Cameroon - Second Livestock Development Project : Credit 1010 - Project Agreement - 3 - Conformed

CONFORMED COPY CREDIT NUMBER 1010 CM Project Agreement (Second Livestock Development Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and FONDS NATIONAL DE DEVELOPPEMENT RURAL Dated June 20, 1980 CREDIT NUMBER 1010 CM PROJECT AGREEMENT AGREEMENT, dated June 20, 1980, between INTERNATIONAL DEVE- LOPMENT ASSOCIATION (hereinafter called the Association) and FONDS NATIONAL DE DEVELOPPEMENT RURAL (hereinafter called FONADER). WHEREAS by the Development Credit Agreement of even date herewith between United Republic of Cameroon (hereinafter called the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to sixteen million dollars ($16,000,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that FONADER agree to undertake such obligations toward the Association as are hereinafter set forth; WHEREAS by a financing agreement to be entered into between the Borrower and FONADER, part of the proceeds of the credit provided for under the Development Credit Agreement will be made available to FONADER on the terms and conditions therein set forth; and WHEREAS FONADER, 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. FONADER shall carry out Part A of the Project described in Schedule 2 to the Development Credit Agreement -2- with due diligence and efficiency and in conformity with appro- priate administrative, economic, financial, training, livestock development and agricultural credit practices. Section 2.02. In order to secure assistance in carrying out Part A of the Project, FONADER shall employ the following special- ists whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association: (a) a pig and poultry specialist; and (b) a cattle production specialist. Section 2.03. (a) Except as the Association shall otherwise agree, procurement of the goods and civil works for Part A of the Project to be financed out of the proceeds of the Credit, other than those to be financed out of the proceeds of a sub-loan, shall be governed by the provisions of Schedule 3 to the Development Credit Agreement. (b) FONADER shall ensure that goods and services to be financed out of the proceeds of a sub-loan shall be procured in an economical and efficient manner, in accordance with estab- lished commercial practices. Section 2.04. (a) FONADER undertakes to insure, or make adequate provision for the insurance of, any imported goods to be financed out of the proceeds of the Credit made available to it by the Borrower against hazards incident to the acquisition, transportation and delivery thereof to the place of use or instal- lation, and for such insurance any indemnity shall be payable in a currency freely usable by FONADER to replace or repair such goods. (b) Except as the Association may otherwise agree, FONADER shall cause all goods and services financed out of the proceeds of the Credit made available to it by the Borrower to be used exclusively for Part A of the Project. Section 2.05. (a) FONADER: (i) shall maintain records and procedures adequate to record and monitor the progress of Part A of the Project (including its cost and the benefits to be derived from it), to identify the goods and services financed out of the proceeds of the Credit allocated thereto, and to disclose their use in said Part of the Project; (ii) shall enable the Associa- tion's accredited representatives to visit the facilities and -3- sites included in said Part of the Project and to examine the goods financed out of the proceeds of the Credit allocated thereto and any relevant records and documents; and (iii) shall furnish to the Association at regular intervals all such information as the Association shall reasonably request concerning said Part of the Project, its cost and, where appropriate, the benefits to be derived from it, the expenditure of such proceeds and the goods and services financed out of such proceeds. (b) FONADER shall enable the Association's representatives to examine all installations, buildings and property of FONADER and any relevant records and documents. Section 2.06. FONADER shall duly perform all its obligations under the FONADER Financing Agreement. Except as the Association shall otherwise agree, FONADER shall not take or concur in any action which would have the effect of amending, abrogating, assigning or waiving the FONADER Financing Agreement or any provision thereof. Section 2.07. (a) FONADER shall, at the request of the Asso- ciation, exchange views with the Association with regard to the progress of Part A of the Project, the performance of its obliga- tions under this Agreement and under the FONADER Financing Agree- ment, and other matters relating to the purposes of the Credit. (b) FONADER 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 FONADER of its obligations under this Agreement and under the FONADER Financing Agreement. Section 2.08. In order to carry out its obligations under this Agreement with respect to the sub-loans to be made under Part A (i) of the Project, FONADER undertakes that, unless the Asso- ciation shall otherwise agree, any such sub-loan shall be made on terms whereby FONADER shall obtain, by written agreement or other appropriate legal means, rights adequate to protect the interests of the Association and of FONADER, including: (i) the right to require the beneficiaries of any sub-loan to carry out and manage the investment to be financed out of the proceeds thereof with due diligence and efficiency and in accordance with sound financial and livestock development or agricultural standards and to main- tain adequate records; (ii) the right to require that the goods -4- to be financed out of the proceeds of the sub-loan be used exclu- sively in the carrying out of the investment for which FONADER has provided the sub-loan; (iii) the right of the A,,ociation and of FONADER to inspect such goods and the sites related to such investment, and any relevant records and documents; (iv) the right to obtain all such information as the Association or FONADER shall reasonably request relating to the foregoing and to the adminis- tration, operations and financial condition of the beneficiary of the sub-loan and the benefits to be derived from such investment; and (v) the right of FONADER to suspend or terminate the right of the beneficiary to the use of the proceeds of the sub-loan upon failure by such beneficiary to perform its obligations under its agreement with FONADER. Section 2.09. Before making any sub-loan under Part A (i) of the Project to a beneficiary leasing land from SODEPA, FONADER shall ensure that a boundary survey of such land has been carried out. ARTICLE III Management and Operations of FONADER Section 3.01. FONADER shall at all times carry on its opera- tions, manage its affairs, plan the future development of its business and maintain its financial position in accordance with appropriate agricultural credit, commercial, economic, financial and administrative practices, and under an experienced and quali- fied management assisted by competent staff in adequate number. Section 3.02. FONADER 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 3.03. FONADER shall at all times take all steps necessary to maintain its corporate existence and right to carry on its operations, and to acquire and to retain such properties, and to acquire, maintain and renew such concessions, licenses, consents, franchises or other rights, as may be necessary or useful for the execution and operation of the Part of the Project for which it is responsible and the conduct of its business. -5- ARTICLE IV Financial Covenants Section 4.01. (a) FONADER shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. (b) FONADER shall, until one year after the Closing Date, retain all records (orders, invoices, bills, receipts and other documents) evidencing the expenditures for Part A of the Project on account of which withdrawals are requested from the Credit Account on the basis of certificates of expenditure, and shall enable the Association's accredited representatives to inspect such records. Section 4.02. FONADER 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, of such scope and in such detail as the Association shall have reasonably requested, including, without limitation to the fore- going, a separate opinion by said auditors in respect of the expenditures and records referred to in Section 4.01 (b) of this Agreement as to whether the proceeds of the Credit made available to FONADER and withdrawn from the Credit Account on the basis of certificates of expenditure have been used for the purpose for which they were provided; and (iii) furnish to the Association such other information concerning the accounts and financial statements of FONADER 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. -6- Section 5.02. (a) This Agreement and all obligations of the Association and of FONADER 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 eighteen years after the date of this Agreement. (b) If the Development Credit Agreement terminates in accordance with its terms befor the date specified in paragraph (a) (ii) of this Section, the Association shall promptly notify FONADER 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 General Conditions. ARTICLE VI. Miscellaneous Provisions Section 6.01o 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 prty 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: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) For FONADER: Fonds National de D6veloppement Rural B. P. 1548 Yaounde, Cameroon Cable address: Telex: FONADER 8365 KN Yaounde 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 FONADER may be taken or executed by the Chairman of the Board (Conseil d'Administration) of FONADER or such other person or persons as the Chairman shall designate in writing, and FONADER shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 6.03. Th.s Agreement may be executed in several counterparts, each of which shall be an original, and all col- lectively 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/ Wilfred Thalwitz Acting Regional Vice President Western Africa FONDS HATIONAL DE DEVELOPPEMENT RURAL By Is! Benort Bindzi Authorized Representative