Conformed Copy - C2362 - Northern Reconstruction Project - Project Agreement

Page 1 CONFORMED COPY CREDIT NUMBER 2362 UG (Northern Reconstruction Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and UGANDA POSTS AND TELECOMMUNICATIONS CORPORATION Dated June 12, 1992 CREDIT NUMBER 2362 UG PROJECT AGREEMENT AGREEMENT, dated June 12, between INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association) and UGANDA POSTS AND TELECOMMUNICATIONS CORPORATION (UPTC). WHEREAS (A) by the Development Credit Agreement of even date herewith between the Republic of Uganda (the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to fifty-one million nine hundred thousand Special Drawing Rights (SDR 51,900,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that UPTC agree to undertake such obligations toward the Association as are set forth in this Agreement; (B) by a subsidiary loan agreement to be entered into between the Borrower and UPTC, part of the proceeds of the credit provided for under the Development Credit Agreement will be relent to UPTC on the terms and conditions set forth in said Subsidiary Loan Agreement; and Page 2 WHEREAS UPTC, 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. UPTC 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 Part E of the Project with due diligence and efficiency and in conformity with appropriate administrative, financial and engineering practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for Part E of the Project. Section 2.02. Except as the Association shall otherwise agree, procurement of the goods, works and consultants' services required for Part E of 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 2.03. UPTC 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 acquisi- tion, respectively) in respect of the Project Agreement and Part E of the Project. Section 2.04. UPTC shall duly perform all its obligations under the Subsidiary Loan Agreement. Except as the Association shall otherwise agree, UPTC shall not take or concur in any action which would have the effect of amending, abrogating, assigning or waiving the Subsidiary Loan Agreement or any provision thereof. Section 2.05. (a) UPTC shall, at the request of the Associa- tion, exchange views with the Association with regard to the progress of Part E of the Project, the performance of its obliga- tions under this Agreement and under the Subsidiary Loan Agreement, and other matters relating to the purposes of the Credit. (b) UPTC shall promptly inform the Association of any condition which interferes or threatens to interfere with the progress of Part E of the Project, the accomplishment of the purposes of the Credit, or the performance by UPTC of its obliga- tions under this Agreement and under the Subsidiary Loan Agreement. ARTICLE III Management and Operations of UPTC Section 3.01. UPTC shall carry on its operations and conduct its affairs in accordance with sound administrative and financial practices under the supervision of qualified and experienced management assisted by competent staff in adequate numbers. Section 3.02. UPTC shall at all times operate and maintain its plant, machinery, equipment and other property, and from time to time, promptly as needed, make all necessary repairs and renewals Page 3 thereof, all in accordance with sound engineering and financial practices. Section 3.03. UPTC shall take out and maintain with responsi- ble insurers, or make other provision satisfactory to the Associa- tion, for insurance against such risks and in such amounts as shall be consistent with appropriate practice. Section 3.04. UPTC shall establish a Project management team which shall be responsible for the implementation of Part E of the Project and (a) furnish the Association with evidence that land and rights in respect of land are available for the sites required for the carrying out of Part E of the Project, (b) commence construction of access roads and of buildings for equipment and select, and finalize negotiations with, consultants and (c) employ consultants to assist in Project management. ARTICLE IV Financial Covenants Section 4.01. (a) UPTC shall maintain records and accounts adequate to reflect in accordance with sound accounting practices its operations and financial condition. (b) UPTC shall: (i) have its records, accounts and financial state- ments (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 Associa- tion; (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 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 re- quested; and (iii) furnish to the Association such other informa- tion concerning said records, accounts and financial statements as well as the audit there- of, as the Association shall from time to time reasonably request. 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 UPTC thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agree- ment shall terminate in accordance with its terms; or (ii) the date twenty 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) Page 4 (ii) of this Section, the Association shall promptly notify UPTC of this event. Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the General Conditions. 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 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 248423 (RCA) Washington, D.C. 82987 (FTCC) 64145 (WUI) or 197688 (TRT) For UPTC: Uganda Posts and Telecommunications Corporation P.O.Box 7171 Kampala Uganda Cable address: Telex: POSTEL 61027 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 UPTC may be taken or executed by the Managing Director or such other person or persons as the Managing Director shall designate in writing, and UPTC shall furnish to the Associa- tion sufficient evidence of the authority and the authenticated specimen 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 collec- tively 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/ Edward V.K. Jaycox Regional Vice President Page 5 Africa UGANDA POSTS AND TELECOMMUNICATIONS CORPORATION By /s/ Stephen K. Katenta-Apuli Authorized Representative