India - Madhya Pradesh Dairy Development Project : Credit 0522 - Amending Agreement - Conformed

REDIT NUMBER 522 IN Amending Agreement (Madhya Pradesh Dairy Development Project) among INDIA and INTERNATIONAL DEVELOPMENT ASSOCIATION THE STATE OF MADHYA PRADESH and INDIAN DAIRY CORPORATION CREDIT NUMBER 522 IN AMENDING AGREEMENT AGREEMENT among INDIA, acting by its President (hereinafter called the Borrower), INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association), THE STATE OF MADHYA PRADESH, acting by its Governor (hereinafter called Madhya Pradesh) and INDIAN DAIRY CORPORATION (hereinafter called IDC). WHEREAS by a development credit agreement dated December 18, 1974 between the Borrower and the Association (hereinafter referred to as the Development Credit Agreement), a Madhya Pradesh agreement of the same date between the i'ssociation and Madhya Pradesh (hereinafter referred to as the Madhya Pradesh Agreement), and a project agreement of the same date between the Association and Agricultural Refinance Corporation (hereinafter referred to as the Project Agreement), the Association agreed to lend to the Borrower an amount in various currencies equivalent to sixteen million four hundred thousand dollars ($16,400,000), on the terms and conditions set forth or referred to in the Development Credit Agreement and on the basis, inter alia, that Madhya Pradesh and Agricultural Refinance Corporation (hereinafter called ARDC) agreed to undertake certain obligations in respect of the carry- ing out of the Project described in Schedule 2 to the Development Credit Agreement; and WHEREAS the Borrower has proposed and the Association has agreed that a part of the proceeds of the Credit provided for under the Development Credit Agreement should be made available to IDC for relending to MPDDC, Unions and Federations under the Project on the terms and conditions hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions 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 Amendment to the Development Credit Agreement Section 2.01. The following paragraphs shall be added to Section 1.02 of the Development Credit Agreement: -2- "(q) "IDC" means Indian Dairy Corporation, a corporation established under the Companies Act, 1956 of the Borrower; (r) "IDC Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and IDC pursuant to Section 3.01 (b) hereof, and all schedules thereto, if any, as the same may be amended from time to time; (s) "Federations" means apex bodies of Unions registered under the laws of Madhya Pradesh; (t) "sub-project" means a project for which a sub-loan is made or proposed to be made to MPDDC, Federations or a Union under the Project by IDC out of the equivalent of the proceeds of the Credit made available to IDC by the Borrower under the IDC Subsidiary Loan Agreement; and (u) "sub-loan" means a Loan made or proposed to be made to finance a sub-project." Section 2.02. Section 3.01 (b) of the Development Credit Agreement shall be amended as follows: "(b) The Borrower shall enter into (i) a Subsidiary Loan Agreement with ARDC and (ii) an IDC Subsidiary Loan Agreement with IDC, on terms and conditions (including, inter alia, those set forth in Schedule 3 to this Agreement) satisfactory to the Association for the purpose of relending to ARDC and IDC the equivalent of the proceeds of the Credit under Categories 1, 2, 3 (a) and 7 of Schedule 1 to this Agreement for relending to the Participating Banks, MPDDC, Unions and Federations. The Borrower shall exercise its rights under the Subsidiary Loan Agreement and the IDC Subsidiary Loan Agree- ment in such manner as to protect the interests of the Borrower and the Association and to accomplish the purpose of the Credit and except as the Association shall otherwise agree, the Borrower shall not assign, amend, abrogate or waive the Subsidiary Loan Agreement, the IDC Subsidiary Loan Agreement, or any provision thereof. Section 2.03. Section 3.02 of the Development Credit Agree- ment shall be amended to read as follows: "The Borrower shall take and shall cause all its agen- cies to take all action which shall be necessary on their -3- part to enable (i) Madhya Pradesh to perform all its obli- gatior, under the Madhya Pradesh Agreement and (ii) ARDC and IDC to perform their obligations under the Project Agreement and the Amending Agreement, and shall not take or permit any of its agencies to take any action which would prevent or interfere with the performance of any such obligations of ARDC and IDC." Section 2.04. Section 4.01 of the Development Credit Agree- ment shall be amended to read as follows: "For the purposes of Section 6.02 of the General Condi- tions, the following additional events are specified: (a) Madhya Pradesh shall have failed to perform any of its obligations under the Madhya Pradesh Agreement; (b) ARDC shall have failed to perform any of its obligations under the Project Agreement or the Subsidiary Loan Agreement; (c) IDC shall have failed to perform any of its obliga- tions under the Amending Agreement or the IDC Subsidiary Loan Agreement; (d) any extraordinary situation shall have arisen which shall make it improbable that (i) Madhya Pradesh will be able to perform its obligations under the Madhya Pradesh Agree- ment, or (ii) ARDC will be able to perform its obligations under the Project Agreement or under the Subsidiary Loan Agreement, or (iii) IDC will be able to perform its obliga- tions under the Amending Agreement or under the IDC Subsi- diary Loan Agreement; (e) ARDC, IDC, MPDDC, Federations or Unions shall have become unable to pay any of its debts as they mature or any action or proceeding shall have been taken by ARDC, IDC, MPDDC, Federations, Unions, or by others whereby any of the property of ARDC, IDC, MPDDC, Federations or the Unions shall or may be distributed among its creditors; and (f) the Borrower or any other authority having juris- diction shall have taken any action for the dissolution or disestablishment of ARDC, IDC, MPDDC or any Federation or Union or for the suspension of the operations of ARDC, IDC, MPDDC or such Federation or Union." Section 2.05. Section 4.02. of the Development Credit Agree- ment shall be amended to read as follows: "For the purposes of Section 7.01 of the General Condi- tions, the following additional events are specified: (a) any event specified in paragraphs (a), (b) and (c) of Section 4.01 of this Agreement shall occur and shall continue for a period of 60 days after notice thereof shall have been given by the Association to the Borrower; and (b) any event specified in paragraphs (e) and (f) of Section 4.01 of this Agreement shall occur." Section 2.06. Schedule 3 to the Development Credit Agreement shall be amended to read as follows: "Principal Terms of Subsidiary Loan Agreement and IDC Subsidiary Loan Agreement I. For the Subsidiary Loan Agreement: A. Annual interest rate of not less than 7-1/4/% less 1/4% for prompt payment. B. Repayment at the end of 15 years. C. The exchange risk to be for the account of the Borrower. II. For the IDC Subsidiary Loan Agreement: Terms for On-lending to IDC 1. Interest rate: 7.5% per annum 2. Amortization period: 20 years 3. The exchange risk to be for the account of the Borrower.- Terms for IDC Financial Assistance 1.. _-mount of sub-loan from 80% of the invest- proceeds of Credit: ment cost of a sub-project -5- 2. Interest rate on 8.5% per annum sub-loan: 3. Amortization of 20 years, inclusive sub-loan: of maximum 5 year grace period on interest and prin- cipal, the interest during grace period to be capitalized." ARTICLE III Amendment to the Madhya Pradesh Agreement Section 3.01. Section 2.04 of the Madhya Pradesh Agreement shall be amended to read as follows: "Madhya Pradesh shall take all action which shall be necessary on its part to enable ARDC and IDC to perform their obligations under the Project Agreement and the Amend- ing Agreement and shall not take or permit any of its agencies to take any action which would prevent or interfere with the performance of any such obligations of ARDC, Participating Banks associated therewith or of IDC." Section 3.02. Section 2.06 (a) of the Madhya Pradesh Agree- ment shall be amended to read as follows: "Madhya Pradesh shall cause MPDDC and Federations to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit relent to MPDDC and Federations by ARDC or IDC against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by MPDDC or Federations to replace or repair such goods." ARTICLE IV Execution of the Project Section 4.01. IDC shall carry out its part of the Project described in Schedule 2 to the Development Credit Agreement with -6- due diligence and efficiency and in conformity with appropriate administrative, agricultural, financial and engineering practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 4.02. 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 Schedule 1 to the Madhya Pradesh Agreement. Section 4.03. Except as the Association may otherwise agree, IDC shall cause all goods and services financed out of the pro- ceeds of the Credit made available to it by the Burrower to be used exclusively for the Project. Section 4.04. (a) IDC shall furnish to the Association, promptly upon their preparation, the plans, specifications, reports, contracts documents and construction and procurement schedules for its part of the Project, and any material modifi- cations thereof or additions thereto, in such detail as the Association shall reasonably request. (b) IDC: (i) shall maintain records and procedures adequate to record and monitor the progress of its part of the Project (including its cost and impact), to identify the gooas and ser- vices financed out of the proceeds of the Credit relent to it by the Borrower, and to disclose their use in the Project; (ii) shall enable the Association's accredited representatives to visit the facilities and construction sites included in its part of the Project and to examine the goods financed out of the proceeds of the Credit and any relevant records and documents; and (iii) shall furnish to the Association at regular intervals all such infor- mation as the Association shall reasonably request concerning its part of the Project, its annual work programs, budgets, and quarterly progress reports, its cost and impact, the expenditure of such proceeds and the goods and services financed out of such proceeds. (c) IDC shall enable the Association's representatives to examine all plants, installations, sites, works, buildings, property and equipment of IDC and any relevant records and documents. Section 4.05. IDC shall duly perform all its obligations under the IDC Subsidiary Loan Agreement. Except as the Association ~~- 7 - -7- shall otherwise agree, IDC shall not take or concur in any action which would have the effect of amending, abrogating, assigning or waiving the IDC Subsidiary Loan Agreement or an. provision thereof. Section 4.06. The lending terms and conditions for carrying out Parts A, B.2 and B.3 of the Project shall be as set forth in Part II of Schedule 3 to the Development Credit Agreement, as said Part II of such Schedule may be amended from time to time by agreement among the Borrower, IDC and the Association. Section 4.07. IDC shall not make sub-loans to Unioaa unless such Unions are organized and registered under constitutions and by-laws which are in conformity with models acceptable to the Association. Section 4.08. IDC shall, in its appraisal of every sub- project to be financed under the Project, apply criteria accept- able to the Association. Section 4.09. IDC shall submit sub-projects approved by it for review by the Association. Section 4.10. IDC shall monitor the progress of each approved sub-project against specific targets acceptable to the Association. Section 4.11. (a) The Association and IDC shall exchange views, as may be necessary from time to time, with regard to the progress of the Project, the performance of the obligations under this Agreement and under the IDC Subsidiary Loan Agreement, and other matters relating to the purposes of the Credit. (b) IDC shall promptly inform the Association of an con- dition which interferes or threatens to interfere with the progress of its part of the Project, the accomplishment of the purposes of the Credit, or the performance by IDC of its obliga- tions under this Agreement and under the IDC Subsidiary Loan Agreement. ARTICLE V Other Covenants Section 5.01. IDC shall cause MPDDC, the Federations and Unions which are sub-borrowers under the Project to take out and -8- maintain with responsible insurers, or make other provisions satisfactory to the Association for, insurance a,.inst such risks and in such amounts as shall be consistent with appropriate practice. ARTICLE VI Financial Covenants Section 6.01. IDC shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. Section 6.02. IDC 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 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; and (iii) furnish to the Association such other information concerning the said accounts and financial statements and the audit thereof as the Association shall from time to time reasonably request. ARTICLE VII Effective Date; Termination; Cancellation and Suspension Section 7.01. This Agreement shall come into force and effect when: (a) the IDC Subsidiary Loan Agreement referred to in Sec- tion 3.01 (b) of the Development Credit Agreement, as amended, has been duly executed on behalf of the Borrower and IDC and has been duly authorized or ratified by all necessary governmental and corporate action; and (b) the Subsidiary Loan Agreement between the Borrower and ARDC has been amended in a form satisfactory to the Association. Section 7.02. (a) This Agreement and all obligations of the Association and of IDC hereunder shall terminate on the earlier of the following two dates: 7-9- (i) the date on which the Development Credit Agreement shall terminate in accordance with its terms; or (ii) a date on which the Madhya Pradesh Agreement and the Project Agreement shall terminate in accordance with their 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 IDC of this event. Section 7.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancella- tion or suspension under the Development Credit Agreement. ARTICLE VIII Miscellaneous Provisions Section 8.01. 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 Borrower: The Secretary to the Government of India Ministry of Finance Department of Economic Affairs New Delhi, India Cable address: ECOFAIRS New Delhi - 10 - 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 Madhya Pradesh: The Chief Secretary Government of Madhya Pradesh Vallabh Bhawan Bhopal - 462-006 Madhya Pradesh, India Cable address: CHIEFSEC Bhopal For IDC: Indian Dairy Corporation 'Darpan', R.C. Dutt Road Baroda - 390005 India Cable address: Telex: INDAIRY 175 239 IDC IN Baroda Section 8.02. Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement on behalf of IDC may be taken or executed by the Managing Director or such other person or persons as he shall designate in writing, and IDC shall furnish to the Association sufficient evidence of the authority and the authenticated spe- cimen signature of each such person. - 11 - Section 8.03. 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 representatives thereunto duly authorized, 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. INDIA By ' Authorized Representative Date INTERNATIONAL DEVELOPMENT ASSOCIATION By k/ *e, South Asia rogams Date el if THE STATE OF MADHYA R SH 4 SH e0!? By 4'( .Z19 Authorized Representative Date INDIAN DAIRY CORPORATION By (I ieo Authorized Representative Date