AMENDMENT NO 3
 
TO THE FUNDING AGREEMENT
of 9 July 2010

between

European Investment Bank

and

Silesia Voivodship

….  December 2015
This Amendment (“Amendment”) is entered into on …. December 2015, by and between:

European Investment Bank
100, boulevard Konrad Adenauer
L-2950 LUXEMBOURG
(“EIB”)

and

SilesiaVoivodship on behalf of which acts
The Board of Silesia Voivodship as Managing Authority of The Regional Operational Programme for Silesia Voivodship for the years 2007-2013
represented by:
………………………………………………..
………………………………………………...

ul. Ligonia 46, 
40-037 Katowice
Poland

(“Managing Authority of the Regional Operational Programme for Silesia Voivodship for the years 2007-2013 (MA ROP SV)”)

hereinafter also referred to jointly as the “Parties”

PREAMBLE

WHEREAS:

1.	The Parties entered into a Funding Agreement on 9 July 2010 (Funding Agreement”) providing for the establishment of a JESSICA Holding Fund for Silesia.
2.	The Parties amended the Funding Agreement by Annex No. 1 on 10 October 2013 and Annex No. 2 on 13 August 2014.
3.	The MA ROP SV wishes to extend the term of the Funding Agreement until 
31 December 2020.
4.	The provisions relating to Additional HF Costs and Additional Tasks are no longer relevant. 
5.	The Parties wish to adopt a consolidated text of the Funding Agreement reflecting all amendments to the Funding Agreement. 
6.	Article 16.3 of the Funding Agreement provides that amendments to the Funding Agreement shall be made in writing and shall become effective upon execution by both Parties thereto.
7.	The amendments to Appendix A (‘Investment Strategy and Planning’) shall be subject to the approval of the Investment Board.
8.	Unless otherwise defined herein, words and expressions defined in the Funding Agreement shall have the same meaning when used herein and words denoting the singular shall include the plural and vice versa.
9.	This Annex shall enter into force as of its execution date.

NOW THEREFORE it is agreed as follows:

1.	Article 7 of the Preamble is deleted in its entirety and is replaced with the following wording:

“The Parties have concluded that the JESSICA Holding Fund (as defined below) will be organised as a “separate block of finance” within EIB in accordance with this Agreement, as permitted under Article 43, par. 2 of the Commission Regulation (EC) No. 1828/2006 and as further outlined below.”

2.	The defined term “Additional HF Costs” and all references to it are removed.

3.	The defined term “Annual Budget for Additional HF Costs” and all references to it are removed.

4.	The defined term “Additional Tasks” and all references to it are removed.

5.	The defined term “Business Plan” is amended to state:

“means each business plan, relating to any UDF, approved in accordance with Article 5.6;”

6.	The defined term “Earliest Ordinary Termination Date” and all references to it are removed.

7.	The defined term “EIB Internal Guide for procurement” is amended to state:

“means the Internal Guide for the procurement of services, works and supplies by EIB for its own account under Article 4.3;”

8.	The defined term “Implementing Regulation” is amended to state:

“means Commission Regulation (EC) No. 1828/2006, as amended from time to time;”

9.	The defined term “Reg. 1080” is amended to state:

“means Regulation (EC) No. 1080/2006 of the European Parliament and of the Council, as amended from time to time;”

10.	The defined term “Reg. 1081” is amended to state:

“means Regulation (EC) No. 1081/2006 of the European Parliament and of the Council, as amended from time to time;”

11.	The defined term “Reg. 1083” is amended to state:

“means Regulation (EC) No. 1083/2006 of the European Parliament and of the Council, as amended from time to time;”

12.	A defined term “Termination Date” is introduced and states as follows:

“means 31 December 2020;”

13.	Article 3 is deleted in its entirety and is replaced with the following wording:

“The Parties agree that the JESSICA Holding Fund shall be organised as a “separate block of finance” within EIB as foreseen by Article 43(2) of the Implementing Regulation. EIB shall operate and administer the JESSICA Holding Fund in accordance with the terms of this Agreement.  EIB shall perform the JESSICA Action for and on behalf of the MA ROP SV, in accordance with the terms of this Agreement and, where applicable, with the decisions of the Investment Board, and under the supervision of the Investment Board, as further described in Article 5.  EIB shall hold at all times the assets and liabilities of the JESSICA Holding Fund on behalf of and for the benefit of MA ROP SV.”

14.	Article 4.1.8 is deleted in its entirety and is replaced with the following wording:

“reasonable assistance in so far as the JESSICA Holding Fund is concerned in collecting essential information necessary in order to allow the MA ROP SV to comply with applicable EU Rules concerning closure of the ROP, in a scope to be separately agreed between the Parties;”

15.	Article 4.1.9 is introduced and states the following:

“external audit of the financial statements of the JESSICA Holding Fund in line with applicable rules;”
16.	Article 4.1.10 is introduced and states as follows:

“any other tasks proposed by the Investment Board and approved by EIB, or vice versa, that contribute to the efficient and effective implementation of the JESSICA Action.”

17.	Article 4.2 is deleted in its entirety and the remaining sub-articles of Article 4 are renumbered accordingly.

18.	Article 4.3, formerly 4.4, is amended to state the following:

“In performing the JESSICA Action, EIB may engage consultants and/or advisors to assist it (which must, where appropriate, have knowledge of the local market) and to retain services of attorneys and external consultants, including, but not limited to tax and legal advisers, for specific tasks in connection with the JESSICA Action requiring, in the reasonable opinion of EIB, expert advice. When procuring such services, EIB shall comply with EIB Internal Guidelines for Procurement and shall ensure that (i) the scope of such services is connected to the scope of this Agreement, (ii) the fees payable for such services are established on competitive market terms, and (iii) the services rendered by the external consultants are reasonably evidenced.” 

19.	Article 4.7 is deleted in its entirety.

20.	Article 5.6.4 is amended to state as follows:

“each proposed Operation including the key terms and conditions of each proposed Operational Agreement and any proposed material amendments to such Operational Agreements;”

21.	Article 5.6.6 is amended to state as follows:

“any task foreseen under Article  4.1.10.”

22.	Article 5.7.3 is amended to state as follows:

“after review by the MA ROP SV, approve the Progress Reports, and discharge EIB for its performance of the JESSICA Action, during the reference period of each approved Progress Report in accordance with this Agreement;”

23.	Article 8.4 is deleted in its entirety.

24.	Article 10.1 is deleted in its entirety and is replaced with the following wording:

“The MA ROP SV shall pay EIB by way of remuneration for its services hereunder Costs equal to 1,35% of the total of all amounts contributed to the JESSICA Holding Fund as further set out in the Costs Letter.”

25.	Article 10.5 is amended to state as follows:

“Costs will be payable in advance and shall be directly debited by EIB from the JESSICA Funds or as otherwise agreed between the Parties at the beginning of each quarter.”

26.	Article 10.8 is deleted in its entirety.

27.	Article 11.1.3 is amended to state as follows:

“it will carry out without unreasonable delay the necessary assessments to ensure compliance with the EU Rules on State aid, and/or major projects notification, it being understood that MA ROP SV shall be the sole responsible Party for carrying out any notifications towards the Commission for Operations or Urban Projects in relation to which such notifications are required under relevant EU Rules; and”

28.	Article 13.4 is amended to state as follows:

“The EIB shall collect and forward to MA ROP SV all relevant information, documents and statements available to it and requested by MA ROP SV to enable MA ROP SV to discharge all its obligations under relevant EU and implementing national rules.”

29.	Article 14.1 is amended to state as follows:

“This Agreement shall become effective upon the date of its execution by MA ROP SV and EIB and shall remain in force, unless terminated in accordance with the provisions of this Article 14, until the Termination Date. Within 6 months of the Termination Date, the Parties shall meet in order to agree upon a possible extension of the term of this Agreement for a further period to be agreed by the Parties.”

30.	Article 14.2 is amended to state the following:

“Where grounds giving rise to a possible Termination for Cause exist the Party that has not caused such circumstances may terminate this Agreement with immediate effect by notifying in writing the other Party that a Termination for Cause has occurred.” 

31.	Article 14.4 is amended to state the following:

“Without prejudice to the right of the Parties to declare a Termination for Cause at any time, this Agreement may be terminated by written notice of 6 (six) months.”

32.	Article 14.5 is amended to state the following:

“EIB shall be entitled to terminate this Agreement, in case (i) MA ROP SV or any public authority duly empowered within Silesia, amends or changes any laws, regulations or administrative acts or (ii) there is a change in the text or interpretation of the EU Structural Funds Regulations, in each case which, in the reasonable opinion of EIB, may have a major adverse impact on the activities, or on the performance, of the JESSICA Holding Fund or on EIB’s ability to perform the JESSICA Action.”

33.	Article 14.7 is amended to state the following:

“Upon termination of this Agreement otherwise than for a Termination for Cause or termination due to the expiration of the Termination Date,  the reasonable costs of termination shall be borne by the Party declaring such termination.”

34.	Article 14.9 is amended to state the following:

“Upon expiration or termination of this Agreement, the JESSICA Funds, as well as any assets resulting from the implementation of Operations, shall be (i) where another entity is appointed to replace EIB transferred to this entity, or (ii) where no other entity is appointed to replace EIB returned to MA ROP SV. All reasonable expenses incurred by EIB both before and after the Termination Date in connection with such transfer or return (including the preparation of documentation as well as monitoring, reporting and audit activities) shall be borne by MA ROP SV (even where such expenses exceed the Costs Cap (as defined in the Costs Letter)) and shall be withheld from the amounts to be returned, unless such transfer occurs upon termination of this Agreement due to a Termination for Cause declared by MA ROP SV in which case such expenses shall be borne by EIB.”
 
35.	Article 16.1 is amended to state as follows:
“Any notice or communication by one Party to the other Party shall be made in writing and shall be delivered by registered mail (with copy sent by e-mail) clearly stating in the subject “JESSICA Holding Fund for Silesia” to the following addresses:
If to MA ROP SV:
ul. Ligonia 46, 
40-037 Katowice
Poland
E-mail: rijessica@slaskie.pl      

If to EIB:
European Investment Bank
Attn: Head of JESSICA
100, boulevard Konrad Adenauer
L-2950
LUXEMBOURG
E-mail: MB-FinInstr@eib.org    
With copy to EIB project manager acting as the contact point for Silesia. 
Either Party shall inform the respective other Party in writing without undue delay of any change of the above address details. Until receipt of notification of such changes, a Party may validly serve notice to the last address duly notified to it.”

36.	Section 3 of Annex A (‘Investment Strategy and Planning’) is deleted in its entirety and is replaced with the following wording:

“3.	 Investment Strategy: Overview

3.1	Overall investment strategy 

The Managing Authority for ROP SV and EIB have agreed on the following strategic objectives to be achieved by the JESSICA Holding Fund:
•	To support the implementation of the EU cohesion policy within the context of urban regeneration;
•	To create opportunity for various forms of public and public-private partnerships in urban projects;
•	To support the creation of sustainable solutions for tackling urban needs in the medium to long term.
The above strategic objectives will be achieved by the JESSICA Holding Fund through making contributions to UDF in line with this Investment Strategy and Planning.

3.2	Specific Objectives and scope

The main Objective of JESSICA initiative in Silesia is to contribute to the increase of competitiveness of the region’s urban space by means of revitalisation of degraded areas in cities (including dilapidated historical buildings, historic housing areas, brownfields, post-military and post-industrial areas, as well as city’s districts undergoing a suburbanization process). This should be achieved by a multifunctional approach to degraded areas aiming at restoring and giving them economic, educational, tourist, social and cultural functions. The realized projects should contribute to the liquidation of economic or social problems on the revitalized areas, which imply disproportionate growth of the potential of cities and their slower development. Projects should also support creation of new city and metropolitan functions, that means development of specialized services and products competitive in the supra-regional scale in the fields of research and development, financial services, transport and telecommunication, higher education, tourism, culture and entertainment. The JESSICA Holding Fund will make contributions to these UDFs, which will provide equity, loans and/or guarantees to urban projects (“Urban Projects”), aimed at the revitalization of degraded areas in big and small cities as further described in Priority 6 measure 6.2.3 of ROP. These Urban Projects shall in each case constitute elements of relevant integrated plans for sustainable urban development2(as required by the regulations) and shall aim at:
•	revitalization of urban areas,
•	revitalization of post-military and post-industrial areas and
•	multifunctional approach to degraded areas (economic, educational, touristic, social and cultural functions.
JESSICA reflows are expected to be further used to support the above objectives in line with the project types described below.
Specific objectives (“Objectives”) which Urban Projects should aim to support encompass in particular:
•	reinforcement of pro-development features of post-military and post-industrial areas in both small and big cities (including comprehensive preparation of land for economic activity); 
•	regeneration of degraded town centers as well as selected deprived districts (including actions aimed at improving public safety);
•	regeneration of large elements of degraded or de-capitalized urban infrastructure (with particular emphasis on houses with significant historic or architectural value);
•	improvement of the condition of housing stock within the framework of applicable EU regulations3(only as part of a larger project regenerating deprived public areas).
Urban projects supported by JESSICA initiative in Silesia shall, in general, contribute towards the achievement of relevant indicators of the ROP as these, from time to time, apply to JESSICA initiative. The indicators provided in the table below shall be achieved through the first cycle of the JESSICA Funds:

Indicator	Unit	Target value (2015)
approx.	
Number of projects ensuring sustainable development of urban areas	Item	10	
Number of events organised with the use of infrastructure covered with priority support	Item	19	
Number of people benefiting from the infrastructure covered with support	Thousands of people	195	
Revitalised area	Hectare	85	
Number of enterprises started	Item	19	
Number of jobs created	Item	84	
Post-2015, projects financed from JESSICA reflows are expected to further contribute to the sustainable development of the urban areas in the Silesia Region through increasing their social and economic potential.”

37.	The first paragraph of section 4.3 of Annex A (‘Investment Strategy and Planning’) is deleted in its entirety and is replaced with the following wording:

“Various JESSICA actions shall be carried out in order to identify proper partners with view to setting up UDFs and signing Operational Agreements. The identification process shall take into account recommendations from the Study and shall be based on the experience and market knowledge of the EIB.”

38.	The first paragraph of section 4.4 of Annex A (‘Investment Strategy and Planning’) is deleted in its entirety and is replaced with the following wording:

“Projects eligible for UDF investments shall comply with relevant Structural Funds Regulations and ROP. They shall also be consistent with relevant integrated plans for sustainable urban development and shall meet the objectives as indicated in this Investment Strategy and Planning and as to be described in relevant Operational Agreements. The projects shall fulfil to the criteria indicated in ROP and shall contribute to the achievement of relevant output and result indicators as set in this Strategy. The investment portfolios of UDFs may comprise of a number of projects different in terms of: duration, size, risk and returns.” 

39.	Section 4.4.1 of Annex A (‘Investment Strategy and Planning’) is deleted in its entirety and is replaced with the following wording:

“Detailed criteria for the Urban Projects selection shall be specified in relevant Operational Agreements. Although different types of project can be distinguished, all projects shall meet the criteria as described below:
	
		General criteria 

-	compliance with general Structural Funds rules and regulations; 
-	soundness in terms of business model, cash flows, partners, etc.;
-	projects shall constitute parts of relevant integrated urban development plans, if applicable;
-	project shall generate direct or indirect revenue sufficient to repay any funding received from a UDF required by JESSICA regulations; and
-	project shall ensure adequate economic and/or social benefits.

		Criteria related to ROP

-	compliance with relevant eligibility criteria as described in the priority VI of ROP   (measure 6.2);
-	contribution to the objectives of ROP, priority VI and the achievement of   relevant indicators set in this strategy (3.2);
-	preferably appropriate scale of the project, ensuring a significant impact on local development; and
-	preferably complementarity with other relevant regeneration projects. 

		Financial and economic criteria

-	Financial criteria will differ according to the projects and financial instrument selected (loans, guarantees, equity) and shall be established on a case by case basis. These criteria may include: internal rate of return, net present value, pay-back period, cash flow profile, availability and form of collateral (if required), other financial indicators typically used in credit analysis, etc.
-	The assessment of projects as regards their economic sustainability and impact may include the following aspects of the projects: contribution to meeting relevant outputs, potential to attract additional funding from other public and private sources, potential to attract investors in other projects, which would be complimentary or which could create economic or social synergies.  
-	Financial and economic criteria shall be proposed by the selected UDF(s) and accommodated to the types of projects foreseen to be supported.”

40.	Section 5 of Annex A (‘Investment Strategy and Planning’) entitled ‘Action Plan’ is removed and Section 6 entitled ‘Potential EIB financial contribution’ is renumbered accordingly.

41.	At Appendix B (‘Monitoring instruments to be implemented by the JESSICA Holding Fund’), the second paragraph of section 6 is deleted in its entirety.

42.	The text of Appendix C (‘Reporting’) is amended to state the following:

“REPORTING

The JESSICA Action reporting system is an essential element of the JESSICA monitoring system and is designed to ensure appropriate management of the initiative and, as far as possible, to contribute to the reporting obligations of Managing Authority ROP SV required by the Commission.

EIB shall comply with the following reporting procedures:
(i)	EIB shall prepare for each calendar year by 31 March  the Annual Progress Report, setting out a detailed analysis of the JESSICA Action performed during the previous calendar year, an analysis on the progress with the implementation of the Investment Strategy and Planning and detailed information on the progress of the Operations. 
(ii)	The Annual Progress Report shall include the information, relating to the Operations and to the JESSICA Holding Fund, necessary in order to allow MA ROP SV to comply with its reporting obligations towards the Commission in accordance with the Implementing Regulation.
(iii)	The Annual Progress Report shall be in the English and Polish language. 
(iv)	The Annual Progress Report shall be submitted by EIB to the Investment Board for its approval, by 31 March of each calendar year, and the Investment Board shall approve it after obtaining approval, where appropriate, from the Managing Authority ROP SV.
(v)	EIB shall also prepare a semi-annual Progress Report, in the English and Polish language, including an analysis of the progress with the implementation of the Investment Strategy and Planning and detailed information about the progress of the Operations, which shall be presented in a form to be separately agreed between the Parties, and submit it to the Investment Board for its approval by 30 September each year for the first half of the year ending on 30 June. 
(vi)	EIB shall procure that Operational Agreements shall include the necessary provisions enabling the same to collect relevant information from the UDFs, in order to facilitate adequate monitoring of the Operations, including relevant information to be collected from Urban Projects receiving financial support under JESSICA.” 

43.	The text of Appendix D (‘Exit Policy for the Contributions from MROP out of the JESSICA Holding Fund’) is amended to state the following:

“1.   Exit policy

The exit policy of the JESSICA Holding Fund out of the underlying UDFs will be systematically included in the Operational Agreements and should be discussed with and approved by the Investment Board. 

At least 6 (six) months before the termination of the Funding Agreement, the Parties shall meet in order to discuss and agree upon the possibility to extend the term of this Agreement for a further period to be determined or to wind-up operations.

The details of the exit strategy of the JESSICA Holding Fund are to be decided at a later stage by the MA ROP SV and the other entities involved depending on the circumstances, a potential exit scenario could be to:

(i)	reinstall a JESSICA Holding Fund, with EIB or another entity; 

(ii)	transfer funds available to the MA ROP SV, or another designated public body or institution dealing with UDFs; or

(iii)	reinvest amounts repaid by final recipients of JESSICA loans under the revolving mechanism with the view to support further Urban Projects meeting objectives defined in the Investment Strategy and Planning and in relevant Operational Agreement.

Eventually funds available will be returned to Silesian Voivodeship5.

This list shall not be regarded as exhaustive, but only as an example of potential options.

2.	Revolving character

During the term of this Agreement, resources returned to the JESSICA Holding Fund from investments undertaken by it, reimbursement of loans, or left over after all guarantees have been honoured as well as any interest generated by the cash balance held in the JESSICA Holding Fund could be reused under the revolving mechanism to be possibly introduced in the Operational Agreement(s) with UDF(s). Under such a revolving mechanism the UDF(s) are expected to be allowed, subject to market demand and within the defined timeframe, to use JESSICA reflows to support further investments.” 

44.	Sections 1 and 1.1 of Appendix E (‘Treasury Guidelines’) are amended to state as follows:

“1.	The JESSICA Funds (excluding the Costs Cap as such term is defined in the Costs Letter) from time to time received by EIB from Managing Authority  and / or from repayments by UDF shall be held in one or more of the following ways, as directed by MA ROP SV in writing:
1.1	The JESSICA Funds may be invested by EIB for the account of the JESSICA Holding Fund in one or more segments, as agreed with MA ROP SV, of the pooled investment portfolio known as the “EIB Unitary Fund". If MA ROP SV agrees for some or all of the JESSICA Funds to be so invested, it acknowledges that such investment shall be made subject to the terms and conditions of the EIB Unitary Fund and accepts the risks of an investment in the EIB Unitary Fund. The costs of the management and administration of the EIB Unitary Fund are payable out of the assets of the EIB Unitary Fund, as described in the aforementioned information memorandum.”
45.	Subparagraph (i) of Appendix F (‘The Investment Board’) is amended to state as follows:

“The Investment Board shall hold meetings as often as necessary and at least once every six months;”

46.	Appendix G (‘Costs Letter’) is deleted in its entirety and is replaced with the following text:

“COSTS LETTER
Costs Letter to the Funding Agreement entered into between the European Investment Bank (“EIB”) and Silesia Voivodship on the date hereof (“Funding Agreement”) relating to the JESSICA Holding Fund for Silesia (the “JESSICA Holding Fund”).

Dear Sirs,
1.	This letter sets out the details relating to calculation and payment of the Costs in accordance with the Funding Agreement, particularly with Article 10, that EIB shall recover for performing the JESSICA Action. The Costs shall constitute cost recovery for any and all costs incurred and/or expected by EIB for the compliance with and performance of the JESSICA Action. All Costs will be paid to EIB in EUR. To mitigate against currency risk and ensure that sufficient funds are available in the JESSICA Holding Fund Account to pay all Costs, an appropriate amount of MA ROP SV's contribution to the JESSICA Holding Fund will be converted from PLN into EUR at the moment the contribution is made. The converted amount shall be equal to the aggregate amount of Costs as projected for the initial 3-year period of the Funding Agreement based on the cap presented in Clause 5 below. After the initial 3-year period, EIB shall be paid from the amount remaining in the account of the JESSICA Holding Fund, resulting from the difference between the initial contribution set aside to cover Costs and the Costs actually incurred during the initial 3-year period ("the Remaining Amount”). The Parties agree that the Remaining Amount will be available for the above purpose until 31 December 2015 or until the moment when the total initial contribution is expended, whichever date falls earlier. Once the above amount has been exhausted, EIB shall be entitled to recover the respective amounts exclusively from returns from the UDFs, it being understood that those returns will be applied first towards payments due to EIB until full payment of any and all amounts due to EIB within the limits indicated under Clause 5 below.
2.	Capitalised terms and expressions defined in the Funding Agreement shall have the same meaning when used herein, unless otherwise defined or the context otherwise requires.
3.	Costs which EIB shall be entitled to recover in relation to the performance of JESSICA Action will refer to the activities listed in Article 4.1 of the Funding Agreement. 
4.	Costs shall be calculated on the basis of:
4.1.	the EIB Standard Cost Rate applicable to EIB staff;
4.2.	the costs connected to consultants (other than legal advisors) assisting EIB in carrying out JESSICA Action, supervised and supported by EIB; these costs shall be based on the rate charged by the consultants to EIB increased by a “co-ordination cost” of EUR 30,000 per year to cover the cost associated with co-ordinating and administering the work of these consultants;  
4.3.	the costs connected to legal advice in connection with Operations (for the avoidance of doubt, excluding litigation costs);
4.4.	the costs connected to travel of EIB staff, in accordance with EIB Group travel policy;
4.5.	where necessary and appropriate, insurance costs related to EIB’s liability under the Funding Agreement (it being understood that such costs will be procured in line with the EIB Internal Guide for Procurement);
4.6.	the costs incurred for translation;
4.7.	the costs attributable to the external audit of the JESSICA Holding Fund;
4.8.	the costs incurred for organisation of IB meetings, compensation of the IB Members, and the travel expenses incurred by the same and reimbursed by the JESSICA Holding Fund; 
4.9.	any applicable reasonable cost of termination of the Funding Agreement in accordance with Article 14 with the exception of the termination costs that may be incurred by EIB both before and after the expiration of the Termination Date which exceed the Cost Cap, as per Article 14.9 of the Agreement and Article 6 below.
With reference to Clause 4.1, the Parties acknowledge and approve the principle for the calculation of the EIB Standard Costs as set out in Annex 1. The Parties also acknowledge that the EIB Standard Cost Rate may be amended from time to time by EIB.
With reference to Clause 4.2, the Parties agree that the cost of one consultant calculated according to the formula therein shall not exceed the cost of one EIB staff with equivalent skills calculated on the basis of EIB Standard Cost Rate.
5.	The Parties acknowledge and agree that the Costs which EIB shall be entitled to recover may not exceed, on a yearly average, for the term of the Funding Agreement, the cap of 1.35% of the total amounts contributed from time to time by MA ROP SV to the JESSICA Holding Fund (the “Costs Cap”). The amount representing the Costs Cap for the whole term of the Funding Agreement shall be held by EIB in accordance with Article 3 of Annex E (“Treasury Guidelines").
The Parties acknowledge that the cap has been agreed on the basis of projections, and that should a cap in any one year not be reached, any excess amount may be allocated towards Costs in any other year. 
The cap has been agreed on the assumption that MA ROP SV contributes to the JESSICA Holding Fund a minimum amount of PLN 249,618,000.00 equivalent of EUR 60,000,000.00. Should the amount contributed to the JESSICA Holding Fund reduce below this figure after 2015, the cap will be adjusted proportionally such that the cap shall never be less than 1.35% of EUR 60,000,000.00.
6.	Where the termination of the Agreement occurs due to the expiration of the Termination Date, the costs incurred by EIB in respect of its activities relating to the termination, which shall include, without limitation, the costs in respect of the transfer or return foreseen in Article 14.9 of the Funding Agreement, shall be payable by MA ROP SV. To the extent possible EIB shall endeavor to limit these costs such that they fall within the Costs Cap. However, should these costs exceed the amount of the Costs Cap, this excess shall be paid by MA ROP SV.
7.	Payments of Costs
The payments of Costs shall be due as follows:
EIB shall send to MA ROP SV an upfront payment notification (“Upfront Payment Notification”) as soon as possible after the beginning of each calendar quarter, providing for the upfront payment of estimated Costs expected for the quarter (“Estimated Costs”) and setting out details of its calculation, as presented in Annex 2. Fifteen (15) days after submission of the Upfront Payment Notification to MA ROP SV, EIB shall be entitled to debit the JESSICA Funds with the amount of the Estimated Costs prescribed in the Upfront Payment Notification, and credit this amount in favour of EIB.
8.	Final Statement of Costs 
8.1	EIB shall send to MA ROP SV and the Investment Board the Final Statement of Costs as soon as possible after the end of each calendar year, and in any case no later than 31 March of the following calendar year, detailing the Costs incurred by EIB as well as the details of calculation, as presented in Annex 2. The Investment Board shall approve the Final Statement of Costs at its next meeting following the date of submission by EIB and in any case not later than 30 (thirty) days following its submission.
The following shall apply:   
8.1.1	once EIB receive the approval from the Investment Board, the Final Statement of Costs shall be considered as approved on the date EIB received the approval from the Investment Board;
8.1.2	should EIB receive neither approval nor objections from the Investment Board, the Final Statement of Costs shall be considered as approved at the end of the 30th day after communication of the Final Statement of Costs to the Investment Board; 
8.1.3	should EIB receive any objections from the Investment Board on specific identified items of the Final Statement of Costs, EIB shall, within 15 days from receipt of such objection, take into account such objections in good faith, taking any actions it deems appropriate, which may include discussing the objections with the Investment Board and/or providing copies of invoices to the IB, and submitting an amended Final Statement of Costs to MA ROP SV and the Investment Board. It is understood that, in this circumstance, the Final Statement of Costs shall then be deemed to be approved;
8.1.4	following the approval of the Final Statement of Costs by the Investment Board if the aggregate of Estimated Costs for the applicable calendar year recovered by EIB in accordance with Clause 7 above exceeds the Costs incurred by EIB, EIB shall repay to the JESSICA Holding Fund, as soon as possible an amount equal to such difference. If the Estimated Costs recovered by EIB in accordance with Clause 7 above falls short of the Costs incurred by EIB, EIB shall be entitled to debit the JESSICA Funds for the amount of the shortfall. Where appropriate, any shortfall or excess may be offset with any amounts due by either Party under this Costs Letter.
9.	Depending on the performance level of the UDF and/or other circumstances, as the case may be, a part of the amounts set aside to cover Costs may be contributed to the UDF following relevant decision of the Investment Board. In such case, should the amounts standing to the credit of the JESSICA Holding Fund Account be insufficient to pay any amount due under Clauses 7 or 8, EIB shall be entitled to recover the respective amounts exclusively from returns from the UDF, it being understood that those returns will be applied first towards payments due to EIB until full payment of any and all amounts due to EIB within the limits indicated under Clause 5. Only thereafter will funds be used to meet the amounts foreseen under Article 5.8 of the Funding Agreement, or used in a revolving mechanism.
10.	For the purposes of identification within the accounting records of EIB an account for the JESSICA Holding Fund will be called “JESSICA Holding Fund for Silesia – number  3752814“. All payments related to the JESSICA Holding Fund for Silesia shall be settled through EIB’s PLN bank account held in Bank Handlowy w Warszawie, number IBAN PL85103015080000000300751016, swift: CITIPLPXXXX.
	For each transfer of funds to the JESSICA Holding Fund shall inform EIB, by e-mail (to fi-pro/bot/val@eib.org or to such other mail address as may be indicated by EIB from time to time) when such payment has been initiated.  The SWIFT message instructing such payment shall include -in field 70 (remittance information) - a clear indication of the source and use of such funds (e.g. “Contribution to JESSICA Holding Fund for Silesia – number 3752814”).  EIB will confirm receipt of the funds, by e-mail to fundusze@silesia-region.pl.
11.	Final balance payment:
	Should the Costs exceed the cap provided under Clause 5 above, MA ROP SV shall be entitled to recover from EIB, as soon as possible after termination and as a final balance payment, an amount equal to such difference. Where appropriate, this amount shall be offset against any payment due by MA ROP SV to EIB under this Costs Letter, provided that such payments fall due at the same time. 
12.	The Parties acknowledge and agree that this Costs Letter shall be treated as confidential, and under no circumstance shall it be published, disclosed or otherwise communicated to third parties without the prior written consent of the other Party, other than to the Investment Board, a Party’s director, officer, employee, representative, lender, risk participant, counsel, reinsurance broker or re-insurer or affiliate, their employees, representatives, lenders or counsel, auditors, regulatory or tax authorities, and any other entity having authority over a Party to which disclosure is required in accordance with applicable law.
13.	This Costs Letter may be amended by agreement in writing between the Parties.” 

47.	The title of Annex 1 to Appendix G (‘Costs Letter’) is amended to read as follows:

“EIB Standard Cost Rate”

48.	Annex 2 to Appendix G (‘Costs Letter’) is deleted in its entirety and replaced with the following text:

“Details of cost calculation to be presented in the Final Statement of Costs 
	
Cost Item	Total (EUR)
	
EIB Standard Cost
	EIB Standard Cost Rate* number of staff members *number of months worked = [•]	
Costs of consultants (other than legal advisers), plus, in respect of consultants retained in the context of the JESSICA Action, including supervision costs
	[•]	
Costs of legal advisers	[•]	
Costs of travel	[•]	
EIB insurance costs	[•]	
Cost of translation		
Costs of termination	[•]	
Costs incurred for organisation of IB meetings and compensation of the IB Members, including travel costs	[•]	
Costs of external audit	[•]	
Costs of meetings with stakeholders organised in the context of the implementation of the JESSICA Action	[•]	
Any other cost items approved each time by the Investment Board	[•]	

49.	This Annex No. 4 is subject to the general principles of law common to the Member States of the European Union as interpreted or to be interpreted by the Court of Justice of the European Union.

50.	The parties hereby submit to the jurisdiction of the Court of Justice of the European Communities.

51.	IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed in three (3) originals in the English language and two (2) in the Polish language. Only the English language version constitutes the authentic text of this document. In case of conflict between the two language versions, the English version shall prevail. 

Signing for and on behalf of: 

European Investment Bank

Luxembourg,                          2015

………………………………………..
Stephen Sturmer
Head of Division, 
Legal Department

…………………………………..
Goetz von Thadden
Head of Unit, Financial Instruments 
Baltic Sea and Northern Europe Department	Signed for and on behalf of:

Silesia Voivodship	

Katowice,                                   2015

……………………………………….

………………………………………..