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CONFORMED COPY
CREDIT NUMBER 3013 IN
Development Credit Agreement
(Uttar Pradesh Second Basic Education Project)
between
INDIA
and
INTERNATIONAL DEVELOPMENT ASSOCIATION
Dated March 3, 1998
CREDIT NUMBER 3013 IN 
DEVELOPMENT CREDIT AGREEMENT 
AGREEMENT, dated March 3, 1998, between INDIA, acting by its President (the 
Borrower), and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association). 
WHEREAS (A) the Borrower, having satisfied itself as to the feasibility and 
priority of the Project described in Schedule 2 to this Agreement, has requested the 
Association to assist in the financing of the Project; 
(B)
the Project will be carried out by the State of Uttar Pradesh (Uttar 
Pradesh) with the assistance of the Uttar Pradesh Sabhee Ke Liye Siksha Pariyojana 
Parishad, also known as the Uttar Pradesh Education for All Projects Board (EFAPB) and 
with the assistance of the Borrower and, as part of such assistance, the Borrower will 
make available to Uttar Pradesh the proceeds of the Credit as provided in this 
Agreement; and 
WHEREAS the Association has agreed, on the basis, inter alia, of the foregoing, 
to extend the Credit to the Borrower upon the terms and conditions set forth in this 
Agreement and in the Project Agreement of even date herewith between the Association 
of one part and Uttar Pradesh and EFAPB of the other part;
NOW THEREFORE the parties hereto hereby agree as follows: 
ARTICLE I 
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General Conditions; Definitions
Section 1.01. The “General Conditions Applicable to Development Credit 
Agreements” of the Association, dated January 1, 1985, with the modifications set 
forth below (the General Conditions) constitute an integral part of this Agreement: 
(a)
The last sentence of Section 3.02 is deleted.
(b)
The second sentence of Section 5.01 is modified to read:
“Except as the Association and the Borrower shall otherwise agree, 
no withdrawals shall be made: (a) on account of expenditures in the 
territories 
of any country which is not a member of the Bank or for 
goods produced in, or 
services supplied from, such territories; or (b) 
for the purpose of any payment to 
persons or entities, or for any import 
of goods, if such payment or import, to the 
knowledge of the 
Association, is prohibited by a decision of the United 
Nations Security 
Council taken under Chapter VII of the Charter of the United 
Nations.”
(c)
Section 6.03 is modified to read:
“Section 6.03.  Cancellation by the Association.  If (a) the right 
of the Borrower to make withdrawals from the Credit Account shall have 
been 
suspended with respect to any amount of the Credit for a continuous 
period of 
thirty days, or (b) at any time, the Association determines, 
after consultation 
with the Borrower, that an amount of the Credit will  not be required to finance the 
Project’s costs to be financed out of the 
proceeds of the Credit, or (c) at any 
time, the Association determines, 
with respect to any contract to be financed 
out of the proceeds of the 
Credit, that corrupt or fraudulent practices were 
engaged in by 
representatives of the Borrower or of a beneficiary of the 
Credit during 
the procurement or the execution of such contract, without the 
Borrower 
having taken timely and appropriate action satisfactory to the 
Association to remedy the situation, and establishes the amount of 
expenditures 
in respect of such contract which would otherwise have been 
eligible for 
financing out of the proceeds of the Credit, or (d) at any 
time, the Association 
determines that the procurement of any contract to 
be financed out of the proceeds 
of the Credit is inconsistent with the 
procedures set forth or referred to in the 
Development Credit Agreement 
and establishes the amount of expenditures in respect 
of such contract 
which would otherwise have been eligible for financing out of the 
proceeds of the Credit, or (e) after the Closing Date, an amount of the 
Credit 
shall remain unwithdrawn from the Credit Account, the Association  may, by notice to 
the Borrower, terminate the right of the Borrower to  make withdrawals with respect to 
such amount.  Upon the giving of such 
notice, such amount of the Credit shall be 
canceled.” 
Section 1.02. Unless the context otherwise requires, the several terms defined in the 
General Conditions and in the Preamble to this Agreement have the respective meanings 
therein set forth and the following additional terms have the following meanings: 
(a)
“Basic Education” means primary (grades 1 through 5) and upper primary 
(grades 6 through 8) schooling and non-formal primary and upper primary education; 
(b)
“Block” means the administrative unit of the Borrower referred to by that 
name into which each district of each state of the Borrower is divided for the purpose 
of development administration; 
(c)
“DIET” means District Institute for Education and Training; 
(d)
“EFAPB” means Uttar Pradesh Sabhee Ke Liye Siksha Pariyojana Parishad, 
also known as the Uttar Pradesh Education For All Project Board, a society established 
under the Borrower’s Societies Registration Act, 1860 as applied to Uttar Pradesh; 
(e)
“Joint Supervision Program” means the joint supervision program agreed 
among the Association, the Borrower and other funding agencies in respect of the 
Second District Primary Education Project (Cr. 2876-IN) (DPEP II).
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(f)
“Project Agreement” means the agreement of even date herewith among the 
Association and Uttar Pradesh and EFAPB, as the same may be amended from time to time, 
and such term includes all schedules and agreements supplemental to the Project 
Agreement; 
(g)
“SCERT” means the Uttar Pradesh State Council of Educational Research and 
Training; 
(h)
“Special Account” means the account referred to in Section 2.02(b) of 
this Agreement; 
(i)
“Uttar Pradesh” means the Borrower’s state of Uttar Pradesh, or any 
successor thereto; and 
(j)
“VEC” means Gram Shiksha Samiti, or Village Education Committee, 
established under the Uttar Pradesh Basic Education Act, 1972 (Uttar Pradesh Act 
Number 34 of 1972), as amended, in any village in which the Project is being, or is to 
be, carried out. 
ARTICLE II 
The Credit 
Section 2.01. The Association agrees to lend to the Borrower, on the terms and 
conditions set forth or referred to in the Development Credit Agreement, an amount in 
various currencies equivalent to forty-three million seven hundred thousand Special 
Drawing Rights (SDR 43,700,000).
Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit 
Account in accordance with the provisions of Schedule 1 to this Agreement for 
expenditures made (or, if the Association shall so agree, to be made) in respect of 
the reasonable cost of goods and services required for the Project described in 
Schedule 2 to this Agreement and to be financed out of the proceeds of the Credit. 
(b)
The Borrower may, for the purposes of the Project, open and maintain in 
dollars a special deposit account in the Reserve Bank of India on terms and conditions 
satisfactory to the Association.  Deposits into, and payments out of, the Special 
Account shall be made in accordance with the provisions of Schedule 3 to this 
Agreement. 
Section 2.03. The Closing Date shall be September 30, 2000 or such later date as 
the Association shall establish. The Association shall promptly notify the Borrower of 
such later date. 
Section 2.04. (a) The Borrower shall pay to the Association a commitment charge 
on the principal amount of the Credit not withdrawn from time to time at a rate to be 
set by the Association as of June 30 of each year, but not to exceed the rate of 
one-half of one percent (1/2 of 1%) per annum.
(b)
The commitment charge shall accrue: (i) from the date sixty days after 
the date of this Agreement (the accrual date) to the respective dates on which amounts 
shall be withdrawn by the Borrower from the Credit Account or canceled; and (ii) at 
the rate set as of the June 30 immediately preceding the accrual date and at such 
other rates as may be set from time to time thereafter pursuant to paragraph (a) 
above. The rate set as of June 30 in each year shall be applied from the next date in 
that year specified in Section 2.06 of this Agreement.
(c)
The commitment charge shall be paid: (i) at such places as the 
Association shall reasonably request; (ii) without restrictions of any kind imposed 
by, or in the territory of, the Borrower; and (iii) in the currency specified in this 
Agreement for the purposes of Section 4.02 of the General Conditions or in such other 
eligible currency or currencies as may from time to time be designated or selected 
pursuant to the provisions of that Section. 
Section 2.05. The Borrower shall pay to the Association a service charge at the 
rate of three-fourths of one percent (3/4 of 1%) per annum on the principal amount of 
the Credit withdrawn and outstanding from time to time. 
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Section 2.06. Commitment charges and service charges shall be payable 
semiannually on May 15 and November 15 in each year. 
Section 2.07. (a)  Subject to paragraphs (b), (c) and (d) below, the Borrower 
shall repay the principal amount of the Credit in semiannual installments payable on 
each\0bMay 15 and November 15 commencing May 15, 2008, and ending November 15, 2032.  
Each installment to and including the installment payable on November 15, 2017, shall 
be one and one-fourth percent (1-1/4%) of such principal amount, and each installment 
thereafter shall be two and one-half percent (2-1/2%) of such principal amount.
(b)
Whenever: (i) the Borrower’s per capita gross national product (GNP), as 
determined by the Association, shall have exceeded for three consecutive years  the 
level established annually by the Association for determining eligibility to access 
the Association’s resources; and (ii) the Bank shall consider the Borrower 
creditworthy for Bank lending, the Association may, subsequent to the review and 
approval thereof by the Executive Directors of the Association and after due 
consideration by them of the development of the Borrower’s economy, modify the 
repayment of installments under paragraph (a) above by: (A) requiring the Borrower to 
repay twice the amount of each such installment not yet due until the principal amount 
of the Credit shall have been repaid; and (B) requiring the Borrower to commence 
repayment of the principal amount of the Credit as of the first semiannual payment 
date referred to in paragraph (a) above falling six months or more after the date on 
which the Association notifies the Borrower that the events set out in this paragraph 
(b) have occurred, provided, however, that there shall be a grace period of a minimum 
of five years on such repayment of principal. 
(c)
If so requested by the Borrower, the Association may revise the 
modification referred to in paragraph (b) above to include, in lieu of some or all of 
the increase in the amounts of such installments, the payment of interest at an annual 
rate agreed with the Association on the principal amount of the Credit withdrawn and 
outstanding from time to time, provided that, in the judgment of the Association, such 
revision shall not change the grant element obtained under the above-mentioned 
repayment modification. 
(d)
If, at any time after a modification of terms pursuant to paragraph (b) 
above, the Association determines that the Borrower’s economic condition has 
deteriorated significantly, the Association may, if so requested by the Borrower, 
further modify the terms of repayment to conform to the schedule of installments as 
provided in paragraph (a) above.
Section 2.08. The currency of the United States of America is hereby specified 
for the purposes of Section 4.02 of the General Conditions. 
ARTICLE III 
Execution of the Project
Section 3.01. (a) The Borrower declares its commitment to the objectives of the 
Project as set forth in Schedule 2 to this Agreement, and, to this end, without any 
limitation or restriction upon any of its other obligations under the Development 
Credit Agreement, shall cause Uttar Pradesh and EFAPB to perform in accordance with 
the provisions of the Project Agreement all the respective obligations of Uttar 
Pradesh and EFAPB therein set forth, shall take and cause to be taken all action, 
including the provision of funds, facilities, services and other resources, necessary 
or appropriate to enable Uttar Pradesh and EFAPB to perform such obligations, and 
shall not take or permit to be taken any action which would prevent or interfere with 
such performance.
(b)
The Borrower shall make the proceeds of the Credit available to Uttar 
Pradesh in accordance with the Borrower’s standard arrangements for development 
assistance to the States of India.
Section 3.02. Except as the Association shall otherwise agree, procurement of 
the goods, works and consultants’ services required for the Project and to be financed 
out of the proceeds of the Credit shall be governed by the provisions of Schedule 1 to 
the Project Agreement.
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Section 3.03. The Borrower and the Association hereby agree that the obligations 
set forth in Sections 9.03, 9.04, 9.05, 9.06, 9.07 and 9.08 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 Project 
shall be carried out jointly and severally by Uttar Pradesh and EFAPB pursuant to 
Section 2.03 of the Project Agreement. 
ARTICLE IV 
Financial Covenants
Section 4.01.(a) For all expenditures with respect to which withdrawals from the 
Credit Account were made on the basis of statements of expenditures, the Borrower 
shall:
(i)
maintain or cause to be maintained in accordance with sound 
accounting practices, records and accounts reflecting such 
expenditures;
(ii)
ensure that all records (contracts, orders, invoices, 
bills, receipts and other documents) evidencing such 
expenditures are retained until at least one year after the 
Association has received the audit report for the fiscal 
year in which 
the last withdrawal from the Credit Account 
was made; and
(iii)
enable the Association’s representatives to examine such 
records.
(b)
The Borrower shall:
(i)
have the records and accounts referred to in paragraph (a) 
(i) of this Section including those for the Special Account 
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 the report of such audit by said auditors, of such 
scope and in 
such detail as the Association shall have 
reasonably requested, 
including a separate opinion by said 
auditors as to whether the 
statements of expenditure 
submitted during such fiscal year, 
together with the 
procedures and internal controls involved in 
their 
preparation, can be relied upon to support the related 
withdrawals; and
(iii)
furnish to the Association such other information 
concerning said records and accounts and the audit thereof 
as the 
Association shall from time to time reasonably 
request.
ARTICLE V 
Remedies of the Association
Section 5.01. Pursuant to Section 6.02 (h) of the General Conditions, the 
following additional events are specified:
(a)
Either Uttar Pradesh or EFAPB shall have failed to perform any of its 
respective obligations under the Project Agreement.
(b)
As a result of events which have occurred after the date of the 
Development Credit Agreement, an extraordinary situation shall have arisen which shall 
make it improbable that Uttar Pradesh or EFAPB will be able to perform its respective 
obligations under the Project Agreement.
 Section 5.02. Pursuant to Section 7.01(d) of the General Conditions, the 
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following additional event is specified, namely, that the event specified in paragraph 
(a) of Section 5.01 of this Agreement shall occur and shall continue for a period of 
sixty days after notice thereof shall have been given by the Association to the 
Borrower, Uttar Pradesh and EFAPB. 
ARTICLE VI 
Effective Date; Termination 
Section 6.01. The following is specified as an additional matter, within the 
meaning of Section 12.02 (b) of the General Conditions, to be included in the opinion 
or opinions to be furnished to the Association, namely, that the Project Agreement has 
been duly authorized or ratified by Uttar Pradesh and EFAPB respectively and is 
legally binding upon each of them in accordance with its terms. 
Section 6.02. The date ninety (90) days after the date of this Agreement is 
hereby specified for the purposes of Section 12.04 of the General Conditions. 
Section 6.03. The provisions of Section 5.02 of this Agreement shall cease and 
determine on the date on which the Development Credit Agreement shall terminate or on 
the date twenty years after the date of this Agreement, whichever shall be the 
earlier.
ARTICLE VII 
Representatives of the Borrower; Addresses 
Section 7.01. The Secretary, Additional Secretary, Director, Deputy Secretary or 
Under Secretary of the Department of Economic Affairs in the Ministry of Finance of 
the Borrower is designated as representative of the Borrower for the purposes of 
Section 11.03 of the General Conditions.
Section 7.02. The following addresses are specified for the purposes of Section 
11.01 of the General Conditions:
For the Borrower:
The Secretary to the Government of India
Ministry of Finance
Department of Economic Affairs
New Delhi, India
Cable address:
Telex:
ECOFAIRS
953-3166175
New Delhi
For the Association:
International Development Association
1818 H Street, N.W.
Washington, D.C. 20433
United States of America
Cable address:
Telex:
INDEVAS
248423 (MCI) or
Washington, D.C.
        64145 (MCI)
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.
INDIA
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By /s/ Sudhakar Rao 
Authorized Representative
INTERNATIONAL DEVELOPMENT ASSOCIATION
By /s/ Mieko Nishimizu 
Regional Vice President 
South Asia
SCHEDULE 1
Withdrawal of the Proceeds of the Credit
1.
The table below sets forth the Categories of items to be financed out of the 
proceeds of the Credit, the allocation of the amounts of the Credit to each Category 
and the percentage of expenditures for items so to be financed in each Category:
Amount of the
Credit Allocated
% of
(Expressed in
  Expenditures
Category
SDR Equivalent)
to be Financed
(1)
Civil Works 
14,200,000
90%
(2)
Teaching-learning
   400,000
90%
materials
(3)
Teacher grants
 2,100,000
100%
and school
improvement
grants
(4)
Local training,
 3,600,000
100%
workshops, materials 
development and 
consultant’s services
(5)
Incremental teacher
20,200,000
80% of local
salaries
expenditures
incurred through
December 31,
1998; 65% of
expenditures
incurred from
January 1, 1999
through 
December 31,
1999; and 25%
of expenditures
incurred thereafter 
(6)
Unallocated
3,200,000
      __________
      43,700,000
TOTAL
      ========== 
2.
For the purposes of this Schedule: 
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(a)
the term “foreign expenditures” means expenditures in the currency of any 
country other than that of the Borrower for goods or services supplied from the 
territory of any country other than that of the Borrower; 
(b)
the term “local expenditures” means expenditures in the currency of the 
Borrower or for goods or services supplied from the territory of the Borrower; and 
(c)
the term “incremental teacher salaries” means teacher salaries for basic 
education in Uttar Pradesh paid in respect of posts created on or after July 1, 1997. 
3.
Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be 
made in respect of payments made for expenditures prior to the date of this Agreement, 
except that withdrawals, in an aggregate amount not exceeding the equivalent of 
SDR 3,700,000 may be made in respect of Categories (1), (2), (3), (4) and (5) set 
forth in the table in paragraph 1 of this Schedule on account of payments made for 
expenditures before that date but after July 1, 1997.
4.
The Association may require withdrawals from the Credit Account to be made on 
the basis of statements of expenditure for expenditures for: (a) grants, local 
training and workshops and incremental teacher salaries; (b) consultants’ services 
under contracts not exceeding $200,000 equivalent in the case of firms and $50,000 
equivalent in the case of individuals; and (c) contracts for goods and works not 
exceeding $300,000 equivalent each; under such terms and conditions as the Association 
shall specify by notice to the Borrower.
SCHEDULE 2 
Description of the Project 
The objectives of the Project are to assist Uttar Pradesh in increasing 
enrollment in, and completion of, basic education and to improve its quality.  The 
Project is designed to complement the Uttar Pradesh Basic Education Project (Credit 
No. 2509-IN)-(UPBEP I) by assisting Uttar Pradesh in managing the increase in basic 
education enrollments resulting from the implementation of UPBEP I.
The Project consists of the following parts, subject to such modifications 
thereof as the Borrower and the Association may agree upon from time to time to 
achieve such objectives:
Part A:
Expanding Primary and Upper Primary Education
Construction of New Classrooms and Schools:  Construction of about 600 primary 
schools and about 300 upper primary schools, and construction of about 11,000 
additional classrooms in existing primary and upper primary schools, so as to create 
about 600,000 additional primary student places and 200,000 additional upper primary 
student places.
Part B:
Improving Quality and Completion Rates
(1)
Teaching-Learning Materials and School Improvement Funds:  
(a)
Provision of materials and books to schools constructed in Project 
Districts;
(b)
Provision of grants to teachers in Project districts to purchase 
materials for teaching aids; 
(c)
Formation of about 600 VECs in areas with schools constructed under the 
Project; and 
(d)
Provision of grants to VECs in Project Districts for school improvement 
funds.
(2)
Additional Teachers:  Appointment of about 13,000 additional teachers and 
provision of funds for salaries of about 16,500 teachers in the primary and upper 
primary schools to be constructed under the Project.
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(3)
Teachers’ Training:  Provision of induction training and in-service training at 
Block Resource Centers for newly-appointed teachers.
(4)
Learning Materials:  Development of learning materials for teachers and 
students, including self-learning materials for students and workbooks to supplement 
textbooks revised under UPBEP I, through the strengthening of SCERT, DIETs and other 
academic resource groups.
**
* 
The Project is expected to be completed by March 31, 2000.
SCHEDULE 3 
Special Account
1.
For the purposes of this Schedule:
(a)
the term “eligible Categories” means Categories (1), (2), (3), (4) and 
(5) set forth in the table in paragraph 1 of Schedule 1 to this Agreement in respect 
of the Project;
(b)
the term “eligible expenditures” means expenditures in respect of the 
reasonable cost of goods and services required for the Project and to be financed out 
of the proceeds of the Credit allocated from time to time to the eligible Categories 
in accordance with the provisions of Schedule 1 to this Agreement; and
(c)
the term “Authorized Allocation” means an amount equivalent to $7,500,000 
to be withdrawn from the Credit Account and deposited into the Special Account 
pursuant to paragraph 3 (a) of this Schedule. 2.
Payments out of the Special 
Account shall be made exclusively for eligible expenditures in accordance with the 
provisions of this Schedule.
3.
After the Association has received evidence satisfactory to it that the Special 
Account has been duly opened, withdrawals of the Authorized Allocation and subsequent 
withdrawals to replenish the Special Account shall be made as follows:
(a)
For withdrawals of the Authorized Allocation, the Borrower shall furnish 
to the Association a request or requests for deposit into the Special Account of an 
amount or amounts which do not exceed the aggregate amount of the Authorized 
Allocation. On the basis of such request or requests, the Association shall, on behalf 
of the Borrower, withdraw from the Credit Account and deposit into the Special Account 
such amount or amounts as the Borrower shall have requested.
(b)
(i)
For replenishment of the Special Account, the Borrower 
shall furnish to the Association requests for deposits into 
the Special Account at such intervals as the Association 
shall 
specify.
(ii)
Prior to or at the time of each such request, the Borrower 
shall furnish to the Association the documents and other 
evidence required pursuant to paragraph 4 of this Schedule 
for the 
payment or payments in respect of which 
replenishment is 
requested. On the basis of each such 
request, the Association shall, 
on behalf of the Borrower, 
withdraw from the Credit Account and 
deposit into the 
Special Account such amount as the Borrower shall 
have 
requested and as shall have been shown by said documents 
and other evidence to have been paid out of the Special 
Account for eligible expenditures. All such deposits shall 
be withdrawn 
by the Association from the Credit Account 
under the respective 
eligible Categories, and in the 
respective equivalent amounts, as 
shall have been justified 
by said documents and other evidence. 
4.
For each payment made by the Borrower out of the Special Account, the Borrower 
shall, at such time as the Association shall reasonably request, furnish to the 
Association such documents and other evidence showing that such payment was made 
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exclusively for eligible expenditures.
5.
Notwithstanding the provisions of paragraph 3 of this Schedule, the Association 
shall not be required to make further deposits into the Special Account:
(a)
if, at any time, the Association shall have determined that all further 
withdrawals should be made by the Borrower directly from the Credit Account in 
accordance with the provisions of Article V of the General Conditions and paragraph 
(a) of Section 2.02 of this Agreement;
(b)
if the Borrower shall have failed to furnish to the Association, within 
the period of time specified in Section 4.01 (b)(ii) of this Agreement, any of the 
audit reports required to be furnished to the Association pursuant to said Section in 
respect of the audit of the records and accounts for the Special Account;
(c)
if, at any time, the Association shall have notified the Borrower of its 
intention to suspend in whole or in part the right of the Borrower to make withdrawals 
from the Credit Account pursuant to the provisions of Section 6.02 of the General 
Conditions; or
(d)
once the total unwithdrawn amount of the Credit allocated to the eligible 
Categories, minus the total amount of all outstanding special commitments entered into 
by the Association pursuant to Section 5.02 of the General Conditions with respect to 
the Project, shall equal the equivalent of twice the amount of the Authorized 
Allocation.
Thereafter, withdrawal from the Credit Account of the remaining unwithdrawn amount of 
the Credit allocated to the eligible Categories shall follow such procedures as the 
Association shall specify by notice to the Borrower. Such further withdrawals shall be 
made only after and to the extent that the Association shall have been satisfied that 
all such amounts remaining on deposit in the Special Account as of the date of such 
notice will be utilized in making payments for eligible expenditures.
6.
(a)
If the Association shall have determined at any time that any payment out 
of the Special Account: (i) was made for an expenditure or in an amount not eligible 
pursuant to paragraph 2 of this Schedule; or (ii) was not justified by the evidence 
furnished to the Association, the Borrower shall, promptly upon notice from the 
Association: (A) provide such additional evidence as the Association may request; or 
(B) deposit into the Special Account (or, if the Association shall so request, refund 
to the Association) an amount equal to the amount of such payment or the portion 
thereof not so eligible or justified. Unless the Association shall otherwise agree, no 
further deposit by the Association into the Special Account shall be made until the 
Borrower has provided such evidence or made such deposit or refund, as the case may 
be.
(b)
If the Association shall have determined at any time that any amount 
outstanding in the Special Account will not be required to cover further payments for 
eligible expenditures, the Borrower shall, promptly upon notice from the Association, 
refund to the Association such outstanding amount.
(c)
The Borrower may, upon notice to the Association, refund to the 
Association all or any portion of the funds on deposit in the Special Account.
(d)
Refunds to the Association made pursuant to paragraphs 6 (a), (b) and (c) 
of this Schedule shall be credited to the Credit Account for subsequent withdrawal or 
for cancellation in accordance with the relevant provisions of this Agreement, 
including the General Conditions.