Caribbean Region - Sixth Caribbean Development Bank Project : Credit 2640 - Agreement - Conformed

CREDIT NUMBER 2640 CRG Assignment Agreement (Sixth Caribbean Development Bank Project) between CARIBBEAN DEVELOPMENT BANK and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated Oi 1994 CREDIT NUMBER 2640 CRG ASSIGNMENT AGREEMENT AGREEMENT, dated OcD, 1994, between CARIBBEAN DEVELOPMENT BANK (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS (A) by an agreement of even date herewith between the Borrower and the Association (hereinafter called the Development Credit Agreement), the Association has agreed to make a credit to the Borrower in an aggregate principal amount in various currencies equivalent to seven million eight hundred thousand Special Drawing Rights (SDR 7,800,000) (hereinafter called the Development Credit); (B) the Borrower has undertaken under the Development Credit Agreement to relend the proceeds of the Development Credit to each of several Eligible Countries under IDA Sub-loans (both terms as defined in the Development Credit Agreement); and (C) the Borrower has agreed to provide security for the payment of principal of and charges on the Development Credit by assigning to the Association all rights that it may exercise under such IDA Sub-loans and for that purpose has agreed to execute this Assignment Agreement; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Section 1.01. Wherever used in this Assignment Agreement, unless the context shall otherwise require, the several terms defined in the Preamble to this Assignment Agreement, in the General Conditions referred to in the Development Credit Agreement, and in the Development Credit Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Development Credit amounts due and payable" as applied to any date means all amounts due and payable as of such date on account of commitment or service charges, or both, on the Develop- ment Credit and on account of principal thereof in accordance with the provisions of the Development Credit Agreement; provided, however, that if the Association shall by notice to the Borrower have declared the principal of the Development Credit then outstand- ing to be due and payable immediately together with the commitment and service charges thereon, then the term "Development Credit - 2 - amounts due and payable" shall also include such principal of, and accrued commitment and service charges on, the Development Credit; (b) "assignment" means any assignment made in accordance with and subject to the provisions of this Assignment Agreement; (c) "assigned agreement" means any agreement (including each Subloan Agreement, as the term is defined in the Development Credit Agreement) pursuant to which proceeds of the Development Credit are relent by the Borrower and which gives rise to rights that have been assigned in accordance with and subject to the provisions of this Assignment Agreement; (d) "sub-borrower" means an Eligible Country, or the Govern- ment thereof, that is a party to an assigned agreement; (e) "assignment benefit" means any amount paid or to be paid by a sub-borrower to the Association pursuant to the provision of an assigned agreement and an assignment; and (f) "Preceding Assignment Agreement" means either the assignment agreement between the Association and the Borrower dated January 9, 1980 or the assignment agreement between the Association and the Borrower dated May 27, 1983 or the assignment agreement between the Association and the Borrower dated May 29, 1987 or the assignment agreement between the Association and the Borrower dated June 18, 1990. ARTICLE II Section 2.01. (a) As security for the due payment of the principal of and service charges on the Development Credit, the Borrower shall assign to the Association any and all rights, contingent or otherwise, which it now has or may hereafter acquire under any agreement pursuant to which proceeds of the Development Credit are relent by the Borrower. (b) Such assignments shall be made by the Borrower by issuing to the Association in respect of any agreement pursuant to which proceeds of the Development Credit are relent by the Borrower an indenture of assignment in form and substance according to the form of indenture of assignment set forth in the Schedule to this Assignment Agreement. - 3 - Section 2.02. (a) Each assignment of rights under an assigned agreement, when executed in accordance with the provisions of the preceding Section 2.01, shall cause the Association to accede to all rights hitherto vested in the Borrower pursuant to the assigned agreement so that the Association shall have full ownership of such rights, without restriction or reservation, and shall entitle the Association to exercise any and all rights which the Borrower would have been entitled to exercise pursuant to that agreement in the absence of such assignment. (b) Each assigned agreement shall specify that the sub- borrower concerned agrees to the assignment by the Borrower to the Association of the Borrower's rights under that agreement in accordance with the provisions of this Assignment Agreement, and to the effects of such assignment specified in this Assignment Agreement. Section 2.03. Without limitation upon the provisions of the preceding Section, the Association hereby authorizes the Borrower to exercise the rights so assigned under any assigned agreement, except for the right to amend, abrogate or waive any Provision of the assigned agreement that relates to payment of prtncipal of, or service charge or other charges on, the Sub-loan made under that agreement, or to any contractual remedy which may be e;.ercised in the event of a default of the sub-borrower in the carrying out of its obligations under that agreement; and the Borrower accepts such authorization and shall exercise such rights in accordance with the provisions of the Development Credit Agreement. Section 2.04. Notwithstanding the foregoing, the Association agrees that it shall not exercise any of the rights under an assigned agreement whose exercise it has delegated to the Borrower under the preceding Section 2.03, unless any of the events mentioned in Section 2.04 of either of the Preceding Assignment Agreements, or the following event shall have occurred, namely that a default shall have occurred in the payment by the Borrower of any Development Credit amounts due and payable, irrespective of whether such default is related or not to a corresponding default on the part of the sub- borrower in the payment of debt service or other payable charges pursuant to that assigned agreement. Section 2.05. The Borrower shall use its best efforts to assist the Association in the enforcement of the assignments and the rights assigned thereunder. To that end, the Borrower shall furnish to the Association all such information, documents and other -4- evidence as the Association shall reasonably request from the Borrower for the purpose. ARTICLE III Section 3.01. All assignment benefits paid to or on the order of the Association shall pro tanto discharge: (a) the sub-borrower concerned from its obligation to pay principal of, and service charge or other charge on, its IDA Sub- loan, but only if the Association has instructed the sub-borrower to make such payment to or on the order of the Association; and (b) the Borrower from its obligation to pay service charge or other charges on and principal of the Development Credit, in that order. Any assignment benefits received by the Association in excess of the Development Credit amounts then due and payable shall be applied to prepay the principal amount of the Development Credit in such order of maturities as shall be determined by the Association. Section 3.02. As far as concerns discharge of the Borrower's obligations pursuant to the Development Credit Agreement that are not discharged by the receipt of assignment benefits by the Association, the Association reserves all its rights and remedies against the Borrower as provided by the Development Credit Agree- ment. In this regard, the parties hereto declare that no assignment shall in any way constitute a payment or represent a novation of the Borrower's obligations towards the Association. ARTICLE IV Section 4.01. The rights and obligations of the Borrower and the Association under this Assignment Agreement shall be governed by the provisions of Articles X and XI of the General Conditions, provided, however, that the term "Development Credit Agreement" wherever it appears in those Articles shall be replaced by a reference to this Assignment Agreement. Section 4.02. The addresses specified in Section 7.01 of the Development Credit Agreement are incorporated into this Assignment Agreement for the purposes of Section 11.01 of the General Condi- tions. Section 4.03. This Assignment Agreement shall become effective upon its signature by both parties. -5- Section 4.04. This Assignment Agreement shall terminate on the date on which the Development Credit Agreement shall terminate in accordance with its terms. 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 Madrid, Spain, as of the day and year first above written. CARIBBEAN DEVELOPMENT BANK Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION A ,c N,'4 Regional Vice President Latin America and the Caribbean -6- SCHEDULE Form of Indenture of Assignment [Date] International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Dear Sirs: Re: Credit No. CRG (Sixth Caribbean Development Bank Project) Assignment of Sub-loan The Caribbean Development Bank (CDB) hereby grants, conveys, assigns and transfers unto International Development Association any and all rights which CDB now has or may hereafter acquire pursuant to the provisions of the Loan Agreement ( Project) dated between CDB and (name of Eligible Country], all in accordance with and subject to the provisions of the Assignment Agreement dated between CDB and International Development Association. Very truly yours, CARIBBEAN DEVELOPMENT BANK By Authorized Representative -7- International Development Association hereby agrees to and accepts the assignment described in the foregoing in accordance with and subject to the provisions of said Assignment Agreement. INTERNATIONAL DEVELOPMENT ASSOCIATION By: Dated: INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the International Development Association. FOR SECRETARY