Conformed Copy - C3581 - Telecommunications Sector Reform Project - Supplemental Letter 4

Page 1 CONFORMED COPY NEPAL TELECOMMUNICATIONS AUTHORITY February 5, 2002 International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Re: Credit No. 3581 NEP (Telecommunications Sector Reform Project) Representations Dear Sirs and Mesdames: In connection with the Project Agreement of even date herewith between the International Development Association (the Association) and the Nepal Telecommunications Authority (the Project Entity) for the above-captioned Credit, the Project Entity hereby undertakes and warrants to the Association that: 1. The Project Entity is not engaged in litigation as plaintiff or defendant, the outcome of which might materially and adversely affect its financial condition. 2. The Project Entity has no outstanding agreements or liabilities, contingent or otherwise (including taxes), that might materially and adversely affect its financial condition. 3. No debt of the Project Entity is secured by any mortgage, pledge, charge, priority, or other lien, and no contract or arrangement exists for the creation of any such mortgage, pledge, charge, priority, or other lien. 4. There are no existing defaults in the payment of principal of, or interest or other charges on, any of the debts of the Project Entity. 5. The Project Entity is not in violation of, and execution and delivery of the Project Agreement and the compliance with all its terms do not and will not result in any violation of, any provisions of any existing agreement, franchise, concession, license, or permit, or of any statute, law, decree-law, executive decree, regulation, or any other legal rule of a similar nature presently in effect and applicable to the Project Entity. 6. The Project Entity is a duly existing corporate body under the laws of the Kingdom of Nepal, with full authority to carry out its present business, to carry out the Project, and to execute and deliver the Page 2 Project Agreement, and has furnished to the Association true copies of the Telecommunications Act, 2053 (1997) and the Telecommunications Regulations, 2054 (1997) as amended by the Telecommunications (First Amendment) Regulations, 2055 (1999), presently in force and effect and governing and applicable to the operations of the Project Entity, as well as of its articles of incorporation and By-Laws presently in effect and governing the Project Entity. It is our understanding that, in making the Credit and entering into the Project Agreement with the Project Entity, the Association may rely on the representations contained herein. Very truly yours, NEPAL TELECOMMUNICATIONS AUTHORITY By /s/ Dr. Bimal Prasad Koirala Authorized Representative