C. The Investor is in Compliance with its Contractual Duties in all material
respects

The Investor did not file an application for damage to the Covered Property
within six months of the loss (Sec. 8.01(a). However, the Investor was seeking
coverage for the loss from its other loss carrier during such period and only after
the claim was finally denied on September 23, 2008 did the Investor seek
compensation from OPIC. For this reason, OPIC has determined to treat this
omission as immaterial.

The Investor has complied with its duties under the Contract in all material
respects and has provided a certificate to that effect that is satisfactory to OPIC.

The Investor will execute a release and receipt in connection with payment of
compensation transferring to OPIC the Investor’s claims arising out of the loss
due to Political Violence.

CONCLUSION

Based on the foregoing determinations and subject to the execution of the
certificate and receipt and release I find that the political violence claim of the
Investor is valid and that OPIC is liable for $130,680 in compensation. The
amount will be paid in consideration of the Investor’s release of OPIC from
further liability for this incident.

OVERSEAS PRIVATE INVESTMENT
CORPORATION

a

a

Aika

Its: Acting Vice President and General
Counsel

Date: /U___,2009



MEMORANDUM OF DETERMINATIONS

Political Violence Claim of International Rescue Committee (the “Investor”)

Chad — Project Country Annex to Master Contract of Insurance No. X-060 (OPIC
Contract of Insurance No. F526)

I.

IL.

CLAIM

By an e-mail dated February 6, 2008, the Investor gave notice to OPIC that the
Investor had losses of Covered Property as a result of political violence in Chad.
The Investor subsequently made an application for compensation, providing an
account of the lost Covered Property on November 17, 2008 and additional
information on the circumstances of the losses on January 20, 2009.'

The losses occurred during fighting in N’Djamena involving Chadian government
troops and various armed rebel groups whose objectives include the overthrow of
the elected government. As a result of the political violence and the ensuing
instability, a civilian mob was able to loot and destroy the Covered Property.
OPIC finds that the claim is valid and that the Investor is entitled to compensation
in the amount of $130,680.

FACTUAL BACKGROUND

For the past few years, Chad has been engaged in armed struggle with competin
rebel organizations allegedly backed by Sudan in the eastern part of the country.
The rebels, who accuse the government of clan-based favoritism and corruption,
seek to overthrow the elected government of President Idriss Deby. The violence
is related to the conflict in Darfur, where Sudan accuses Chad of backing anti-
government rebels there. In 2006 and 2008, rebel forces attacked the Chadian
capital, N’Djamena, which is located in the western part of the country.

The Investor has claimed that, late in the morning on February 2, 2008, there was
fighting between rebels and government forces around the Investor’s N’Djamena
offices and that, after fighting moved away from the offices, a mob of civilians
entered the Investor’s compound, where Covered Property, including, computers,
copiers, scanners, telephones, furniture, office supplies, medicine, fuel, spare parts
and shelter supplies, was taken or destroyed in three waves.

Sources independent of the Investor describe how early on February 2, 2008,
three main rebel groups, the United Force for Democracy and Development, the
Rally of Forces for Change, and the UFDD-Fondamentale, launched an attack on
the capital, seizing large parts of the city, and surrounding the Presidential Palace.

' The notice, application for compensation, and related documents are attached as Exhibit 1,
* The factual description is based upon reports in the international press and State Department background
notes, copies of which are attached hereto as Exhibit 2.


Those sources also describe instances of looting as a result of the fighting.
Chadian government forces eventually pushed the rebels out of the city and a
cease fire was signed on February 5, 2008.

IH. THE CONTRACT
A. Scope of Coverage

The Master Contract of Insurance No. X-060 dated September 24, 2004 (the
“Master Contract”) and the Country Annex for Chad, OPIC Contract of Insurance
F526 dated April 20, 2005 (the “Country Annex”) together constitute the contract
of insurance (“the Contract”).

Article VI of the Master Contract provides compensation if Political Violence in
Chad is the direct and immediate cause of the permanent loss of all or some of the
Covered Property used for the Project due to physical damage, destruction or the
physical loss and retention of the Covered Property. “Covered Property” is
defined in Sec.1.01.1 as the office equipment and other property that the Investor
has provided to its branch offices (each a “Foreign Enterprise”) as described in
each country annex. “Political Violence” is defined in Sec. 6.01 as “a violent act
undertaken with the primary intent of achieving a political objective, such as
declared or undeclared war, hostile action by national or international armed
forces, civil war, revolution, insurrection, civil strife, terrorism or sabotage.”

The Investor is required to provide a current list of Covered Property, including
its historical cost and localities, in connection with each annual premium payment
(Sec 6.01; Sec 9.01).

B. Compensation

Section 7.01 of the Master Contract provides that, if the requirements of Article
VI are satisfied and subject to limitations, compensation will be payable in the
amount of the reasonable cost to repair any item of Covered Property lost or
replace it with equivalent new property but not to exceed 200% of the Historical
Cost of the Covered Property for which compensation is paid (Sec 7.01 (a)). The
Historical Cost is that set forth in the corresponding Country Annex.

IV. DETERMINATIONS UNDER THE CONTRACT

A. Political violence was the direct and immediate cause of the permanent
loss of Covered Property used for the Project

° Copies of the Master Contract and the Country Annex are attached hereto as Exhibit 3. Terms capitalized
herein for other than grammatical reasons are used as defined in the Contract. Section references are to the
Master Contract.


As the objective of the rebels is the overthrow of the government of Chad, the
armed attack launched on N’Djamena had a political objective and therefore
constituted political violence. The political violence is well documented by
accounts in the international press, as well as State Department background notes.

N’Djamena is not among the locations listed in the original Country Annex and
was not added in connection with any subsequent annual premium payment.
However, it is among the locations in Chad where political violence has been
reported in the international press, a location in the eastern part of the country
(where political violence has regularly occurred over the past few years) is listed
in the Country Annex, the Contract does not preclude the Investor from moving
Covered Property to locations that are not listed and the Project required the
Investor to expand its operations in Chad. For all these reasons, OPIC has
determined to treat this omission as immaterial.

None of the exclusions apply, as the amount of compensation payable is not less
that the minimum compensable loss, there are no measures that the Investor could
have taken to protect the Covered Property, there is no question of provocation by
the Investor, and the Covered Property does not include any excluded items (Sec.
6.03 (a) ~ (d).)

B. Compensation is payable in an amount of up to $ 130,680

The Investor has provided a file listing lost Covered Property at Historical Cost of
$144,614. Under the Contract, compensation is payable for the reasonable cost to
replace the lost Covered Property with equivalent new property, but not to exceed
200% of the Historical Cost of the Covered Property for which compensation is
paid (Sec. 7.01 (a).)

A limitation upon compensation applies. Although the above amount is less than
the Maximum Aggregate Compensation (Sec.1.04) under the Master Contract on
the date of loss ($5,000,000), the amount exceeds the Maximum Insured Amount
in the Country Annex ($130,680). Accordingly, payment of compensation is
limited to $130,680.

Payment of compensation in the above limited amount would not violate the
Investor’s duty to be self-insured (Sec. 1.03, 1.04(b); Sec.7.02 (a) — (c);
Sec.9.01.3). According to the Country Annex, the Historical Cost of all Covered
Property is $145,200, and the Maximum Insured Amount is $130,680 or 90% of
the Historical Cost. Therefore, the requirement that the Investor bear the risk of
loss of 10% of the Historical Cost of all Covered Property is satisfied (Sec. 1.03).
Should the Investor experience a loss on any additional Covered Property in
Chad, no further compensation will be payable under the Contract.