4. pants

Entitlement to EIF Direct

Costs

4.1

Entitlement to EIF Standard Costs

The Parties acknowledge and agree

that EIF shall be entitled to the EIF Standard Costs, quantified

for each calendar year in the relevant Cost Payment Statement,

which shall be calculated for any given calendar year on the

basis of the EIF Standard Cost Rate applicable for such calendar

year. The EIF Standard Costs shall be equal to the actual time

spent on the Task by any EIF JEREMIE Employee, multiplied by the

EIF Standard Cost Rate. It is understood that EIF will be fully

responsible for the most efficient allocation of its operational

staff in its head office in Luxembourg as well as locally in

Riga.

The Parties acknowledge that the

EIF Standard Cost Rate is reviewed from time to time, and may be

modified, by EIF, and that the rate currently in force will be

updated at the end of each calendar year based on the audited

accounts for that year; in particular, although the updates may

not be determined in advance, EIF expects the EIF Standard Cost

Rate to be subject to an increase on an annual basis. The current

estimate of the EIF Standard Cost Rate applicable for the year

2008 is attached hereto as Annex 1, being it understood that the

final EIF Standard Cost Rate applicable to that year shall result

from the audited accounts for 2008, as soon as they will be

available.

The Parties acknowledge and agree

with the exclusive use of the EIF Standard Cost Rate for the

purposes of the quantification of EIF Standard Costs, and

acknowledge the principle for its calculation.

4.2

Entitlement to EIF Travel Costs

The Parties acknowledge and agree

that EIF shall be entitled to the EIF Travel Costs, quantified

for each calendar year in the relevant Costs Payment Statement,

which shall correspond to the actual costs incurred by EIF for

travel of EIF personnel in connection with the compliance with

the Task.

4.3

Entitlement to EIF Local Office Costs

The Parties acknowledge and agree

that EIF shall be entitled to the EIF Local Office Costs,

quantified for each calendar year in the relevant Costs Payment

Statement, which shall correspond to the actual costs incurred by

EIF for the establishment and operation of the EIF local office

in Riga.