Conformed Copy - C1952 - Third National Seeds Project - Project Agreement 2

Page 1 CONFORMED COPY CREDIT NUMBER 1952 IN (Third National Seeds Project) among INTERNATIONAL DEVELOPMENT ASSOCIATION and STATE OF ANDHRA PRADESH and STATE OF ASSAM and STATE OF BIHAR and STATE OF GUJARAT and STATE OF KARNATAKA and STATE OF MADHYA PRADESH and STATE OF ORISSA and STATE OF RAJASTHAN and STATE OF UTTAR PRADESH and STATE OF WEST BENGAL Dated December 22, 1988 CREDIT NUMBER 1952 IN PROJECT AGREEMENT AGREEMENT, dated December 22, 1988 between INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association) and the States of ANDHRA PRADESH, ASSAM, BIHAR, GUJARAT, KARNATAKA, MADHYA PRADESH, ORISSA, RAJASTHAN, UTTAR PRADESH and WEST BENGAL (hereinafter collectively referred to as "the States" and severally in each case as "the State"). WHEREAS (A) by the Development Credit Agreement of even date herewith between India, acting by its President (the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to one hundred and eight million six hundred thousand Special Drawing Rights (SDR 108,600,000) on the terms and conditions set forth in the Development Credit Agreement, provided that each State agrees to undertake such obligations toward the Association as are set forth in this Agreement; Page 2 (B) by a Project Agreement of even date herewith between the Association and the National Bank for Agriculture and Rural Development (NABARD) (the NABARD Agreement), NABARD has agreed to undertake certain obligations in respect of the carrying out of the Project; and WHEREAS each State, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, has agreed to undertake the obligations set forth in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Unless the context otherwise requires, the several terms defined in the Development Credit Agreement, the Preamble to this 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. (a) Each State declares its commitment to the objectives of the Project as set forth in Schedule 2 to the Development Credit Agreement, and, to this end, shall carry out the Project with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering and agricultural practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the Project. (b) Each State shall take all such steps as shall be necessary to assist the Borrower, NABARD and SSCs in carrying out their respective obligations under the Project. (c) Each State shall take all steps necessary to make available the proceeds of the Credit provided to it pursuant to Section 3.01 (c) of the Development Credit Agreement, to its respective Department of Agriculture, Agricultural Universities and SSCA in accordance with standard arrangements for the passing of such funds. Section 2.02. Each State shall take all necessary steps to (i) duly carry out the Action Plan Implementation Agreement to which it is a party; and (ii) enable and cause the concerned SSC to duly implement the Action Plan Implementation Agreement including, in particular, the key elements set out in Schedule 4 to the Development Credit Agreement. Section 2.03. Each State shall continue to implement its policy to encourage the growth of a viable seed industry including the private sector. Section 2.04. The States shall cause their respective Agricultural Universities to carry out Part B (2) of the Project. Section 2.05. For the purpose of enforcing minimum seed quality control standards under the applicable laws, each State shall carry out adequate seed quality inspection. Section 2.06. Each State shall cause its SSC, SSCA and, where relevant and in respect of the production of seeds, its Agricultural Universities, to separately prepare and furnish to the Association: (i) an annual work program by the commencement of their respective financial years; and (ii) bi-annual progress reports within two months of the close of each semester. Page 3 Section 2.07. Except as the Association shall otherwise agree, procurement of the goods, works and consultants' services required for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 3 to the Development Credit Agreement. Section 2.08. The States shall carry out the obligations set forth in Sections 9.03, 9.04, 9.05, 9.06, 9.07 and 9.08 of the General Conditions (relating to insurance, use of goods and services, plans and schedules, records and reports, maintenance and land acquisition, respectively) in respect of the Project Agreement and Parts A and B of the Project. Section 2.09. (a) Each State shall, at the request of the Association, exchange views and cause its SSC, SSCA and Agricultural University to 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) Each State shall promptly inform the Association of any condition which interferes or threatens to interfere with the progress of the Project, the accomplishment of the purposes of the Credit, or the performance by each State of its obligations under this Agreement. ARTICLE III Financial Covenants Section 3.01. (a) Each State shall maintain and cause its SSC, SSCA and Agricultural University to maintain records and accounts adequate to monitor and record the progress of the Project and reflect in accordance with sound accounting practices its operations and financial condition in respect of the Project. (b) Each State shall: (i) have its records and accounts, and those of the concerned SSC, SSCA and Agricultural University, referred to in paragraph (a) of this Section, 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 six months after the end of each such year a certified copy of 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 said records, accounts and financial statements as well as the audit thereof, as the Association shall from time to time reasonably request. ARTICLE IV Effective Date; Termination; Cancellation and Suspension Section 4.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. Section 4.02. (a) This Agreement and all obligations of the Association and of the States thereunder shall terminate on the earlier of the following two dates: Page 4 (i) the date on which the Development Credit Agreement shall terminate in accordance with its terms; or (ii) the date 15 years after the date of this Agreement. (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 each State of this event. Section 4.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the General Conditions. ARTICLE V Miscellaneous Provisions Section 5.01. 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 States of America Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) For Andhra Pradesh: Chief Secretary to the Government of Andhra Pradesh Hyderabad, Andhra Pradesh, India For Assam: Chief Secretary to the Government of Assam Gauhati 781006, Assam, India For Bihar: Chief Secretary to the Government of Bihar Patna, Bihar, India For Gujarat: Chief Secretary to the Government of Gujarat Gandhinagar, Gujarat, India For Karnataka: Chief Secretary to the Government of Karnataka Bangalore, India Page 5 For Madhya Pradesh: Chief Secretary to the Government of Madhya Pradesh Bhopal, India For Orissa: Chief Secretary to the Government of Orissa Bhubaneswar, India For Rajasthan: Chief Secretary to the Government of Rajasthan Jaipur, India For Uttar Pradesh: Chief Secretary to the Government of Uttar Pradesh Vidhan Bhavan Lucknow, Uttar Pradesh, India For West Bengal: Chief Secretary, Writer's Building Government of West Bengal Calcutta, West Bengal, India Section 5.02. Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement on behalf of any State, may be taken or executed by its Chief Secretary or such other person or persons as the concerned State shall designate in writing, and the concerned State shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 5.03. This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, 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 /s/ S. J. Burki Acting Regional Vice President Asia STATE Of ANDHRA PRADESH STATE OF ASSAM STATE OF BIHAR STATE OF GUJARAT STATE OF KARNATAKA STATE OF MADHYA PRADESH STATE OF ORISSA STATE OF RAJASTHAN STATE OF UTTAR PRADESH Page 6 AND STATE OF WEST BENGAL By /s/ Anil Kumar Authorized Representative