Mou

MEMORANDUM OF UNDERSTANDING THIS MEMORANDUM OF UNDERSTANDING made at Delhi this 11th day of December Two Thousand and Four BETWEEN Naman Buildcon Limited a company incorporated under the provisions of the companies Act, 1956 , having its registered office at Plot No. 5 Sagar Complex, New Rajadhani Enclave, Main Vikas Marg, Delhi110092 represented herein by iots Director Mr. Abishek Bansal hereinafter referred to as NBL (which expression shall unless by it be repugnant to the context or meaning thereof be deemed to mean and include its successors and assign) authorized vide its resolution dated 02.08.04 of the ONE PART AND Chunmun Stores Private Limited (Chunmun Stores) a company incorporated under the provisions of the Companies Act,1956, having its registered office at II/J-18, Central Market , Lajpat Nagar, represented herein by its Director Mr. Sharad Suri herein referred to as “CS” (which expression shall unless it be repugnant to the context or meaning thereof be deemed to mean and include its successors) authorized vide its resolution dated __________ of the OTHER PART : WHEREAS :A. NBL is developing a Multiplex Cum Theatre cum 3 Star Hotel Complex named (HEREINAFTER REFERRED TO AS “The Complex”) .The competent authorities has sanctioned the plans for the Complex vide letter dated 11.03.2004 No.20867/SIDCL/RPG/198/1 ENCLOSED AS ANNEXURE – I . The proposed Complex shall consist of basement , lower ground, ground and upper floor levels . B. CS is engaged in retailing of readymade garments and other consumer goods on shop in shop arrangement with various brands. C. NBL represents that it is fully entitled and authorized to put up the Project in the manner mentioned supra and is fully competent and authorized to execute this agreement and provide the rights to CS as contained herein . D. NBL has offered an area of approximately 27147 sq. ft (Super Area) on the Ground Floor of built up area (marked red in the plan annexed) for running a Departmental Store hereinafter be referred as Said Space . E. CS has a right to enter into various business conducting agreement except leasing/subleasing for space within the store with various companies on shop in shop arrangement except for the purpose of restaurant business . The parties hereto are desirous of recording the terms and conditions agreed between them :NOW THIS MEMORANDUM OF UNDERSTANDING WITNESSETH AS FOLLOWS :1. Scope NBL hereby agrees to permit CS to put up and operate its Departmental Store at the Said Space in the complex as more clearly described in the Schedule annexed with the present Memorandum of Understanding and marked as Annexure-I, on the terms and conditions herein contained and in the Agreement/s to be executed between them .

2. Term The term of the Agreement/s shall be for a period of 25 years commencing from the date of commencement . Lock in period of the agreement will be 2 years and in case CS terminates agreement before this date, it will be liable to pay the rent for the remaining period to the NBL. NBL or any purchaser can not terminate this agreement before the Term of this agreement unless CS does any act in contravention to the provisions of this agreement. 3. Area An area of approximately 27147 sq. ft. (Super) on the Ground floor of Pacific having a covered area of 19546 sq. ft. for running a Department Store as marked red in the annexed map. 4. Fit Out Date 4.1 NBL shall permit CS to enter upon the Said Space to enable CS to carry out the Fit Out for use as a Departmental Store at CS’s own costs and expenses, on or before March 2005 with an extension of 3 (three) months grace period (hereinafter referred as Fit Out Date) subject to force majeure events or extension thereof as mutually agreed . 4.2 For the purpose of this Agreement, NBL shall be deemed to have handed over possession of the Said Space for fit out date only when CS is permitted to enter the Said Space for carrying out its fit out activities. NBL shall hand over the possession of Said Space in bare shell shape with Flooring . 4.3 The amenities to be provided by the NBL include air-conditioning (high sie only), Fire fighting upto false ceiling level, Electric cable at one point , Glass façade and flooring of vitrified tiles only. Flooring can be provided as per your specification but subject to a budget of Rs.10 lacs (maximum) . A service corridor will also be provided for the loading/unloading of goods from store directly . 5. Commencement Date : 5.1 Unless prevented by any Act of God, CS shall ensure that the Commencement Date of Agreement shall definitely be within a period of 4 months from the Fit Out date, However it can not be earlier than opening of major anchor stores in Pacific, such as Giant Adlabs Cinema and Globus . 5.2 The period between the Fit Out Date and the Commencement Date shall be compensation free period for CS . 5.3 CS shall be liable to pay the Minimum Guaranteed Profit from the Commencement Date irrespective of the commencement of business by the CS . 6. Minimum Guaranteed Profit CS shall pay in consideration of being permitted to operate its Departmental Store, to NBL (from the date of commencement) the higher of the amounts provided in a ) or b) as provided hereunder: a. Minimum Guarantee of Rs. 11,80,895/-(Rupees Eleven Lacs Eighty Thousand Eight Hundred and Ninety Five only ) per month calculated @Rs. 43.50 per square foot per month on Super Area .

b. 1% commission of the sales per month . It is further agreed that the parties shall enhance the Minimum Guarantee by 15% once in every 5 years from when the Minimum Guaranteed profit becomes payable as per this Agreement i.e. the starting of payment of Minimum Guaranteed Profit. CS shall pay and / or reimburse all amounts payable as per this agreement to NBL and / or its nominees on or before 7th (Seventh) day of each succeeding English Calendar month . CS shall be liable to pay interest on all delayed payments at the reate of 12% per annum for the period of delay . Commission account will be settled on 1st April every year . 7. Maintenance Charges 7.1 CS shall pay to NBL or any of its nominees/maintenance agency appointed by NBL, maintenance charges for maintenance an use of common areas including but not limited to air conditioning, power backup etc. each month for the Complex at the rates fixed under agreement entered between them. Tentative amount of maintenance charges payable per month shall be mentioned at the time of signing of fnal License Agreement . 7.2 In case NBL/Complex Maintenance agency increase the maintenance charges for all the other occupants in the complex, then CS shall also be liable to bear the increase in the same proportion to the area occupied by it over the last maintenance charges paid by CS . 7.3 NBL may appoint one or more agencies for providing house-keeping facilities . 8. Signage CS shall be permitted to put up its signage at the entrance and exit to the Said Space and within the Said Space in such manner as decided by mutual consultation with NBL . Entire signage space will be decided by mutual consent by NBL abd CS at the time of handing over of possession for fit outs or commencement of business by CS. CS shall obtain all municipal and other approvals and bear and pay the costs taxes, rates, cess, and levies including operating costs for signage .NBL also agrees that it will provide atleast 2-signage spaces to CS on front façade of building , one facing Delhi road and other one facing Dr. Burman road . 9. Insurance CS shall be responsible for insuring all its products , stocks , workmen , visitors and customers against all risks within the demised premises . 10. Rates and Taxes 10.1 NBL shall be responsible for the due discharge of all statutory liabilities in connection with the Complex and in particular the Said Space . NBL shal promptly pay all property tax , cess rates whatsoever in connection with the Said Space and shall hold CS free and harmless against any such liabilities at all times. 10.2 Sales tax and all other taxes , charges payable with regard to the business conducted by CS shall be borne and paid by CS .

11. Interest Free Security Deposit CS shall be liable to pay interest to NBL a sum of Rs. 35,42,685/- as Interest Free security Deposit (herein after referred to as “the Security Deposit”) towards due performance of CS’s obligations, terms and conditions. CS shall pay the Security Deposit to NBL in the following manner . a) Rs. 11,80,895/- (Rupees Eleven Lacs Eighty Thousand Eight Hundred Ninety Five Only) b) Rs. 23,61,790/- (Rupees Twenty Three Lacs Sixty One Thousand Seven Hundred Ninty Only) on fit out date. 12. Power 12.1 CS shall pay Rs. 1500/- per KVA to NBL as additional Security Deposit against power requirement, which is refundable in the same way as interest free security deposit. 12.2 CS shall make monthly payment on account of consumption of electricity as per the tariff rate of UPSEB according to the actual consumption recorder in the meter to be provided by NBL for this purpose including Lowerside AHU. 13.

TTERMINATION

13.1

On expiry or sooner determination of the Agreement’s to be executed between NBL and CS. It is agreed that:-

(a)

CS will give atleast 3 months prior notice to NBL before vacanting the premises.

(b)

CS shall hand over charge of the premises to NBL simultaneously against NBL refunding the security deposit amount, after deducting arrears therefrom, if any, to CS.

(c)

In the event if CS is ready and willing to vacate the premises, but NBL fails to refund the Security Deposit, then:(i)

(ii)

CS shall be entitled to use the premises free of charges for such time as the Security Deposit is refunded by NBL to CS provided however, CS shall bear and pay the costs of utilities including electricity, water, telephone and communication charges, and NBL shall become liable to pay to CS interest at 18% (eighteen percent) per annum on the security deposit by way of compensation / damages, from the date of expiry or sooner determination upto the date o payment of the Security Deposits by NBL

13.2

Notwithstanding the foregoing provision, NBL shall be entitled to deduct from the security deposit, arrears and all amounts, if any, which may have become due and payable by CS to NBL at the expiry or sooner determination of the agreements.

13.3

In the event of failure on the parts of CS to hand over vacant charge of the Said Space to NBL on the expiry or sooner determination of Agreement/s, NBL shall be entitled to retain the security deposit until CS hands over vacant peaceful charge thereof to NBL and CS shall bear and pay to NBL a sum payable per day (being twice the aggregate compensation), as damages and compensation for such wrongful use in addition to the monthly compensation.

13.4

That in the event of CS committing any breach under this MOU, limited to violation of Financial Term, deviation from main course of trade or such alike violation, the same shall be required to be rectified by the CS within 60 Days of the date of written intimation to the CS. In the event CS fails to respond or act onto rectification of the said breach, NBL shall have the right to terminate this agreement ad get the demised premises vacated by serving 90 days advance written notice onto the CS. In case of the other breaches of this agreement apart from the breaches mentioned above CS will be liable to pay a penalty of Rs. 10000/- per day till CS rectifies the breach.

14. Compliance CS shall, at its own costs, make all necessary applications for permissions, approvals and / or sanctions as may be necessary or required or the purpose of conducting the business of Departmental Store in the Said Space. NBL shall provide copies of such documents in respect of the Said Space as may be required by any competent authority for the purpose of granting such permission / approval sought for by CS as applicable to business of CS. 15. 15.1

NBL ‘s right to sell Premises NBL is entitled to sell, mortgage, gift, assign, transfer the Premises to any person and shall ensure that in such an event during the period of this Agreement the rights conferred to CS as per this Agreement are not affected in any manner whatsoever and shall further ensure that in case of sale of the Premises the prospective purchaser execute an Agreement with CS on the same terms and conditions contained herein. There is no right of objection of the CS to any such transfer, so long as the terms and conditions of this agreement are not affected. NBL agrees that as and when premises are sold in entirety or in parts, be minimum area of the part sold shall not be less than 5000Sq. ft. to single purchaser. NBL agrees that before selling/transferring the demised premises to any third party, it will give 15 days prior right to CS to purchase the premises.

16. Repairs CS shall be responsible for carrying out all repairs inside the said Space during the period of this Agreement and for any other damages caused on caused on account of any act of willful commission or negligence on the part of CS. CS shall not make any structural additions or alterations in the Said Space and/or the complex NBL shall be responsible for carting out all structural repairs in the Said Space. 17. Rights/Title/Interest 17.1 Nothing herein contained shall (notwithstanding any new enactment , change in the law or judgment , decree or order of any court) be construed as creating any right, interest , easement, tenancy or sub-tenancy in favour of CS in over or upon the Said Space or transferring any interest therein in favour of CS other than the permissive right of use as contained in these present. 17.2 CS shall not transfer/assign/relinquish/alienate/sell or dispose of its rights in the Said Space except with the written permission of NBL. 17.3 CS shall not create any Management change in CS company without consent of NBL . 18. Functioning of the Departmental Store and Timings . CS hereby undertakes that the Departmental Store shall function in accordance with licence/permit from concerned authorities, and in conformity with the rules of the complex that may be framed by NBL/Complex Maintenance Agency, subject to what is stated herein. Common facilities and utilities in the Complex such as air conditioning , sufficient lighting , lifts , security and vehicle parking facility shall be available during normal working hours and timings of CS’s business in the Said Space. If any facility/utility is to be availed of before or after normal working hours and timings, it shall be upon payment of prescribed charges therefore. CS shall , as its own costs, be solely responsible for storage, disposal of goods in the Premises and shall ensure adequate security thereof.

19. Settlement of Disputes All disputes and difference between the parties hereto regarding the interpretation scope or effect of any of the terms and conditions herein contained or in any way touching or concerning these presents shall be referred to a Sole Arbitrator and the same shall be deemed to be a reference within the meaning of the Arbitration and Conciliation Act 1996 or any other statutory re-enactment or modification thereto for the time being in force . The courts at Delhi shall have jurisdiction to entertain and try all actions suits and proceedings arising out of these presents. The cost of stamping and registration of this agreement shall be borne by the intending party.

IN WITNESS WHEREOF the parties hereto have hereunto set and subscribed their respective hands the day month and year first hereinabove written. SIGNED AND DELIVERED by the ) Withinnamed

) ) )

Naman Buildcon Limited (Director) In the presence of ………

SIGNED AND DELIVERED by the

)

Withinnamed

) ) )

Chunmun Stores Private Limited (Director) In the presence of ………