The RA Government Decrees

2012

2

2012

The RA Government Decrees on the Investment Program on the Construction and Development of the Yerevan Greenhouse Zone in the Vicinity of Noragavit district

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Երևանի ծրագրի կատարման աջակցման and մեխանիզմները Development velopment The ջերմատնային RA Governmentգոտու Decrees on the ներդրումների Investment Program on the Construction De

of the Yerevan Greenhouse Zone in the Vicinity of Noragavit district

DRAFT

EXCERPT FROM THE P R O T O C O L OF THE RA GOVERNMENT SESSION 17-18

ON THE APPROVAL OF THE INVESTMENT PROGRAM ON GREENHOUSE CONSTRUCTION AND DEVELOPMENT IN THE VICINITY OF NORAGAVIT DISTRICT OF YEREVAN

To approve the Investment Program on the Construction and Development of Greenhouses in the Vicinity of Noragavit District of Yerevan submitted by the Armenian Harvest Promotion Centre CJSC in accordance with the Annex.

3 May, 2012

RA Prime Minister Tigran Sargyan

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of the Yerevan Greenhouse Zone in the Vicinity of Noragavit district

Annex the RA Government Decree № 17 of May 3, 2012

INVESTMENT PROGRAM ON GREENHOUSE CONSTRUCTION AND DEVELOPMENT IN THE VICINITY OF NORAGAVIT DISTRICT OF YEREVAN

Preface Over the past 5 years, the average annual volume of vegetable crop production in Armenia has made up 800 000 tons, which is approximately 250kg per capita. This is quite a good figure.

Nevertheless, crop production in Armenia is highly seasonal in nature, as a result of which, during different seasons drastic price changes are recorded in the market, and export volumes cover a meagre per cent of the gross production.

The development and expansion of state-of-the-art greenhouses is an effective measure for mitigating the seasonal fluctuations of crop production in Armenia, increasing the competitiveness both in domestic and foreign markets, as well as for reducing the import volumes of crop production in the country.

The existing greenhouses in Armenia were constructed decades ago and considerably fall behind the modern ones in technology and productivity. Except for the greenhouses constructed during the last 1-2 years (approx. 3 ha), the productivity of the rest of existing greenhouses fluctuates between 15 and 20 kg per square metre, while the modern ones are able to provide 45100kg product per square meter depending on the technological solutions applied. At present, the Armenian producers are still unable to produce the appropriate amount, and varieties of vegetable, as well as to meet the rhythmicity requirements of the major foreign markets.

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Երևանի ծրագրի կատարման աջակցման and մեխանիզմները Development velopment The ջերմատնային RA Governmentգոտու Decrees on the ներդրումների Investment Program on the Construction De

of the Yerevan Greenhouse Zone in the Vicinity of Noragavit district

The investment program on greenhouse construction and development in the vicinity of Noragavit district of Yerevan has been developed for the purpose of developing and enhancing state-of-the-art greenhouses.

Within three years the program assumes constructing approximately 50ha greenhouse zone with engineering and logistic facilities in the vicinity of Noragavit district of Yerevan in accordance with the most modern technology requirements. The aforementioned selection of the zone is conditioned by the availability of ground area and opportunity to use the Yerevan TPP resources for centralized heat supply.

The Greenhouses Development Program complies with the RA Government’s economic development strategy and objectives, in particular, with the creation of competitive economy, attracting investments, raising the level of food security and poverty reduction.

In terms of job creation, the effective use of lands, as well as ensuring additional local budget receipts from property and land tax, the program is of social and ecological significance also.

The program is developed in accordance with the climate data in the vicinity of Noragavit district of Yerevan and the study and analysis on communal infrastructure and the Yerevan TPP resources. While developing the program, the comparative advantages of Armenia, such as the number of sunny days, the length of daylight, the availability of agricultural lands and water resources, as well as rather competitive tariffs of electric energy and gas have been taken into consideration.

Through introducing the most modern technologies for greenhouse construction, the implementation of the program will enable the large and small enterprises to combine year-round crop production and ensure the sufficient amount of products for export. This will give the opportunity to improve the productivity of crop production, ensure the availability of the products in the domestic market and the comparative stability of prices. On top of that, the 4|Page

Երևանի ծրագրի կատարման աջակցման and մեխանիզմները Development velopment The ջերմատնային RA Governmentգոտու Decrees on the ներդրումների Investment Program on the Construction De

of the Yerevan Greenhouse Zone in the Vicinity of Noragavit district

further greenhouse development will significantly mitigate the existing agricultural risks associated with weather changes.

Program Description The Armenian Harvest Promotion Centre CJSC (hereinafter referred to as Program Manager) is authorized to manage the implementation of the investment program on Greenhouse Construction and Development in the Vicinity of Noragavit District of Yerevan. For the project implementation, the Program Manager will organize the investors’ selection, conclusion of contracts with the investors and contract management processes, the construction of the centralized system infrastructure for thermal and electric energy, water, gas supply and water discharge, as well as will provide the investors with land plots with their points to connect to the infrastructures and will bear the responsibility for the program implementation.

Under the investment program it is assumed to construct glass greenhouses with their supporting operation and- maintenance facilities /cold storage, processing, sorting, packaging facilities, etc./in the land area adjacent to Noragavit District of Yerevan, which will meet the modern technology requirements.

State-of-the-art greenhouses are at least 4 m high glass or polycarbonate steel frame structures with their heating, screening, blacking out, assimilation lighting (or without this), drip irrigation, modern automatic electric and computer climate control systems, as well as with their operation and maintenance supporting (cool storage, sorting, packaging, etc.) facilities for hydroponic and soil-based crop production.

Under the investment program, during three years 50 ha of greenhouses will be constructed in the 70ha of land area adjacent to the Yerevan TPP.

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of the Yerevan Greenhouse Zone in the Vicinity of Noragavit district

On the assumption of the international experience in the area of greenhouse construction, the minimal economically optimal size of the greenhouses is 4 ha together with the area for maintenance and supporting facility.

In case of availability of the required amount of

investments, the construction of two greenhouses with one maintenance and supporting facility in 10-12 ha land plot is more efficient. It will give the opportunity to cut back on the required investment volumes, reduce the product cost price and to raise its competitiveness.

Taking into account the aforementioned preconditions, the positions of the existing greenhouses maintenance facilities as well as those to be constructed, we anticipate dividing the land area into 9 separate land plots each with 5-11 ha of land plots. The investors will have the opportunity to obtain one or more land plots.

Planning the layout of the greenhouse is carried out in a way which will allow secluding plots from the main greenhouse area in order to construct a greenhouse for specialized bulb production in case if the need arises. Moreover, open field agricultural farms can also use the bulbs to be produced in the greenhouses.

The Program Manager will conduct the investor selection process for the program implementation, the main preconditions for which will be the timing for greenhouse construction and plot price payment, as well as the number of obtained land plots. The respective land plots will be alienated to the selected investors through direct sales.

Taking into consideration that the construction of greenhouses of the estimated dimensions requires milliards drams of investment, the provision of favorable conditions for local and foreign investors such as alienation of land plots to the investors through installment sale, providing them with centralized system infrastructures for thermal and electric energy, water, gas supply and water discharge, can be the key to the program success.

Investors will have the opportunity to obtain the land areas through installment sale for a term of one year.

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Երևանի ծրագրի կատարման աջակցման and մեխանիզմները Development velopment The ջերմատնային RA Governmentգոտու Decrees on the ներդրումների Investment Program on the Construction De

of the Yerevan Greenhouse Zone in the Vicinity of Noragavit district

After terminating the pledge of the land area(s) obtained under the present program and after land leveling for the greenhouses construction by the investor, in order to attract financial resources needed for the implementation of the program, (taking into account the opportunity to use the centralized system of the infrastructures) it would be expedient to provide an investor up to 80 % government guarantee of the land area(s)’s market value.

We are also planning to construct a centralized system of thermal and electric energy, water, gas supply and drainage infrastructure for the greenhouses. We are planning to use the Yerevan TPP resources for the greenhouses heating. The investors will be able to connect to the infrastructures of the centralized system directly from the special points of their land plots.

The availability of the centralized system of the main infrastructures will enable the investors to avoid rather sophisticated, time and resource consuming solutions for electric power, water and gas supply, as well as for water discharge. As to the heat supply, the construction of the main supply infrastructure for the greenhouse zone will allow the investors to compensate the most part of the thermal energy generation cost. Meanwhile, the use of the TPP's thermal energy will promote the stability of the TPP's product consumption, on the one hand, and the investors will benefit from more affordable supply, on the other. Consequently, the product cost price will decrease; and the level of profitability and the product competitiveness will increase. The aforementioned factors will positively influence on the price of the investments’ payback period also.

The estimated investment volume of the program will be about 35-40 billion Armenian drams, and the annual gross product of the greenhouses to be constructed will make at least 30 000-40 000 tons.

Approximately 1500-2000 new workplaces will be created for the whole value chain, ranging from the production to realization of the product; only 800-1000 of the employees will be employed at the greenhouses (15-20 workplaces per 1 ha of greenhouse).

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Երևանի ծրագրի կատարման աջակցման and մեխանիզմները Development velopment The ջերմատնային RA Governmentգոտու Decrees on the ներդրումների Investment Program on the Construction De

of the Yerevan Greenhouse Zone in the Vicinity of Noragavit district

Based on the practical results of the constructed greenhouses and on the availability of the required resources, we’ll discuss the feasibility and expediency to construct 65 more ha of greenhouses in the area of approximately 86 ha in the above mentioned zone for the second phase of the program.

The Main Program Implementation Arrangements We anticipate implementing the program during three years. The investment program timeline is entitled to change based on the investors selection deadline. During the mentioned period approximately 50ha of greenhouses with their supporting operation and maintenance facilities will be constructed and operated in accordance with the modern technology solutions.

The following arrangements will be implemented under the program: 1. The Yerevan Municipality will ensure that the actual land users vacate 156 ha land area in the vicinity of Noragavit district of Yerevan; 2. Organisation of the investors’ selection process for the program implementation by the Program Manager. Preference will be given to the investors who a) will obtain more land plots, b) will offer the shortest payment deadlines for the right to use the centralized system infrastructures for thermal and electric energy, water, gas supply and water discharge, as well as for land alienation, c) will offer the shortest payment deadlines for the construction of state-of-the-art greenhouses in compliance with the investment program requirements; 3.

Alienation of separate land plots to the selected investors through direct installment sale, based on the cadastral value. The land sections which are overloaded with water mains, are not entitled to be alienated to investors and for these section free perpetual easement will be applied in order that the investors could purposefully use the obtained land plots;

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Երևանի ծրագրի կատարման աջակցման and մեխանիզմները Development velopment The ջերմատնային RA Governmentգոտու Decrees on the ներդրումների Investment Program on the Construction De

of the Yerevan Greenhouse Zone in the Vicinity of Noragavit district

4.

Imposing liability for a breach of payment in installment and construction prescribed in the contract on the direct sale of the land plot;

5.

Land site leveling, greenhouses construction on minimum 75% of the land (at least 1ha in the first year) with their operation and maintenance facilities by the investors;

6.

Obtaining permission to construct roads and the centralized system infrastructures for the greenhouses thermal and electric energy, gas, water supply and water discharge; preparation of the design-calculation documents package for the infrastructures construction by the Program Manager;

7.

Construction of the roads and centralized system infrastructures for thermal and electric energy, water and gas supply to the greenhouses , water discharge, as well as providing the investors with land plots with their points to connect to the infrastructures by the Program Manager;

8.

Imposing liability on the Program Manager in case of default on ensuring the construction of the centralized system infrastructures for thermal and electric energy, water and gas supply to the greenhouses, water discharge, as well as providing the investors with their land plots with the points to connect to the infrastructures;

9.

Providing the Program Manager with free perpetual easement over the land area overloaded with the infrastractures for the maintenace of the infrastracuteres ensuring electric energy, gas, and water supply, as well as water discharge.

10. Managing the execution of the contract terms concluded with the investors.

11. Managing the mainenance of the centralized system infrastructure for thermal and electric energy, water and gas supply, as well as water discharge by the Program Manager.

Estimated energy requirements for the greenhouses: Electric capacity:

30 MW/h

Thermal energy consumption: 89 Gcal/h Gas consumption:

16000 m³/h.

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Երևանի ծրագրի կատարման աջակցման and մեխանիզմները Development velopment The ջերմատնային RA Governmentգոտու Decrees on the ներդրումների Investment Program on the Construction De

of the Yerevan Greenhouse Zone in the Vicinity of Noragavit district

Anticipated Program Outcomes 1. Attracting large-scale investments in the Armenian agriculture sector (the overall investment volume under the program will constitute 35-40 billion AMD); 2. Proper use of land areas in the vicinity of Noragavit district of Yerevan; 3. Development of state-of-the-art greenhouses and import of the most modern technologies and know-hows in Armenia; 4. Promotion of the development of crop production and realization value chain, Expansion of the Armenian crop production and export volumes, (the annual gross product of the greenhouses to be constructed will make 30 000-40 000 tons), as well as improvement of productivity and quality; 5. Mitigation of the seasonal price changes of crop products in the domestic market; 6. Considerably decrease in import volumes along with the increase in crop production volumes; 7. Creation of new jobs; 8. Ensuring additional community budget receipts from the cost of the land to be alienated and, later on, from property and land tax; 9. Setting preconditions for the development of similar zones in the other regions of the Republic.

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of the Yerevan Greenhouse Zone in the Vicinity of Noragavit district

GOVERNMENT OF THE REPUBLIC OF ARMENIA DECISION 3 May 2012, № 633 - N

ON THE INVESTMENT PROGRAM ON GREENHOUSE CONSTRUCTION AND DEVELOPMENT IN THE VICINITY OF NORAGAVIT DISTRICT OF YEREVAN AND ON HOLDING THE RA DECREE OF N1516N1516-A OF OCTOBER 27, 2011 TO BE INVALID

Based on the Clause 5 of Part 1 of Article 66 of the RA Land Code and on the Investment Program on Greenhouse Construction and Development in the vicinity of Noragavit District of Yerevan submited by the Armenian Harvest Promotion Centre CJSC, the Government of the Republic of Armenia decides: 1.

to approve the proposal on alienating separate lots (hereinafter referred to as Lot)

from 69.83 ha plot of land in the vicinity of Noragavit district of Yerevan owned by the Yerevan community through direct sale in compliance with the conditions established by the present decree, in a manner consistent with Annex N 1 in order to construct state-ofthe-art greenhouses; 2. to establish that: 1) the “Armenian Harvest Promotion Centre” Closed Joint Stock Company (hereinafter referred to as “Program Management Company”) will be responsible for the Invetsment Program on the construction and development of greenhouses in the vicinity of Noragavit district of Yerevan (hereinafter referred to as “ Program”);

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of the Yerevan Greenhouse Zone in the Vicinity of Noragavit district

2) the separate land parcels specified by Section 1 of this Decree will be sold to the investors selected by the Program Management Company for the purpose of implementing the entire Investment Program under the terms established by this Decree; 3) during the implementation of the Program the sizes and numbers of the separate land parcels specified by Section 1 of this Decree may change in the a result of the negotiations with investors.

Meanwhile, investors may be selected by the Program Management Company by 1 December, 2014. The Program Management Company will prefer the investors who will acquire a larger number of land parcels and will propose shorter timeframes for the payment of the amounts and the construction of greenhouses with modern technologies; 4) the parts of the land parcel specified by Section 1 of this Decree which are loaded with water mains or are foreseen for the development of infrastructure for the centralised system or for roads for common use will not be for sale; 5) in the event investors are not selected for no less than 40 per cent of the separated land parcels specified by Section 1 of this Decree by 1 December, 2012 the Program will be deemed as not established and this Decree shall be repealed; and 6) the restrictions established by the Decree N 498 of the Government of the Republic of Armenia dated 11 May 2002 for the contruction of production buildings and facilities on agricultural land shall not extend to the separated land parcels specified by Section 1 of this Decree which are to be sold to the investors selected under the Invetsment Program.

3. Recommend that the Mayor of Yerevan ensures, in accordance with the established procedure, the implementation of the change of the purpose of the land specified by Section 1 of this Decree.

4. Establish the main terms and conditions for the transactions under the Investment Program, pursuant to Annext 2.

5. Assign the Minister of Territorial Admnistration, the Minister of Energy and Natural Resources and the Minister of Urban Development of the Republic of Armenia, as well as

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Երևանի ծրագրի կատարման աջակցման and մեխանիզմները Development velopment The ջերմատնային RA Governmentգոտու Decrees on the ներդրումների Investment Program on the Construction De

of the Yerevan Greenhouse Zone in the Vicinity of Noragavit district

recommend the Mayor of Yerevan and the Public Services Regulatory Commission of the Republic of Armenia to assist with the implementatin of the Program within their powers.

6. The Chairperson of the State Water Committee under the Ministry of Territorial Admnistration of the Republic of Armenia to discuss with the Water Users Union/Association and the Program Management Company and ensure the disassebling and transportation of the water mains on the land area specified by Section 1 of this Decree.

7. Repeal Decree N 1516-A of the Government of the Republic of Armenia dated 27 October 2011 “On Participating in the Pilot Project Based on the Public-Private Partnership for the Development of the Greenhouses Sector in the Republic of Armenia“.

8. This Decree shall take effect on the day following the official promulgation.

Tigran Sargyan

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of the Yerevan Greenhouse Zone in the Vicinity of Noragavit district

Annex N 1 the RA Government Decree № 633 – N of May 3, 2012

Chief of Staff of the Government of the Republic of Armenia

D.Sargsyan

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Երևանի ծրագրի կատարման աջակցման and մեխանիզմները Development velopment The ջերմատնային RA Governmentգոտու Decrees on the ներդրումների Investment Program on the Construction De

of the Yerevan Greenhouse Zone in the Vicinity of Noragavit district

Annex N 2 the RA Government Decree № 633 - N of May 3, 2012

TRANSACTIONS TO BE MADE UNDER THE INVESTMENT PROGRAM ON GREENHOUSE CONSTRUCTION AND DEVELOPMENT IN THE VICINITY OF NORAGAVIT DISTRICT OF YEREVAN

Transaction 1.

Contract to be concluded between Yerevan community and the Program

Management Company Party - 1

Yerevan Community

Party - 2

Program Management Company

Liabilities of the parties

The Yerevan community is obliged: 1. to carry out proper changes in the lands in the prescribed manner; 2. to make a decree on the allienation of appropriate land areas to investors through direct installment sale for a term of one year and in compliance with the master plan suggested by the program management company within 10-day period after receiving information from the program management company on the selection of each investor; In order to properly use the land areas, the land sections which are overloaded with water mains and centralized system infrastructures, shall be given to the investors in compliance with free perpetual easement. These sections shall not be entitled to alienation to investors; 4. after making the decree on the allienation of land area(s)

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of the Yerevan Greenhouse Zone in the Vicinity of Noragavit district

to each investor within 5 days to conclude a contract with the investor on direct sale of the respective land area(s) on the condition of installment payment; 5. to provide the investors with land areas free of the actual possession and the rights of third parties in accordance with the contracts on direct allienation of lands; 6. within its jurisdiction to grant all the permits required for building the greenhouses in the manner prescribed by the RA legislation; 7. to provide the program management company with lands free of the actual possession and rights of third parties for thermal and electric energy, water and gas supply, as well as water discharge infrastructures; 8. within its jurisdiction to grant all the permits required for thermal and electric energy, water and gas supply, as well as water discharge and road building infrastructures in the manner prescribed by the RA legislation; 9. To provide the program management company with free perpetual easement in respect of the land areas needed for thermal and electric energy, water and gas supply, as well as water discharge, road building and maintenance infrastructures.

The program management company is obliged: 1. To carry out the investors selection process, and, after selecting investors for at least 40% of the total land area to be alienated under the program, to inform Yerevan community on the selection of each investor within five days.

2. to develop and justify the sample forms of contracts on the

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of the Yerevan Greenhouse Zone in the Vicinity of Noragavit district

rights to use the infrastructures to be concluded between the program management company and investors, as well as contracts on direct sale of land areas to be concluded between the Yerevan community and investors with Yerevan community.

3. to organise the process of signing contracts between Yerevan community and investors on direct sale of land areas; 4. to conclude a contract with the investor on the right to use thermal and electric energy, water and gas supply, as well as water discharge infrastructures while signing contracts between Yerevan community and each investor on direct sale of land areas; 5. to build the road, thermal and electric energy, water and gas supply, as well as water discharge infrastructures within seven months after the moment of concluding contracts with investors.

The infrastructures shall be the ownership of the Party-2, and the Party-2 shall ensure their operation and the needed capacities. Based on the deadline for receiving the permits for building the infrastructures, the deadline mentioned in the present Chause may be postponed, but no longer than the deadline for the permit envisaged by legal acts; 6. to organise the process of concluding respective contracts with investors on supplying thermal and electric energy, water and gas; 7. Exercises supervision over the execution of the contractual obligations included in the contracts signed with the investors, and let Yerevan community know in case if there are violations; 8.to submit quarterly reports to Yerevan community on the implementation of the investment program, after signing 17 | P a g e

Երևանի ծրագրի կատարման աջակցման and մեխանիզմները Development velopment The ջերմատնային RA Governmentգոտու Decrees on the ներդրումների Investment Program on the Construction De

of the Yerevan Greenhouse Zone in the Vicinity of Noragavit district

contracts between Yerevan community and investors on direct sale of land areas; Responsibility of the Parties

The Parities, pursuant to the legislation of the Republic of Armenia, shall bear responsibility for non-fulfillment or improper fulfillment of the contractual obligations.

Transaction 2. Contracts to be concluded between the investors selected for the implementation of the Investment Program on the Construction and Development of Greenhouses in the vicinity of Yerevan community and Noragavit district Seller

Yerevan community

Buyer

Investor selected for the implementation of the Invetsment Program on the construction and development of greenhouses in the vicinity of Noragavit district

Object

Direct sale of land area/areas to the Buyer on the installment plan for the construction of greenhouses with modern technologies

Timeframe for concluding

With five days following the making of the decree of the Seller

the Contract

to sell the land area/areas

The price and payment

The amount to be paid by the Buyer to the Seller constitutes

terms of the Contract

AMD 4,460 (four thousand four hundred and sixty) per square meter . The price of the Contract includes the cadastral value of the land – AMD 2,940 (two thousand and nine hundred forty) and an additional amount of AMD 1,520 (one thousand five hundred and twenty).

The amount specified in this section will be paid by the Buyer in accordance with the schedule proposed by him/her during the process of selection of investors, within one year of the conclusion of the Contract, with the first installment payment 18 | P a g e

Երևանի ծրագրի կատարման աջակցման and մեխանիզմները Development velopment The ջերմատնային RA Governmentգոտու Decrees on the ներդրումների Investment Program on the Construction De

of the Yerevan Greenhouse Zone in the Vicinity of Noragavit district

(13 per cent) to be made no later than within 10 days after the conclusion of the Contract, and the second installment payment (9 per cent) to be made within 90 days following the expiration of the term for the first installment payment, the third installment payment (35 per cent) to be made within 120 days following the expiration of the term for the second installment payment, and the fourth installment payment (43 per cent) to be made within 130 days following the expiration of the term for the third installment payment.

Transfer of the title on land

The title on land area/areas will be transfered to the Buyer upon

by Contract

the state registration of the rights, however the land area/areas will be deemed as mortgaged in Yerevan community before the full payment by the Buyer of the Contract price and the payment for the title esablished by the Contract between the Program Administrator and the Buyer.

Costs for concluding the

At the Buyer’s expense

Contract (provision of a plan, address, notary certification of the Contract, etc.)

The liabilities of the Parties

The Seller is obliged to: 1. Provide the Buyer with a land area/areas free from the rights and factual possession of third parties.

2. Establish a permanent free easement in respect of the segments of the land area/areas which are loaded with water mains and other infrastructure belonging to third parties, th euse the sold land area/areas for their designated purpose.

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of the Yerevan Greenhouse Zone in the Vicinity of Noragavit district

3. Within its powers and according to the procedure established by the legislation of the Republic of Armenia, provide the Buyer with all the permissions required for the construction of greenhouses and supporting facilities for their operation and maintenance.

The Buyer is obliged to: 1. Pay the Contract price pursuant to the terms and conditions of the Contract.

2. At the time of conclusion of the Contract, conclude with the Program Administrator a Contract on making available the right to join the infrastructures providing supply of thermal energy, electric energy, water and gas, and sewerage.

3. Carry out the construction of greenhouses in accordance with the schedule proposed by him/her during the process of selection of investors. Meanwile, develop no less than 75 per cent of the land area/areas with greenhouses and supporting facilities for their operation and maintenance (at least 1 ha during the first year of development).

4. Use the land area/areas exclusively for the construction and operation of greenhouses with modern technologies, glasscovered or Polycarbonate-covered, heated greenhouses at least 4m high, in compliance with the terms and conditions under the Investment Program on the construction and development of greenhouses in the vicinity of Noragavit district, and supporting facilities for their operation and maintenance (refrigeration, sorting, packaging, etc.).

6. To use the greenhouses built on the land area at least for ten

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Երևանի ծրագրի կատարման աջակցման and մեխանիզմները Development velopment The ջերմատնային RA Governmentգոտու Decrees on the ներդրումների Investment Program on the Construction De

of the Yerevan Greenhouse Zone in the Vicinity of Noragavit district

years exclusively for the production of plant products and/or seedlings.

7. Create conditions for the implementation of surveillance by the Program Management Company over the fullfilment of th eterms of the Contract.

8. In the event of using assimilation lighting, provide the developed greenhouses with a verticl and horizontal blackout system, using it in the evening and night hours.

9. To sell the land area/areas acquired by it only with th eagreemnet of the Seller before the complete performance of the obligations taken on under the Contract. The land area/areas can be sold to a new buyer only in th event the new buyer assumes the obligations established by the Contract concluded with the Buyer.

The responsibility of the

The Parities, pursuant to the legislation of the Republic of

Parties

Armenia, shall bear responsibility for violating the terms and conditions of the Contract.

The Buyer shall be responsible for. a) violating the timeframes of payment of the Contract price, in which case a fine shall be calculated against the outstanding amount due, from the maturity date through the date of fulfillment of the obligation, twice of the RA Central Bank Settlement rate of bank interest for the respective time periods.

In the event of delaying the regular payment timeframes for more than 180 days, the Seller shall be entitled to dissolve the Contract. The amounts paid by the Buyer before the moment of dissolution of the agreement shall not be returned;

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Երևանի ծրագրի կատարման աջակցման and մեխանիզմները Development velopment The ջերմատնային RA Governmentգոտու Decrees on the ներդրումների Investment Program on the Construction De

of the Yerevan Greenhouse Zone in the Vicinity of Noragavit district

b) violating the development timeframes, in which case a fine shall be calculated against the Contract price per unit of the land area not developed, from the maturity date through the date of fulfillment of the obligation, twice of the RA Central Bank Settlement rate of bank interest for the respective time periods.

In the event of delaying the development timeframes for more than 180 days, the Seller shall be entitled to dissolve the Contract for the land area not developed. The amounts paid by the Buyer before the moment of dissolution of the agreement shall not be returned.

Liabilty for violating other terms and conditions of the Contract will be established by the Contract.

Transaction 3. Contracts to be Concluded Between the Program Management Company and the Investors selected for the Implementation of the Investment Program Party – 1

Program Management Company

Party - 2

Investor selected for the implementation of the Invetsment Program on the Construction and Development of Greenhouses in the vicinity of Noragavit district of Yerevan (hereinafter referred to as Investor)

Subjec

Enabling Party-1 and Party-2 to connect to thermal and electric energy, water and gas supply, as well as water discharge infrastructures.

Timeline for concluding

While concluding contracts on direct sale of land area(s) between

contracts

Yerevan Municipality and Party-2

Contract Price and

The price for the right to connect to the thermal and electric energy,

Timeframe

water and gas supply, as well as water discharge infrastructures per 1

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Երևանի ծրագրի կատարման աջակցման and մեխանիզմները Development velopment The ջերմատնային RA Governmentգոտու Decrees on the ներդրումների Investment Program on the Construction De

of the Yerevan Greenhouse Zone in the Vicinity of Noragavit district

sq.m land area constitutes 2540 (two thousand five hundred forty) Armenian Drams.

The contract price shall be paid by Party-2 during the process of selecting investors in accordance with the timeframe suggested by Party-2 within one year after concludong the contracts, but no later than the first payment (in an amount equal to 45 %) within 10 days after concluding the contract, the second payment (in an amount equal to 45 %) withing 90 days after the deadline defined for the first payment, the third payment (in an amount equal to 5%) within 120 days аfter the deadline defined for the second payment, and the forth payment (in an amount equal to 5%) withing 130 days after the deadline defined for the third payment.

Assignent of the rights to

The right to connect to each of the thermal and electric energy, water

use the infrastructures

and gas supply, as well as water discharge infrastructures shall be

under the contract

deemed assigned to Party-2 starting from the moment of connecting to the respective infrastructures.

Liabilities of the parties

Party-1 is obliged 1. to provide the land area(s) acquired from Party-2 with a point/ points to connect to thermal and electric energy, water and gas supply, as well as water discharge infrastructures within seven months after concluding a contract with investors. Based on the deadline for obtaining the infrastructures’ building permits, the timeframe defined in the present clause may be prolonged; 2. after building the thermal and electric energy, water and gas supply, as well as water discharge infrastructures to conclude a contract with Party-2 on using the infrastructues; 3. to provide Party-2 with the required capacites for the thermal and

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of the Yerevan Greenhouse Zone in the Vicinity of Noragavit district

electric energy, water and gas supply, as well as water discharge infrastructures; 4. to organise the process of concluding appropriate contracts on supplying the investors with thermal and electric energy, water and gas.

Party-2 is responsible 1. for paying the contract price in complicance with the terms and conditions of the contract; 2. for concluding a contract with Party-1 on using the infrastructures for an appropriate fee, after completing the building of the thermal and electric energy, water and gas supply, as well as water discharge infrastructures.

Responsibility of the Parties The Parities, pursuant to the legislation of the Republic of Armenia, shall bear responsibility for violating the terms and conditions of the Contract.

Party-1 shall be responsible for violating the timeframe for building the thermal and electric energy, water and gas supply, as well as water discharge infrastructures, in this case penalty shall be imposed in respect of the contract price from the maturity date till the date of fulfillment of the liability, twice of the RA Central Bank Settlement rate of bank interest for the respective time periods.

Party-2 shall bear responsibility for violating payment deadlines, in which case fine shall be imposed for the amount subject to payment but still not paid from the maturity date till the date of fulfillment of the liability, twice of the RA Central Bank Settlement rate of bank interest for the respective time periods.

The Contract may be cancelled only in case of cancellation of the

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Երևանի ծրագրի կատարման աջակցման and մեխանիզմները Development velopment The ջերմատնային RA Governmentգոտու Decrees on the ներդրումների Investment Program on the Construction De

of the Yerevan Greenhouse Zone in the Vicinity of Noragavit district

Contract concluded between Yerevan community and Party-2 on direct sale of land area(s).

As to violation of other term and conditions of the Contract, liability shall be imposed under the Contract.

Chief of Staff of the Government of the Republic of Armenia

D.Sargsyan

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Երևանի ծրագրի կատարման աջակցման and մեխանիզմները Development velopment The ջերմատնային RA Governmentգոտու Decrees on the ներդրումների Investment Program on the Construction De

of the Yerevan Greenhouse Zone in the Vicinity of Noragavit district

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