Grant Agreement between the Government of the United States of America,acting through the U.S. Trade and Development Agency (TDA), and Tomsk Oblast(Grantee). TDA agrees to provide the Grantee under the terms of this GrantAgreement not to exceed U.S. dollars $850,000 to assist in funding thecost of a feasibility study on the TEC­3 project in Tomsk.

It is further agreed between TDA and the Grantee that:

1. Terms of Reference

The terms of reference for the study are attached as Annex I to thisGrant Agreement. The study will examine the technical, financial, and environmentalaspects of the proposed project.

2. U.S. Dollar/Local Currency Funding

The funding to be provided under this Grant Agreement shall be usedto fund U.S. dollar and local currency costs for professional and technicalservices as required by the terms of reference,and performed by a U.S. firm (the contractor) in preparing the study. Thefunds provided under this Grant Agreement are the only funds that willbe made available to Grantee by TDA for the study, unless otherwise agreedin writing.

3. Additional Funding

TDA shall not provide any funds in addition to those provided underthis Grant Agreement which may be required to fund components of the studyother than those specified in the terms of reference.

The Grantee shall provide necessary administrative support, includingoffice space, consulting expertise, and secretarial support for the contractorperforming the study.

4. Most Favorable Conversion Rate

The funds provided under this Grant Agreement for the purposes of carryingout the obligations hereunder shall be convertible into local currencyat the highest rate which is lawful in the Russian Federation at the timethe conversion is made.

5. Effective Date and Completion Date

This Agreement shall take effect upon signature by both parties. Thecompletion date for the study, which is twelve months from the effectivedate of this Grant Agreement, is the date by which the parties estimatethat all services funded under this Grant Agreement will have been furnished.

6. Prohibition Against Funding Before Effective Date and After CompletionDate

No funds may be disbursed under this Grant Agreement for services whichare provided under orders and contracts entered into prior to the effectivedate of this Grant Agreement, except as the parties may otherwise agreein writing. TDA will not issue or approve documentation which would authorizedisbursement of grant funds for services performed subsequent to the completiondate of this Grant Agreement, except as TDA may otherwise agree in writing.

7. Taxes

Funds provided under this Grant Agreement shall not be used to pay anytaxes, tariffs, duties, or other levies imposed under laws in effect inthe territory of Grantee. To the extent that any contractor funded by thisGrant Agreement, including any consulting firm or any personnel of suchcontractor, and any property or transaction relating to such contract fundedunder this Grant Agreement are not exempt from taxes, tariffs, duties orother levies imposed under laws in effect in the territory of Grantee,the contractor funded by this Grant Agreement will pay the same with fundsother than those provided under this Grant Agreement. Neither the Granteenor the contractor will seek reimbursement from TDA for such taxes, tariffs,duties, or other levies.

8. Disbursement Procedures

The Grantee may obtain disbursement of funds under this Grant Agreementfor the costs of services required under the terms of this Grant Agreementby submitting to TDA requests for disbursement for such services. Suchrequests shall consist of the following:

(1) A contractor's invoice. The invoice shall include a signed statementby the contractor that the amounts involved do not include taxes or feesimposed under the laws of the Russian Federation; and

(2) Grantee's approval of the contractor's invoice, certifying thatthe services for which disbursement is requested have been performed satisfactorily,and are in compliance with the terms of this Grant Agreement.

A copy of the signed contract outlining the services for which paymentis requested must accompany the initial request for disbursement of funds.

Requests for payment shall be submitted by courier or mail to:

U.S. Trade and Development Agency
FM/CMP/DCB
Room 700, SA­2
515 22nd Street, N.W.
Washington, D.C. 20522­0209

Final disbursement of funds provided under this Grant Agreement forservices performed will be made within six months after the completiondate or such other period as TDA agrees to in writing.

10. Use of U.S. Air Carriers

Transportation by air of persons or property funded under this GrantAgreement shall be on U.S. flag carriers in accordance with the Fly AmericaAct, 49 U.S.C. 1517, to the extent service by such carriers is available,as provided under U.S. Government regulations.

11. Nationality, Source and Origin

All goods and services provided under this Grant Agreement shall havetheir nationality, source, and origin in the United States or in the RussianFederation. In no case shall goods and services having their nationality,source, and origin in the Russian Federation exceed 20 percent of the amountof the funding provided by TDA.

12. Selection of Contractor

Contracting for professional and technical services shall be carriedout by the Grantee according to acceptable procedures for the competitiveselection of Contractors, subject to prior approval of those proceduresby TDA. Pursuant to these procedures, the Grantee shall have the authorityto carry out all aspects of the procurement, including the ranking andselection of firms based on technical qualifications; price shall not bea factor in evaluation or selection.

At TDA's request, the Grantee shall furnish to TDA for its approvalany specifications, terms or reference or documents related to the prequalificationof Contractors, and to the solicitation of bids or proposals for servicesto be funded under this Agreement.

13. TDA Prior Approval of Contracts and Contractors

It is understood by the parties that TDA has reserved certain rightssuch as, but not limited to, the right to approve the terms of the contract and any subcontracts thereunder or amendments thereto, the selection ofall contractors and subcontractors, the terms of reference, and any orall documents related to any contract funded under this Grant Agreement.The parties hereto further understand and agree that TDA, in reservingany or all of the foregoing approval rights, has acted solely as a financingentity to assure the proper use of United States Government funds, andthat any decision by TDA to exercise or refrain from exercising these approvalrights shall be made as a financier in the course of financing this effortand shall not be construed as making TDA a party to the contract. The partiesto this Grant Agreement understand and agree that TDA may, from time totime, exercise the foregoing approval rights, or discuss matters relatedto these rights and the project with the parties to the contract, jointlyor separately, without thereby incurring any responsibility or liabilityto the parties to the contract or to any one of them. Any approval or failureto approve by TDA shall not bar the Grantee or TDA from asserting any right,or relieve the contractor of any liability which the contractor might otherwisehave to the Grantee.

14. Mandatory Contract Clauses

Contracts, subcontracts, contractors, and subcontractors funded underthe Grant Agreement for the provision of professional and technical services,and any amendments thereto, including any changes in the terms of reference,must be agreed to by TDA in writing before execution or amendment of thecontracts or subcontracts. All such contracts and subcontracts shall includethe following mandatory clauses:
 

"A. It is understood by the parties that TDA has reserved certainrights such as, but not limited to, the right to approve the terms of thecontract and any subcontracts thereunder or amendments thereto, the selectionof all contractors and subcontractors, the terms of reference, and any and alldocuments relatedto this contract or any subcontracts funded under the Grant Agreement dated

1994. The parties hereto further understand and agree that TDA, in reservingany or all of the foregoing approval rights, has acted solely as a financingentity to assure the proper use of United States Government funds and thatany decision by TDA to exercise or refrain from exercising these approvalrights shall be made as a financier in the course of financing this effortand shall not be construed as making TDA a party to the contract. The partieshereto understand and agree that TDA may, from time to time, exercise theforegoing approval rights, or discuss matters related to these rights andthe project with the parties to the contract or related subcontracts, jointlyor separately, without thereby incurring any responsibility or liabilityto the parties to the contract or related subcontracts or to any one ofthem. Any approval or failure to approve by TDA shall not bar the Granteeor TDA from asserting any right, or relieve the contractor of any liabilitywhich the contractor might otherwise have to the Grantee.

"B. All goods and services provided by the contractor or any subcontractorshall have their nationality, source and origin in the United States orthe Russian Federation. In no case shall goods and services having theirnationality, source, and origin in the Russian Federation exceed 20 percentof the amount of the funding provided by TDA.

"C. The feasibility study report, while aiming at optimum specificationsand characteristics for the project, shall identify the availability ofU.S. sources of supply so as to maximize their use in implementation ofthe project.

"D. The contractors funded under the Grant Agreement shall maintainbooks, records, documents, and other evidence, and shall apply generallyaccepted accounting principles and practices sufficient to reflect properlyall transactions under or in connection with the contract. The foregoingconstitutes "records" for purposes of this clause.

(1) Such records shall be maintained during the contract termand for a period of three years after final disbursement by TDA.
(2) All records maintained by the contractor shall be subject to inspectionand audit by TDA, or its authorized agents, at all reasonable times. Thecontractor shall afford TDA proper facilities for such inspection and audit.

"E. Transportation by air of persons or property funded under this GrantAgreement shall be on U.S. flag carriers inaccordance with the Fly America Act, 49 U.S.C. 1517, to the extentservice by such carriers is available, as provided under U.S. Governmentregulations.

"F. The contractor shall provide adequate Workman's Compensation Insurancecoverage under service contracts funded by TDA.

"G. After completion of the contract, the contractor shall advise TDAby letter at six month intervals, for a period of two years, as to thedisposition of the follow on work resulting from the TDA­funded feasibilitystudy. If, at any time, the contractor receives follow­on project workfrom the Grantee, the contractor shall so notify TDA, and

1 ) designate the contractor's contact point including name,telephone, and fax number; and
2) agree with TDA upon a method for TDA to receive from the contractortimely and accurate procurement information about the project.

"H. The contractor shall provide 3 copies of the final report, in English,to TDA for its use and public distribution. The final report must be paginated."

The parties shall cooperate to assure that the purpose of this GrantAgreement will be accomplished. To this end, the parties, at the requestof either, will exchange views on the progress of the study, the performanceof obligations under this Grant Agreement, the performance of any consultantor contractor engaged in the study, and other matters relating to the study.Furthermore, for five years following completion of the final report, theGrantee or its representative agrees to respond to an annual questionnairefrom TDA about the status of the project.
 
In accordance with this Agreement, both parties will take all possiblemeasures, while the feasibility study is under way, to attract financialinstitutions to finance construction of the TEC­3 project in Tomsk.

16. Implementation Letters

To assist the Grantee in the implementation of this Grant Agreement,TDA may, from time to time, issue implementation letters that will provideadditional information about matters covered in this Grant Agreement. Bothparties may also use jointly agreed upon implementation letters to confirmand record their mutual understanding of the implementation of this GrantAgreement.

17. Books and Records

The Grantee agrees to maintain, in accordance with consistently appliedaccounting principles and practices, books, records, and documents relatingto the study and this Grant Agreement adequate to show, without limitation,the receipt and use of services acquired under this Grant Agreement. Suchbooks and records shall be maintained for three years after the date ofthe final disbursement by TDA. The Grantee shall afford TDA or its authorizedrepresentatives the opportunity at reasonable times to review books, records,and other documentation relating to the feasibility study and this GrantAgreement.

18. Representation of Parties

For all purposes relevant to the Grant Agreement, the Grantee will berepresented by its Governor and the United StatesGovernment will be represented by the United States Ambassador in Moscow,each of whom may, by written notice,designate additional representatives for all purposes under this GrantAgreement.

19. Addresses of Record for Parties

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

To: Administration of Tomsk Oblast
6 Lenin Ave.
Tomsk
634032 Russian
Tel: 22­24­44
Fax: (382) 22­48­84

To: U.S. Trade and Development Agency
SA­16, Room 309
Washington, D.C. 20523­1602
Telephone: (703) 875­4357
Fax: (703) 875­4009

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

Appropriation No.: 11X1001
Budget Plan: 2TDX­95­71004­DG71
Project No.: 94­816B
Obligation No.: 5713040
TDA No.: TDA­4816­G­00­5070­00

Either party may terminate this Grant Agreement by giving the otherparty 30 days advance written notice. The termination of the Grant Agreementwill end any obligations of the parties to provide financial or other resourcesfor the study, except for payments which they are committed to make pursuantto noncancellable commitments entered into with third parties prior tothe written notice to terminate.

21. Non­waiver of Rights and Remedies

No delay in exercising any right or remedy accruing to either partyin connection with this Grant Agreement shall be construed as a waiverof such right or remedy.

22. Statement by Grantee

In recognition of TDA's efforts on behalf of the United States Governmentin funding the feasibility study, the Grantee shall, under otherwise equalconditions, give priority to U.S. suppliers in procuring the technologyand equipment needed for the project.
 

IN WITNESS WHEREOF, the Government of the United States of America andTomsk Oblast, each acting through its duly authorized representative, havecaused this Grant Agreement to be signed in the English language in theirnames and delivered as of the day and year written below.

For the Government of
the United States of America

Signed By J. Joseph Grandmaison
 

For Tomsk Oblast

Signed By Y. Yegorov

Dated: ____________________

U.S. TRADE AND DEVELOPMENT AGENCY
Washington, D.C. 20523­1602


AMENDMENT TO GRANT AGREEMENT

The Grant Agreement, dated December 16, 1994, between the Governmentof the United States of America, acting through the U.S. Trade and DevelopmentAgency, and the Tomsk Oblast is hereby amended to increase the amount ofTDA funding by $210,000 to a total of $1,060,000. The additional $210,000shall be used to fund the feasibility study on the Seversk TETS in Tomsk­7,as set forth in Annex 1A. The remaining portion of the costs required tocomplete the terms of reference in Annex IA, which is not less than $95,000,shall be provided by Gilbert/Commonwealth, the U.S. firm which has beenselected as the contractor for the study. The feasibility study on theSeversk TETS shall be carried out by Gilbert/Commonwealth under a contractwith the Siberian Group of Chemical Enterprises.

The opening paragraph of the Grant Agreement is amended by adding atthe end of the second sentence: "and not to exceed $210,000 to assist infunding the cost of a feasibility study on the Seversk TETS in Tomsk­7."

Clause 1 of the Grant Agreement is amended to read as follows: "Theterms of reference for the two studies are attached as Annex I and AnnexIA to this Grant Agreement. The studies will examine the technical, financial,and environmental aspects of the two proposed projects."

Clause 2 of the Grant Agreement is amended to read as follows: "Thefunding to be provided under this Grant Agreement shall be used to fundU.S. dollar and local currency costs for professional and technical servicesas required by the terms of reference, and performed by Gilbert/Commonwealth(the contractor) in preparing the study. The remaining costs required tocomplete the terms of reference, which are not less than $127,500 for theterms of reference in Annex I and $95,000 for the terms of referenced AnnexIA, shall be provided by the contractor. The funds provided under thisGrant Agreement are the only funds that will be made available to Granteeby TDA for the two studies, unless otherwise agreed in writing."

Clause 14 is amended to include paragraph 1., which states the following:"It is understood and agreed by the Parties that the contractor will certifythat it has provided funding totaling no less than $127,500 and $95,000in completing the terms of reference in Annex I and Annex IA, respectively."