Tanzania - Beef Ranching Development Project : Credit 0132 - Project Agreement - Conformed

CREDIT NUMBER 132 TA Project Agreement (Beef Ranching Development Project) BETWEEN INTERNATIONAL DEVELOPMENT ASSOCIATION AND NATIONAL DEVELOPMENT CORPORATION AND NATIONAL AGRICULTURAL COMPANY, LIMITED DATED OCTOBER 31, 1968 CREDIT NUMBER 132 TA Project Agreement (Beef Ranching Development Project) BETWEEN INTERNATIONAL DEVELOPMENT ASSOCIATION AND NATIONAL DEVELOPMENT CORPORATION AND NATIONAL AGRICULTURAL COMPANY, LIMITED DATED OCTOBER 31, 1968 AGREEMENT, dated October 31, 1968, between INTER- NATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association), the NATIONAL DEVELOPMENT CORPORATION (hereinafter called NDC) and the NATIONAL AGRICULTURAL COMPANY, LTD. (hereinafter called NACO). WHEREAS by a Development Credit Agreement of even date herewith between the United Republic of Tanzania (hereinafter called the Borrower) and the Association, which agreement, the schedules therein referred to and the Development Credit Regulations No. 1 of the Associa- tion made applicable thereto are hereinafter called the Development Credit Agreement, the Association has agreed to assist in the financing of a beef ranching development project of the Borrower by making available to the Bor- rower 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 inter alia that NDC and NACO agree to undertake certain obligations to the Asso- ciation as hereinafter in this Project Agreement set forth; and WVHEREAs NDC and NACO, in consideration of the Asso- ciation's entering into the Development Credit Agreement with the Borrower, have agreed to undertake the obliga- tions hereinafter set forth; Now THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions SECTION 1.01. Wherever used in this Project Agreement, unless the context shall otherwise require, the several 4 terms defined in the Development Credit Agreement shall have the respective meanings therein set forth. ARTICLE II Particular Covenants of NDC SECTION 2.01. NDC shall carry out Part A of the Project described in Schedule 2 to the Development Credit Agree- ment with due diligence and efficiency and shall at all times conduct its operations and affairs in accordance with sound economic, administrative and financial practices and under the supervision of experienced and competent man- agement. SECTION 2.02. NDC shall relend the proceeds of the First Subsidiary Loan to NACO, in accordance with Part A of the Project, on terms and conditions satisfactory to NDC and the Association pursuant to a loan agreement satis- factory to the Association, and, in granting such loan, NDC shall obtain rights adequate to protect its interests and the interests of the Borrower. SECTION 2.03. NDC shall make available to NACO, by way of subscription to the capital stock of NACO, funds ,equivalent to 35%o of the total cost of carrying out the ranch development referred to in Part A of the Project. SECTIOx 2.04. NDC shall duly perform all its obligations under the First Subsidiary Loan Agreement. Except as the Association shall otherwise agree, NDC shall not take any action or concur in any action which would have the effect of amending, abrogating, assigning or waiving any provision of the First Subsidiary Loan Agreement. SECTION 2.05. NDC shall exercise its rights under the Second Subsidiary Loan Agreement in such manner as to protect the interests of NDC, the Borrower and the Asso- ciation, and, except as the Association shall otherwise agree, NDC shall not take or concur in any action which w 5 would have the effect of amending, abrogating, assigning or waiving any provision of the Second Subsidiary Loan Agreement. SECTION 2.06. Before the Project shall have been com- pleted in accordance with the Development Credit Agree- ment, any appointment to the position of NACO's General Manager shall be made only after agreement with the Association. ARTICLE III Particular Covenants of NACO SECTION 3.01. (a) NACO shall carry out the Project with due diligence and efficiency and shall at all times conduct its operations and affairs in accordance with sound agricultural, administrative, economic and financial prac- tices and under the supervision of experienced and com- petent management. (b) NACO shall appoint Ranch Managers in charge of the ranches included in the Project, upon the recommenda- tion of NACO's Chief Development Officer (Ranching) and after consulting with the Association sufficiently in advance of such appointments for the Association to have adequate opportunity to comment on them. (c) Before the Project shall have been completed in accordance with the Development Credit Agreement, any appointment to the positions of NACO's Chief Develop- ment Officer (Ranching) and Chief Veterinary Officer shall be made only after agreement with the Association, and the terms, conditions, powers and duties for such positions shall be determined in consultation with the Association. SECTION 3.02. (a) NACO shall select appropriate sites for two ranches additional to those situated respectively at Kitengule, West Kilimanjaro and Mkata, and shall, within eighteen months of the date of this Agreement sub- mit to the Association for its approval, detailed plans for 7 6 the development of such additional ranches. The Associa- tion shall make its best efforts to appraise such plans promptly upon their submission to the Association. (b) Upon the approval by the Association of such devel- opment plans, NACO shall transfer all breeding cattle from the Mkata ranch to the said two additional ranches, provided, however, that if NACO shall submit to the Asso- ciation, evidence, satisfactory to the Association, as to the technical and financial feasibility of carrying on a cattle breeding enterprise on said Mkata ranch, NACO may oper- ate approximately 80,000 acres of such ranch for the pur- pose of breeding and fattening cattle. (c) If NACO shall operate Mkata ranch for the purpose of breeding cattle pursuant to the proviso to the provisions of the foregoing paragraph (b) the breeding stock on said Mkata ranch shall not exceed 3,000 breeding cows plus 3,600 young cows (ages ranging from 6 months to 3 years). NACO shall transfer to other ranches of NACO, or other- wise dispose of, any breeding stock in excess of said numbers. (d) NACO shall not purchase any breeding cattle for the ranches included in the Project unless such cattle shall have been duly inspected by NACO's Chief Veterinary Officer and approved by its Chief Development Officer (Ranching). SECTION 3.03. NACO shall inform the Association of any proposed investment projects in dairying sufficiently in advance of the proposed investments to enable NACO to take into account the comments of the Association with respect to the technical feasibility and the economic and financial viability of such investment projects. SECTION 3.04. NACO shall (i) cause all goods financed out of the proceeds of the Second Subsidiary Loan to be used exclusively in the territories of the Borrower in carry- ing out the Project; and (ii) cause such goods to be pro- 7 cured in accordance with the methods and procedures pro- vided in Section 3.02 of the Development Credit Agreement and in agreements supplemental thereto. SECTION 3.05. NACO shall establish and maintain sepa- rate accounts for each of the ranches included in the Proj- ect, and have such accounts and the financial statements of NACO audited annually by an independent accountant or accounting firm acceptable to the Association, and shall transmit to the Association, not later than three months after the close of NACO's fiscal year, certified copies of such accounts and a signed copy of such accountant's or such firm's report. SECTION 3.06. NACO shall maintain records adequate to identify the goods financed out of the proceeds of the Second Subsidiary Loan, to disclose the use thereof, to record the progress of the Project and to reflect in accord- ance with consistently maintained sound accounting prac- tices all financial transactions between NACO and NDC with respect to the Project and the operations and financial condition of NACO; and shall enable the Association's representatives to inspect the goods financed out of the proceeds of the Second Subsidiary Loan and any relevant records and documents. SECTION 3.07. Except as the Association shall otherwise agree, NACO shall insure or cause to be insured the im- ported goods, including livestock, to be financed out of the proceeds of the Second Subsidiary Loan against marine, transit and other hazards incident to the acquisition, trans- portation and delivery thereof to the place of use or instal- lation and for such insurance any indemnity shall be pay- able in a currency freely usable by NACO to replace or repair such goods. SECTION 3.08. NACO shall duly perform all its obliga- tions under the Second Subsidiary Loan Agreement. Except as the Association and NDC shall otherwise agree, NACO 8 shall not take any action or concur in any action which would have the effect of amending, abrogating, assigning or waiving any provision of the Second Subsidiary Loan Agreement. SECTION 3.09. NACO shall (i) promptly take all requi- site steps for the acquisition and retention by NACO of all such lands, interests in land and properties and all rights, powers and privileges as may be necessary for the establishment and operation of the ranches included in the Project; and (ii) promptly furnish to the Association satisfactory evidence of its acquisition of such lands, inter- ests, rights, powers and privileges. ARTICLE IV Joint Covenants of NDC and NACO SECTION 4.01. (a) NDC, NACO and the Association shall cooperate fully to assure that the purposes of the Credit will be accomplished. To that end, each of them shall furnish to the other parties all such information as such other parties shall reasonably request. (b) NDC, NACO and the Association shall from time to time exchange views through their representatives with regard to matters relating to the purposes of the Credit. NDC and NACO shall promptly inform the Association of any condition which interferes with, or threatens to inter- fere with, the accomplishment of the purposes of the Credit, or the performance by NDC and NACO of their respective obligations under this Project Agreement, or, where appro- priate, the carrying out of the provisions of the Develop- ment Credit Agreement. ARTICLE V Effective Date; Termination SECTION 5.01. This Project Agreement shall enter into force and effect on the Effective Date. If the Development Credit Agreement shall terminate pursuant to Section 8.04 of the Regulations, the Association shall promptly notify NDC and NACO of this event and, upon the giving of such notice, this Project Agreement and all obligations of the parties hereunder shall forthwith terminate. SECTION 5.02. If and when the entire principal amount of the Second Subsidiary Loan shall have been repaid by NACO to NDC in accordance with the Second Subsidiary Loan Agreement, or on December 31, 1980, whichever is later, this Project Agreement and all obligations of NDC and NACO hereunder shall forthwith terminate. ARTICLE VI Miscellaneous Provisions SECTION 6.01. No delay in exercising, or omission to exercise, any right, power, or remedy accruing to any party under this Project Agreement upon any default shall impair any such right, power or remedy or be con- strued to be a waiver thereof or an acquiescence in such default; nor shall the action of such party in respect of any default or any acquiescence in any default, affect or impair any right, power or remedy of such party in respect of any other or subsequent default. SECTION 6.02. Any notice or request required or per- mitted to be given or made under this Project Agreement and any agreement between the parties contemplated by this Project 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 or cablegram to the party to which it is required or per- mitted 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 request. The addresses so specified are: 10 For the Association: InternationalDevelopment Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Indevas Washington, D.C. For NDC: National Development Corporation Development House, P. 0. Box 2669 Dar es Salaam, Tanzania Cable address: NATDEV Dar es Salaam For NACO: National Agricultural Company, Ltd. Mavuno House, P. O. Box 9113 Dar es Salaam, Tanzania Cable address: NACO Dar es Salaam SECTION 6.03. NDC and NACO shall furnish to the Asso- ciation sufficient evidence of the authority of the persons who will, on behalf of NDC and NACO respectively, take any action or execute any documents required or permitted to be taken or executed by NDC and NACO pursuant to any of the provisions of this Project Agreement and the authenticated specimen signature of each such person. SECTION 6.04. This Project Agreement may be executed in several counterparts, each of which shall be an original and all collectively but one instrument. 11 IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Project Agreement to be signed in their respec- tive names and 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 NATIONAL DEVELOPMENT CORPORATION By /s/ MICHAEL LUKUMBUZYA Authorized Representative NATIONAL AGRICULTURAL COMPANY, LIMITED By /s/ MICHAEL LUKUMBUZYA Authorized Representative