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.
JVL OVERSEAS is obliged to take good care of the leased land and the natural resources on it, 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
Restrictions on transactions with affiliated parties
Dividing the leased land among the shareholders of JVL OVERSEAS to develop in an independent way or subleasing to any party is strictly forbidden and shall result in the termination of the agreement
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 790,000 (or birr 158 per hectare). The total amount payable under the agreement shall be birr 19,750,000. JVL OVERSEAS 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.
JVL OVERSEAS 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, subject to the type and size of the investment project.
Upon the expiry or termination of the agreement, JVL OVERSEAS shall remove all 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 JVL OVERSEAS.
If the agreement is terminated by JVL OVERSEAS for failure of the Government to fulfill its obligations or for termination by the Government on justified good cause for the better public interest, the Government shall pay to JVL OVERSEAS the value of improvements made by JVL OVERSEAS on the land at the market price after setting off any dues on account of rentals or taxes
The Ministry of Agriculture 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 JVL OVERSEAS 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 JVL OVERSEAS. The Government shall protect the right of JVL OVERSEAS to the peaceful possession, use and quiet enjoyment of the leased area.
JVL OVERSEAS 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. JVL OVERSEAS shall develop 1/3 of the land within the first year, and the entire leased land within 3 years from the date of signing or receipt of all clearances from the Government, whichever is later.
JVL OVERSEAS has to execute all development activities as per the agreed business plan. JVL OVERSEAS shall, upon entering into the agreement, submit an advance action plan regarding the use of the leased rural land, accompanied by the agreement, to the Ministry of Agriculture.
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, JVL OVERSEAS has no right to transfer the land or properties developed on the land to other persons. Upon developing 75% of the land, JVL OVERSEAS can transfer the land or properties (but not the remaining land which is not developed) to other persons with the prior permit of the Ministry of Agriculture.
JVL OVERSEAS 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) on justified good cause for better public interest, (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 JVL OVERSEAS 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 JVL OVERSEAS has given a written notice of 6 months and the Government fails to perform, (9.4) failure of JVL OVERSEAS to settle annual rental and other relevant tax payments for 2 consecutive years, (9.5) failure of JVL OVERSEAS to perform its obligations in the lease after the Government has given 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 JVL OVERSEAS has not cured the failure within 1 year. The Ministry of Agriculture 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 may either extend the time period for compliance or terminate the agreement.
JVL OVERSEAS shall not use the land for any purpose beyond the purpose stated in art. 3 (which involves developing the land for cotton farming and related activities), except with the prior written consent of the Ministry of Agriculture
JVL OVERSEAS shall provide correct data and investment activity reports upon request by the Ministry of Agriculture. The Ministry of Agriculture has the right to monitor and establish the fact that JVL OVERSEAS 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 JVL OVERSEAS.