Ghana - Fisheries Project : Credit 0163 - Project Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 163 GH Project Agreement (Fisheries Project) BETWEEN INTERNATIONAL DEVELOPMENT ASSOCIATION AND GHANA INDUSTRIAL HOLDING CORPORATION DATED SEPTEMBER 25, 1969 CONFORMED COPY CREDIT NUMBER 163 GH Project Agreement (Fisheries Project) BETWEEN INTERNATIONAL DEVELOPMENT ASSOCIATION AND GHANA INDUSTRIAL HOLDING CORPORATION DATED SEPTEMBER 25, 1969 AGREEMENT, dated September 25, 1969, between INTER- NATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and GHANA INDUSTRiL HoLDiNG CORPORATION (hereinafter called GIHOC). WHEREAS by an agreement of even date herewith between the Republic of Ghana (hereinafter called the Borrower) and the Association, which agreement, the Schedules thereto and the General Conditions Applicable to Development Credit Agreements of the Association dated January 31, 1969, made applicable thereto are hereinafter called the Development Credit Agreement, the Association has agreed to lend to the Borrower an amount in various currencies equivalent to one million three hundred thousand dollars ($1,300,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that GIHOC agree to undertake certain obligations to the Association as hereinafter provided; and WITHEREAS GIHOC, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, has agreed to undertake the obligations herein- after 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 de- flned in the Development Credit Agreement shall have the respective meanings therein set forth. 4 ARTICLE II Particular Covenants SECTION 2.01. (a) GIHOC shall carry out, through the Division, Parts A and D of the Project, described in Sched- ule 2 to the Development Credit Agreement, with due dili- gence and efficiency and in conformity with sound financial, commercial and technical standards and practices. (b) Except as the Association shall otherwise agree, GIHOC shall, in carrying out, through the Division, Parts A and D of the Project employ a qualified and experienced naval architect and a qualified and experienced production manager for the Division, both acceptable to and on terms and conditions satisfactory to the Association. (c) GIHOC shall enter into the GIHOC Subsidiary Loan Agreement with the Borrower. (d) GIHOC shall, through the Division, furnish to the Association, promptly upon their preparation, the plans, specifications and work schedules for Parts A and D of the Project and any material modifications subsequently made therein, in such detail as the Association shall from time to time request. SECTION 2.02. (a) GIHOC shall, through the Division, maintain records adequate to identify the goods and serv- ices financed out of the proceeds of the Credit, to disclose the use thereof in Parts A and D of the Project, to record the progress of Parts A and D of the Project (including the cost thereof) and to reflect in accordance with sound accounting practices the operations and financial condition of GIHOC and of the Division; shall enable the Associa- tion's representatives to inspect Part A of the Project, such goods, all other plants, sites, works, property and equip- ment of the Division and any relevant records and docu- ments; and shall furnish to the Association all such informa- tion as the Association shall reasonably request concerning 5 the expenditure of the proceeds of the Credit, such goods and services, Parts A and D of the Project and the admin- istration, operations and financial condition of GIHOC and of the Division. (b) GIHOC shall cause the Division: (i) to maintain accounts separate from the accounts for other divisions or operations of GIHOC; (ii) to establish and maintain sepa- rate identifiable statements of accounts in respect of Parts A and D of the Project; (iii) to have such accounts and statements audited annually by an independent accountant or accounting firm acceptable to the Association; and (iv) promptly after such audited statements of accounts and financial statements (balance sheet and related statement of earnings and expenses) for the Division are available, and, except as the Association shall otherwise agree, not later than six months after the close of the financial year to which they apply, to transmit to the Association certified copies of such statements and a signed copy of the account- ant's or accounting firm's report relating to such state- ments. (c) Except as the Association shall otherwise agree, GIHOC shall transmit to the Association, not later than six months after the close of the financial year to which they apply, certified copies of GIHOC 's financial statements (balance sheet and related statement of earnings and ex- penses) audited in accordance with the GIHOC Decree. SECTION 2.03. (a) The Association and GIHOC shall co- operate fully to assure that the purposes of the Credit will be accomplished. To that end, the Association and GIHOC shall from time to time exchange views through their repre- sentatives with regard to matters relating to the perform- ance by GIHOC of its obligations under the Project Agree- ment, the administration, operations and financial condition of GIHOC and of the Division and other matters relating to the purposes of the Credit. 6 (b) GIHOC shall promptly inform the Association and the Borrower of any condition which interferes with, or threatens to interfere with, the accomplishment of the pur- poses of the Credit or the performance by GIHOC of its obligations under this Agreement. SECTION 2.04. (a) GIHOC shall operate its business and the business of the Division and conduct its affairs and the affairs of the Division in accordance with sound business, commercial and financial practices under the supervision of qualified and experienced management and shall operate, maintain, renew and repair its plants, equipment and prop- erty and those of the Division in accordance with sound commercial and engineering practices. (b) GIHOC shall, at a reasonable time prior to any pro- posed appointment of a General Manager (or head) of the Division, notify the Association of any proposal to make such appointment and shall make such appointment only after consideration of the views expressed by the Asso- ciation. (c) GIHOC shall take all action reasonably required to maintain and renew all rights, powers, privileges and fran- chises necessary or useful in the conduct of the Division's business. SECTION 2.05. (a) GIHOC shall take out and maintain with responsible insurers or make other provision satis- factory to the Association for insurance for the Division against such risks and in such amount as shall be consistent with sound practice. (b) Without limiting the generality of the foregoing, GIHOC undertakes to insure the imported goods to be financed out of the proceeds of the Credit against marine, transit and other hazards incident to acquisition, transpor- tation and delivery thereof to the place of use or installa- 7 tion, and any indemnity under such insurance shall be pay- able in a currency freely usable by GIHOC to replace or repair such goods. SECTION 2.06. GIHOC undertakes that all goods and services referred to in Section 3.02 of the Development Credit Agreement which are procured by, or arrangements for the procurement of which are made by, GIHOC, through the Division, shall be procured in accordance with the pro- visions of such Section 3.02. SECTION 2.07. The price at which each of the fishing vessels shall be sold by GIHOC, through the Division, to purchasers shall be based upon the Division's March 1969 prevailing price of 44,000 New Cedis in the currency of the Borrower for a 45-foot boat fully equipped for purse seine fishing, subject to such reasonable allowances as shall be agreed between the Association, ADB and GIHOC to cover (i) increases in the Division's production costs of the fishing vessels and (ii) changes in taxes, duties and levies. SECTION 2.08. Except as the Association shall otherwise agree, GIHOC shall take all action necessary or appropriate to ensure that adequate earnings of the Division are re- tained in the Division, (i) to maintain or expand its facili- ties as required for the construction and servicing of the fishing vessels and (ii) otherwise for the operation of the business of the Division in accordance with sound financial and commercial practices. SECTION 2.09. Except as the Association and GIHOC shall otherwise agree, GIHOC shall not: (a) take any action to disestablish or effect any change in the functions or administrative structure of the Division; or (b) sell, lease, transfer, or otherwise dispose of any of the properties or assets of the Division which shall be 8 required for the efficient carrying on of the business of the Division. SECTION 2.10. Except as the Association shall otherwise agree, GIHOC shall, through the Division, maintain the arrangements made with ADB under the GIHOC-ADB Agreement. ARTICLE III Effective Date; Termination SECTION 3.01. This Agreement shall come into force and effect on the Effective Date. If the Development Credit Agreement terminates pursuant to Section 6.03 thereof, this Agreement and all obligations of the parties hereunder shall terminate. SECTION 3.02. This Agreement and all obligations of GIHOC and of the Association hereunder shall terminate on the later of (i) the date when the GIHOC Subsidiary Loan Agree- ment shall terminate in accordance with its terms or (ii) the date six months after the close of GIHOC's financial year within which delivery of the last of the fishing vessels has been effected by GIHOC and GIHOC has given notice thereof to the Borrower, the Association and ADB. ARTICLE IV Miscellaneous Provisions SECTION 4.01. Any notice, demand 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 9 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 demand or request. The addresses so specified are: For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Alternative address for cables: Indevas Washington, D.C. For the Borrower: The Principal Secretary Ministry of Finance P. 0. Box M40 Accra, Ghana Alternative address for cables: Prudence Accra For GIHOC The Managing Director Ghana Industrial Holding Corporation P. 0. Box 2784 Accra, Ghana 10 Alternative address for cables: Holdings Accra For ADB: The Secretary Agricultural Development Bank P. 0. Box 4191 Accra, Ghana Alternative address for cables: Agricbank Accra SECTION 4.02. Any action required or permitted to be taken, and any documents required or permitted to be exe- cuted, under this Agreement on behalf of GIHOC may be taken or executed by the Managing Director of GIHOC or such other person or persons as he shall designate in writing. SECTION 4.03. GIHOC shall furnish to the Association sufficient evidence of the authority of the person or persons who will, on behalf of GIHOC, take any action or execute any documents required or permitted to be taken or exe- cuted by GIHOC pursuant to any of the provisions of this Agreement and the authenticated specimen signature of each such person. SECTION 4.04. This Agreement may be executed in sev- eral counterparts, each of which shall be an original and all collectively 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 11 names and to be delivered in the District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ J. BURKE KNAPP Vice President GHANA INDUSTRIAL HOLDING CORPORATION By /s/ E. M. DEBRAH Authorized Representative