Schedule 2 Section II. 1. The Borrower shall cause the PIE to furnish to the Bank each Project Report, in a format agreed with theBank, not later than forty-five days after the end of each calendar semester, covering the calendar semester.Schedule 2 SectionII. 2. The Borrower shall cause the PIE to prepare, under terms of reference satisfactory to the Bank, and furnish to the Bank nolater than thirty-six (36) months from the Effective Date, a consolidated mid-term review report for the Project, in accordancewith the provision of paragraph 2 of Section II of the Schedule to the Project Agreement.

Schedule 2 Section III. C. The following shall not be Eligible Expenditures and the Borrower shall ensure, and cause the ProjectImplementing Entity to ensure, that the following expenditures are financed exclusively out of the Project Implementing Entity'sown resources, as the case may be, and not out of the proceeds of the Loan, namely:(a) all land acquisition required for theProject; (b) any compensation, resettlement and rehabilitation payment to affected persons in accordance with the provisions ofthe ESCP;(c) any compensatory afforestation payments;(d) any interest during construction; (e) retention money/securitydeposit retained (till the time it is not released);(f) expenditures incurred after the Project Closing Date;(g) expendituresnot in line with the Project description in this Agreement;(h) procurement not in line with agreed procurement procedures;and(i) expenses disallowed by auditors and not resolved adequately, and expenses found ineligible during Bank review.

Schedule 2 Section IV. The Borrower shall provide or cause the PIE to provide, as needed, the funds, facilities and services andother resources required for the Project.

Schedule 2. Section I. B. 1. The Borrower shall, and shall cause the Project Implementing Entity to, ensure that the Project iscarried out in accordance with the Environmental and Social Standards, in a manner acceptable to the Bank.Schedule 2. Section 1.B. 2. Without limitation upon paragraph 1 above, the Borrower shall, and shall cause the Project Implementing Entity to, ensurethat the Project is implemented in accordance with the Environmental and Social Commitment Plan (“ESCP”), in a manner acceptable tothe Bank.To this end, the Borrower shall, and shall cause the Project Implementing Entity to, ensure that: (a) the measures andactions specified in the ESCP are implemented with due diligence and efficiency, and as further specified in the ESCP;(b) sufficient funds are available to cover the costs of implementing the ESCP; (c) policies, procedures and qualified staffare maintained to enable it to implement the ESCP, as further specified in the ESCP; and (d) the ESCP or any provision thereof,is not amended, revised or waived, except as the Bank shall otherwise agree in writing and the Borrower has, thereafter, disclosedthe revised ESCP. In case of any inconsistencies between the ESCP and the provisions of this Agreement, the provisions of thisAgreement shall prevail.Schedule 2. Section I. B. 3. The Borrower shall, and shall cause the Project Implementing Entityto:(a) take all measures necessary on its part to collect, compile, and furnish to the Bank through regular reports, with thefrequency specified in the ESCP, and promptly in a separate report or reports, if so requested by the Bank, information onthe status of compliance with the ESCP [and the management tools and instruments referred to therein], all such reports in form andsubstance acceptable to the Bank, setting out, inter alia: (i) the status of implementation of the ESCP; (ii) conditions, if any,which interfere or threaten to interfere with the implementation of the ESCP; and (iii) corrective and preventive measures taken orrequired to be taken to address such conditions; and(b) promptly notify the Bank of any incident or accident related to or havingan impact on the Project which has, or is likely to have, a significant adverse effect on the environment, the affectedcommunities, the public or workers, in accordance with the ESCP, the instruments referenced therein and the Environmental andSocial Standards.Schedule 2. Section I. B. 4. The Borrower shall, and shall cause the Project Implementing Entity to, maintainand publicize the availability of a grievance mechanism, in form and substance satisfactory to the Bank, to hear and determinefairly and in good faith all complaints raised in relation to the Project, and take all measures necessary to implement thedeterminations made by such mechanism in a manner satisfactory to the Bank.

Schedule 2. Section III. B. Notwithstanding the provisions of Part A above, no withdrawal shall be made:(a) for payments madeprior to the Signature Date, except that withdrawals up to an aggregate amount not to exceed US$3,000,000 may be made from Category(2) for payments made prior to this date but on or after April 30, 2019; and (b) under Category (1), until and unless theBorrower has:(i) complied with the instructions under the Disbursement and Financial Information Letter and any additionalinstructions specified in accordance with Section 2.01(b) of the General Conditions, including the submission to the Bank of theapplicable interim unaudited financial reports evidencing the incurrence of EEP expenditures for which payment is requested;and(ii) furnished evidence satisfactory to the Bank that the DLR under the DLIs for which payment is requested has been achievedas set forth in Schedule 3 to this Agreement in form and substance satisfactory to the Bank and in accordance with the verificationprotocols agreed with the Bank and as verified by the IVA-TAC.

Schedule. Section I. A. 3. No later than July 1, 2020, or the first disbursement against Disbursement Linked Indicators (DLIs),whichever comes first, the PIE through HPRIDC shall engage an Independent Verification Agent (IVA) – Technical Audit Consultant(TAC) - with qualifications, experience and terms of reference acceptable to the Bank, to confirm the fulfilment of theverification protocols for the DLIs and authorize disbursement.

Schedule. Section I. B. 1.The PIE through HPRIDC, HPDOT, and HP State Police, shall implement the Project in accordance with thePIM.

Schedule. Section I. C. 1.The Project Implementing Entity shall ensure that the Project is carried out in accordance with theEnvironmental and Social Standards, in a manner acceptable to the Bank.Schedule. Section I. C. 2.Without limitation uponparagraph 1 above, the Project Implementing Entity shall ensure that the Project is implemented in accordance with theEnvironmental and Social Commitment Plan (“ESCP”), in a manner acceptable to the Bank. To this end, the Project Implementing Entityshall ensure that: (a) the measures and actions specified in the ESCP are implemented with due diligence and efficiency, and asfurther specified in the ESCP; (b) sufficient funds are available to cover the costs of implementing the ESCP; (c) policies,procedures and qualified staff are maintained to enable it to implement the ESCP, as further specified in the ESCP; and (d) theESCP or any provision thereof, is not amended, revised or waived, except as the Bank shall otherwise agree in writing and theProject Implementing Entity has, thereafter, disclosed the revised ESCP. In case of any inconsistencies between the ESCP and theprovisions of this Agreement, the provisions of this Agreement shall prevail.Schedule. Section I. C. 3.The Project ImplementingEntity shall:(a) take all measures necessary on its part to collect, compile, and furnish to the Bank through regular reports,with the frequency specified in the ESCP, and promptly in a separate report or reports, if so requested by the Bank, information onthe status of compliance with the ESCP [and the management tools and instruments referred to therein], all such reports in form andsubstance acceptable to the Bank, setting out, inter alia: (i) the status of implementation of the ESCP; (ii) conditions, if any,which interfere or threaten to interfere with the implementation of the ESCP; and (iii) corrective and preventive measures taken orrequired to be taken to address such conditions; and(b) promptly notify the Bank of any incident or accident related to or havingan impact on the Project which has, or is likely to have, a significant adverse effect on the environment, the affectedcommunities, the public or workers, in accordance with the ESCP, the instruments referenced therein and the Environmental andSocial Standards.Schedule. Section I. C. 4. The Project Implementing Entity shall maintain and publicize the availability of agrievance mechanism, in form and substance satisfactory to the Bank, to hear and determine fairly and in good faith all complaintsraised in relation to the Project, and take all measures necessary to implement the determinations made by such mechanism in amanner satisfactory to the Bank.

Schedule. Section I. D. The Project Implementing Entity through the HP State Police shall:(a) ensure that the personnel of theState Traffic Police selected/enlisted to be part of the implementation of Component 3 of the Project be: (i) duly screened toconfirm that they have not engaged in past unlawful or abusive behavior, including but not limited to gender-based violence orexcessive use of force; and (ii) adequately instructed and trained, namely on the use of force and appropriate behavior/conduct,all in a manner acceptable to the Bank, as further detailed in the HP State Police Standard Operating Procedure/Code of Conduct forHP State Traffic Police personnel adopted by the HP State Police in form and substance satisfactory to the Bank; and (b) promptlyreview and diligently investigate any allegations of unlawful or abusive behavior by HP State Traffic Police personnel, andthereafter, if/when warranted: (i) take appropriate disciplinary action reporting such behavior to the relevant authorities andsanctioning the responsible party; and (ii) adopt any necessary measures to preempt their recurrence.In order to ensure that theroad safety initiatives under the Project are implemented in a manner designed to achieve the objectives of the Project, theProject Implementing Entity shall ensure that, unless the Bank shall otherwise agree in writing:(a) all goods and technicalassistance provided for these activities are used by the HP State Police and HP State Traffic Police exclusively for the solepurpose of enforcing the Project Implementing Entity's road traffic laws and regulations;(b) the proceeds of the Loan shall notbe used to: (i) enforce any laws or regulations unrelated to traffic management and/or road safety; and (ii) support theinvestigation, prosecution, and/or enforcement of judgments that, ex ante, target specific individuals; and(c) the Loan shall notbe used to purchase arms or ammunition or to train any personnel in the use of arms or ammunition.

Schedule. Section II. 1. The PIE shall monitor and evaluate the progress of the Project and prepare Project Reports in accordancewith the provisions of Section 5.08 (b) of the General Conditions and on the basis of indicators acceptable to the Bank. Each suchProject Report shall cover the period of one calendar semester, and shall be furnished to the Bank not later than forty-five daysafter the end of the period covered by such report.Schedule. Section II. 2. The PIE shall prepare, under terms of referencesatisfactory to the Bank, and furnish to the Bank no later than thirty-six (36) months from the Effective Date, a consolidatedmid-term review report for the Project, summarizing the results of the monitoring and evaluation activities carried out from theinception of the Project, and setting out the measures recommended to ensure the efficient completion of the Project and to furtherits objective.