DEVELOPMENT OF MODERN AGRICULTURAL MARKET COMPLEX

PARTIES INVOLVEDBetween

Special Agriculture Produce Market Committee for Fruits and Vegetables, established under the provisions of the Karnataka Produce Marketing Act, referred to as “APMC” or the First Party in the agreement.

AND

Sobha Assets Private Limited, a Company incorporated under the provisions of the Companies Act, 1956, referred to as the second party.

Project Development and

Implementation Agreement

FACTS AND FIGURES OF THE AGREEMENT

1. APMC who owns 30 acres on Bellary Road(NH 7), Bangalore, has the following

objectives with reference to the agreement, referred to as Project Site

Relocate wholesale vegetable Commission Agents from APMC Kalasipalyam and APMC Yeshwanthpur and develop a

modern agri-marketing infrastructure in Byatarayanapura.

Develop any other incidental/ ancillary agri-infrastructure facilities such as cold storage and ripening chamber facility,

warehouse facility, electronic display board, areas for banks, transport companies, rest rooms for farmers and drivers.

Utilize the residual area for development of commercial activities.

2. After a transparent Bid Process Sobha Developers Pvt Ltd was selected by APMC and awarded the Project

Development Rights. The successful Bidder has since promoted and incorporated M/s Sobha Assets Private

Limited as a limited liability company under the Companies Act 1956, for executing the project.

3. With reference to the Project the Second Party has submitted to APMC the Performance Security being bank

guarantee for Rs.22,73, 20000.

PROJECT SITE

• Part A (Site for Modern Wholesale Market Complex) – 20acres

• Part B( Site for Additional Facilities/ Commercial Activities) – 10 Acres

APMC within 15 days from the Appointed Date, handover to the second party, the Project site

for Development

Rights and Use of the Project Site

• The Second Party has the right to use the Project Site and the Project Facilities and also the right to

let-out/ sub-let, license the Additional Facilities or any part thereof, to such Person/s and collect from

such Person/s rentals, deposits, fees, user fees, maintenance charges, salvage charges and other

amounts during the Agreement Period.

• The second party can construct at its own expense an increase to the built-up area by mutual consent

of the parties, however the provisions of the area shall remain and continue to be the property of

APMC.

• The Second Party shall not part or create Encumbrance on the whole or any part of the Project Site/

Facilities.

• The Second Party shall allow access to and use of the Project site for laying/ installing/ maintaining

telegraph lines, electric lines or for such other public purposes as APMC may specify.

PROJECT DEVELOPMENT RIGHTS

Grant of Project Development Rights

APMC grants and authorizes the Second Party;

• To design, engineer, procure, finance and construct the Project Facilities and also to

hand back the Mandatory Facilities upon issue of completion certificate.

• To exercise and / or to enjoy the powers, rights, benefits, privileges, authorizations and

entitlements to collect, retain and appropriate all tariffs, rentals, other fees and charges for

the facilities and services provided in the Additional Facilities, and to hand back the

Additional Facilities on the expiry date or the Termination Date.

Agreement Period

1) Time line for the Project is 3 years

2) Lease rights on Part B for the next 6o years

OBLIGATIONS OF THE SECOND PARTY

Performance Security

• A bank guarantee is initially provided to APMC valid till the commencement date . Value of Performance

Security shall be equal to a sum of eight quarterly Payments payable to APMC during the first and second year

after Commencement Date. The Performance Security shall be subsequently renewed every four quarters(one

year) for a value equal to a sum of the subsequent eight quarterly Payments.

• The Performance security shall remain with APMC, throughout the Agreement Period and shall be returned to

the Second Party within eight weeks of the Expiry Date.

Financing Arrangement

The Second Party should meet all the expenses and risk to make such financial arrangement that is

necessary to implement the Project, to meet its obligations in a timely manner.

Project Completion

The Second Party should Develop the Project Facilities in accordance with the approved Detailed Project

Report including the Drawings, Construction Requirements.

APMC’S OBLIGATIONS

APMC shall allocate the Godowns and cubicles and other areas of the Project Site to the Commission

Agent.

APMC shall grant all required approvals, permissions and authorizations required by the Second Party in a

timely manner.

APMC shall set, collect, retain and appropriate shop rentals/ market cess/ fee for shops, entry fees for

vehicles etc.,

APMC has to respond in Writing to any Modification proposal within 60 days from the date of receipt,

failing to which the proposal can be considered to be approved.

Upon the completion of the project APMC shall make all the arrangements for allocating the shops in

mandatory facilities to the Commission agent.

General Obligations

APMC shall

• assist the second party in securing the necessary Applicable Permits

• observe and comply with all its obligations set forth in the Agreement

SHAREHOLDING

The Second Party having been set up for the sole purpose to exercise the rights and observing

and performing its obligations and liabilities, hereby undertakes and agrees to comply with

the following conditions

a) The share holding of the successful Bidder in the Second Party shall not decline below;

1) 51% during the period between Appointed Dated and Commencement Date

2) 33% during a period of 3 years following the Commencement Date

3) 26% or such lower proportion as may be permitted by APMC during the remainder of

the Agreement Period

b) In the event of any Change in the shareholding pattern of the Second Party after the

Appointed Date, the Second Party shall, in Writing, intimate to APMC such revised

shareholding within 7 days of such change or revision.

PAYMENT

Second Party’s Obligations

• The Second party shall make payment to APMC as per the agreement. The payment shall increase by 3% every

year throughout the Agreement Period. The first quarterly Payment to APMC shall be made on the Appointed date.

The second quarterly Payments shall be made on the commencement Date and subsequent Payments shall be made

on the dates occurring every three months of the Commencement date during the Agreement Period

Any delay in making any payment shall incur an interest amount of 5% p.a. from the relevant date till the date of

payment.

• Total Payment(Rs Millions) by concessionaire as per mile stone over next 60 years with 3% increase p.a.

Quarterly payment to APMC from appointed date with 3% p.a. increase- (Varies from Rs2.60 Crores to

Rs 15.31 Crores over the next 723 instalments)

HAND BACK OF PROJECT FACILITIES

Second Party’s Obligations

• After the issue of the completion certificate and on the commencement date, the second party has to hand back

vacant and peaceful possession of the Mandatory Facilities to APMC free of cost and in good operable

condition.

• On the expiry of the agreement the second party shall hand back the possession of Project Facilities in Part B

to APMC free of cost and in good operable condition.

• Atleast 24 months prior to the expiry date the second party has to provide a bank guarantee to APMC worth

Rs.60, 38, 00, 000

• Atleast 12 months before the Expiry date a joint inspection in Part B will be undertaken by both the Parties.

Any changes required by APMC should be intimated which will be executed by the second party atleast 3

months prior to the expiry date.

• A second joint inspection will be conducted 45 days prior and both parties acknowledge the completion of

the project.

APMC’S OBLIGATIONS

APMC shall deduct amount towards

• carrying out works/jobs, which have not been carried out by the second party

• purchase of items, which have not been handed back to APMC along with the Project Facilities in Part B

• any outstanding dues, which may have accrued in respect of the Project during the Agreement Period

APMC should discharge and release to the second party the hand back guarantee within 3 months from the

expiry date

DISPUTE HANDLING

Procedure: Dispute which is not resolved amicably shall be finally settled by binding

arbitration under the Arbitration and Conciliation Act, 1996

Place of Arbitration: The place of Arbitration shall be held ordinarily in Bangalore

unless required to be held elsewhere.

Language: English shall be the language used in all the hearings.

The parties agree that the decision from arbitration shall be final and shall be

enforceable in accordance with the Provision of the Arbitration Act subject to the

rights of the aggrieved parties to secure relief from any higher forum.