India - Karnataka Sericulture Project : Credit 1034 - ARDC Agreement - Conformed

DOCUMEN~TS CREDIT NUMBER 1034 IN ARDC Agreement (Karnataka Sericulture Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and AGRICULTURAL REFINANCE AND DEVELOPMENT CORPORATION Dated October 27, 1980 ARDC AGREEMENT AGREEMENT, dated October 27, 1980, between INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and AGRICULTURAL REFINANCE AND DEVELOPMENT CORPORATION (hereinafter called ARDC). WHEREAS by the Development Credit Agreement of even date herewith between India, acting by its President (hereinafter called the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to fifty-four million dollars ($54,000,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that ARDC agree to undertake such obligations toward the Association as are hereinafter set forth; WHEREAS by financial arrangements to be entered into between the Borrower and ARDC, part of the proceeds of the Credit will be made available to ARDC on the terms and conditions therein set forth; and WHEREAS ARDC, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, has agreed to undertake the obligations hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Wherever used in this Agreement, unless the context shall otherwise require, the several terms defined in the Development Credit Agreement and in the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. ARDC shall carry out Parts A.1 and B.2 of the Project in accordance with a banking plan satisfactory to the Association,as such banking plan may be amended from time to time by agreement between the Borrower, ARDC and the Association. -2- ARDC shall act with due diligence and efficiency and in confor- mity with appropriate administrative, agricultural and financial practices, and shall provide, promptly as needed, the funds required for the carrying out of Parts A.1 and B.2 of the Project. Section 2.02. ARDC shall enter into Financial Arrangements (hereinafter referred to as the ARDC Financial Arrangements) with the Borrower on terms and conditions agreed upon between the Borrower and the Association. ARDC shall duly perform all its obligations under the ARDC Financial Arrangements. Except as the Association may otherwise agree, ARDC shall not take or concur in any action which would have the effect of amending, abrogating, assigning or waiving the ARDC Financial Arrangements or any provision thereof. Section 2.03. The lending terms and conditions for carrying out Parts A.1 and B.2 of the Project shall be agreed upon amongst the Borrower, ARDC and the Association. Section 2.04. Except as the Association may otherwise agree, ARDC shall cause all goods and services financed out of the proceeds of the Credit relent to it by the Borrower to be used exclusively for the Project. Section 2.05. (a) ARDC: (i) shall maintain records adequate to record and monitor the progress of Parts A.1 and B.2 of the Project (including their costs) to identify the goods and services financed out of the proceeds of the Credit relent to it by the Borrower, and to disclose their use in Parts A.1 and B.2 of the Project; and (ii) shall furnish to the Association at regular intervals all such information as the Association shall reasonably request concerning Parts A.1 and B.2 of the Project, the cost thereof, the expenditure of the proceeds of the Credit so relent to it and the goods and services financed out of such proceeds. (b) Promptly after completion of the Project, but in any event not later than six months after the Closing Date or such later date as may be agreed for this purpose between the Associa- tion and ARDC, ARDC shall prepare and furnish to the Association a report, of such scope and in such detail as the Association shall reasonably request, on the execution and initial operation of Parts A.1 and B.2 of the Project, their costs and the bene- fits derived and to be derived from them, the performance by ARDC and the Association of their respective obligations under this Agreement and the ARDC Financial Arrangements and the accom- plishment of the purposes of the Credit. -3- Section 2.06. (a) ARDC shall, at the request of the Associa- tion: (i) exchange views with the Association with regard to the progress of Parts A.1 and B.2 of the Pro- ject, the performance of its obligations under this Agreement and under the ARDC Financial Arrange- ments, and other matters relating to the purposes of the Credit; and (ii) furnish to the Association all such information as the Association shall reasonably request in respect of Parts A.1 and B.2 of the Project. (b) ARDC shall promptly inform the Association of any condition which interferes or threatens to interfere with, the progress of Parts A.1 and B.2 of the Project, the accomplishment of the purposes of the Credit, or the performance by ARDC of its obligations under this Agreement and under the ARDC Financial Arrangements. ARTICLE III Management and Operations of ARDC Section 3.01. ARDC shall: (i) at all times manage its affairs, maintain its financial position, plan its future expan- sion and carry on its operations, all in accordance with sound business and financial practices and under the supervision of experienced and competent management assisted by experienced and competent staff in adequate number; and (ii) take all steps necessary to acquire, maintain and renew all rights, powers, privileges and franchises which are necessary or useful in the conduct of its business or in the carrying out of Parts A.1 and B.2 of the Project. ARTICLE IV Financial Covenants Section 4.01. ARDC shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. -4- Section 4.02. ARDC shall: (i) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with sound auditing principles consistently applied, by indepen- dent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than four months after the end of each such year, (A) certified copies of its financial statements for such year as so audited and (B) the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning the accounts and financial statements of ARDC and the audit thereof as the Association shall from time to time reason- ably request. Section 4.03. ARDC shall cause the Participating Banks:. (i) to maintain separate accounts for loans made in respect of Parts A.1 and B.2 of the Project; and (ii) to send to the Asso- ciation through ARDC their audited accounts (together with an analysis of overdue and bad debts and a statement certified by ARDC of their Project lending) not later than nine months after the end of their fiscal years. ARTICLE V Effective Date; Termination; Cancellation and Suspension Section 5.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. Section 5.02. (a) This Agreement and all obligations of the Association and of ARDC thereunder shall terminate on the earlier of the following two dates: (i) a date twenty years after the date of this Agree- ment; or (ii) the date on which the Development Credit Agreement shall terminate in accordance with its term. (b) If the Development Credit Agreement terminates in accordance with its terms before the date specified in paragraph (a) (i) of this Section, the Association shall promptly notify ARDC of this event. -5- Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any partial cancellation or suspension under the Development Credit Agreement. ARTICLE VI Miscellaneous Provisions Section 6.01. Any notice or request required or permitted to be given or made under this Agreement and any agreement between the parties contemplated by this Agreement shall be in writing. Such notice or request shall be deemed to have been duly given or made when it shall be delivered by hand or by mail, telegram, cable, telex or radiogram to the party to which it is required or permitted to be given or made at such party's address hereinafter specified or at such other address as such party shall have designated by notice to the party giving such notice or making such request. The addresses so specified are: For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United Stntes of America Cable address: INDEVAS Washington, D.C. For ARDC: Managing Director Agricultural Refinance and Development Corporation ShriNiketan F Block Shiv Sagar Estate Dr. Annie Besant Road Worli, Bombay, 18 W.B. India -6- Cable address: AGREFINANS, WORLI Bombay 18, India Section 6.02. Any action required or permitted to be taken, and any documents required or permitted to be executed, under this Agreement, on behalf of ARDC, may be taken or executed by its Managing Director or such other person or persons as ARDC shall designate in writing, and ARDC shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 6.03 This Agreement may be executed in several counterparts, each of which shall be an original, and all collec- tively but one instrument. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL DEVELOPMENT ASSOCIATION By)is( T Acting Regional Vice President South Asia AGRICULTURAL REFINANCE AND DEVELOPMENT CORPORATION By IS1 M I - bN Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Development Association. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Association thereunto the c *P day of 198 . FORSECRITARY