Jordan - Second Agricultural Credit Project : Credit 0103 - Project Agreement - Conformed

CREDIT NUMBER 103 JO Project Agreement (Second Agricultural Credit Project) BETWEEN -a INTERNATIONAL DEVELOPMENT ASSOCIATION AND AGRICULTURAL CREDIT CORPORATION DATED MAY 9, 1967 CREDIT NUMBER 103 JO Project Agreement (Second Agricultural Credit Project) BETWEEN INTERNATIONAL DEVELOPMENT ASSOCIATION AND AGRICULTURAL CREDIT CORPORATION DATED MAY 9, 1967 AGREEMENT, dated May 9, 1967, between the INTER- NATIONAL DEVELOPMENT AssoCIATIoN (hereinafter called the Association) and the AGRICULTURAL CREDIT CORPORATION (hereinafter called the Corporation). WHEREAS by a development credit agreement of even date herewith (hereinafter called the Development Credit Agreement) between THE HASHEMITE KINGDOM OF JORDAN (hereinafter called the Borrower) and the Association, the Association has agreed to make available to the Borrower a development credit in various currencies equiv- alent to three million dollars ($3,000,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that the Corporation agree to under- take certain obligations to the Association as hereinafter in this Project Agreement set forth; and WHEREAS the Corporation, in consideration of the Associ- ation'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 Project Agreement, unless the context shall otherwise require, the several terms defined in the Development Credit Agreement and in the Regulations (as therein defined) shall have the respective meanings therein set forth. 4 ARTICLE II Particular Covenants of the Corporation SECTION 2.01. (a) The Corporation shall carry out the Project with due diligence and efficiency and shall at all times conduct its operations and affairs and maintain its financial position in accordance with sound agricultural, engineering and financial practices and under capable and efficient management appointed in consultation with the Association. (b) The Corporation agrees to submit such information as the Association shall reasonably request about any proposed loan or loans exceeding in the aggregate the equivalent of 20,000 Dinars to be extended by the Corpora- tion under the Project for any individual farmer or for any single scheme. The Corporation further agrees that it will not make any such loans without prior approval of the Association. (c) The Corporation shall have its financial statements (balance sheet and related statement of earnings and expenses) prepared in a manner satisfactory to the Asso- ciation and shall have its statements certified annually by an outside accountant acceptable to the Association and shall promptly after their preparation and not later than four months after the close of the Corporation's fiscal year transmit to the Association certified copies of such state- ments and a signed copy of such accountant's report. SECTInN 2.02. The Corporation shall lend the proceeds of the Credit, or the equivalent thereof, for the purposes of the Project on terms and conditions and in accordance with procedures satisfactory to the Association and, in granting loans, the Corporation shall obtain rights adequate to protect its interests and the interests of the Borrower and the Association. SECTION 2.03. Except as the Association and the Cor- poration shall otherwise agree, the Corporation shall cause 5 all goods and services purchased in whole or in part with the proceeds of the Credit to be used exclusively in the territories of the Borrower in carrying out the Project. SECTION 2.04. The Corporation shall maintain or cause to be maintained records adequate to identify the goods and services financed out of the proceeds of the Credit, to disclose the use thereof, to record the progress of the Project (including the cost thereof), and to reflect in accordance with consistently maintained sound accounting practices the operations and financial condition of the Corporation and all financial transactions between the Borrower and the Corporation with respect to the Project, shall enable the Association's representatives to inspect the Project, the goods financed out of the proceeds of the Credit, all plants, farms, works, properties and equipment financed by the Corporation, and any relevant records and documents. SECTION 2.05. The Corporation shall furnish to the Asso- ciation all such information as the Association shall reason- ably request concerning the expenditure of the proceeds of the Credit, the goods and services financed out of such proceeds, the Project, and the administration, operations and financial condition of the Corporation.. SECTION 2.06. (a) The Corporation and the Association shall cooperate fully to assure that the purposes of the Credit will be accomplished. To that end, each of them shall furnish to the other all such information as it shall reason- ably request. (b) The Association and the Corporation shall from time to time exchange views through their representatives with regard to matters relating to the purposes of the Credit. The Corporation shall promptly inform the Association of any condition which interferes with, or threatens to inter- fere with, the accomplishment of the purposes of the Credit, or the performance by the Corporation of its obligations 6 under this Project Agreement or the obligations to be performed by it pursuant to the provisions of the Development Credit Agreement. SECTION 2.07. The Corporation shall at all times charge interest rates on all its loans such as to enable it: (a) to cover all its operating expenditures and charges, including taxes, if any, and interest payments on bor- rowings; (b) to build up and maintain a special reserve against bad or doubtful loans; and (c) to accumulate adequate general reserves. SECTION 2.08. The Corporation shall take out and main- tain, with good and reputable insurance companies, insurance against such risks and in such amounts as shall be consistent with sound business practices. SECTIOx 2.09. The Corporation shall not, without the consent of the Association, contract any debt maturing more than one year after the date of its incurrence. ARTICLE III Effective Date; Termination SECTIOX 3.01. This Project Agreement shall come into force and effect on the Effective Date. If, pursuant to Section 8.04 of the Regulations, the Association shall terminate the Development Credit Agreement, the Associa- tion shall promptly notify the Corporation thereof and, upon the giving of such notice, this Project Agreement and all obligations of the parties hereunder shall forthwith terminate. SECTION 3.02. If and when the entire proceeds of the Credit shall have been repaid by the Corporation to the Borrower in accordance with the agreement entered into 7 between them pursuant to Section 4.02(a) of the Develop- ment Credit Agreement, this Project Agreement and all obligations of the Corporation hereunder shall forthwith terminate. ARTICLE IV Miscellaneous Provisions SECTION 4.01. Any notice or request required or per- mitted to be given or made under this Project Agreement and any agreement between the parties contemplated by this Project 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 or radiogram to the party to which it is required or permitted to be given or made at its 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: (a) For the Association: International Development Association 1818 H Street, N.W. Washington, D. C. 20433 United States of America Alternative address for cablegrams and radiograms: Indevas Washington, D. C. (b) For the Corporation: Agricultural Credit Corporation P.O. Box 77 Amman Jordan Alternative address for cablegrams and radiograms: ACC Amman 8 SECTION 4.02. Any action required or permitted to be taken, and any documents required or permitted to be executed, under this Project Agreement on behalf of the Corporation may be taken or executed by the Director General of the Corporation or such other person or persons as he shall designate in writing. SECTION 4.03. The Corporation shall furnish to the Asso- ciation sufficient evidence of the authority of the person or persons who will, on behalf of the Corporation, take any action or execute any documents required or permitted to be taken or executed by the Corporation pursuant to any of the provisions of this Project Agreement and the authenticated specimen signature of each such person. SECTION 4.04. This Project Agreement may be executed in several counterparts, each of which shall be an original and all collectively but one instrument. IN WITNESS AVITEREOF the parties hereto have caused this Project Agreement to be signed in their respective names by their representatives thereunto duly authorized and delivered in the District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL DEVELOPMENT AssoCIATION By /s/ A. BROCHES General Counsel AGRIOULTURAL CREDIT CORPORATION By /s/ FARHAN SIIUBEILAT Authorized Representative