LIPPO-MAPLETREE - Lippo Malls Indonesia Retail Trust - Investor ...

Business and propertiesIndah Plaza is constructed on land under HPL titles which will be valid as long as the land is being used bythe land owner.In respect of Bandung Indah Plaza, the land owner (as BOT Grantor) has granted the relevant Retail MallIndonesian SPC (as BOT Grantee) the right to apply for a HGB title on top of its HPL (Right to Manage) title.Pursuant to this BOT Scheme, the BOT Grantee is granted the right to build and operate the Retail Mall andto own a HGB title for the term of the BOT Agreement. Ownership of the HGB title allows the BOT Granteeto encumber the land with prior consent of the BOT Grantor and subject to the BOT Agreement.(See “Overview of Relevant Laws and Regulations in Indonesia—Rights to Own and/or to Use”.)The Retail SpacesEach of the seven Retail Spaces is wholly-owned by a Retail Space Indonesian SPC which is, in turn,owned by two Retail Space Singapore SPCs. LMIR Trust will, via its ownership of 100% of the shares of therespective Retail Space Singapore SPCs, indirectly own the Retail Spaces. (See “Certain AgreementsRelating to LMIR Trust and the Properties—Summary of Ownership Structure of the Retail Spaces”.)The Retail Spaces are held by the respective Indonesian SPCs under the following types of title:Retail SpaceMall WTC Matahari Units . . . . . . . . . . . . . . . . . . .Metropolis Town Square Units . . . . . . . . . . . . . . .Depok Town Square Units . . . . . . . . . . . . . . . . . .Java Supermall Units . . . . . . . . . . . . . . . . . . . . . .Malang Town Square Units. . . . . . . . . . . . . . . . . .Plaza Madiun . . . . . . . . . . . . . . . . . . . . . . . . . . . .Grand Palladium Medan Units . . . . . . . . . . . . . . .Held by LMIR Trust via:Strata titles ownership certificatesKiosks Sale and Purchase Binding AgreementKiosks Sale and Purchase Binding AgreementStrata titles ownership certificatesKiosks Sale and Purchase Binding AgreementHGB titlesKiosks Sale and Purchase Binding AgreementStrata titlesTwo of the Retail Spaces, namely Mall WTC Matahari Units and Java Supermall Units are held via StrataTitles.(See “—The Retail Malls—Strata Titles”.)Kiosks Sale and Purchase Binding AgreementAs at the Latest Practicable Date, four of the seven Retail Spaces, namely Metropolis Town Square Units,Depok Town Square Units, Malang Town Square Units and Grand Palladium Medan Units, are each boundby Kiosks Sale and Purchase Binding Agreements because their strata titles are in the process of beingissued by the Indonesian government.A Kiosks Sale and Purchase Binding Agreement is regulated by Article 1338 of the Indonesian Civil Code.In addition, for a strata title, it is a common practice to enter into a Kiosks Sale and Purchase BindingAgreement prior to entering into a deed of sale and purchase of land. Under a Kiosks Sale and PurchaseBinding Agreement, each of the parties agree on the terms and conditions for the transaction (i.e. the saleand purchase of land) but the Kiosks Sale and Purchase Binding Agreement does not have the effect oftransferring the ownership of the land to the other party. Instead, subject to certain conditions in the KiosksSale and Purchase Binding Agreement, the vendor is bound to sell the land and the purchaser is bound topurchase the land. These agreements shall be executed in good faith and cannot be revoked except bymutual agreement or pursuant to certain reasons which have been legally declared as sufficient.Upon the completion of the conditions stipulated in the said agreement (including the issuance of the stratatitle certificate), the parties enter into a deed of sale and purchase which shall be made before the localland deed official. Once the parties enter into a deed of sale and purchase agreement, the vendor isdeemed to have sold and transferred its rights of ownership of the land to the purchaser, who is in turn,deemed to have accepted the transfer of the said rights from the vendor. Pursuant to the Basic Principal ofAgrarian Law No. 5/1960, the transfer of ownership rights over the land is perfected upon registration atthe local land office.130