15. Article

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.