India - Fertilizer Industry Project : Credit 0598 - Project Agreement - Conformed

CONFORMED COPY CREDIT NUMBER. 598 IN IDBI Project Agreement (Fertilizer Industry Project) BETWEEN INTERNATIONAL DEVELOPMENT ASSOCIATION AND INDUSTRIAL DEVELOPMENT BANK OF INDIA DATED DECEMBER 31, 1975 0 PROJECT AGREEMENT AGREEMENT, dated December 31, 1975, between INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and INDUSTRIAL DEVELOPMENT BANK OF INDIA (hereinafter called IDBI). WHEREAS by the Development Credit Agreement of even date herewith between India, acting by its President (hereinafter called the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to one hundred five million dollars ($105,000,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that IDBI agree to undertake such obligations toward the Association as hereinafter set forth; WHEREAS by a subsidiary loan a-r. ment to be entered into between the Borrower and IDBI, part of the proceeds of the credit provided for under the Development Credit Agreement will be made available to IDBI on the terms and conditions therein set forth; and WHEREAS IDBI, 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. 1DBI shall cause to be carried out Part B of the Project described in Schedule 2 to the Development Credit Agreement and conduct its operations and affairs with due diligence and efficiency and in accordance with 4 sound administrative, economic, financial and investment standards and practices, with qualified and experienced management and personnel and in accordance with the Industrial Development Bank of India Act, No. 18 of 1964. Section 2.02. In order to cause Part B of the Project to be carried out, IDBI shall relend to GSFC, SPIC, HPCL and Zuari, respectively, funds equivalent to the amount allocated to each said Beneficiary in Schedule 1 to the Development Credit Agreement and made available by the Borrower to IDBI out of the proceeds of the Credit, on terms and conditions satisfactory to the Association. These terms and conditions shall not, with respect to repayment, interest including special charges, if any, and commitment fee, be more favorable to any of the said Beneficiaries than the following: (a) the loans shall be repaid within 15 years, including not more than 4 years of grace; (b) interest, including special charges, if any, shall be paid on the outstanding balance from time to time at a rate not less than ten and one-quarter per cent (10-1/4%) per annum; and (c) a commitment fee of not more than one per cent (1%) per annum shall be paid on the principal amount of the loans not withdrawn from time to time. Section 2.03. IDBI shall obtain from GSFC, SPIC, HPCL and Zuari, respectively, an undertaking, acceptable to the Association: (a) to carry out their respective parts of the Project with due diligence and efficiency and in conformity with sound engineering, financial and administrative practices; (b) to employ, if required, engineering consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association; (c) to procure equipment, spares and materials to be financed out of the proceeds of the Credit made available to them by IDBI in accordance with Schedule 3 to the Development Credit Agreement, and to use such goods exclusively in the carrying out of their respective parts of the Project; (d) to take all necessary action to procure any equipment or material in accordance with procedures satisfactory to the Borrower and the Association if at any time it is determined pursuant to Section 3.04(c) of the Development Credit 5 Agreement that any such equipment or material cannot be delivered on or prior to its scheduled delivery date and that such delay would adversely affect the completion of their respective parts of the Project; (e) to furnish to the Association promptly upon their preparation, the plans, specifications, reports, contract documents and construction and procurement schedules for their respective parts of the Project and any material modifications subsequently made therein, in such detail as the Association shall from time to time request; (f) to maintain records adequate to identify the goods and services acquired out of the proceeds of the Credit made available to them by IDBI, to disclose the use thereof in their respective parts of the Project, to record the progress of their respective parts of the Project (including the cost thereof) and to reflect in accordance with consistently maintained sound accounting practices their operations and financial condition; (g) to allow the Association's representatives to inspect their respective parts of the Project and the goods financed out of the proceeds of the Credit, and to examine all plants, installations, sites, works, buildings, property and equipment included in the Project, the operation thereof and any relevant records and documents; (h) to insure with responsible insurers, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit made available to them by IDBI, 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 to replace or repair such goods; (i) to take out and maintain with responsible insurers, or make other provisions satisfactory to the Association for, insurance against such risks and in such amounts as shall be consistent with appropriate practice; () to inform the Borrower, IDBI and the Association promptly of any condition which interferes with, or threatens to interfere with, the accomplishment of the purposes of the Credit, the carrying out of their respective parts of the Project; (k) to give all such information as the Association shall reasonably request relating to their financial condition, operation and administration; 6 (1) to furnish to the Association all such information as the Association shall reasonably request concerning their respective parts of the Project, the expenditure of the proceeds of the Credit made available to them and the goods and services financed out of such proceeds; and (in) to (A) have their accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with sound auditing principles consistently applied, by independent auditors acceptable to the Association; (B) furnish to the Association as soon as available, but, in any case not later than six months after the end of each such year, (i) certified copies of the financial statements for such year as so audited and (ii) report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (C) furnish to the Association such other information concerning the foregoing accounts and financial statements as the Association shall from time to time reasonably request. Section 2.04. IDBI shall duly perform all its obligations under the IDBI Subsidiary Loan Agreement. Except as the Association shall otherwise agree, IDBI shall not take or concur in any action which would have the effect of amending, abrogating, assigning or waiving the IDBI Subsidiary Loan Agreement or any provision thereof. Section 2.05. (a) IDBI shall, at the request of the Association, exchange views with the Association with regard to the progress of Part B of the Project, the performance of its obligations under this Agreement and under the IDBI Subsidiary Loan Agreement, and other matters relating to the purposes of the Credit. (b) IDBI 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 IDBI of its obligations under this Agreement and under the IDBI Subsidiary Loan Agreement. Section 2.06. IDBI shall not make any repayment in advance of maturity in respect of any outstanding debt of IDBI which, in the judgement of the Association, would materially affect IDBI's ability to meet its financial obligations. 7 ARTICLE I Financial Covenants Section 3.01. IDBI shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. Section 3.02. IDBI 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 sound 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 five 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 requested; and (iii) furnish to the Association such other information concerning the accounts and financial statements of IDBI and 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 IDBI 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) a date 16 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 IDBI 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 Development Credit Agreement. 8 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: INDEVAS Washington, D.C. For IDBI: Industrial Development Bank of India New India Centre 17 Cooperage Bombay 400039, India Cable address: Telex: INDBANKIND 022-2193 Bombay Bombay Section 5.02. Any action required or permitted to be taken, and any documents required or permitted to be executed, under this Agreement on behalf of IDBI may be taken or executed by its General Manager or such other person or persons as IDBI shall designate in writing. 9 Section 5.03. IDBI 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 IDBI, take any action or execute any documents required or permitted to be taken or executed by IDBI pursuant to any of the provisions of this Agreement. Section 5.04. 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 in the District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL DEVELOPMENT ASSOCIATION By /s / Ernest Stern Regional Vice President South Asia INDUSTRIAL DEVELOPMENT BANK OF INDIA By /s / G. V. Ramakrishna Authorized Representative CONFORMED COPY CREDIT NUMBER 598 IN FCI Project Agreement (Fertilizer Industry Project) BETWEEN INTERNATIONAL DEVELOPMENT ASSOCIATION AND FERTILIZER CORPORATION OF INDIA DATED DECEMBER 31, 1975 PROJECT AGREEMENT AGREEMENT, dated December 31, 1975, between INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and FERTILIZER CORPORATION OF INDIA (hereinafter called FCI). WHEREAS by the Development Credit Agreement of even date herewith between India, acting by its President (hereinafter called the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to one hundred five million dollars ($105,000,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that FCI agree to undertake such obligations toward the Association as hereinafter set forth; WHEREAS by a subsidiary loan agreement to be entered into between the Borrower and FCI, part of the proceeds of the credit provided for under the Development Credit Agreement will be made available to FCI on the terms and conditions therein set forth; and WHEREAS FCI, 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. FCI shall carry out Part A of the Project described in Schedule 2 to the Development Credit Agreement with due diligence and efficiency and in conformity with appropriate administrative, financial and engineering practices. 4 Section 2.02. In order to assist FCI in execution of Part A of the Project, FCI may employ engineering consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Section 2.03. (a) Except as the Association shall otherwise agree, the goods, works or services (other than consultants' services) for the Project to be financed out of the proceeds of the Credit, shall be procured in accordance with the provisions of Schedule 3 to the Development Credit Agreement. (b) If at any time the Association or FCI determines, after consultation with each other and the Borrower, that any equipment or material cannot be delivered on or prior to its scheduled delivery date, and that such delay would adversely affect completion of Part A of the Project, FCI shall promptly take all necessary action to procure such equipment or material by such procedures as shall be satisfactory to the Borrower and the Association. Section 2.04. (a) FCI undertakes 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 it by the Borrower 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 FCI to replace or repair such goods. (b) Except as the Association may otherwise agree, FCl shall cause all goods and services financed out of the proceeds of the Credit relent to it by the Borrower to be used exclusively for the Project. Section 2.05. (a) FCl shall furnish to the Association promptly upon their preparation, the plans, specifications, reports, contract documents and construction and procurement schedules for Part A of the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) FCI: (i) shall maintain records adequate to record the progress of Part A of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Credit relent to it by the Borrower, and to disclose the use thereof in the Project; (ii) shall, without limitation upon the provisions of paragraph (c) of this Section, enable the Association's representatives to visit the facilities and construction sites included in Part A of the Project, and to examine the goods financed out of such proceeds and any relevant records and documents; and (iii) shall furnish to the Association all such information as the Association shall reasonably request concerning Part A of the Project, the __ 5 expenditure of the proceeds of the Credit so relent to it and the goods and services financed out of such proceeds. (c) FCI shall enable the Association's representatives to examine all plants, installations, sites, works, buildings, property and equipment of FCL and any relevant records and documents. Section 2.06. FCI shall duly perform all its obligations under the FCI Subsidiary Loan Agreement. Except as the Association shall otherwise agree, FCI shall not take or concur in any action which would have the effect of amending, abrogating, assigning or waiving the FCI Subsidiary Loan Agreement or any provision thereof. Section 2.07. (a) FCI shall, at the request of the Association, exchange views with the Association with regard to the progress of Part A of the Project, the performance of its obligations under this Agreement and under the FCI Subsidiary Loan Agreement, and other matters relating to the purposes of the Credit. (b) FCt shall promptly inform the Association of any condition which interferes or threatens to interfere with the progress of Part A of the Project, the accomplishment of the purposes of the Credit, or the performance by FCI of its obligations under this Agreement and under the FCI Subsidiary Loan Agreement. ARTICLE III Management and Operations of FCI Section 3.0 1. FCI shall take out and maintain with responsible insurers, or make other provisions satisfactory to the Association for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. Section 3.02. FCI shall: (a) at all times manage its affairs, maintain its financial position, plan its future expansion and carry on its operations in accordance with appropriate business, financial and engineering practices and under the supervision of experienced and competent management assisted by adequate and competent staff; and (b) promptly staff with experienced and competent personnel any vacant position related to the construction and operation of the facilities included in Part A of the Project. 6 Section 3.03. Except as the Association shall otherwise agree, FCI shall: (a) at all times take all steps N hich are necessary to maintain its existence and its right to carry on operations and to acquire and retain ownership of all lands and to maintain and renew all interests in land and other properties and all rights, powers, privileges and franchises which are necessary or useful in the carrying out of Part A of the Project or in the conduct of its business; (b) at all times operate and maintain its plants, machinery, equipment and other property, and promptly make all necessary repairs and renewals thereof, in accordance with appropriate engineering practices; (c) not sell, lease, transfer or otherwise dispose of any of its property or assets which shall be required for the efficient operation of its business and undertaking; and (d) not alter its corporate structure or amend its Memorandum or Articles of Association in any way that will materially and adversely affect its ability to perform its obligations under this Agreement. ARTICLE IV Financial Covenants Section 4.01. FCI shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. Section 4.02. FCI 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 sound 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 four 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 requested; and (iii) furnish to the Association such other information concerning the accounts and financial statements of FCI and the audit thereof 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. 7 Section 5.02. (a) This Agreement and all obligations of the Association and of FCI 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) a date 1 6 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 FCI 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 Development Credit Agreement. 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: INDEVAS Washington, D.C. For FCI: Fertilizer Corporation of India F-43 South Extension Area Part I Ring Road New Delhi-49, India 8 Cable address: FERTILIZER New Delhi Section 6.02. Any action required or permitted to be taken, and any docume.nts required or permitted to be executed, under this Agreement on behalf of FCI may be taken or executed by its Managing Director or such other person or persons as FCI shall designate in writing. Section 6.03. FCI 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 FCI, take any action or execute any documents required or permitted to be taken or executed by FCI pursuant to any of the provisions of this Agreement. Section 6.04. 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 in the District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL DEVELOPMENT ASSOCIATION By /s / Ernest Stern Regional Vice President South Asia FERTILIZER CORPORATION OF INDIA By /s / G. V. Ramakrishna Authorized Representative