The agreement can be renewed for additional years as mutually agreed by the parties. The agreement shall be renewed on the same terms and conditions. If either party wishes to renew the agreement, it shall inform the other party at least 6 months before the expiration of the term.
Environmental impact assessment and management plan
Sannati Agro Farm Enterprises has an obligation to conduct an environmental impact assessment and deliver the report within 3 months of execution of agreement
Sannati Agro Farm Enterprises shall provide good care and conservation of the lease land and its natural resources, with particular obligations to (a) conserve tree plantations that have not been cleared for earth works, (b) apply appropriate work methods to prevent soil erosion in "slopping" areas, and (c) observe and implement all legislation regarding natural resource conservation
The Government undertakes to provide special investment privileges such as exemptions from taxation, import duties of capital goods, and repatriation of capital and profits granted under the investment laws of Ethiopia
There shall be a 3-year grace period for the land rent, where the rent during this period will be prorated over the remaining years annually. After the first 3 years, the annual lease rate shall be birr 1,580,000 (or birr 158 per hectare). The total amount payable under the agreement shall be birr 39,500,000. Sannati Agro Farm Enterprises is also required to make a 1-year down payment to the Government. The Government reserves the right to revise the lease payment rate as the need may arise.
Sannati Agro Farm Enterprises has the right to build infrastructure such as dams, water boreholes, power houses, irrigation system, roads, bridges, offices, residential buildings, fuel/power supply stations/outlets, health/hospitals/dispensaries and education facilities at its discretion upon consultation and submission of permit request with the Government and subject to the type and size of the investment project. Upon the expiry of the agreement, Sannati Agro Farm Enterprises shall remove assets installed on the leased land within 1 year. However, where the agreement is terminated upon expiry of the term or for one of the reasons in article 9, the Government has the priority right to purchase properties over the land in negotiation with Sannati Agro Farm Enterprises.
The Ministry of Agriculture and Rural Development has an obligation to arrange access and use of facilities of the Government and Regional State Research centers for soil testing and mapping purposes, for a fee
The Government shall ensure that Sannati Agro Farm Enterprises shall, during the period of the lease, enjoy peaceful and trouble free possession of the premises and shall be provided adequate security, free of cost, for carrying out its activities, against any riot, disturbance or other turbulent time other than force majeure, as and when requested by Sannati Agro Farm Enterprises. The Government shall protect the right of Sannati Agro Farm Enterprises to the peaceful possession, use and quiet enjoyment of the leased area.
Sannati Agro Farm Enterprises is expected to start developing the land within 6 months from the date of execution of the agreement, or from the date that it receives final clearance from the Government, whichever is later. Sannati Agro Farm Enterprises shall develop 1/5th (2000 hectares) of the land within the first year, and the entire leased land within 5 years from the date of signing or receipt of all clearances from the Government, whichever is later.
Upon entering into the agreement, Sannati Agro Farm Enterprises shall submit an advance action plan with regards to the use of the leased land to the Ministry of Agriculture and Rural Development
In the event of a dispute, both parties will do their utmost to resolve the dispute amicably and to their mutual satisfaction. If they are unable to achieve such a settlement, the dispute shall be referred to Ethiopian Federal Court.
Unless 75% of the land is developed, Sannati Agro Farm Enterprises has no right to transfer the land or properties developed on the land to other persons. Upon developing 75% of the land, Sannati Agro Farm Enterprises can transfer the land or properties (but not only the remaining land which is not developed) to other persons with the prior permit of the Ministry of Agriculture and Rural Development.
Sannati Agro Farm Enterprises has the right to terminate the land lease agreement subject to at least 6 months' prior written notice upon justified good cause. The Government has the right to terminate the land lease agreement subject to at least 6 months' prior written notice (i) upon justified good cause, (ii) on the grounds of failure to develop the land within the time limits in accordance the contract obligation, (iii) on the grounds of any damage on the natural resources, or (iv) on the grounds of non-performance of due payment of lease charge. In the case of (ii), (iii) and (iv) above, if Sannati Agro Farm Enterprises does not address such issue, the Government may extend the time period for such compliance or terminate the agreement. The land lease agreement may be terminated for a number of reasons, including upon (9.3) failure of the Government to fulfill or observe any of its obligations or covenants in the lease after Sannati Agro Farm Enterprises has given written notice of 6 months and the Government fails to perform, (9.4) failure of Sannati Agro Farm Enterprises to settle annual rental and other relevant tax payments for 2 consecutive years, (9.5) failure of Sannati Agro Farm Enterprises to perform its obligations in the lease after the Government has given a 6 months' written notice calling upon them to observe and perform such obligations. The Government has the right to restore any land which is not developed with 6 months' advance notice and after Sannati Agro Farm Enterprises has not cured the failure within 1 year.The Ministry of Agriculture and Rural Development shall issue 6 months' written notice prior to termination of the agreement on the grounds of failure to develop the land within the time limits set by the agreement. If the issue is not addressed, the Ministry of Agriculture and Rural Development may either extend the time period for compliance or terminate the agreement.
If the agreement is terminated by Sannati Agro Farm Enterprises for failure of the Government to fulfill its obligations or for termination by the Government on justified good cause, the Government shall pay to Sannati Agro Farm Enterprises the value of improvements made by Sannati Agro Farm Enterprises on the land at the market price after setting off any dues on account of rentals or taxes
Sannati Agro Farm Enterprises shall not make any unauthorized use of the leased land beyond the purpose of article 3 (which is, among other things, developing the land for rice and other rotational crops) without the express written consent of the Ministry of Agriculture and Rural Development
Sannati Agro Farm Enterprises shall provide correct data and investment activities reports upon request by the Government. The Government has the right to monitor and establish the fact that Sannati Agro Farm Enterprises is discharging and accomplishing its obligations diligently. This monitoring must be done in a manner that does not cause any hindrances to the work and activities of Sannati Agro Farm Enterprises.