Mortgages - How Does it Work?

(1)

Lending conditions

Loan currency Armenian dram US dollar Euro

Loan amount AMD equivalent up to USD 300.000 up to USD 300.000 Euros equivalent up to USD 300.000

Lending interest rate 11-17% 10-16% 10-16%

Interest rate for the uncommitted balance of the credit line

Loan disbursement method Loan maturity date

Loan collaterals (pledge)

Loan/collateral (pledge) ratio Insurance

Prior repayment

"Mellat Bank" CJSC extends business loans (credits) and credit lines (loan facility) to resident and non-resident individuals (physical persons) of the RA with the following terms:

Any minimum for an extended loan amount shall not be set.

0.2% annually non-cash up to 72 months

minimum period of lending: 1 month

Commissions charged by the Bank

Loan extension fee: at the rate of 0.1 % of the loan amount, minimum amount is AMD 10.000, to be charged as one-time fee upon extension of the loan. In case a loan amount is received in cash: an encashment fee is

charged as per the tariffs applicable in the Bank.

Real estate, as well as the types of guarantees, mentioned in "General terms and conditions" Maximum 70% of value of the real estate being obtained, in Yerevan, as well as the defined ratios in respect of the types of guarantees, mentioned in "General terms and conditions"

To be performed each year for the balance amount of the loan and the accrued (calculated) interests

A penalty is charged in the amount 10 percent of the unpaid interests

Fines and penalties for overdue loan repayment

With respect to an overdue loan the calculation of the interest stipulated by the contract is terminated and banking interest rate established by Central Bank of the RA becomes effective with respect to such overdue loan.

(2)

Penalties against overdue interest

Documents required for lending

Fines and penalties for overdue loan repayment

A penalty is calculated for each overdue day with a view to the overdue loan with 12 percent annually.

A penalty is calculated for each overdue day with a view to the overdue interest of 12 percent annually.

1. Application

2. Copies of passports and social security cards of the director and shareholders

3. Consent for receiving information from “ACRA Credit Reporting” credit bureau

4. Questionnaire for disclosure of affiliated parties

5. Questionnaire for selection of insurance company in case of insuring a property

6. Confirmation about being exposed to possible unfavorable consequences due to changes in currency exchange rates in case of

receiving a loan in foreign currency

7. Certificate of an organization or private entrepreneur, obtained from the State Registry

8. Taxpayer ID of an organization or private entrepreneur

9. Relevant license in case of being involved in the activates subject to licensing

10.Latest approved statute (charter) of an organization

11.Information from the State Registry regarding the shareholders and the director (manager)

12.Consent of the shareholders to receive a loan in case of concluding a large deal (transaction) specified by the charter

13.Work (activity) program (documents in support of the program, including conditions required for ensuring the fulfillment of

certain activities, such as own land (premise) or rental contract (lease arrangement), supply and sales contracts), as required

14.Reference (information) by the Tax Inspection (office) regarding liabilities to the Budget

15.Statement regarding availability of accounts and liabilities with other banks and absence of such liabilities

16. Financial statements of the organization · Accounting balance-sheet

· Income statement (profit and loss account)

· Profit tax report, upon availability

17. Reference (information) regarding receivables and payables 18. In case of pledging real estate as collateral (security): · Certificate of title (original)

(3)

· Basis fоr acquisition of title for property (purchase and sale contract, agreement for succession, deed of gift) · Reference from the place of residence (regarding the registered persons)

· WARNING:IN CASE A BORROWER FAILS TO REPAY THE INTEREST AND PRINCIPAL AMOUNTS OF THE LOAN IN DUE TIME, INFORMATION REGARDING SUCH BORROWER SHALL BE REPORTED TO THE CREDIT REGISTRY".

· A unified statement on registered rights to the real estate and imposed limitations on it

· In case of business property: decision of an authorized body to pledging the property, in a statutory manner · Other documents as required by the Bank.

· "WARNING: FROM THE INSTANCE A BORROWER FAILS TO TIMELY CARRY OUT HIS/HER OBLIGTIONS, THE RIGHT OF

DEMAND FOR APPLICATION OF CONFISCATION IN RESPECT OF THE PLEDGED PROPERTY IT SHALL EMERGE. THE PROPERTY (house, car or other) MAY BE CONFISCATED.

· In case the amount received from the sale of the pledged inventory does not cover the liabilities of borrower, the Bank shall be entitled to extend such confiscation to other property of the borrower.

(4)

(5)