Conformed Copy - L3593 - Transport Project - SNCFR Project Agreement

Page 1 CONFORMED COPY LOAN NUMBER 3593 ROM SNCFR Project Agreement (Transport Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and NATIONAL RAILWAY COMPANY OF ROMANIA Dated April 30, 1993 LOAN NUMBER 3593 ROM SNCFR PROJECT AGREEMENT AGREEMENT, dated April 30, 1993, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank) and NATIONAL RAILWAY COMPANY OF ROMANIA (SNCFR). WHEREAS (A) by the Loan Agreement of even date herewith between Romania (the Borrower) and the Bank, the Bank has agreed to make available to the Borrower an amount in various currencies equivalent to one hundred twenty million dollars ($120,000,000), on the terms and conditions set forth in the Loan Agreement, but only on condition that SNCFR agree to undertake such obligations toward the Bank as are set forth in this Agreement; (B) by a subsidiary financing agreement to be entered into between the Borrower and SNCFR, the proceeds of the loan allocated from time to time to Category (3) of the table set forth in paragraph 1 of Schedule 1 to the Loan Agreement will be relent to SNCFR on the terms and conditions set forth in said Subsidiary Financing Agreement; and WHEREAS SNCFR, in consideration of the Bank's entering into the Loan Agreement with the Borrower, has agreed to undertake the obligations set forth in this Agreement; Page 2 NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Unless the context otherwise requires, 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 Part C of the Project Section 2.01. (a) SNCFR declares its commitment to the objectives of the Project as set forth in Schedule 2 to the Loan Agreement, and, to this end, shall carry out Part C of the Project with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering and railway practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for Part C of the Project. (b) Without limitation upon the provisions of paragraph (a) of this Section and except as the Bank and SNCFR shall otherwise agree, SNCFR shall: (i) maintain arrangements, satisfactory to the Bank, with NRA pursuant to which NRA shall, through PMU, undertake the responsibility for the carrying out of the Project, including Part C thereof, and the procurement of the goods therefor; and (ii) carry out the staff training under Part C of the Project in accordance with programs and criteria for the selection of candidates thereunder satisfactory to the Bank. Section 2.02. Except as the Bank shall otherwise agree, procurement of the goods required for Part C of the Project and to be financed out of the proceeds of the Loan shall be governed by the provisions of Schedule 4 to the Loan Agreement. Section 2.03. SNCFR shall carry out the obligations set forth in Sections 9.04, 9.05, 9.06, 9.07, 9.08 and 9.09 of the General Conditions (relating to insurance, use of goods and services, plans and schedules, records and reports, maintenance and land acquisition, respectively) in respect of the SNCFR Project Agreement and Part C of the Project. Section 2.04. SNCFR shall duly perform all its obligations under the SNCFR Subsidiary Financing Agreement. Except as the Bank shall otherwise agree, SNCFR shall not take or concur in any action which would have the effect of amending, abrogating, assigning or waiving the SNCFR Subsidiary Financing Agreement or any provision thereof. Section 2.05. (a) SNCFR shall, at the request of the Bank, exchange views with the Bank with regard to the progress of Part C of the project, the performance of its obligations under this Agreement and under the SNCFR Subsidiary Financing Agreement, and other matters relating to the purposes of the Loan. (b) SNCFR shall promptly inform the Bank of any condition which interferes or threatens to interfere with the progress of Part C of the Project, the accomplishment of the purposes of the Loan, or the performance by SNCFR of its obligations under this Agreement and under the SNCFR Subsidiary Financing Agreement. ARTICLE III Management and Operations of SNCFR Section 3.01. SNCFR shall carry on its operations and conduct its affairs in accordance with sound administrative, financial and Page 3 railway practices under the supervision of qualified and experienced management assisted by competent staff in adequate numbers. Section 3.02. SNCFR shall at all times operate and maintain its plant, machinery, equipment and other property, and from time to time, promptly as needed, make all necessary repairs and renewals thereof, all in accordance with sound engineering, financial and railway practices. Section 3.03. SNCFR shall take out and maintain with responsible insurers, or make other provision satisfactory to the Bank for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. ARTICLE IV Financial Covenants Section 4.01. (a) SNCFR shall maintain records and accounts adequate to reflect in accordance with sound accounting practices its operations and financial condition. (b) SNCFR shall: (i) have its records, 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) 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 Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning said records, accounts and financial statements as well as 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 SNCFR thereunder shall terminate on the date on which the Loan Agreement shall terminate in accordance with its terms, and the Bank shall promptly notify SNCFR thereof. 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 6.01. 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 Page 4 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 Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address:Telex: INTBAFRAD 248423 (RCA) Washington, D.C. 82987 (FTCC) 64145 (WUI) or 197688 (TRT) For SNCFR: National Railway Company of Romania 38, Bld. Dinicu Golescu Bucharest Romania Telex: 11553 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 SNCFR, may be taken or executed by its President or such other person or persons as said President shall designate in writing, and SNCFR shall furnish to the Bank sufficient evidence of the authority and the authenticated 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 collectively but one instrument. IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, 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/ Michael Wiehen Acting Regional Vice President Europe and Central Asia NATIONAL RAILWAY COMPANY OF ROMANIA By /s/ Vasile Puscas Authorized Representative Page 5