by the Architects, to the Appropriate Authorities for the issue of the certificate of fitness for occupation of each of the Buildings and shall deliver copies of such certificates relating to the Developer’s Units to the Developer and those relating to purchasers of the Contractor’s Units to such purchasers upon issue.
(j) Insurance
at all times during the development of the Housing Development insure and keep insured all buildings and structures of the Housing Development that are of an insurable nature against loss and damage by fire, lightning, tempest, flood, riot, civil commotion, strike, theft, burglary, malicious acts and such other risks as from the Commencement Date and insure and keep the workmen on the site insured against injury or death with a reputable firm of insurers under the relevant policy or policies of insurance and pay all premium for such insurance when due including all renewals of such policy or policies;
(k) Inspection of Works
grant and/or cause to be granted access to the Developer or its agents to the site office at all reasonable times to inspect all plans, drawings, reports, documents and records relating to the Buildings and the Housing Development and access to the building sites of the Housing Development and all structures of the Housing Development to inspect the works in progress and to report thereon to the Developer;
(L) Completion
Ensure that the Housing Development be completed on or before the Completion Date;
(M) Defects Liability Period
ensure that any defects, shrinkage or other faults in each of the Buildings which shall become apparent within a period of eighteen (18) months (or such other period prescribed by law) from the Completion Date relating to each of the Buildings and which are due to defective workmanship or materials or such of the Buildings not having been constructed in accordance with the Building Plans or the Specifications, shall be repaired and made good by the Contractor at its own costs and expense within thirty (30) days of receipt of written notice thereof from the Developer and if such defects, shrinkage or other faults in such of the Buildings have not been made good by the Contractor, the Developer shall be entitled to carry out such repairs and to recover from the Contractor the cost of repairing and making good the same;
(N) Vacant Possession
in the event of the termination of this Agreement by the Developer as herein provided, to redeliver vacant possession of the portions of the Development Land to which the Developer has granted a licence to the Contractor to occupy as provided in Clause 6.1(a), to the Developer; and
(O) Supervision /Meetings
the Housing Development shall be jointly supervised by the Developer and the Contractor. The Developer shall have the right to be represented by a nominated representative at each and every meeting relating to the Housing Development including but not limited to any meetings with the Consultants/Sub-Contractors and the Appropriate Authorities.
6. DEVELOPER’S COVENANTS
6.1 The Developer shall:-
(a) Deliver Vacant Possession of Development Land
grant to the Contractor a licence to take possession and deliver possession of those portions of the Development Land required for the Housing Development to the Contractor within seven (7) days from the date of this Agreement subject always to the termination of the aforesaid licence upon the termination of this Agreement;
(b) Payment of Land Premium
make payment of the Land Premium to the Appropriate Authorities as and when it is necessary to do so in order that the individual documents of title to each of the lots of the Development Land are to be issued as provided in the sub-clause next following;
(c) Apply for Issue of Individual Titles
in the case of the Contractor’s Units, cause PKNS to apply for the issue of individual documents of title to each of the Contractor’s Units and ensure such issue on or before each Completion Date to the Contractor or at its directions together with; (i) duly executed transfers in favour of the Contractor or purchasers of such Contractor’s Units who have entered into the Contractor’s S& P, (ii) written consent from the Appropriate Authorities for the transfers to purchasers together with the consent for the purchasers of the Contractor’s Units to charge the individual document of title to financiers providing finance to such purchasers, and (iii) appropriate letters from AMMBB disclaiming any interest in such of the Contractor’s Units.
(d) Redemption of Titles
take the necessary action to obtain from AMMBB letters of release (“Letters of Release”) of such number of the Contractor’s Units at the times and in the manner following:-
i.The Letters of Release shall be in the form of a letter from AMMBB confirming that AMMBB has no further interest in such of the Contractor’s Units and that AMMBB shall at the request of the Developer deliver to the Contractor or the purchaser of that Contractor’s Unit a re-assignment of AMMBB’s interest in that Contractor’s Unit or a duly executed discharge of a charge over that Contractor’s Unit , if individual documents of titles to the Contractor’s Units have been issued; and
ii.The number of Letters of Release in respect of the Contractor’s Units to be obtained from time to time shall be determined on the basis following:-
Step I
Determine the value of each unit of the Buildings (“Unit Value”) by dividing the total contract cost of the Buildings including the cost of infracstructure attributed to such Buildings by the number of Buildings to be constructed;
Step II
Determine the number of units to be redeemed by dividing the total value of the certificates of payment to be issued by the Architects by the Unit Value; and
Step III
Determine the number of the Contractor’s Units to be redeemed by dividing the number of units to be redeemed as determined in step II by the relevant percentage of the Contractor’s Units (that is 59%). The number of the Contractor’s Units so ascertained to be redeemed shall be brought to the nearest whole number.
For the purposes of redemption under this section, the Developer agrees to provide to the Contractor a copy of AMMBB’s redemption statement relating to the Contactor’s Units and that the Contractor may determine the order in which the Contractor’s Units are redeemed and that the Developer’s payment shall be made to AMMBB within thirty (30) days from the date of issue of the relevant architect’s certificate of payment. The Developer agrees to forward to the Contractor a copy of its letters making payment to AMMBB and the Contractor agrees that the copies of such letters shall constitute good and sufficient evidence that payment has been duly made by the Developer to AMMBB . In the event that the Developer fails to make payment to AMMBB in accordance with the above , the Contractor may redeem the same from AMMBB directly and off-set the redemption amount against the Developer’s funds held in the HDA Account, provided that in the event that there are insufficient funds in the HDA Account, the Contractor may recover such outstanding amount as a debt owing from the Developer.
(e) Construct Main Spine Road
ensure that the Main Spine Road and related infrastructure (which are within the Developer’s responsibility ) are constructed in a good and workmanlike manner in accordance with the Infrastructure Plans approved by the Appropriate Authorities and that the construction is completed to an extent sufficient to satisfy the requirements for the Appropriate Authorities to issue the certificate of fitness for occupation of the Buildings;
(f) Right of Way, etc.
grant to the Contractor and to purchasers of the Contractor’s Units rights and liberties for the Contractor and such purchasers, in common with the Developer and all other persons having the like rights and liberties to use without or with vehicles of every description at all times and for all purposes whatsoever connected with the use and enjoyment of the Housing Development to pass and repass along, over and upon all roads serving the Housing Development and to make all necessary connections and thereafter to use in a proper manner the drains, pipes, cables and wires laid or constructed by the Contractor or the Developer under or over such roads;
(g) Substations
allot such parcels of the Development Land that may be required for the construction of such number of sub-stations as may be required by the Appropriate Authorities to serve the facilities of the Housing Development;
(h) Sale of Contractor’s Unit
in the case of the Contractor’s Units, permit the Contractor to sell such of the Contractor’s Units in accordance with the provisions of Clause 7 hereunder;
(i) Contractor’s Sale Office
provide appropriate office space at the sale office of the Developer for the Contractor to maintain a staff of no more that 2 persons (other than at the date of launch for the Housing Development) to attend to the sale of the Contractor’s Units until the Completion Date subject to, (i) such staff members of the Contractor complying with rules of office procedure reasonably adopted and imposed by the Developer from time to time and (ii) to the Contractor paying to the Developer the sum of Ringgit Malaysia (RM , .00) only upon the launch and/or commencement of marketing of the Contractor’s Units for sale. For the avoidance of doubt it is hereby agreed that the Contractor shall be solely responsible for the sales administration and credit control aspects relating to the Contractor’s Units and shall be liable for any telephone and facsimile charges and/or other outgoings relating to the sale and marketing of the Contractor’s Units which are attributable to the Contractor arising from the usage by the Contractor’s staff of such facilities at the sale office of the Developer;
(j) Sign Application/s for Certificates of Fitness for Occupation
sign all applications for the issue of certificates of fitness for occupation in respect of each of the Buildings when requested to do so by the architects and such other applications relating to the Housing Development, to the Appropriate Authorities, without undue delay;
(k) Developer’s Licence And Advertising & Sale Permit
ensure that the Developer’s Licence issued to the Developer pursuant to the Act is current and that a valid advertising and sale permit is issued to the Developer prior to the commencement of sales of the Contractor’s Units as aforesaid; and
(l) Letter of Disclaimer
obtain from AMMBB a letter of disclaimer in relation to the proceeds of sale of the Contractor’s Units held in the HDA Account within 1 month from the date of this Agreement.
7. SALE OF CONTRACTOR’S UNIT PENDING COMPLETION
7.1 Contractor’s Entitlement
The Contractor shall be entitled to sell the Contractor’s Units subject to the conditions set out in the following sub-clauses.
7.2 Determination of Purchase Price
The sale prices of each of the Contractor’s Units shall be mutually agreed upon between the parties hereto and the Developer shall upon agreement, then seek the approval of the Controller of Housing under the provisions of the Act. The Contractor shall be responsible for and shall sell the Contractor’s Units no lower than the agreed sale price.
In the event the Contractor is able to offer for sale on all or any of the Contractor’s units at prices in excess of the list or mutually agreed prices for the said units, SCB shall not be required to obtain the consent of the Developer before doing so.
7.3 Sale and Purchase Agreements
(a) Upon the Contractor agreeing to each sale of the Contractor’s Units, the Contractor shall instruct the Developer to enter into sale and purchase agreements as the Vendor. The sale and purchase Agreements (“Contractor’s S & P”) shall be in the standard form prescribed in the Housing Developers (Control and Licensing) Regulations 1989 with appropriate permitted amendments;
(b) Subject to the provisions of Clause 7.4 and to the Contractor remaining entitled to sell such of the Contactor’s Units as aforesaid in Clause 7.1, the Developer shall enter into the Contractor’s S&P as and when requested to do so by the Contractor. The Parties hereby agree that the Contractor shall be solely responsible to procure PKNS’ execution of the Contractor’s S & P;
(c) The Developer shall at all times on the request of the Contractor for the Sale and Purchase of the Contractor’s Units endorse their consent to any assignment that may be required in favour of Purchaser’s end financiers to assist the Purchasers in the purchase of their respective units.
7.4 Indemnity
In consideration of the Developer agreeing to and entering into the Contractor’s S & P as aforesaid in Clause 7.3, the Contactor shall indemnify and keep the Developer fully indemnified against any loss, cost, claim, action, demand or expenses (including legal fees) sustained or incurred by the Developer arising out of or in connection with the Developer entering into the Contactor’s S & P or the exercise of its powers, discretions and authorities and performance of its duties under the Contactor’s S & P.
7.5 Housing Development Account
(a) HDA Account
The Developer shall, pursuant to Section 7A of the Act, open and maintain a housing development account (“HDA Account”) with ……… for the Housing Development in relation solely for the Contractor’s Units. In the event that the HDA Account is to be utilised for the entire Housing Development the proceeds of the sale of the Contractor’s Units (“Contractor’s Funds”) shall then be separately journalised when paid into the HDA Account.
(b) Operation of HDA Account
The HDA Account, in relation to the Contractor’s Funds, shall be operated by the authority of three signatories, with one (1) signatory from each of the following groups nominated by; (1) the Contractor, (2) the Developer and (3) PKNS. Save and except for any default of this agreement by the Contractor, the parties hereto agree that the Contractor’s nominated signatory shall not be changed by the Developer without the consent of the Contractor until the final account in relation to the Housing Development has been determined and paid.
7.6 Proceeds of Sale
(a) The Contractor hereby confirms and directs the Developer and the Developer hereby agrees to make payment of the Contractor’s Funds into the HDA Account.
(b) The Developer undertakes to the Contractor that the Developer shall not utilise any part of the Contractor’s Funds held in the HDA Account other than for the purposes of this Agreement.
(c) The Developer shall from time to time, within 30 days of receipt of the request from the Contractor , release to the Contractor such of the Contractor’s Funds or such portion(s) thereof according to the value of work done as certified by the Architect in accordance with the Payment Schedule to Contractor annexed to this Agreement as Schedule V, subject always to any of the Developer’s rights/obligations of retention and agreed to by the Developer Provided That; (i) payments to all sub-Contractors and consultants are current ; (ii) all payments are paid out in accordance with the provisions of the Housing Developers (Housing Development Account) Regulations, 1991; (iii) there are sufficient funds in the Contractor’s portion of the HDA Account ; and (iv) an equal amount of work has been completed in relation to the Developer’s Units and the Contractor’s Units. For the avoidance of doubt , it is hereby agreed that no monies shall be released until at least after the Architect has certified that the foundation and footing works of the Buildings.
(d) The Developer agrees, in the event that the purchaser(s) of the
Contractor’s Units secure from any licensed bank or other financial institution (“End-Financier”) credit facilities to finance in part or otherwise their purchase of any of the Contactor’s Units, such that the End Financier shall make payment towards redemption [as referred to in Clause 6.1 (d)] directly to AMMBB, the Developer shall make a corresponding payment into the Contractor’s portion of the HDA Account.
(e) Any surplus of monies held in the HDA Account shall be disbursed in accordance with the provisions of the Housing Developers (Housing Development Account) Regulations, 1991.
7.7 Commission Payable To Developer
In the event that any of the Contractor’s Units shall be sold through or at the Developer’s office, the Contractor shall pay to the Developer a commission equivalent to 1% of the purchase price.
8. DEFAULT & TERMINATION
8.1 Events of Default
Each of the following events shall constitute an event of default of each of the Parties severally, namely, if:
(a) default be made in payment of any moneys payable under the provisions hereof or relating to this Agreement;
(b) a Party commits any breach of or omits to observe any of the conditions, obligations, undertakings or covenants under this Agreement;
(c) a petition shall be presented (except when such petition is contested by the such party with bona fides) or an order be made or a resolution be passed for winding up of a Party except that this event shall not apply if the resolution is passed for a voluntary winding-up of the Party for the purpose of reorganization thereof with the prior written consent of the other;
(d) a receiver and/or manager of a Party’s undertaking or property or any part thereof pursuant to any agreement or charge shall be appointed;
(e) any representation or warranty of a Party made herein or in connection with this Agreement proves to be untrue or incorrect when made and such default shall not be rectified for a period of seven (7) days after the other Party shall have given written notice of such default;
(f) a distress or execution or other process of a Court of competent jurisdiction be levied upon or issued (except in the case where an appeal is pending and a stay of execution has been obtained) against any property of a Party such distress execution or other process as the case may be is not satisfied by the Party within seven (7) days from the date thereof;
(g) a Party shall have failed to satisfy any judgment passed against that Party issued out of a Court of competent jurisdiction and no appeal against such judgment has been made to any appropriate appellate Court in Malaysia within the time prescribed by law;
(h) in the case of the Contractor, the Contractor without reasonable cause:-
(i) fails to commence work on the Housing Development within seven (7) days from the respective Commencement Date;
(j) suspends any material part of the work on the Housing Development for a period of fourteen (14) days . In this context “suspension of any material part of the works” shall include suspension of any part of the works as shall retard the progress of the works; or
(k) abandons work on the Housing Development;
and fails to remedy such breach within a period of fourteen (14) days or such further period as may be agreed to by the Developer after receipt of notice in writing from the Developer requiring such breach to be remedied. For the purpose of this sub-section, it is hereby agreed by the parties hereto that it shall be deemed to be reasonable cause should the Developer fail to comply with its obligation under Clause 6.1(b) and 6.1(d) above.
8.2 Default by Developer
Upon the happening of any of the Events of Default aforesaid in Clause 8.1 attributable to the Developer the Contractor shall be entitled at its election by notice in writing to the Developer to (i) claim for specific performance of this Agreement and damages or (ii) terminate this Agreement whereupon the following consequences shall ensure:
(a) the Security Deposit shall be refunded by the Developer to the Contractor free of interest within fourteen (14) days of receipt of the aforesaid notice; and
(b) the Contractor shall be entitled to recover such damages which the Contractor may have suffered.
8.3 Default by Contractor
Upon the happening of any of the Events of Default aforesaid in Clause 8.1 attributable to the Contractor the Developer shall be entitled at its election by notice in writing to the Contractor to (i) claim for specific performance of this Agreement and damages or (ii) terminate this Agreement whereupon the following consequences shall ensue in the order following, that is to say:-
a. the Contractor shall at the direction of the Developer take all steps to terminate any contracts or sub-contracts entered in relation to the Housing Development or to assign such contracts or sub-contracts to the Developer or its nominee/s;
b. the Contractor’s licence to occupy the Development Land or any part/s thereof shall cease;
c. an inspection of the Housing Development shall be carried out jointly by the representatives of the Developer and the Contractor within fourteen (14) days thereof to ascertain the condition and state of the development and to determine the costs for the completion of the Housing Development together with any additional costs of consultants and costs overrun as may be required to complete the Housing Development and the legal costs of the Developer (“Housing Development Completion Costs”);
d. the Contractor shall deliver and/or cause to be delivered to the Developer all documents, plans, drawings and other relevant documents (including but not limited to all approvals and applications to the Appropriate Authorities for development and building plans) in relation to the Housing Development which are in the possession of the Contractor or any of its Contractors, sub-contractors or the Consultants;
e. the Contractor shall terminate the services of the Consultants and settle in full all fees, expenses and claims of the Consultants and deliver to the Developer the relevant letters of discharge of the Consultants and their respective letters of release as consultants for the Housing Development;
f. the Developer shall within six (6) from the determination of the Housing Development Completion Costs recommence work keeping within the Housing Development Completion Costs until completion and in carrying out the works the Developer shall be entitled to enter into such arrangements and/or contracts with such other companies or persons upon such terms and conditions as the Developer shall deem fit;
g. the Developer shall be entitled to the full benefit of the Contractor’s S & P, the Security Deposit, any of the Contractor’s Units that have not been sold and to the Contractor’s Funds in the HDA Account and to utilise the same for the completion of the Housing Development;
h. the Developer shall be entitled to recover such damages (if any) which the Developer may have suffered arising from the default of the Contractor;
i. the Developer shall, as from the date of default by the Contractor, be entitled to sell or otherwise dispose of the Contractor’s Units or interest therein, in such manner as the Developer shall deem fit provided that any such transaction be at arm’s length, in order to recover such sums as may be necessary to settle the Housing Development Completion Costs and the Developer shall deal with the proceeds from such sale in accordance with sub-clause (j) below;
j. in the event of the Developer selling or disposing of the Contractor’s Units or interests therein as aforesaid in sub-clause (i) then the proceeds from the sale or disposal shall be paid out as follows:-
i.first, towards payment of all costs of and incidentals to the sale or disposal of the Contractor’s Units or interests therein;
ii.secondly , towards payment of the Housing Development Completion Cost;
iii.thirdly, towards payment to the Developer of damages suffered by the Developer as a result of the default of the Contractor and of any monies owing by the Contractor to the Developer; and
iv.fourthly, any balance thereof shall be paid to the Contractor
Provided always that if the proceeds from the sales or disposals are insufficient to meet the Housing Development Completion Costs and/or monies owing by the Contractor to the Developer, the Developer shall be entitled to recover any deficiency from the Contractor including the cost of such recovery; and
k. Upon completion of the Housing Development by the Developer as aforesaid the Developer shall render a full account of all sums recovered from the Security Deposit, the Contractor’s Funds and the proceeds of the sales or disposals of the Contractor’s Units or interests thereof, the costs and expenses in the completion of the Housing Development and the Developer shall pay to the Contractor or the Contractor shall pay to the Developer any sums that may then be owing by one to the other , as the case may.
Subject to Clause 3.3(d), in the event that the Contractor fails to complete the work on or before the Completion Date, the Developer shall be entitled to and the Contractor shall fully indemnify and keep indemnified the Developer against any loss, cost, claim, action, demand or expense (including legal fees) sustained or incurred by the Developer as a result of the same Provided Always that if the work is not completed after six (6) months after the Completion Date, the Developer shall be entitled , without prejudice to any of the Developer’ rights in law or in equity, to forfeit the Security Deposit absolutely.
9. DEVELOPER’S REPRESENTATIONS
The Developer hereby represents, warrants and undertakes with the
Contactor that:-
(a) the Developer is the beneficial owner of the Development Land and save as otherwise disclosed the same is free from all encumbrances save and except for the restriction in interest and conditions of title that the Appropriate Authorities have imposed or may impose on each of the documents of title upon issue;
(b) the Developer has assigned its interest in the Development in the Development Land in favour of AMMBB as security for banking facilities granted to the Developer;
(c) the category of land use of the Development Land is building;
(d) the Developer is a licensed housing developer and has been issued with a housing developer’s licence, namely, Licence No.;
(e) the Developer has obtained or will obtain from the Appropriate Authorities the consent for , (i) PKNS to transfer the Contractor’s Units to purchasers and (ii) the purchasers to charge the individual parcels to a bank or financial institution as security for loans given to such purchasers;
(f) the Developer as at the date of this Agreement has not received any notification or declaration pursuant to section 4 and/or 8 of the Land Acquisition Act, 1960 of any intended acquisition of the Development Land or any part thereof;
(g) the SPA has been duly completed;
(h) the Developer will pay the Land Premium and all charges fees and costs relating to the change in category of land use and subdivision of the Development Land and the issue of individual titles arising therefrom;
(i) the Developer has the full power and authority to execute, deliver and perform the terms of this Agreement and has taken or will take all necessary corporate or other actions to authorise the execution and performance of the terms of this Agreement;
(j) no winding up petition has been presented against the Developer nor any receivers or managers appointed;
(k) as at the date hereof all rates charges taxes quit rent and other outgoings in respect of the Development Land have been paid and the Developer will continue to pay all such charges taxes quit rent and other outgoings; and
(l) as from the date of this Agreement the Developer shall not further encumber the Development Land.
10. CONTRACTOR’S REPRESENTATION
The Contractor hereby represents, warrants and undertakes with the
Developer that:-
i. the Contractor has the full power and authority to execute , deliver and perform the terms of this Agreement and has taken or will take all necessary corporate or other actions to authorise the execution and performance of the terms of this Agreement; and
ii. no winding up petition has been presented against the Contactor nor any receivers or managers appointed.
11. GENERAL
11.1 Entire Contract
This Agreement constitutes the entire understanding between the parties and supersedes all previous agreements and undertakings. No variations hereof shall be effective unless made in writing and signed by both parties hereto. It is hereby irrevocably agreed between the Parties that the Parties shall as soon as reasonably practicable, enter into the ….. (PAM)’s conditions of contract, substantially in the format of the specimen annexed hereto as Schedule VI and in the event of any inconsistency of any terms and/or conditions contained in this Agreement with those in the aforesaid conditions of contract, the terms and conditions contained in this Agreement shall prevail.
11.2 Applicable Law
This Agreement shall be governed by the laws of Malaysia.
11.3 Time
Time wherever mentioned in this Agreement shall be deemed to be of the essence of this Agreement.
11.4 Non-waiver
No failure or delay on the part of any party thereto in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of such right or power preclude any other or further exercise thereof or the exercise of any other right or power thereof.
11.5 Further Acts and Deeds
The parties hereto shall execute do and procure all other necessary persons or companies, if any, to execute and do all such further deed , assurance, acts and things as may be reasonably required so that full effect may be given to the terms and conditions of this Agreement.
11.6 Costs
(a) Solicitor’s Costs
Each party shall be responsible for its own legal costs.
(b) Stamp fees
The stamp fees payable on this Agreement shall be borne and paid by the Parties in equal shares.
11.7 Notices
Unless otherwise specified herein, all notices, requests or other communications to or upon each of the parties hereto shall be deemed to have been given, in the case of notice by letter five (5) days after the same is sent by prepaid registered post, or three (3) days after the same is sent by prepaid ordinary post or, in the case of notice given by telex upon transmission with an answer back confirmation or , in the case of transmission by facsimile when the recipient’s registered address number is shown on the sender’s receipt of a confirmed log print-out for the transmission regarding the date, time and transmission of all pages and shall be addressed to the addresses of the parties hereto hereinbefore mentioned or such other address as any of the parties may designate from time to time by written notice to the other party hereto.
11.8 Exclusion of Implied Relationships
Nothing contained in this Agreement shall be deemed or construed to constitute any party a partner or to create any trust or commercial partnership. No party shall have the authority to act or to incur any obligations on behalf of the other party or parties except as expressly provided in this Agreement.
11.9 Headings
The headings of each of the provisions herein contained are inserted merely for convenience of reference and shall be ignored in the interpretation and construction of any of the provisions herein contained.
11.10 Schedules
The schedules referred to in this Agreement shall be construed as an integral part of this Agreement to the same extent as if the same have been set forth verbatim herein.
11.11 Confidentiality
Subject to any applicable statutory or regulatory rules or otherwise as may be required by any regulatory authority in Malaysia, none of the parties hereto shall make any public announcement in relation to the transactions the terms of which are set out in this Agreement or the transactions or arrangements hereby contemplated or herein referred to or any matter ancillary hereto or thereto without the prior written consent of the other parties (which consent shall not be unreasonably withheld or delayed).
11.12 Severability
Any term, conditions, stipulation , provision, covenant or undertaking in this instrument which is illegal, void, prohibited or unenforceable shall be ineffective to the extent of such illegality , voidness, prohibition or unenforceability without invalidating the remaining provisions hereof, and any such illegality , voidness, prohibition or unenforceability shall not invalidate or render illegal, void or unenforceable any other term, conditions, stipulation, provision, covenant or undertaking herein contained.
11.13 Successors in Title And Assigns
This Agreement shall be binding upon the parties hereto their successors in title, personal representatives, next of kin and lawful assigns respectively.
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IN WITNESS WHEREOF the parties hereto have hereunto set their hands the day and year first above written.
The Common Seal of the Developer )
……………………. SDN BHD )
(Company No. ………..) )
was hereunto affixed in )
the presence of:- )
………………………….. ………………………………
Director Director/Secretary
Name: Name:
Nric No. Nric No.
The Common Seal of the Contractor )
…………………………. )
(Company No. ……………..) )
was hereunto affixed in )
the presence of :- )
……………………………. ………………………………
Director Director/Secretary
Name: Name :
Nric No. Nric No.
