Philippines - Small Farmer Development -Land Bank Of The Philippines- Project : Loan 1646 - Project Agreement - Conformed

CONFORMED COPY LOAN NUMBER 1646 PH Project Agreement (Small Farmer Development - Land Bank of the Philippines - Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and LAND BANK OF THE PHILIPPINES Dated January 26, 1979 LOAN NUMBER 1646 PH PROJECT AGREEMENT AGREEMENT, dated January 26, 1979, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and LAND BANK OF THE PHILIPPINES (hereinafter called the Land Bank). WHEREAS (A) by the Loan Agreement of even date herewith between the Republic of the Philippines (hereinafter called the Borrower) and the Bank, the Bank has agreed to make available to the Borrower an amount in various currencies equivalent to sixteen million five hundred thousand dollars ($16,500,000), on the terms and conditions set forth in the Loan Agreement, but only on condition that the Land Bank agree to undertake such obliga- tions toward the Bank as are hereinafter set forth; * (B) by a subsidiary loan agreement to be entered into between the Borrower and the Land Bank, part of the proceeds of the loan provided for under the Loan Agreement will be made available to the Land Bank on the terms and conditions therein set forth; and WHEREAS the Land Bank, in consideration of the Bank's entering into the Loan 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 Loan Agreement, the Preamble to this Agreement and the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. The Land Bank shall carry out Parts A, C and D of the Project described in Schedule 2 to the Loan Agreement with due diligence and efficiency and in conformity with appropriate - 2 - administrative, financial and agricultural practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 2.02. In order to assist in carrying out those Parts of the Project for which the Land Bank is responsible, the Land Bank shall, as and when it deems necessary, employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank. Section 2.03. Except as the Bank shall otherwise agree, procurement of the goods and civil works to be financed out of the proceeds of the Loan, shall be governed by the provisions of Schedule 4 to the Loan Agreement. Section 2.04. (a) The Land Bank undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Loan made available 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 the Land Bank to replace or repair such goods. (b) Except as the Bank may otherwise agree, the Land Bank shall cause all goods and services financed out of the proceeds of the Loan made available to it by the Borrower to be used exclusively for the Project. Section 2.05. (a) The Land Bank shall furnish to the Bank, promptly upon their preparation, the plans, specifications, reports, contract documents and work and procurement schedules for Parts A, C and D of the Project, and any material modifications thereof or additions thereto, in such detail as the Bank shall reasonably request. (b) The Land Bank: (i) shall maintain records and procedures adequate to record and monitor the progress of Parts A, C and D of the Project (including their cost and the benefits to be derived from them), to identify the goods and services financed out of the proceeds of the Loan, and to disclose their use in Parts A, C and D of the Project; (ii) shall enable the Bank's accredited representatives to visit the facilities and construction sites included in Parts A, C and D of the Project and to examine the goods financed out of the proceeds of the Loan and any -3- relevant records and documents; and (iii) shall furnish to the Bank at regular intervals all such information as the Bank shall reasonably request concerning Parts A, C and D of the Project, their cost and, where appropriate, the benefits to be derived from them, the expenditure of the proceeds of the Loan and the goods and services financed out of such proceeds. (c) Promptly after completion of Parts A, C and D of the Project, but in any event not later than six months after the Closing Date or such later date as may be agreed for this purpose between the Land Bank and the Bank, the Land Bank shall prepare and furnish to the Bank a report, of such scope and in such detail as the Bank shall reasonably request, on the execution and initial operation of Parts A, C and D of the Project, their cost and the benefits derived and to be derived from them, the performance by Land Bank and the Bank of their respective obligations under the Project Agreement and the accomplishment of the purposes of the Loan. (d) The Land Bank shall enable the Bank's representatives to examine all plants, installations, sites, works, buildings, property and equipment of the Land Bank and any relevant records and documents. Section 2.06. The Land Bank shall duly perform all its obligations under the Subsidiary Loan Agreement. Except as the Bank shall otherwise agree, the Land Bank 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 2.07. (a) The Land Bank shall, at the request of the Bank, exchange views with the Bank with regard to the progress of Parts A, C and D of the Project, the performance of its obliga- tions under this Agreement and under the Subsidiary Loan Agree- ment, and other matters relating to the purposes of the Loan. (b) The Land Bank shall promptly inform the Bank of any condition which interferes or threatens to interfere with the progress of Parts A, C and D of the Project, the accomplishment of the purposes of the Loan, or the performance by the Land Bank of its obligations under this Agreement and under the Subsidiary Loan Agreement. Section 2.08. The Land Bank shall take all measures necessary to ensure that all conveniently available farm support facilities and equipment are used before credits under Part A.3 (b) of the Project are granted. Section 2.09. The Land Bank shall: (i) establish and maintain a program satisfactory to the Bank to monitor and evaluate the Project, and (ii) submit periodic reports to the Bank on the implementation of such program. Section 2.10. Except as the Bank shall otherwise agree, the Land Bank shall cause the principal amounts of credits extended by the Land Bank under Part A.3 of the Project: (i) which have been repaid to the Land Bank by the sub-borrowers, and (ii) which are not required by the Land Bank for repayment to the Borrower under the Subsidiary Loan Agreement, to be used for the provision of additional credits under Part A.3 of the Project. ARTICLE III Management and Operations of the Land Bank Section 3.01. The Land Bank shall at all times carry on its operations, manage its affairs, plan its future development and maintain its organization and its financial position all in accordance with appropriate financial and administrative practices and under the supervision of experienced and competent management. Section 3.02. Except as the Bank shall otherwise agree, the Land Bank shall extend credits under Part A.3 of the Project, in accordance with the Credit Terms and Conditions. Section 3,03. The Land Bank shall, in carrying out Part C of the Project: (a) adequately staff its field offices with competent staff in accordance with a staffing program satisfactory to the Bank; (b) allocate annually sufficient funds in accordance with a financing plan satisfactory to the Bank; and (c) implement the Special Order of the President of the Land Bank No. 273 dated September 18, 1978 (as authorized by the Land Bank's Board of Director Resolution No. 78-140 dated May 30, 1978) on its organizational structure and delegation of authority, and . change said Special Order with respect to its Field Operations Group only after prior consultation with the Bank. -5- ARTICLE IV Financial Covenants Section 4.01. The Land Bank shall maintain separate records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations in respect of each Part of the Project for which the Land Bank is responsible. Section 4.02. The Land Bank shall: (i) have such 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 Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year, (A) certi- fied 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 Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning such accounts and the audit thereof as the Bank 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 Loan Agreement becomes effective. Section 5.02. This Agreement and all obligations of the Bank and of the Land Bank thereunder shall terminate on the date on which the Loan Agreement shall terminate in accordance with its terms, and the Bank shall promptly so notify the Land Bank there- of. 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. - 6 - 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 herein- after 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 Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) For the Land Bank: Land Bank of the Philippines 6th Floor B. F. Condominium Aduana, Intramuros Manila, Philippines Cable address: Telex: LANDBANK 2679 LBP PH Manila 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 the Land Bank, may be taken or -7- executed by its President or such other person or persons as he shall designate in writing, and the Land Bank shall furnish to the Bank sufficient evidence of the authority and the authenti- cated 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 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 BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Stanley Please Acting Regional Vice President East Asia and Pacific LAND BANK OF THE PHILIPPINES By /s/ Eduardo Z. Romualdez Authorized Representative