Dahomey - Zou-Borgou Cotton Project : Credit 0307 - Project Agreement - 1 - Conformed

CONFORMED COPY CREDIT NUMBER 307 DA Project Agreement (Zou-Borgou Cotton Project) BETWEEN INTERNATIONAL DEVELOPMENT ASSOCIATION AND SOCIETE DE COMMERCIALISATION ET DE CREDIT AGRICOLE DU DAHOMEY DATED MAY 24, 1972 CONFORMED COPY CREDIT NUMBER 307 DA Project Agreement (Zou-Borgou Cotton Project) BETWEEN INTERNATIONAL DEVELOPMENT ASSOCIATION AND SOCIETE DE COMMERCIALISATION ET DE CREDIT AGRICOLE DU DAHOMEY DATED MAY 24, 1972 PROJECT AGREEMENT AGREEMENT, dated May 24, 1972, between INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and SOCIETE DE COMMERCIALISATION ET DE CREDIT AGRICOLE DU DAHOMEY (hereinafter called SOCAD). WHEREAS by the Development Credit Agreement of even date herewith between Republic of Dahomey (hereinafter called the Borrower) and ,the Association (hereinafter referred to as the Development Credit Agreement), the Association has agreed to make available to the Borrower an amount in various currencies equivalent to six million and one hundred thousand dollars ($6,100,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that SOCAD agree to undertake such obligations toward the Association as hereinafter set forth; and WHEREAS SOCAD, 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. SOCAD shall perform all its obligations under this Agreement with due diligence and efficiency and in conformity with sound administrative and financial practices. 4 Section 2.02. SOCAD shall (a) establish and thereafter maintain a separate cotton account; and (b) open and thereafter maintain in a banking institution satisfactory to the Association an account for its cotton operations; such account shall be credited with such amounts as shall be allocated in accordance with the provisions of Section 3.11 of the Development Credit Agreement and debited solely with any amounts necessary to meet (i) transfers to be made to the Agricultural Credit Fund upon submission by SONACO of applications for reimbursements of amounts corresponding to the subsidy payable by the Borrower in respect of fertilizer purchased by SONACO for the use of cotton growers under the Project and (ii) the Borrower's share in losses incurred under the Convention de mandat de gestion or such arrangements as shall be made in accordance with the provisions of Section 4.02 of the Development Credit Agreement and the balance, if any, may be invested in obligations maturing within a year. ARTICLE III Management and Operations of SOCAD Section 3.01. SOCAD shall at all times conduct its operations and affairs under capable and efficient management. Section 3.02. Except as the Association shall otherwise agree, SOCAD shall not undertake or execute, for its own account or for the account of any third party or parties, any new project or development other than the Project, which might interfere with its obligations under this Agreement. Section 3.03. SOCAD shall, except as the Association shall otherwise agree, take all steps necessary to acquire, maintain and renew all rights, powers and franchises which are necessary or useful for the purpose of carrying out its obligations under this Agreement. ARTICLE IV Financial Covenants Section 4.01. SOCAD shall maintain records adequate to reflect in accordance with consistently maintained sound accounting practices its operations and financial condition. Section 4.02. SOCAD shall: (i) adopt auditing procedures satisfactory to the Association; (ii) have the SOCAD cotton account and the financial statements related to it for each fiscal year audited, in accordance with such auditing 5 procedures consistently applied, by independent auditors acceptable to the Association; (iii) 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 such 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 (iv) furnish to the Association such other information concerning the accounts and financial statements of SOCAD and the audit thereof as the Association shall from time to time reasonably request for its own information. Section 4.03. SOCAD shall appoint and maintain a qualified and experienced accountant, under the responsibility and the supervision of SOCAD's President Directeur Ggneral, to carry out SOCAD's accounting operations with respect to the SOCAD cotton account. Such accountant shall be assisted by appropriate personnel to keep SOCAD's accounts up to date. ARTICLE V Consultation, Information and Inspection Section 5.01. The Association and SOCAD shall cooperate fully to assure that the purposes of the Credit will be accomplished. To that end, the Association and SOCAD shall from time to time, at the request of either party, exchange views through their representatives with regard to the performance of their respective obligations under this Agreement, the administration, operations and financial condition of SOCAD and other matters relating to the purpose of the Credit. Section 5.02. The Association and SOCAD shall promptly inform each other of any condition which interferes with, or threatens to interfere with, the accomplishment of the purposes of the Credit. Section 5.03. SOCAD shall enable the Association's representatives to inspect all offices and properties of SOCAD and any records and documents pertaining to the SOCAD cotton account. ARTICLE VI Effective Date; Termination; Cancellation and Suspension Section 6.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. 6 Section 6.02. (a) This Agreement and all obligations of the Association and of SOCAD 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) the date on which the SONACO Contract shall terminate in accordance with its terms. (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 SOCAD of this event and, upon the giving of such notice, this Agreement and all obligations of the parties thereunder shall forthwith terminate. Section 6.03, All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the Development Credit Agreement. ARTICLE VII Miscellaneous Provisions Section 7.01. 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, ielegram, 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: Indevas Washington, D.C. 7 For SOCAD: Socift6 de Commercialisation et de Cr6dit Agricole du Dahomey B.P. 933 Cotonou Dahomey Cable address: SOCAD B.P. 933 Cotonou - Dahomey Section 7.02. Any action required or permitted to be taken, and any documents required or permitted to be executed, under this Agreement on behalf of SOCAD may be taken or executed by its Prdsident Directeur Gindral or such other person or persons as SOCAD shall designate in writing. Section 7.03. SOCAD shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of the person or persons who will, on behalf of SOCAD, take any action or execute any documents required or permitted to be taken or executed by SOCAD pursuant to any of the provisions of this Agreement. Section 7.04. 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 representatives thereunto duly authorized, have caused this Agreement to be signed in their respective 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 / S. Aldewereld Vice President SOCIETE DE COMMERCIALISATION ET DE CREDIT AGRICOLE DU DAHOMEY By /s/ Saturnin Soglo Authorized Representative