24 September 2012

Sahn Malen Chiefdom in the Pujehun District; Bum Chiefdom in the Bonthe District; and Bagbo and Lugbu Chiefdoms in the Bo District, Southern Province

Socfin Agricultural Company (S.L) Limited

5 years, renewable

Oil palm

12,000 hectares

Ministry of Agriculture, Forestry and Food Security, Ministry of Finance and Economic Development, and Ministry of Trade and Industry

5 years

Memorandum of Understanding and Agreement

Socfin Agricultural Company (S.L) has finalized the technical and environmental studies which confirm the feasibility of the project from the perspective of soil quality, climate and environmental conditions, and transport logistics. The government recognizes the project will be based on the Environmental and Social Impact Assessment (ESIA) report based on the forthcoming government Environmental and Social Performance Standards for Agribusiness investments attached to the contract. Socfin Agricultural Company (S.L) shall develop environmental management plan to address afforestation issues, water management, etc. The environmental license for the project will be granted to Socfin Agricultural Company (S.L), subject to typical conditions for an environmental license, no later than 6 weeks after the application is lodged unless: (a) it is withheld for one or more lawful reasons which are objectively reasonable under the relevant laws of the Republic of Sierra Leone; or (b) Socfin Agricultural Company (S.L)'s environmental management plan (including the Environmental and Social Impact Assessment) is not being implemented to a material extent

Socfin Agricultural Company (S.L) shall adhere to the Environmental Protection Agency Act (as amended) 2008, and other environmental regulations developed by the government and in line with international best practices

Socfin Agricultural Company (S.L) shall also develop model farms to showcase and train people in the most appropriate irrigation techniques for the land type of its project location. The government agrees to enter into a water rights agreement with Socfin Agricultural Company (S.L) and Socfin Agricultural Company (S.L) shall be charged at a fixed rate of 3 Leone per cubic metre of water extracted from rivers and other watercourses. There will be no restriction on the volume of water extracted by Socfin Agricultural Company (S.L) from rivers, other watercourses, wells and boreholes.

The directors, consultants, employees, contractors and sub-contractors of Socfin Agricultural Company (S.L) can bring into or import, and export following or in anticipate of the ending of their period of residence of work, such personal and household effects (including one vehicle per family), free of all taxes and all customs duties (other than any prevailing ECOWAS tax which is currently set at 0.5% of the value of the applicable goods) but otherwise subject to the governments usual terms and conditions being applied and for the same to be processed through the port of entry or exit, including any customs procedures, without delay. The import of any agricultural inputs shall not be subject to any tax or duty whatsoever. All plants, machineries, vehicles and equipment which are not agricultural inputs are eligible for duty free import from 2011 until 2018 (inclusive). All duty waivers will be granted at the time of import and not as duty claw-back.

The government agrees that the directors, consultants, employees, contractors and sub-contractors of Socfin Agricultural Company (S.L) shall be exempt from personal income tax, subject to the general rules on expatriate taxation as defined in the National Investment Incentive legislation for agricultural businesses. Socfin Agricultural Company (S.L) shall be entitled to claim tax deduction in respect of depreciation of its capital assets of the project from the dole of commencement of commercial operations of the project. The government will exempt from withholding tax interest payments made by Socfin Agricultural Company (S.L) to other lenders, or indirectly by Socfin Agricultural Company (S.L) to its shareholder's which is then paid to other lenders, which are at least 20 per cent directly or indirectly owned by a foreign government and which has as one of its primary objectives the provision of development finance in emerging markets. Payments of rent by Socfin Agricultural Company (S.L) in connection with any land lease or right shall be allowable deductions for corporation tax purposes and not subject to any withholding tax but Socfin Agricultural Company (S.L) shall otherwise deduct withholding tax at a reduced rate of 5% from interest payments. Socfin Agricultural Company (S.L) shall be entitled to an exemption from deduction of withholding tax on 50% of any dividend paid until 2021 provided that Socfin Agricultural Company (S.L) maintains records of its financial transactions and records relevant to the sale during this period of palm oil and other agricultural products (such records to be retained by Socfin Agricultural Company (S.L) for 6 years). Accounts will be kept in USD only, all transactions in Leones or other currencies being converted at the relevant exchange rate. The remaining 50% of any dividend shall be subject to the withholding tax deduction of 10%. Until 31 December 2018, direct head-office cost and management fees, excluding payments for goods or services provided by a third party that is not an affiliate of Socfin Agricultural Company (S.L) or the SOCFIN Group (the "Overhead Allocation"), that can be demonstrated to be properly incurred for the specific purpose or benefit of Socfin Agricultural Company (S.L)'s business and reimbursed by Socfin Agricultural Company (S.L) will be treated as bona fide business payment and expenses representing an allowable deduction for corporate tax purposes and not subject to any withholding tax subject to: (i) the submission of invoices, and as laid out in a detailed schedule of expenses verified by independent auditors, and (ii) the approval of the board of the directors Socfin Agricultural Company (S.L). After 1 January 2019, any Overhead Allocation over the Overhead Cap will be subject to corporate tax and withholding tax al the applicable rate. The Overhead Cap for each applicable fiscal period will be 6% of Socfin Agricultural Company (S.L)'s revenues. Socfin Agricultural Company (S.L) shall be entitled to a full 100% exemption from corporate tax on income received or accrued prior to 31 December 2022. A 50% exemption for 2023 and 25% exemption on the result of 2024. For the avoidance or doubt, any losses accrued during this period will be entitled to be carried toward beyond 2024. The government shall grant Socfin Agricultural Company (S.L) an institutional relief of Good and Services Tax (GST) on supplies until 2015 incl. or any such period thereafter, when production is scheduled lo start.

From 1 January 2022 all dividends shall be subject to a withholding tax 10%

Socfin Agricultural Company (S.L) has negotiated land lease agreements covering the project area with the government, the Chiefdom Councils and landowners of Malen, Bagbo, Lugbu and Bum and will continue to do so with the help of the government in order to secure sufficient concession areas for its development plan

Socfin Agricultural Company (S.L) will seek to improve the livelihood of the local population by providing transportation for the movement of fruit, building and improving social infrastructure, employing and/or contracting staff and training its workforce. Socfin Agricultural Company (S.L) shall develop a corporate social responsibility plan based on an assessment of community needs in collaboration with local government officials, Paramount Chiefs, representatives of land owning families, and the communities themselves.

Socfin Agricultural Company (S.L) will seek to improve the livelihood of the local population by employing and/or contracting staff and training its workforce. The government welcomes labour intensive industries which provide stable income and training to its workforce. The government recognizes the expected benefits of the project in terms of job creation. Socfin Agricultural Company (S.L) should provide the government with a detailed human resource plan which includes projections for the hiring of Sierra Leonean staff at all management, middle cadre and junior levels. Included in this human resource plan should be information on internships or apprenticeship opportunities and a detailed training and succession plan. Socfin Agricultural Company (S.L) is obliged to promote employment of Sierra Leoneans.

Socfin Agricultural Company (S.L) agrees to permit tendering by local suppliers of relevant ancillary services, such as transportation, input supplies, warehousing, engineering and shipping, from time to time on such terms and conditions as Socfin Agricultural Company (S.L) shall reasonably specify. Socfin Agricultural Company (S.L) is obliged to promote the use of locally available Sierra Leonean goods in the industrial and manufacturing sectors.

Socfin Agricultural Company (S.L) shall develop a smallholder or outgrower scheme as per the government's guidance. The aim of the scheme shall be to achieve food self sufficiency and ultimately security. Activities to be developed will include but not limited to providing basic agricultural inputs, training, market access, etc. in line with the Smallholder Commercialization Programme (SCP) and the Food Security flagship programme of the government. Socfin Agricultural Company (S.L) shall develop a collection mechanism to collect the agricultural products of the smallholder. Socfin Agricultural Company (S.L) shall have exclusive right to collect the raw material (fresh fruit bunches in case of crude palm oil extraction mill) from the smallholders, the price for such raw material shall be market determined. Socfin Agricultural Company (S.L) undertakes to collaborate with the government on the smallholder commercialization programme to closely work with smallholders / outgrowers in the project areas.

The government agrees that Socfin Agricultural Company (S.L)'s directors, consultants, employees (including their immediate families), contractors and sub-contractors shall be entitled to: (a) enter into, leave and reside in Sierra Leone for the purposes of the project and (b) work in Sierra Leone (excluding immediate families who are only entitled to apply to work in relation to the same conditions that apply to other expatriates)

Socfin Agricultural Company (S.L) will seek to improve the livelihood of the local population by training its workforce. Socfin Agricultural Company (S.L) shall also develop farmer's training schools in the chiefdoms where its project has leased/acquired lands. Such training schools shall focus on the crops cultivated by Socfin Agricultural Company (S.L) and other cash crops with particular emphasis on rice and other food crops. Socfin Agricultural Company (S.L) shall also exclusively develop areas to showcase advanced farming of one or two crops, mutually agreed with the government. Socfin Agricultural Company (S.L) is obliged to develop the human and institutional capacity of Sierra Leoneans through training and transfer of knowledge and technology.

Socfin Agricultural Company (S.L) agrees to meet all project-related capital expenditures anticipated in the business plan on a best effort basis. These expenditures include, but are not limited to, clearance, earth moving, road construction and improvement, planting of oil palms, installation of a processing plant and a nursery irrigation network and system, factory installation and fit-out and related civil works, residential and social infrastructure, warehouse and workshops.

USD 11 million. Requirement of SAC to secure sufficient funding (capita and loans)l / Estimated new investment: 111 million USD (2011-2019); ...

All disputes shall be referred to and resolved by arbitration in London before three arbitrators under the Rules of Arbitration of the International Chamber of Commerce from time to time in force. Socfin Agricultural Company and the government may not appeal to any court on a question of law arising out of an award made in the arbitration. Socfin Agricultural Company and the government irrevocably waive any rights of appeal they might otherwise have had. The arbitration award shall be final and binding on Socfin Agricultural Company and the government or anyone claiming through or under them. Judgment rendered on the award may be entered in any court having jurisdiction or application may be made to such court for judicial acceptance of the award and an order of enforcement as the case may be.

The government agrees that it will not nationalize, expropriate or confiscate all or any part of the assets or rights of Socfin Agricultural Company (S.L), its sub-contractors or their respective contractors or any other party to the documents relevant to the development, operation and funding of the project or the share capital of Socfin Agricultural Company (S.L) other than on the basis of full compensation (including loss of profit) to the affected parties

This Memorandum is governed and shall be construed in accordance with the laws of the Republic of Sierra Leone

The government acknowledges that the execution, performance and delivery by Socfin Agricultural Company (S.L) or the government of this contract shall constitute a private commercial transaction entered into entirely in Socfin Agricultural Company (S.L)'s, or the government's, commercial capacity. The government agrees that should any other party bring legal proceedings against it or its assets in relation to this contract, no immunity from such legal proceedings shall be claimed by or on behalf of itself other than in respect of government buildings located in Sierra Leone or buildings forming part of a diplomatic or consular mission, except to the extent necessary to effect service of legal process. The government confirms that Socfin Agricultural Company (S.L) will be granted all the required permits and other authorizations in connection with the project and its funding provided that Socfin Agricultural Company (S.L) complies with all published requirements of the Laws of the Republic of Sierra Leone in relation to such permits or authorizations.

Socfin Agricultural Company (S.L) shall submit quarterly progress reports on its obligations based on a pre-determined monitoring plan. The government representatives will conduct periodical monitoring visits.

A "Change In Law" occurs if any law applied in Sierra Leone comes into effect or is amended, modified, repealed, withdrawn or replaced. If a Change In Law has a material adverse effect on the ability of Socfin Agricultural Company (S.L), its contractors sub-contractors, any shareholder or funder to perform their respective obligations under any document relevant to the project or the cost of or return from so doing then the government undertakes to grant to the project, Socfin Agricultural Company (S.L), its contractors, sub-contractors, shareholders or funders any exemption or license or other authorization necessary or desirable to ensure that such interest, rights, obligations and economic return are not materially adversely affected. If there is a dispute between the government and Socfin Agricultural Company (S.L) in relation to whether the Change in Law has the effect described above it shall be referred to the arbitration procedure as agreed and set out in the contract.