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Grant Agreement between the Government of the United States of America and the Government of the Republic of Latvia on technical assistance for Port Security

This Grant Agreement is entered into between the Government of the United States of America, acting through the U.S. Trade and Development Agency ("USTDA") and the Government of the Republic of Latvia, acting through the Ministry of Transportation ("Grantee"). USTDA agrees to provide the Grantee under the terms of this Agreement US$390,740 ("USTDA Grant") to fund the cost of goods and services required for technical assistance ("TA") on the proposed Integrated Master Port Security Plan Project ("Project") in Latvia ("Host Country").

1. USTDA Funding

The funding to be provided under this Grant Agreement shall be used to fund the costs of a contract between the Grantee and the U.S. firm selected by the Grantee ("Contractor") under which the Contractor will perform the TA ("Contract"). Payment to the Contractor will be made directly by USTDA on behalf of the Grantee with the USTDA Grant funds provided under this Grant Agreement.

2. Terms of Reference

The Terms of Reference for the TA ("Terms of Reference") are attached as Annex I and are hereby made a part of this Grant Agreement. The TA will examine the technical, financial, environmental, and other critical aspects of the proposed Project. The Terms of Reference for the TA shall also be included in the Contract.

3. Standards of Conduct

USTDA and the Grantee recognize the existence of standards of conduct for public officials, and commercial entities, in their respective countries. The parties to this Grant Agreement and the Contractor shall observe these standards, which include not accepting payment of money or anything of value, directly or indirectly, from any person for the purpose of illegally or improperly inducing anyone to take any action favorable to any party in connection with the TA.

4. Grantee Responsibilities

The Grantee shall provide such support for the Contractor as is described under Conditions of Work Effort in the Terms of Reference attached as Annex I of the Grant Agreement. The Grantee shall cooperate with and, in appropriate circumstances, assist and provide reasonable support for the Contractor..

5. USTDA as Financier

(A) USTDA Approval of Competitive Selection Procedures

Selection of the U.S. Contractor shall be carried out by the Grantee according to its established procedures for the competitive selection of contractors with advance notice of the procurement published online through Federal Business Opportunities (www.fedbizopps.gov). Upon request, the Grantee will submit these contracting procedures and related documents to USTDA for information and/or approval.

(B) USTDA Approval of Contractor Selection

The Grantee shall notify USTDA at the address of record set forth in Article 17 below upon selection of the Contractor to perform the TA. Upon approval of this selection by USTDA, the Grantee and the Contractor shall then enter into a contract for performance of the TA. The Grantee shall notify in writing the U.S. firms that submitted unsuccessful proposals to perform the TA that they were not selected.

The Grantee and the Contractor shall enter into a contract for performance of the TA. This contract, and any amendments thereto, including assignments and changes in the Terms of Reference, must be approved by USTDA in writing. To expedite this approval, the Grantee (or the Contractor on the Grantee's behalf) shall transmit to USTDA, at the address set forth in Article 17 below, a photocopy of an English language version of the signed contract or a final negotiated draft version of the contract.

(D) USTDA Not a Party to the Contract

It is understood by the parties that USTDA has reserved certain rights such as, but not limited to, the right to approve the terms of the contract and any amendments thereto, including assignments, the selection of all contractors, the Terms of Reference, the Final Report, and any and all documents related to any contract funded under the Grant Agreement. The parties hereto further understand and agree that USTDA, in reserving any or all of the foregoing approval rights, has acted solely as a financing entity to assure the proper use of United States Government funds, and that any decision by USTDA to exercise or refrain from exercising these approval rights shall be made as a financier in the course of funding the TA and shall not be construed as making USTDA a party to the contract. The parties hereto understand and agree that USTDA may, from time to time, exercise the foregoing approval rights, or discuss matters related to these rights and the Project with the parties to the contract or any subcontract, jointly or separately, without thereby incurring any responsibility or liability to such parties. Any approval or failure to approve by USTDA shall not bar the Grantee or USTDA from asserting any right they might have against the Contractor, or relieve the Contractor of any liability which the Contractor might otherwise have to the Grantee or USTDA.

(E) Grant Agreement Controlling

Regardless of USTDA approval, the rights and obligations of any party to the contract or subcontract thereunder must be consistent with this Grant Agreement. In the event of any inconsistency between the Grant Agreement and any contract or subcontract funded by the Grant Agreement, the Grant Agreement shall be controlling.

6. Disbursement Procedures

(A) USTDA Approval of Contract Required

USTDA will make disbursements of Grant funds directly to the Contractor only after USTDA approves the Grantee's contract with the Contractor.

(B) Contractor Invoice Requirements

The Grantee should request disbursement of funds by USTDA to the Contractor for performance of the TA by submitting invoices in accordance with the procedures set forth in the USTDA Mandatory Clauses in Annex II.

7. Effective Date

The effective date of this Grant Agreement ("Effective Date") shall be the date of signature by both parties or, if the parties sign on different dates, the date of the last signature.

8. TA Schedule

(A) TA Completion Date

The completion date for the TA, which is December 31, 2007, is the date by which the parties estimate that the TA will have been completed.

(B) Time Limitation on Disbursement of USTDA Grant Funds

Except as USTDA may otherwise agree, (a) no USTDA funds may be disbursed under this Grant Agreement for goods and services which are provided prior to the Effective Date of the Grant Agreement; and (b) all funds made available under the Grant Agreement must be disbursed within four (4) years from the Effective Date of the Grant Agreement.

9. USTDA Mandatory Clauses

All contracts funded under this Grant Agreement shall include the USTDA mandatory clauses set forth in Annex II to this Grant Agreement. All subcontracts funded or partially funded with USTDA Grant funds shall include the USTDA mandatory clauses, except for clauses B(1), G, H, I, and J.

10. Use of U.S. Carriers

(A) Air

Transportation by air of persons or property funded under the Grant Agreement shall be on U.S. flag carriers in accordance with the Fly America Act, 49 U.S.C. 40118, to the extent service by such carriers is available, as provided under applicable U.S. Government regulations.

(B) Marine

Transportation by sea of property funded under the Grant Agreement shall be on U.S. carriers in accordance with U.S. cargo preference law.

11. Nationality, Source and Origin

Except as USTDA may otherwise agree, the following provisions shall govern the delivery of goods and services funded by USTDA under the Grant Agreement: (a) for professional services, the Contractor must be either a U.S. firm or U.S. individual; (b) the Contractor may use U.S. subcontractors without limitation, but the use of subcontractors from Host Country may not exceed twenty percent (20%) of the USTDA Grant amount and may only be used for specific services from the Terms of Reference identified in the subcontract; (c) employees of U.S. Contractor or U.S. subcontractor firms responsible for professional services shall be U.S. citizens or non-U.S. citizens lawfully admitted for permanent residence in the U.S.; (d) goods purchased for performance of the TA and associated delivery services (e.g., international transportation and insurance) must have their nationality, source and origin in the United States; and (e) goods and services incidental to TA support (e.g., local lodging, food, and transportation) in Host Country are not subject to the above restrictions. USTDA will make available further details concerning these provisions upon request.

12. Taxes

USTDA funds provided under the Grant Agreement shall not be used to pay any taxes, tariffs, duties, fees or other levies imposed under laws in effect in Host Country. Neither the Grantee nor the Contractor will seek reimbursement from USTDA for such taxes, tariffs, duties, fees or other levies.

13. Cooperation Between Parties and Follow-Up

The parties will cooperate to assure that the purposes of the Grant Agreement are accomplished. For five (5) years following receipt by USTDA of the Final Report (as defined in Clause I of Annex II), the Grantee agrees to respond to any reasonable inquiries from USTDA about the status of the Project.

14. Implementation Letters

To assist the Grantee in the implementation of the TA, USTDA may, from time to time, issue implementation letters that will provide additional information about matters covered by the Grant Agreement. The parties may also use jointly agreed upon implementation letters to confirm and record their mutual understanding of matters covered by the Grant Agreement.

15. Recordkeeping and Audit

The Grantee agrees to maintain books, records, and other documents relating to the TA and the Grant Agreement adequate to demonstrate implementation of its responsibilities under the Grant Agreement, including the selection of contractors, receipt and approval of contract deliverables, and approval or disapproval of contractor invoices for payment by USTDA. Such books, records, and other documents shall be separately maintained for three (3) years after the date of the final disbursement by USTDA. The Grantee shall afford USTDA or its authorized representatives the opportunity at reasonable times to review books, records, and other documents relating to the TA and the Grant Agreement.

16. Representation of Parties

For all purposes relevant to the Grant Agreement, the Government of the United States of America will be represented by the U. S. Ambassador to Host Country or USTDA and Grantee will be represented by the Minister of the Ministry of Transportation. The parties hereto may, by written notice, designate additional representatives for all purposes under the Grant Agreement.

17. Addresses of Record for Parties

Any notice, request, document, or other communication submitted by either party to the other under the Grant Agreement shall be in writing or through a wire or electronic medium which produces a tangible record of the transmission, such as a telegram, cable or facsimile, and will be deemed duly given or sent when delivered to such party at the following:

To:	Mr.Janis Lagzdons Deputy Director Head of Part Division
	Ministry of Transport of the Republic of Latvia
	Gogola Str 3, Riga
	LV-1743, Latvia

	Phone: (371) 7-028-198
	Fax: (371) 7-331-406
	E-mail:Janis.Lagzdons@sam.gov.lv
To:	U.S. Trade and Development Agency
	1000 Wilson Boulevard, Suite 1600
	Arlington, Virginia 22209-3901
	USA
	Phone: (703) 875-4357
	Fax: (703) 875-4009

All such communications shall be in English, unless the parties otherwise agree in writing. In addition, the Grantee shall provide the Commercial Section of the U.S. Embassy in Host Country with a copy of each communication sent to USTDA.

Any communication relating to this Grant Agreement shall include the following fiscal data:

Appropriation No.: 116/71001

Activity No.: 2006-81042A

Reservation No.: 068142353

Grant No.: GH068142353

18. Termination Clause

Either party may terminate the Grant Agreement by giving the other party thirty (30) days advance written notice. The termination of the Grant Agreement will end any obligations of the parties to provide financial or other resources for the TA, except for payments which they are committed to make pursuant to noncancellable commitments entered into with third parties prior to the written notice of termination.

19. Non-waiver of Rights and Remedies

No delay in exercising any right or remedy accruing to either party in connection with the Grant Agreement shall be construed as a waiver of such right or remedy.

20. U.S. Technology and Equipment

By funding this TA, USTDA seeks to promote the project objectives of the Host Country through the use of U.S. technology, goods, and services. In recognition of this purpose, the Grantee agrees that it will allow U.S. suppliers to compete in the procurement of technology, goods and services needed for Project implementation.

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IN WITNESS WHEREOF, the Government of the United States of America and the Government of the Republic of Latvia, each acting through its duly authorized representative, have caused this Agreement to be signed in the English language in their names and delivered as of the day and year written below. In the event that this Grant Agreement is signed in more than one language, the English language version shall govern.

For the Government of the United States of America	For the Government of the Republic of Latvia
By: Catherine Todd Bailey	By: Krišjānis Peters
Date: September 12, 2006	Date: September 12, 2006
Witnessed:	Witnessed:
By:_______________	By:_______________

Annex I -- Terms of Reference

Annex II -- USTDA Mandatory Clauses

Annex I

Terms of Reference

The Latvian Ministry of Transportation is interested in conducting a comprehensive review of port security at the Ports of Riga, Ventspils and Liepaja that would lead to an overall integrated master security plan for the three ports. The plan would be designed to protect people, infrastructure and equipment against security incidents and their devastating effects. Recognizing that Latvia is a small nation with limited resources, the plan would need to make the best use of existing resources, ensure that actions taken achieve clear improvements in overall port security with the greatest economy of actions, and that new technology and equipment recommended for purchase under this endeavor would be effective and, when properly used, be able to discern illegal and hazardous materials, their components, and other contraband. The goal of this TA is to re-engineer the security processes of each port authority, terminal operators, and other entities operating within the port to provide a layered security system that meets the security needs of each component but which, working together as a designed system, achieves overall port security that can be centrally managed. The TA would determine equipment, training, information technology (IT) support, and other requirements for the port security operating system.

Task 1: Planning and Analysis

The Contractor shall initially review the cargo flows through the three ports of Riga, Ventspils and Liepaja, including the types of cargo and the origins and destinations, to get a basic understanding of the ports' economic conditions and the risk imposed by the cargo. The Contactor shall conduct research to gain an understanding of ports' operations, and shall interview persons via phone and email who have direct knowledge of ports' operations and issues prior to departing for work in-country.

The Contractor shall perform sufficient research to gain an in-depth understanding of the economics of the ports and their risk conditions prior to departure for Latvia so as to maximize the use of time while in-country focusing on operational and security issues. The Contractor shall provide a brief report on the findings from the research gathered.

Task 2: Review of Security Assessments, Security Plans, Security Training, Information Technology Support and Security Infrastructure

The Contractor shall review the current security measures that the terminals and other firms operating in the ports developed in response to threat assessments and the International Maritime Organization's (IMO) International Ship and Port Security Code (ISPS) requirements. The initial review shall include collecting all previous security assessments and security plans for the terminals and other firms and any assessments and plans that have been done by the port authorities. The Contractor shall, if required by the Grantee, enter into confidentiality and/or non disclosure agreements with the firms and the port authority. The Contractor shall respect the confidentiality provisions of the ISPS code and shall carry out the review and evaluations recognizing the confidentiality requirements and shall maintain close control of documents and information. In some cases certain security reviews and assessments are classified as confidential, and the Grantee will not be able to fully disclose those documents to the Contractor. In these cases, the Grantee shall provide summaries or other descriptive materials that will be sufficient to allow the Contractor to conduct the reviews. The Contractor shall conduct an inventory of all security assessments, security plans, security procedures, security training, security equipment, security infrastructure, access controls, IT infrastructure that supports security, and other information it deems necessary to construct a baseline of the current security capabilities in each of the ports. The review shall include all areas within the territory of each port, including waterside operations and approaches to each port, areas adjacent to the port and other areas that have a direct bearing on port security.

Deliverable: The Contractor shall prepare a comprehensive report on the current security conditions within the ports that shall serve as a baseline for recommendations to create port-wide security plans.

Task 3: Evaluate the Overall Security Conditions of the Ports

The Contractor shall evaluate the overall state of security within each of the ports. The Contractor shall identify best practices where security is being carried out in an exemplary manner. It shall identify gaps in security in terms of processes, training, equipment, infrastructure, cooperation among entities, or any other matter having an adverse impact on achieving high levels of security within the ports.

Deliverable: The Contractor shall prepare a comprehensive evaluation of the overall security conditions of the ports, built on the baseline established in Task 2.

Task 4: Defining a Port Security Model and Implementation Plan for the Ports

The Contractor shall construct a working definition of port security appropriate for each of the three ports that comports with the ISPS Code, European Union (EU) Code EU/2004/725 on enhancing ship and port facility security, 2005/65/EC on enhancing port security, and other relevant EU regulations. The Contractor shall then construct a strategy which can be implemented by the ports that will allow for centralized coordination and oversight by the port authorities and that will achieve high degrees of security within each of the three ports.

The end product of the TA shall be an integrated plan to manage all the diverse elements that operate within each port using a "systems" approach to security management. Each component of security within each of the ports is now managed to optimize the security performance of each separate element within each port, and there is only rudimentary oversight of the entire port. The goal of this task is to create a security master plan for each port authority and to modify or revise the component parts so as to contribute to the optimization of the overall port security system. The approach would bring an economy of actions in that it will maximize the use of equipment and resources that are already in the ports, and will reorient their use to support the overall security plan. The goal of this task is to provide a layered security system that meets the security needs of each component and which, working together as a designed system, achieves overall port security that can be centrally managed, thus establishing a "systems" approach to security management. The Contractor shall determine equipment, training, IT support, and other requirements necessary to design and implement the port security operating system. The implementation plan shall meet the needs of the three ports to demonstrably increase levels of port-wide security and to be in consonance with the regulatory requirements of the European Union.

The Contractor shall present the revised master security plans for each port as recommendations to the Grantee. The Grantee shall review the recommendations with other governmental entities and shall provide comments and/or requests for changes to the master security plans to the Contractor. The final determination by the Grantee on the implementation of the recommendations and security master plans will be made in accordance with governing procedures within Latvia.

Deliverable: The Contractor shall prepare a comprehensive strategy and implementation plan that can be implemented by each of the ports; that will provide for centralized coordination and oversight by each of the port authorities; and that will achieve high degrees of security within each of the three ports. The implementation plan will include a training curriculum for managers and employees within the three ports that Latvian port officials and the Grantee may use in developing specific training for port and public sector employees related to the port.

Task 5: Financing assessment

The Contractor shall identify the likely financing sources for the full implementation of the recommendations of the TA, including multilateral development banks (such as the European Bank for Reconstruction and Development), export credit agencies, commercial lenders, and special environmental funds, and determine the terms and conditions of utilizing those funds relative to the TA and the implementation of its recommendations.

Deliverable: The Contractor shall provide a detailed overview of the available financing options, including guarantees, direct loans and grants, along with the principal terms and conditions. The Contractor shall also provide an assessment of the effect that the available financing options would have on the implementation of the TA recommendations for the project structure and schedule. Finally, the Contractor shall provide a TA description and term sheet to be used by the Grantee in initiating negotiations with possible financial institutions.

Task 6: Environmental and Developmental Impact Assessments

The Contractor shall perform a preliminary environmental impact assessment of the TA. The primary objective of this task is to ensure that the TA and the implementation plans will comply with all relevant Latvian and European Union environmental regulations.

The Contractor shall also prepare a report on the potential Development Impact of the TA in Latvia. In the report, the Contractor shall focus on what the economic development outcomes will be if the recommendations of the TA are fully implemented. While specific focus should be paid to the immediate impact of the TA, the Contractor shall include, where appropriate, any additional developmental benefits of the TA, including spin-off and demonstration effects. The analysis of potential benefits of the TA should be as concrete and detailed as possible. The Development Impact factors are intended to provide the TA's decision-makers and interested parties with a broader view of the TA's potential effects on Latvia. The Contractor shall provide estimates of the TA's potential benefits in the following areas:

- Infrastructure: a statement on the infrastructure impact giving a brief synopsis.

- Market-Oriented Reform: a description of any regulations, laws, or institutional changes that are recommended and the effect they would have if implemented.

- Human Capacity Building: a description of the number and type of positions that would be needed to fully implement the recommendation of the TA as well as the number of people who will receive training and a brief description of the training program.

- Technology Transfer and Productivity Enhancement: a description of any advanced technologies that will be implemented as a result of the TA. A description of any efficiency that will be gained.

- Other: any other developmental benefits to the TA, including spin-off or demonstration effects.

Deliverables: The Contractor shall prepare a preliminary environmental impact assessment report. In the report, the Contractor shall identify, and propose remedies for, any potential air, water, or noise pollution increases that might result from implementing the recommendations of the TA, as well as any environmental impacts that may result from the installation of new equipment. The primary objective of this task is to ensure that the proposed Project will comply with all relevant Latvian and European Union environmental regulations, and with the criteria of the Export-Import Bank of the United States covering port projects financed with credits or guarantees provided by the bank. The Contractor shall also prepare a comprehensive report on what the developmental impacts of the TA will be when it is fully implemented.

Task 7: Final report

The Contractor shall prepare a detailed and comprehensive Final Report in accordance with Clause I of Annex II of the Grant Agreement. The Final Report shall incorporate the key findings, recommendations, and conclusions of the TA and shall incorporate all other documents and/or reports provided pursuant to Tasks 1 through 6 above. It is the Contractor's responsibility to identify prospective U.S. Sources of Supply in the Final Report to be submitted to USTDA and the Grantee in accordance with Clause I of Annex II of the Grant Agreement. The U.S. Suppliers list shall identify the capabilities of each of the suppliers. The Final Report shall also include proposed methods of financing the Project.

Conditions of Work Effort

During the course of the TA the Contractor shall work closely with the staff and management of the Grantee, who shall cooperate fully in the timely completion of all TA tasks. The Grantee shall arrange for the prompt and complete submittal of all technical data necessary and appropriate for carrying out the TA. Recognizing that the documentation supporting the security programs is quite extensive, the Grantee shall provide translated summaries in English of documents as the government deems appropriate. The Contractor shall be responsible for preparing all reports and other documents resulting from the TA in English.

Notes:

(1) The Contractor is responsible for compliance with U.S. export licensing requirements, if applicable, in the performance of the Terms of Reference.

(2) The Contractor and the Grantee shall be careful to ensure that the public version of the Final Report contains no security or confidential information.

(3) The Grantee and USTDA shall have an irrevocable, worldwide, royalty-free, non-exclusive right to use and distribute the Final Report and all work product that is developed under these Terms of Reference.

Annex II

USTDA Mandatory Contract Clauses

A. USTDA Mandatory Clauses Controlling

The parties to this contract acknowledge that this contract is funded in whole or in part by the U.S. Trade and Development Agency ("USTDA") under the Grant Agreement between the Government of the United States of America acting through USTDA and the Government of the Republic of Latvia, acting through the Ministry of Transportation ("Client"), dated ___________ ("Grant Agreement"). The Client has selected ________________ ("Contractor") to perform the technical assistance ("TA") for the Integrated Master Port Security Plan Project ("Project") in Latvia ("Host Country"). Notwithstanding any other provisions of this contract, the following USTDA mandatory contract clauses shall govern. All subcontracts entered into by Contractor funded or partially funded with USTDA Grant funds shall include these USTDA mandatory contract clauses, except for clauses B(1), G, H, I, and J. In addition, in the event of any inconsistency between the Grant Agreement and any contract or subcontract thereunder, the Grant Agreement shall be controlling.

B. USTDA as Financier

(1) USTDA Approval of Contract

All contracts funded under the Grant Agreement, and any amendments thereto, including assignments and changes in the Terms of Reference, must be approved by USTDA in writing in order to be effective with respect to the expenditure of USTDA Grant funds. USTDA will not authorize the disbursement of USTDA Grant funds until the contract has been formally approved by USTDA or until the contract conforms to modifications required by USTDA during the contract review process.

(2) USTDA Not a Party to the Contract

It is understood by the parties that USTDA has reserved certain rights such as, but not limited to, the right to approve the terms of this contract and amendments thereto, including assignments, the selection of all contractors, the Terms of Reference, the Final Report, and any and all documents related to any contract funded under the Grant Agreement. The parties hereto further understand and agree that USTDA, in reserving any or all of the foregoing approval rights, has acted solely as a financing entity to assure the proper use of United States Government funds, and that any decision by USTDA to exercise or refrain from exercising these approval rights shall be made as a financier in the course of financing the TA and shall not be construed as making USTDA a party to the contract. The parties hereto understand and agree that USTDA may, from time to time, exercise the foregoing approval rights, or discuss matters related to these rights and the Project with the parties to the contract or any subcontract, jointly or separately, without thereby incurring any responsibility or liability to such parties. Any approval or failure to approve by USTDA shall not bar the Client or USTDA from asserting any right they might have against the Contractor, or relieve the Contractor of any liability which the Contractor might otherwise have to the Client or USTDA.

C. Nationality, Source and Origin

D. Recordkeeping and Audit

The Contractor and subcontractors funded under the Grant Agreement shall maintain, in accordance with generally accepted accounting procedures, books, records, and other documents, sufficient to reflect properly all transactions under or in connection with the contract. These books, records, and other documents shall clearly identify and track the use and expenditure of USTDA funds, separately from other funding sources. Such books, records, and documents shall be maintained during the contract term and for a period of three (3) years after final disbursement by USTDA. The Contractor and subcontractors shall afford USTDA, or its authorized representatives, the opportunity at reasonable times for inspection and audit of such books, records, and other documentation.

E. U.S. Carriers

(1) Air

(2) Marine

Transportation by sea of property funded under the Grant Agreement shall be on U.S. carriers in accordance with U.S. cargo preference law.

F. Workman's Compensation Insurance

The Contractor shall provide adequate Workman's Compensation Insurance coverage for work performed under this Contract.

G. Reporting Requirements

The Contractor shall advise USTDA by letter as to the status of the Project on March 1st annually for a period of two (2) years after completion of the TA. In addition, if at any time the Contractor receives follow-on work from the Client, the Contractor shall so notify USTDA and designate the Contractor's contact point including name, telephone, and fax number. Since this information may be made publicly available by USTDA, any information which is confidential shall be designated as such by the Contractor and provided separately to USTDA. USTDA will maintain the confidentiality of such information in accordance with applicable law.

H. Disbursement Procedures

(1) USTDA Approval of Contract

Disbursement of Grant funds will be made only after USTDA approval of this contract. To make this review in a timely fashion, USTDA must receive from either the Client or the Contractor a photocopy of an English language version of a signed contract or a final negotiated draft version to the attention of the General Counsel's office at USTDA's address listed in Clause M below.

(2) Payment Schedule Requirements

A payment schedule for disbursement of Grant funds to the Contractor shall be included in this Contract. Such payment schedule must conform to the following USTDA requirements: (1) up to twenty percent (20%) of the total USTDA Grant amount may be used as an advance payment; (2) all other payments, with the exception of the final payment, shall be based upon contract performance milestones; and (3) the final payment may be no less than fifteen percent (15%) of the total USTDA Grant amount, payable upon receipt by USTDA of an approved Final Report in accordance with the specifications and quantities set forth in Clause I below. Invoicing procedures for all payments are described below.

(3) Contractor Invoice Requirements

USTDA will make all disbursements of USTDA Grant funds directly to the Contractor. The Contractor must provide USTDA with an ACH Vendor Enrollment Form (available from USTDA) with the first invoice. The Client shall request disbursement of funds by USTDA to the Contractor for performance of the contract by submitting the following to USTDA:

(a) Contractor's Invoice

The Contractor's invoice shall include reference to an item listed in the Contract payment schedule, the requested payment amount, and an appropriate certification by the Contractor, as follows:

(i) For an advance payment (if any):

"As a condition for this advance payment, which is an advance against future TA costs, the Contractor certifies that it will perform all work in accordance with the terms of its Contract with the Client. To the extent that the Contractor does not comply with the terms and conditions of the Contract, including the USTDA mandatory provisions contained therein, it will, upon USTDA's request, make an appropriate refund to USTDA. "

(ii) For contract performance milestone payments:

"The Contractor has performed the work described in this invoice in accordance with the terms of its contract with the Client and is entitled to payment thereunder. To the extent the Contractor has not complied with the terms and conditions of the Contract, including the USTDA mandatory provisions contained therein, it will, upon USTDA's request, make an appropriate refund to USTDA."

(iii) For final payment:

"The Contractor has performed the work described in this invoice in accordance with the terms of its contract with the Client and is entitled to payment thereunder. Specifically, the Contractor has submitted the Final Report to the Client, as required by the Contract, and received the Client's approval of the Final Report. To the extent the Contractor has not complied with the terms and conditions of the Contract, including the USTDA mandatory provisions contained therein, it will, upon USTDA's request, make an appropriate refund to USTDA."

(b) Client's Approval of the Contractor's Invoice

(i) The invoice for an advance payment must be approved in writing by the Client.

(ii) For contract performance milestone payments, the following certification by the Client must be provided on the invoice or separately:

"The services for which disbursement is requested by the Contractor have been performed satisfactorily, in accordance with applicable Contract provisions and the terms and conditions of the USTDA Grant Agreement."

(iii) For final payment, the following certification by the Client must be provided on the invoice or separately:

"The services for which disbursement is requested by the Contractor have been performed satisfactorily, in accordance with applicable Contract provisions and terms and conditions of the USTDA Grant Agreement. The Final Report submitted by the Contractor has been reviewed and approved by the Client. "

Requests for disbursement shall be submitted by courier or mail to the attention of the Finance Department at USTDA's address listed in Clause M below.

(4) Termination

In the event that the Contract is terminated prior to completion, the Contractor will be eligible, subject to USTDA approval, for reasonable and documented costs which have been incurred in performing the Terms of Reference prior to termination, as well as reasonable wind down expenses. Reimbursement for such costs shall not exceed the total amount of undisbursed Grant funds. Likewise, in the event of such termination, USTDA is entitled to receive from the Contractor all USTDA Grant funds previously disbursed to the Contractor (including but not limited to advance payments) which exceed the reasonable and documented costs incurred in performing the Terms of Reference prior to termination.

I. USTDA Final Report

(1) Definition

"Final Report" shall mean the Final Report described in the attached Annex I Terms of Reference or, if no such "Final Report" is described therein, "Final Report" shall mean a substantive and comprehensive report of work performed in accordance with the attached Annex I Terms of Reference, including any documents delivered to the Client.

(2) Final Report Submission Requirements

The Contractor shall provide the following to USTDA:

(a) One (1) complete version of the Final Report for USTDA's records. This version shall have been approved by the Client in writing and must be in the English language. It is the responsibility of the Contractor to ensure that confidential information, if any, contained in this version be clearly marked. USTDA will maintain the confidentiality of such information in accordance with applicable law.

and

(b) Three (3) copies of the Final Report suitable for public distribution ("Public Version"). The Public Version shall have been approved by the Client in writing and must be in the English language. As this version will be available for public distribution, it must not contain any confidential information. If the report in (a) above contains no confidential information, it may be used as the Public Version (provided USTDA receives a total of four (4) copies). In any event, the Public Version must be informative and contain sufficient Project detail to be useful to prospective equipment and service providers.

The Contractor shall also provide one (1) copy of the Public Version of the Final Report to the Foreign Commercial Service Officer or the Economic Section of the U.S. Embassy in Host Country for informational purposes.

(3) Final Report Presentation

All Final Reports submitted to USTDA must be paginated and include the following:

(a) The front cover of every Final Report shall contain the name of the Client, the name of the Contractor who prepared the report, a report title, USTDA's logo, USTDA's mailing and delivery addresses, and the following disclaimer:

"This report was funded by the U.S. Trade and Development Agency (USTDA), an agency of the U. S. Government. The opinions, findings, conclusions or recommendations expressed in this document are those of the author(s) and do not necessarily represent the official position or policies of USTDA. USTDA makes no representation about, nor does it accept responsibility for, the accuracy or completeness of the information contained in this report."

(b) The inside front cover of every Final Report shall contain USTDA's logo, USTDA's mailing and delivery addresses, and USTDA's mission statement. Camera-ready copy of USTDA Final Report specifications will be available from USTDA upon request.

(c) The Contractor and any subcontractor that performs work pursuant to the Grant Agreement must be clearly identified in the Final Report. Business name, point of contact, address, telephone and fax numbers shall be included for Contractor and each subcontractor.

(d) The Final Report, while aiming at optimum specifications and characteristics for the Project, shall identify the availability of prospective U.S. sources of supply. Business name, point of contact, address, telephone and fax numbers shall be included for each commercial source.

(e) The Final Report shall be accompanied by a letter or other notation by the Client which states that the Client approves the Final Report. A certification by the Client to this effect provided on or with the invoice for final payment will meet this requirement.

J. Modifications

All changes, modifications, assignments or amendments to this contract, including the appendices, shall be made only by written agreement by the parties hereto, subject to written USTDA approval.

K. TA Schedule

(1) TA Completion Date

The completion date for the TA, which is December 31, 2007, is the date by which the parties estimate that the TA will have been completed.

(2) Time Limitation on Disbursement of USTDA Grant Funds

Except as USTDA may otherwise agree, (a) no USTDA funds may be disbursed under this contract for goods and services which are provided prior to the Effective Date of the Grant Agreement; and (b) all funds made available under the Grant Agreement must be disbursed within four (4) years from the Effective Date of the Grant Agreement.

L. Business Practices

The Contractor agrees not to pay, promise to pay, or authorize the payment of any money or anything of value, directly or indirectly, to any person (whether a governmental official or private individual) for the purpose of illegally or improperly inducing anyone to take any action favorable to any party in connection with the TA. The Client agrees not to receive any such payment. The Contractor and the Client agree that each will require that any agent or representative hired to represent them in connection with the TA will comply with this paragraph and all laws which apply to activities and obligations of each party under this Contract, including but not limited to those laws and obligations dealing with improper payments as described above.

M. USTDA Address and Fiscal Data

Any communication with USTDA regarding this Contract shall be sent to the following address and include the fiscal data listed below:

U.S. Trade and Development Agency

1000 Wilson Boulevard, Suite 1600

Arlington, Virginia 22209-3901

USA

Phone: (703) 875-4357

Fax: (703) 875-4009

Fiscal Data:

Appropriation No.: 116/71001

Activity No.: 2006-81042A

Reservation No.: 068142353

Grant No.: GH068142353

N. Definitions

All capitalized terms not otherwise defined herein shall have the meaning set forth in the Grant Agreement.

O. Taxes

USTDA funds provided under the Grant Agreement shall not be used to pay any taxes, tariffs, duties, fees or other levies imposed under laws in effect in Host Country. Neither the Client nor the Contractor will seek reimbursement from USTDA for such taxes, tariffs, duties, fees or other levies.