15. pants

Effective

Date; Termination

15.1 This Agreement shall become

effective upon the date of its execution by the Government of

Latvia and EIF and is entered into for the period from the date

of its execution until the date of issuance of the final report

on the Operational Programme, such period being deemed by the

Parties as necessary with a view to enabling EIF to carry out the

Task, also in compliance with the provisions of Reg. 1083. Within

6 months before the end of such period, the Parties shall meet in

order to agree upon the opportunity to extend the term of this

Agreement for a further period to be agreed by the Parties.

15.2 The Parties agree and

acknowledge that, on 30 June 2011, the Government of Latvia shall

have the right:

(i) to review the progress and

strategy of the JEREMIE Holding Fund;

(ii) subject to the review

mentioned under Article 15.2(i) above, to terminate this

Agreement, in accordance with the provisions of Article 15.5

below; and

(iii) in compliance with EU

Structural Funds Regulations including, but not limited to, with

Article 44 of Reg. 1083, to enter into a new funding agreement

with a third party, which shall perform the JEREMIE Holding Fund

tasks, or to appoint a Successor Entity under Article 2.3 of this

Agreement.

15.3 During the term of this

Agreement, either of the Parties may at any time terminate this

Agreement with immediate effect by notifying to the other Party

that a Termination for Cause has occurred.

15.4 In particular, and without

prejudice to the generality of the grounds which may give rise to

a Termination for Cause:

(a) the Government of Latvia may

declare a Termination for Cause in case of failure by EIF to

comply with the Task and more particularly, in case of: (i) a

failure by EIF to comply with the strategies defined in the

Investment Strategy and Planning, or (ii) a failure by EIF to

comply with any of its material obligations under this

Agree ment, in each case provided that the Government of Latvia

has sent a warning notice to EIF stating such breach and EIF has

not cured such breach within a period of sixty days from the date

of receipt of the notice; and

(b) EIF may declare a Termination

for Cause in case of (i) a failure by the Government of Latvia to

procure the disbursements to the JEREMIE Holding Fund in

accordance with this Agreement so as to enable EIF to exercise

the Right, or (ii) a default by the Government of Latvia in

payment of any amount due to EIF under this Agreement in excess

of EUR 100,000 for a period of more than sixty days, or (iii) a

failure by the Government of Latvia to comply with any of its

material obligations under this Agreement in case such failure

would prevent EIF from exercising the Right and fulfilling the

Task in compliance with this Agreement, or (iv) subject to the

Parties' consultation prescribed in Articles 10.2, transfer of

funds in accordance with Article 6.1(i) does not occur before 31

December 2008, in each case provided that EIF has sent a warning

notice to the Government of Latvia stating such breach and the

Government of Latvia has not cured such breach within a period of

sixty days from the date of receipt of the notice.

In the event of Termination for

Cause, any expenses in connection with the termination of this

Agreement shall be borne by the Party whose fault gave rise to

the termination.

15.5 Without prejudice to the

right of the Parties to declare a Termination for Cause at any

time, this Agreement may be terminated in the absence of Cause

only effective on or after the Earliest Ordinary Termination Date

at the earliest, following a six months prior notice by either

Party. Even before the Earliest Ordinary Termination Date, EIF

shall be entitled to terminate this Agreement, in case the

Republic of Latvia, or any public authority duly empowered within

the Republic of Latvia, amends or changes laws or other

regulations which, in the reasonable opinion of EIF, may have a

material adverse impact on the activities, or on the performance,

of the JEREMIE Holding Fund and consequently on the EIF's ability

to perform the Task and comply with the special purpose for which

this Agreement was concluded.

15.6 In case of termination of

this Agreement, EIF shall be released from any obligation to

perform the JEREMIE Action as of the effective date of such

termination. All amounts in respect of Costs to which EIF is

entitled concerning periods prior to the effective date of the

termination shall become due and payable as of such date. EIF

shall refund a portion of the Costs corresponding to the amount

of the Costs received for the remaining term of this Agreement

from the effective date of the termination until 31 December of

the year of the termination (based on the number of remaining

full months) within fifteen days from the effective date of the

termination.

15.7 Upon termination of this

Agreement other than a Termination for Cause:

(i) in case of termination due to

expiration of the term, all expenses incurred by the JEREMIE

Holding Fund and EIF in connection with such termination,

including expenses regarding the transfer of the Right and of the

JEREMIE Assets and Liabilities, including the Operational

Agreements and/or Co-Investment Agreements, to the Successor

Entity or to the Government of Latvia, as may be applicable,

shall be borne by the Government of Latvia or by the Successor

Entity as applicable;

(ii) in case of early termination,

including under Article 15.2 above, all expenses incurred by the

JEREMIE Holding Fund and EIF in connection with such termination,

including expenses regarding the transfer of the Right and of the

JEREMIE Assets and Liabilities, including the Operational

Agreements and/or Co-Investment Agreements, to the Successor

Entity or to the Government of Latvia, as may be applicable,

shall be borne by EIF as JEREMIE Holding Fund up to the amount of

Euro 50,000, and by the Government of Latvia or the Successor

Entity for any excess.

15.8 All Operational Agreements

and all Co-Investment Agreements shall provide for substitution

and/or nomination rights of the Government of Latvia in order to

ensure the transfer of such agreements to the Successor Entity,

or to any newly appointed entity, in case of termination of this

Agreement. Accordingly, in case of termination of this

Agreement:

(i) all Operational Agreements and

all Co-Investment Agreements shall remain effective between the

relevant Financial Intermediary and the Successor Entity, or the

entity newly appointed as JEREMIE holding fund; and

(ii) all commitments and

obligations provided for in the Operational Agreements and the

Co-Investment Agreements in force shall remain valid and fully

effective vis-à-vis the Successor Entity, or the entity newly

appointed as JEREMIE holding fund.

15.9 Without prejudice to Article

15.6, upon expiration or termination of this Agreement, the Right

shall return to the Government of Latvia, and the balance of the

JEREMIE Funds credited to any JEREMIE Bank Account and the

balance of any funds credited to the JEREMIE Additional Bank

Account, as well as any other JEREMIE Assets and Liabilities,

shall be transferred to the Government of Latvia, and as

appropriate shall be credited with such bank account which the

Government of Latvia shall communicate to EIF. All expenses

incurred by EIF in connection with the transfer of any JEREMIE

Assets and Liabilities shall be borne as per Article 15.7.

Should the Government of Latvia

have communicated to EIF the identity of the Successor Entity as

provided under Article 2.3 above, EIF shall perform the Transfer

Obligation. In such case, all expenses incurred by EIF in

connection with the transfer of any JEREMIE Assets and

Liabilities shall be borne by EIF up to the amount set forth

under Article 15.7(ii) above, and shall be withheld from the

JEREMIE Funds to be transferred to the same, and for any excess

by the Successor Entity.

15.10 Notwithstanding any other

provision of this Article 15, in the event that an unforeseeable

exceptional situation or event beyond any of the Parties' control

occurs (other than labour disputes, strikes or financial

difficulties, and the kind), including (without limitation) the

cancellation or suspension of JEREMIE pursuant to an act of the

European Union or otherwise, which prevents either of them from

fulfilling any of their obligations under this Agreement, which

was not attributable to error or negligence on their part and

proves insurmountable in spite of all due diligence (each a

"Force Majeure Event"), the Party facing it shall inform

the other Party without delay pursuant to a written notice

("Force Majeure Notice") stating the nature, probable

duration and foreseeable effects. Upon receipt of a Force Majeure

Notice, the Parties shall immediately enter into consultation and

make every effort to minimise any damage due to the occurrence of

the relevant Force Majeure Event, it being understood that

neither party shall be held in breach of its obligations under

this Agreement if it is prevented from fulfilling them due to a

Force Majeure Event. If the Parties, acting in good faith,

ascertained that the continuation of the performance of the

JEREMIE Action and the compliance with the Task is impossible or

extremely onerous as a result of the occurrence of a Force

Majeure Event, this Agreement shall be terminated and the

provisions of the second and third sentence of Article 15.6 will

apply.