Nicaragua - Urban Reconstruction Project : Credit 0965 - Amending Agreement - 2 - Conformed

 CONFORMED COPY OFFICIAL CREDIT NUMBER 965 NI DOCUMENTS Amending Agreement (Urban Reconstruction Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and CORPORACION FINANCIERA DE NICARAGUA - CORFIN Dated October 8, 1980  NICARAGUA - CREDIT NUMBER 965-NI AMENDING AGREEMENT Agreement, dated October 8, 1980, between International Development Association (hereinafter called the Association) and Corporacion Financiera de Nicaragua (hereinafter called CORFIN). WHEREAS by a Development Credit Agreement (hereinafter called the Credit Agreement) dated January 4, 1980, between the Republic of Nicaragua (hereinafter called the Borrower) and the Associa- tion, the Association has made a credit to the Borrower in an amount in various currencies equivalent to twenty-two million United States dollars ($22,000,000), on the terms and conditions set forth in the Credit Agreement; WHEREAS by a Project Agreement (hereinafter called the Project Agreement) dated January 4, 1980, between the Association and Banco Nacional de Desarrollo (hereinafter called BND), BND undertook to carry out Part B of the Project through Fondo Especial de Desarrollo (hereinafter called Fondo); WHEREAS Decree No. 463 of the Borrower, dated July 2, 1980, abrogated Decree No. 43 of the Borrower, dated August 15, 1979, entrusting to CORFIN the operation of Fondo; WHEREAS, in consequence, CORFIN should replace BND as a party to the Project Agreement; WHEREAS the Association and CORFIN have agreed to certain changes in the Project Agreement, and, for such purpose, have agreed to enter into this Agreement (hereinafter called this Agreement), upon the terms and conditions hereinafter set forth; NOW THEREFORE, it is hereby agreed as follows: ARTICLE I Section 1.01. CORFIN hereby assumes, and agrees to carry out, through Fondo, Part B of the Project and to fulfill all the covenants, agreements and obligations of BND in the Project Agreement contained and the Association hereby recognizes the succession of CORFIN to the rights of BND under the Project Agreement, all with the same effect as though CORFIN were substi- tuted for BND as a party to the Project Agreement;  -2- Section 1.02. CORFIN acknowledges that all action heretofore taken under the Project Agreement by BND shall be valid and binding on CORFIN as though CORFIN were BND and that, except as expressly provided in this Agreement, the coming into effect of this Agreement shall not affect any right acquired or obligation incurred or the consequences of action taken or omitted to be taken by the Association or BND under the Project Agreement. ARTICLE II Section 2.01. The Project Agreement is amended as follows: (a) Second WHEREAS clause. Delete "three million two hundred thousand dollars ($3,200,000)" and substitute therefor "four million two hundred thousand dollars ($4,200,000)". (b) Third WHEREAS clause and Sections 5.02 (a), 5.02 (b) and 6.02. Delete "BND" and substitute therefor "CORFIN". (c) Section 2.05. Delete in its entirety, renumbering the subsequent Section accordingly. (d) Section 6.01. Delete: "For Banco Nacional de Desarrollo Fondo Especial de Desarrollo Edificio Banco Nacional de Desarrollo Apartado Postal No. 328 Managua, Nicaragua Cable address: Telex: BANADES BNDCM - 1035 Managua" and substitute therefor "For Corporacion Financiera de Nicaragua Edificio Oscar Perez Casar Telex: Apartado Postal A-53 1096" Managua, Nicaragua (e) Paragraph I.A (2) of the Schedule. Insert in the first sentence, between the words "Enterprises" and "and" the following: ",Micro-Enterprises".  -3- (f) Paragraph I.A (3) of the Schedule. Delete in its en- tirety, renumbering the subsequent paragraphs accordingly. (g) Paragraph I of Schedule. Insert in the title, after "Sub-loans", the words "under Part B (1), (2) and (3). (h) Schedule. Insert new paragraph II, renumering the subsequent paragraph accordingly. The new paragraph II shall read: "II. Sub-loans under Part B (4) A. - Eligibility and Procedures (1) Sub-loans for the repair of buses and micro- buses and the purchase and utilization of spare parts will be made only to transport operators duly authorized to operate by MT on the basis of (i) a proposal prepared by one of the transport cooperatives, (ii) previous approval of the proposal by MT, and (iii) final approval of the proposal by the respective Participating Bank. (2) A transport operator will be eligible for a sub-loan in an amount not to exceed in the aggregate $7,500 equivalent. B. - Terms and Conditions Sub-loan contracts will include, inter alia, the following terms and conditions: (1) Sub-loans will be made and will be repay- able in c6rdobas; (2) interest on the outstanding principal for each Sub-loan to a Beneficiary will be payable at the rate of not less than 12% per nnum; (3) repayment terms will not exceed 5-1/2 years including 9 months of grace period; (4) arrangements, acceptable to the Association, to secure the repayment of the Sub-loan; (5) the right of the Association and Fondo to inspect the sites, the improvement of which is financed by the Sub-loan, any equipment, materials or inputs financed by the Sub-loan, the business of the Beneficiary, the operation thereof, and any relevant records and docu- ments; (6) the right to obtain all such information as the Association and Fondo will reasonably request relating to the foregoing and to the operations and financial condition of the Beneficiary; (7) the right to require the Beneficiary to carry on his business, with due diligence and efficiency and in accordance with appropriate technical, commercial and financial prac- tices and standards, and to maintain adequate records; (8) the right to require the Beneficiary to insure, or make adequate provision for the insurance of, to the extent that Fondo deter- mines it be necessary, any goods to be financed out of the proceeds of such Sub-loan against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation and against hazards incident to their use in the enter- prise; (9) the right to suspend or terminate access by the Beneficiary to the use of the proceeds of the Sub-loan upon failure by him to perform his obligations under the Sub-loan Contract and, in appropriate cases, to premature the Sub-loan; and (10) all such other provisions as necessary to enable the Borrower to fulfill its obligations under the Credit Agreement and to enable Fondo and the Participating Bank to fulfill their obligations under the Subsidiary Loan Agree- ment, and to protect their interests and those of the Association. * - 5- ARTICLE III Section 3.01. This Agreement shall come into force and effect on the date upon which the Amending Agreement for the Credit Agreement becomes effective. IN WITNESS WHEREOF, the parties hereto, acting through their respective representatives thereunto duly authorized have caused this Agreement to be signed in their respective names, and delivered in the District of Columbia, United States of America, as of the day and year above written. INTERNATIONAL DEVELOPMENT ASSOCIATION By Is/ Suitbertus van der Meer Authorized Representative CORPORACION FINANCIERA DE NICARAGUA- CORFIN By /s/ Alf redo Cesar Authorized Representative Accepted by BANCO NACIONAL DE DESARROLLO By Is! Fernando Guzman Cuadra Authorized Representative