India - Cashewnut Project : Credit 1012 - ARDC Agreement - Conformed

OFFICIAL DOCUMENTS CREDIT NUMBER 1012 IN ARDC Agreement (Cashewnut Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and AGRICULTURAL REFINANCE AND DEVELOPMENT CORPORATION Dated t() 1980 CREDIT NUMBER 1012 IN ARDC AGREEMENT AGREEMENT, dated WU-' 10 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 twenty-two million dollars ($22,000,000), 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 provided for under the Development Credit Agreement 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 Part A of the Project described in Schedule 2 to the Development Credit Agreement in accordance with a banking plan, and shall act with due diligence and efficiency and in conformity with appropriate administrative and financial practices. -2- Section 2.02. Except as the Association shall otherwise agree, procurement of the goods and civil works to be financed out of the proceeds of the Credit, shall be governed by the provisions of the Schedule to the Project Agreement. Section 2.03. 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 2.04. ARDC shall enter into Financial Arrangements with the Borrower on terms and conditions agreed upon between the Borrower and the Association. 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 provisions of the Financial Arrangements. Section 2.05. The lending terms and conditions for carrying out Part A of the Project shall be mutually agreed upon among the Borrower, ARDC and the Association. Section 2.06. ARDC: (i) shall maintain records adequate to record the progress of Part A of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Credit relent to it by the Borrower, and to disclose the use thereof in the Project; and (ii) shall furnish to the Association all such information as the Association shall reasonably request concerning the Project, the expenditures of the proceeds of the Credit so relent to it and the goods and services financed out of such proceeds. Section 2.07. (a) ARDC shall at the request of the Associa- tion exchange views with the Association with regard to the progress of the Project, the performance of its obligations under this Agreement and other matters relating to the purposes of the Credit. (b) ARDC shall promptly inform the Association of any condition which interferes or threatens to interfere with, the progress of Part A of the Project, the accomplishment of the purposes of the Credit, or the performance by ARDC of its obliga- tions under this Agreement. Section 2.08. ARDC shall, in consultation with the Project States, establish criteria for selecting cashew plantations for improvement in the Project Area. - 3 - 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 technical 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 Part A 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. 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 appropriate auditing principles consistently applied, by independent 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 reasonably request. Section 4.03. ARDC shall cause the Participating Banks (i) to maintain separate accounts for loans made in respect of Part A of the Project; and (ii) to send to the Association 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 four months after the end of their fiscal years. Section 4.04. ARDC shall, after the completion of the Pro- ject, make available adequate credit funds in the Project Area to ensure completion of the plantation program initiated under the Project. 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) the date on which the Development Credit Agreement shall terminate in accordance with its terms; or (ii) a date twenty years after the date of this Agree- ment. (b) If the Development Credit Agreement terminates in accordance with its terms before the date specified in paragraph (a) (ii) of this Section, the Association shall promptly notify ARDC of this event. 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 herein- after specified or at such other address as such party shall have -5- 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 States of America Cable address: INDEVAS Washington, D.C. For ARDC: Managing Director Agricultural Refinance and Development Corporation Shri Niketan Dr. Annie Besant Road Worli, Bombay, 18 W.B. India Cable address: AGREFINANS Bombay 18, India Section 6.02. Any action required or permitted to be taken, and any document 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 speci- men 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 col- lectively 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 -6- of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL DEVELOPMENT ASSOCIATION By K Regional Vice President South Asia AGRICULTURAL REFINANCE AND DEVELOPMENT CORPORATION By 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 /OA- day of 1980 V FOR SECRETARY