Amending Agreement to Loan and Guarantee Agreements

Transcription

1 Public Disclosure Authorized S i LOAN NUMBEk 2063 AR Public Disclosure Authorized Amending Agreement to Loan and Guarantee Agreements Public Disclosure Authorized (Second Industrial Credit Project) between THE ARGENTINE REPUBLIC and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and Public Disclosure Authorized BANCO NACIONAL DE DESARROLLO DI

2 LOAN NUMBER 2063 AR AMENDING AGREEMENT TO LOAN AND GUARANTEE AGREEMENTS AGREEMENT,.ated L d', 1985, between The Argentine Republic (hereinafter called he Guarantor) INTER- NATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and BANCO NACIONAL DE DESARROLLO (hereinafter called the Borrower). WHEREAS (A) by the Loan Agreement dated November 30, 1982, between the Bank and the Borrower (hereinafter called the Loan Agreement), the Bank has made a loan (hereinafter called the Loan) to the Borrower, in an amount in various currencies equivalent to one hundred million United States dollars ($100,000,000) on the terms and conditions set forth in the Loan Agr<hment, for the purposes of assisting in the financing of the project described in Section 3.01 to the Loan Agreement (hereinafter called the ProJect); (B) by the Guarantee Agreement dated November 30, 1982, between the Guarantor and the Bank (hereinafter called the Guarantee Agreement), the Guarantor guaranteed the payment of the principal of, and interest and other charges on, the Loan referred to in (A) above as well as the punctual performance of all the other obligations of the Borrower under the Loan Agreement; (C) the Borrower, the Guarantor and the Bank have agreed to amend the scope of the Project in order to permit the use of Loan proceeds for financing working capital requirements for imported production inputs and to modify some convenants, agreements and obligations of the Loan and Guarantee Agreements as set forth hereinafter; NOW, THEREFORE, the parties hereto hereby agree as follows: A. Amendments to the Loan Agreement 1. Section is amended by: (i) the deletion of paragraphs (c), (d) and (f) and their substitution by the following: *(c) "Investment Enterprise* means an industrial or mining enterprise including, in the case of Energy Conservation Sub-loans, enterprises operating utility service

3 -2- centers, to which the Borrower or a Provincial Bank proposes to make or has made a Sub-loan or a loan for a Second Round Investment Project (as the term is defined below) or in which it proposes to make or has made an investment;" "(d) "Investment Project" means a specific development project to be carried out by an Investment Enterprise utilizing the proceeds of a Sub-loan, and the term "Second Round Investment Project" means a specific development project to be carried out by an Investment Enterprise utilizing funds from the Project Account, as the term is defined in paragraph (y) below;" "(f) "Energy Conservation Investment Project" means an Investment Project, the purpose of which,, is to reduce an Investment Enterprise's production cost by means of a more efficient use of energy or by converting its industrial facilities or<utility service center from oil to gas;" (ii) the addition of the following new paragraphs (s), (t), (u), (v), (w), (x), and (y): "(s) "Working Capital Loan" means a loan made or proposed to be made by the Borrower out of the proceeds of the Loan to a Working Capital Beneficiary (as said term is defined below) for the financing of the foreign currency cost of directly-imported goods to be utilized as production inputs or of services supplied from outside the territories of the Guarantor and "Second Rodnd Working Capital Loan" means a loan made or to be made fobr the same purposes of a Working Capital Loan to a Working Capital Beneficiary out of funds withdra-?a from the Project Account (as said term is defined below);" "(t) "Working Capital Beneficiary" means an enterprise engaged in manufacturing, processing or agro-industrial activities, selected by the Borrower in accordance with the criteria agreed between the Bank and the Borrower and to which the Borrower has made or proposes to make a Working Capital Loan or a Second Round Working Capital Loan;" "(u) "Working Capital Loan Agreement" means the agreement to be entered into between the Borrower and a Working Capital Bfneficiary pursuant to Section 3.03 of this Agreement and "Second Round Working Capital Loan Agreement" means

4 -3- an agreement to be entered into between the Borrower and a Working Capital Beneficiary pursuant to Section 3.03 of this Agreement;" "(v) "Special Account" means the account to be opened in accordance with the provisions of Section 2.09 of this Agreement;" "(w) "Initial Deposit" means the initial deposit into the Special Account equivalent to $5,000,000 to be withdrawn from the Loan Account pursuant to paragraph (b) of Section 2.09 of this Agreement under the Categories set forth in paragraph (b) of Section 2.02 of this Agreement in the following respective amounts: Category (i) an amount of $450,000 equivalent, Category (ii) an amoun of $2,000,000 equivalent, Category (iii) an amount of $50,000 equivalent and Category (iv) an amount of $2,500,000 equivalent;" "(x) "Project Account" means the account to be opened and maintained by the Borrower in accordance with the provisions of Section 3.12 of this Agreement;" and "(y) "Account Bank" means Banco de la Nacion Argentina or any other bank, acceptable to the Bank, in which the Borrower shall maintain the Project Account and the Special Account." 2. Section 2.02 of the Loan Agreement is amended by: (i) The deletion of sub-paragraphs (a)(i), (a)(ii) and (a)(iv) and their substitution by the following: "(i) withdrawals made by an Investment Enterprise under a Sub-loan made by the Borrower or a Provincial Bank, to meet the following percentages of the reasonable cost of goods or services required for the Investment Project in respect of which the withdrawals from the Loan Account are applied for: (A) in the case of Energy Conservation Investment Projects, 75% of the cost of goods; (B) in the case of other Investment Projects: (1) 100% of the foreign currency cost of directly-imported goods; (2) 60% of the cost in Pesos of imported goods purchased in Argentina; and (3) 30% of the cost in Pesos of goods produced in Argentina; and (C) 100% of the foreign currency cost of services provided from abroad for an Investmevt Project."

5 "(ii) 100% of the reasonable foreign currency cost or 7'5% of the reasonable cost in Pesos of consultants' services required for purposes of Part B of the Project;" and "(iv) 100% of the reasonable foreign currency cost or 75% of the reasonable cost in Pesos of acquisition or. leasing of equipment and software, including installation and servicing, required by the Borrower for purposes of Parts B.1 and B.4 of the Project;" (ii) the addition of the following new paragraph (aa): "(aa) Notwithstanding the provisions of paragraph (a) of this Agreement, the amount of the Loan may be withdrawn from the Loan Account on account of: (i) withdrawals made by a Working Capital Beneficiary under a Working Capital Loan to meet 100% of the reasonable foreign currency cost of directly-imported goods or services supplied from outside the territory of the Guarantor; or (ii) deposits into the Special Account made in accordance with the provisions of Section 2.09 (b)(i) to this Agreement; provided, however, that no withdrawal shall be made under this paragraph (aa): (A) if the amount of a Working Capital Loan together with the amount of any other Working Capital Loan or Second Round Working Capital Loan made or committed to the same Working Capital Beneficiary exceeds the amount of $4,000,000 equivalent; or (B) in respect of any Working Capital Lo&n for which the Bank shall not have authorized withdrawals from the Loan Account." (iii) the deletion of paragraph (b) and its substitution by the following: "(b) Except as the Bank shall otherwise agree, the proceeds of the Loan shall be allocated as follows: Category (i) Energy Conservation Sub-loans Amount of the Loan Allocated $10,000,000 equivalent (ii) Other Sub-loans $39,500,000 eqgivalent

6 -5- (iii) Category Amount of the Loan Allocated Technical Assistance and training under Part B of the Project $ 500,000 equivalent (iv) Working Capital Loan. $50,000,000 equivalent TOTAL $100,000,000 equivalent provided, however that after December 31, 1986 the Bank may, by notice to the Borrower, transfer to Category (ii) the amounts allocated to Category (iv) which have not been committed by the Borrower as of such date." 3. Section 2.03 is amended by: (i) the addition after paragraph (b) thereof of the following paragraph (bb): "(bb) Each request by the Borrower for authorization to make withdrawals from the Loan Account in respect of a Working Capital Loan shall contain a summary description of: (i) the corresponding Working Capital Beneficiary; (ii) the goods and services to be financed thereunder; and (iii) the terms and conditions thereof; and" (ii) the addition of "and (bb)" after the letter (b) in paragraph (c) of such Section 2.03 and the substitution of the date December 31, 1985 referred to therein by December 31, The substitution of the date December 31, 1986 set forth in Section 2.04 of the Loan Agreements by December 31, Section 2.08 of the Loan Agreement is amended by: (i) the deletion of paragraph (a) and its substitution by the following: "(a) The Borrower shiall repay the principal amount of the Loan in accordance with the amortization Schedule set forth in Schedule 1 to this Agreement."; and (ii) substituting in paragraph (b)(i) the words "15 years" by "9 years". 6. Section 2.09 is deleted and substituted by the following: "Section (a) For purposes of paragraph (b) of this Section, the Borrower shall cause to be opened and

7 -6- thereafter maintained a Special Account in dollars in the Account Bank on terms and conditions satisfactory to the Bank. Payments out of the Special Account shall be made exclusively to pay the r.aasonable cost of goods and services required to carry out the Project and to be financed by the Bank under this Agreement in accordance with the provisions of Section 2.02 of this Agreement. (b) (i) The Bank shall, at the request.of the Borrower withdraw on behalf of the Borrower from the Loan Account and deposit into the Special Account an amount in dollars of $5,000,000; (ii) at the request of the Borrower, the Bank shall further withdraw from the Loan Account and deposit into the Special Account such amounts as shall be required to replenish the Special Account with,amounts equal to payments made out of the Special Account for expenditures for the Project 'eligible for financing under this Agreement. Except as the Bank may otherwise determine, each such deposit after the initial deposit shall be withdrawn by the Bank from the Loan Account under the same categories set forth in paragraph (b) of Section 2.02 of this Agreement, and in the same respective amounts, as have been justified by the documentation for the request for such deposit furnished pursuant to paragraph (d) of this Section. (c) Prior to or at the time of each request for a withdrawal by the Borrower from the Special Account, the Borrower shall furnish to the Account Bank an application for withdrawal from the Special Account showing that the payment was made on account of the reasonable cost of goods or services required for the Project and to be financed out of the proceeds of the Loan in accordance with paragraph (a) above. The Account Bank shall authorize withdrawals from the Special Account on the basis of the foregoing evidence, and shall debit the Special Account with the amount in dollars so withdrawn or with the dollar equivalent of the currency other than dollars in which the payment was made, determined on the basis of the rate of exchange between the dollar and such currency in effect: (1) at the time each payment was made, if the payment has taken place within 60 days before the date on which the withdrawal in question has been requested; or (2) at the date each withdrawal shall have been made, if the withdrawal in question refers to: (A) payments made more than 60 days before such withdrawal has been requested, or (B) payments to be made directly from the Special Account.

8 -7- (d) Prior to or at the time of each request for a deposit by the Bank into the Special Account, the Account Bank shall, through or on behalf of the Borrower, furnish to the Bank in respect of each withdrawal from the Special Account an application for withdrawal from the Loan Account referred to in paragraph (c) of this Section. (e) If the Bank shall have determined that any payment out of the Special Account: (i) was made for any expenditure or in any amount not eligible for financing by withdrawals frow" the Loan Account, or (ii) was not justified by the application of withdrawal furnished pursuant to paragraph (d) of this Section, the Borrower shall, promptly, upon notice from the Bank and, unless otherwise determined by the Bank, prior to any further deposit in the Special Account by the Bank, deposit in the Special Account an amount equal to the amount of such payment or the portion thereof not so eligible or justified. (f) Notwithstanding the provision of paragraph (b) of this Section, no further deposit in the Special Account shall be made by the Bank, when the Bank shall have determined, after consultation with the Borrower, that all further withdrawals from the Loan Account may be made directly by the Borrower from the Loan Account pursuant to paragraph (a) above, or when the total amount withdrawn from the Loan Account plus the amount of any cancellation of the Loan amount, of any qualified agreement to reimburse made by the Bank and of any special commitment entered into by the Bank pursuant to Section 5.02 of the General Conditions, shall have reached the equivalent of $90,000,000. Withdrawal from the Loan Account of the remaining amount of the Loan for the Project shall follow such procedures as shall be agreed between the Borrower and the Bank and shall be made only to the extent that the Bank shall be satisfied by the evidence submitted in support of the application for such withdrawal that all payments by the Borrower out of the Special Account were made on account of the reasonable cost of goods or services required for the Project and eligible for financing out of the proceeds of the Loan in accordance with Section 2.02 of this Agreement. (g) If the Bank shall have determined at any time that any amount outstanding in the Special Account will not be required to cover further payments for expenditures under

9 -8- the Project eligible for financing under the Loan, the Borrower shall promptly upon notice from the Bank and unless otherwise agreed by the Bank, refund, or cause the Account Bank to refund, to the Bank such outstanding amount." 7. Paragraph (a) of Section 3.01 is amended by: (i) deleting Part B.1 of the Project and substituting it by the following: "1. A program to design policies necessary for the expansion of industrial exports by (i) identifying industrial subsectors with the most promising export potential and (ii) defining policy measures promzting industrial exports. The program intends to generate, on a monthly basis, basic information on key industrial subsectors and to introduce improvements in the techniques used for analysis of industrial exportf and the determination of policies governing export promotion, and includes the.acquisition and utilization of equipment and software for these purposes."; and (ii) by adding the following new Part C: "Part C. Financing of Working Capital Loans to enterprises in the industrial or mining sectors, in furtherance of the corporate purposes of the Borrower as are provided in the Carta and Statement of Policy and, to the extent applicable, the provisions of Schedule 3 to this Agreement." 8. Paragraph (c) of Section 3.01 of the Loan Agreement is deleted and substituted by the following: "(c) The terms and conditions of Sub-loans, Working Capital Loans and Second Round Working Capital Loans and of loans made by the Borrower to Provincial Banks for the sole purpose of financing Sub-loans by such Provincial Banks, shall be satisfactory to the Bank and shall include those set forth in Schedule 3 to this Agreement." 9. Section 3.01 is amended by the addition of the following paragraph (d): "(d) The Borrower shall make loans out of the proceeds of the Project Account for purposes of financing Second Round Investment Projects on the same terms and conditions set forth for Sub-loans in paragraph A of Schedule 3 to this Agreement."

10 Section 3.02 is amended by adding "B.1" after the words "Parts" therein. 11. Section 3.03 of the Loan Agreement is deleted and substituted by the following: "Section (a) The Borrower undertakes thft, unless the Bank shall otherwise agree, any Sub-loan, Working Capital Loan, or loan made out of the proceeds of the Project Account for purposes of a Second Round Working Capital Project or a Second Round Investment Project will be made on terms whereby the Borrower shall obtain, by written contract with the Investment Enterprise or Working Capital Beneficiary, as the case may be, or by other appropriate legal means, rights adequate to protect the interests of the Bank and the Borrower, including the right of the Borrower to: (i) req4ire the Investment Enterprise to carry out and operate the Investment Project with due diligence and efficiency and in accordance with sound technical, financial and managerial standards and to maintain adequate records; (ii) require that: (1) the goods, civil works and services to be financed out of the proceeds of the Loan or out of the Project Account shall be purchased at a reasonable price, account being taken also of other relevant factors such as time of delivery and efficiency and reliability of the goods and availability of maintenance facilities and spare parts therefor, and, in the case of services, of their quality and the competence of the parties rendering them, provided, however, that the procurement of goods and civil works which are included in contracts estimated to cost the equivalent of $500,000 or more the Investment Enterprises shall be required, in addition, to identify principal sources of supply in Argentina and abroad and to solicit price quotations from a reasonable number of such suppliers from countries eligible under the Guidelines for Procurement under World Bank Loans and IDA Credits (March 1977), to assure efficient procurement; and (2) such goods and services shall be used exclusively in the carrying out of the Investment Project or the Second Round Investment Project; (iii) inspect, by itself or jointly with representatives of the Bank if the Bank shall so request, such goods and the sites, works, plants and construction included in the Investment Project or Second Round Investment Project or the use being given to such goods, in case of a Working Capital Loan or Second Round Working Capital Loan, the operation thereof,

11 and any relevant records and documents; (iv) require that: (1) the Investment Enterprise or Working Capital Beneficiary shall take out and maintain with responsible insurers such insurance, against such risks and in such amounts, as shall be consistent with sound business practice; and (2) without any limitation upon' the foregoing, such insurance shall cover hazards incident to the acquisition, transportation and delivery of goods ffnanced out of the proceeds of the Loan or of the funds of he Project Account to the place of use or installation, any indemnity thereunder to be made payable in a currency freely usable by the Investment Enterprise or Working Capital Beneficiary, as the case may be, to replace or repair such goods; (v) oltain all other such information as the Bank or the Borrower shall reasonably request relating to the foregoing and to thie administration, operations and financial condition of the Investment Enterprise or Working Capital Beneficiary, as the case may be, and to the benefits to be derived from the Investment Project or Second Round Investment Project or Working Capital Loan or Second Round Working Capital Loan; and (vi) suspend or terminate the right of the Investment Enterprise or Working Capital Beneficiary to the use of the proceeds of the Loan or of the funds of the Project Account upon failure by such Investment Enterprises or Working Capital Beneficiary to perform its obligations to the Borrower. (b) The Borrower shall exercise its right in relation to each Investment Pkoject or Second Round Investment Project or Working Capital Loan or Second Round Working Capital Loan in such manner as to: (i) protect the interests of the Bank and the Borrower; (ii) comply with its obligations under this Agreement; and (iii) achieve the purposes of the Project." 12. Section 3.06 of the Loan Agreement is amended by substituting the period at the end of the Section by a comma and adding the following sentence thereafter: "other than Investment Projects consisting of conversion of oil installation to gas". 13. Paragraphs (a) and (c) of Section 3.09 of the Loan Agreement are hereby amended by inserting the phrase, ", the Second Round Investment Projects, the Working Capital Beneficiaries" after the word "Projects" and the phrase, ", Working Capital Loans and Second Round Working Capital Loans" after the word" Sub-loans" in such paragraph (a), and the phrase, "Second Round

12 Investment Projects" after the word "Projects" in such paragraph (c). 14. The addition after Section 3.11 of the following Section 3.12: "Section (a) The Borrower shall open and thereafter maintain in the Account Bank an account in dollars on terms and conditions satisfactory to the Bank, including inter alia, the payment by the Account Bank to the Borrower of adequate interest on the balance of such account. (b) The Borrower shall deposit into the Project Account, promptly upon receipt, all amounts collected by the Borrower as payment of principal of Working Capital Loans and Second Round Working Capital Loans, including amounts payable to the Borrower pursuant to guarantees given by the Guarantor to the Borrower in respect of such Loans. (c) The Borrower shall make withdrawals out of the Project Account exclusively for making: (i) payments of principal under the Loan Agreement; or (ii) payments under Second Round Working Capital Loans, provided, however, that no withdrawals shall be made out of the Project Account in respect of Second Round Working Capital Loans that the Borrower has committed after December 31, 1986; or (iii) after December 31, 1986, payments under loans for the financing of Second Round Investment Projects. 15. Section 4.01 is hereby amended by: (i) numbering the current wording as paragraph (a); (ii) in such paragraph (a) inserting the words "and Second Round Investment Project" after the words "Investment Project" and the phrase "and of each Working Capital Loan or Second Round Working Capital Loan" after the parenthesis; and (iii) adding the following two new paragraphs (b) and (c): "(b) without limitation to the provisions of paragraph (a) of this Section, the Borrower shall maintain separate accounts reflecting all expenditures on account of which withdrawals are requested from the Loan Account on the basis of statement of expenditures; (c) the Borrower shall retain, until one year after the Closing Date, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing the expenditures on account of which withdrawals are requested from the Loan Account on the basis of statements of expenditures,

13 and shall enable the Bank's representatives to examine such records." 16. Section 4.02 is hereby amended by: (i) the designation of the existing paragraph under said Section as paragraph (a); and (ii) substituting sub-paragraph (B) in paragraph (a) (ii) by the following: "(B) the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested, including, without limitation to the foregoing, separate opinions by said auditors in respect of expenditures and records referred to in Section 4.01 (c) of this Agreement, as to whether the proceeds of the Loan withdrawn from the Loan Account on the basis of statement of expenditures have been used for the purpose for which they were provided; and as to whether the internal control and procedures followed in the preparation of the statement of expenditures are adequate and in accordance with consistently maintained accounting practices." and (iii) the addition of the following paragraph (b): "(b) Without limitation to paragraph (a) above, the Borrower shall furnish to the Bank, not later than 30 days after each calendar quarter, a report containing: (i) the calculation by the Borrower of the various debt to equity ratios set forth in paragraph (a) of Section 4.05 by the end of each such calendar quarter, such calculations to be made on the basis of unqualified consolidated balance sheets of the Borrower and all its subsidiaries; and (ii) the performance by the Guarantor of its obligation pursuant to Section 3.05 of the Guarantee Agreement; such report to be audited by independent auditors acceptable to the Bank in accordance with sound auditing principles consistently applied." 17. Section 4.05 is deleted and substituted by the following: "(a) Except as the Bank and the Borrower shall otherwise agree: (i) the Borrower shall maintain at all times a ratio of consolidated long-term unsecured debt of the Borrower and all its subsidiaries to the consolidated capital and surplus of the Borrower and all its subsidiaries of not more than 10 to 1 during the year 1985 and each year thereafter; (ii) the Borrower shall maintain at all times a ratio of consolidated unsecured debt of the Borrower and all its

14 subsidiaries to the consolidated capital and surplus of the Borrower and all its subsidiaries of not more than 15 to 1 during the year 1985 and each year thereafter; and (iii) the Borrower shall maintain at all times a ratio of consolidated long-term debt of the Borrower and all its subsidiaries to the consolidated capital and surplus of the Borrower and all its subsidiaries not more than 28 to 1 during the year 1985, 26 to 1 during the year 1986, 23 to 1 during the year 1987 and 20 to 1 during the year 1988 and each year thereafter. (b) For the purposes of this Section: (i) "debt" means any outstanding debt incurred by the Borrower or any subsidiary; (ii) (iii) "long-term debt" means any debt incurred by the Borrower or any subsidiary maturing more than one year after the date on which it is originally incurred; "unsecured debt" means debt, as so defined, excluding from such debt an amount equal to the outstanding principal of loans made or guaranteed by the Borrower which repayment has been guaranteed or otherwise secured by the Guarantor; (iv) debt shall be deemed to be incurred in respect of the Borrower or any of its subsidiaries: (i) under a loan contract or agreement on the date and to the extent the amount of the loan is drawn down and outstanding pursuant to such loan contract or agreement; and (ii) under a guarantee agreement, on the date the agreement providing for such guarantee has been entered into; (v) whenever in connection with this Section it shall be necessary to value in terms of pesos debt payable in foreign currency, such valuation shall be made at the prevailing lawful rate of exchange at which such foreign currency is, at the time of such valuation, obtainable by the Borrower for the purposes of servicing such debt;

15 -14- (vi) "subsidiary" means any company of which, a majority of the outstanding voting stock or other proprietary interest is owned or effectively controlled by the Borrower and which, in the judgement of the Bank, is engaged in promotional, financial or technical activities similar or complementary to the operations of the Borrower; (vii) "consolidated debt of the Borrower and all its subsidiaries" means the total amount of debt of the Borrower and its subsidiaries, excluding any debt owed by the Borrower to any subsidiary; and (viii) "consolidated capital and surplus of the Borrower and all its subsidiaries" means the aggregate of the unimpaired paid-up capital, surplus and free reserves of the Borrower and its subsidiaries after excluding therefrom such amounts as shall represent: (i) equity interests of the Borrower in any such subsidiary or of any such subsidiary in the Borrower or any other such subsidiary; or (ii) adequate provisions, determined in accordance with sound practices, for probable losses on the outstanding amount of all loans and investments made, or guarantees given, by the Borrower." 18. The following new Section 4.10 is added to the Loan Agreement: "Section (a) the Borrower shall cause the Special Account to be audited annually by independent auditors acceptable to the Bank and, promptly after the audit and not later than six months after the close of the Account Bank's fiscal year, the Bank shall be furnished with certified copies of such audit, together with a certified copy of the auditors report, including a description of the audit procedures; (b) the Borrower shall furnish, or cause to be furnished, to the Bank each month certified statements of the Special Account, and from time to time such other

16 information concerning such Special Account and the audit thereof as the Bank shall reasonably request." 19. Section 5.01 of the Loan Agreement is amended by adding the following new paragraph (f): "(f) the Guarantor shall have failed to pay to the Borrower, within thirty days from the date on which they became due, any amounts of the principal of, and interest and other charges on, any loan made or guaranteed by the Borrower which has been guaranteed or counter-guaranteed by the Guarantor." 20. Paragraph (b) of Section 5.02 of the Loan Agreement is amended by adding the words "or paragraph (f)" after the words "paragraph (e)". 21. The Amortization Schedule of Schedule 1 of the Loan Agreement is deleted and substituted by the following: Date Payment Due "SCHEDULE 1 Amortization Schedule Payment of Principal (expressed in dollars)* June 1, ,000,000 December 1, ,000,000 June 1, ,500,000 December 1, ,500,000 June 1, ,000,000 December 1, ,000,000 June 1, ,500,000 December 1, ,500,000 June 1, ,000,000 December 1, ,250,000 June 1, ,750,000 December 1, ,500,000 June 1, ,500,000 December 1, ,500,000 June 1, ,500,000 December 1, ,500,000 June 1, ,000,000 December 1, ,500,000" * The figures in this column represent dollar equivalent determined as of the respective dates of withdrawal; (see General Conditions, Section 4.04).

17 Schedule 2 to the Loan Agreement is amended as follows: (i) by the deletion of paragraph (1) thereof, and renumbering current paragraphs (2) and (3) as (1) and (2), respectively; (ii) by the addition of the phrase "and expenditures financed under Working Capital Loans" after the word "Projects" in new paragraph (1) thereof; and (iii) by the addition of the words "or paragraph (bb)" after the words "or paragraph (b)" in new paragraph (2) thereof. 23. Schedule 3 to the Loan Agreement is amended as follows: (i) By the deletion of Part A thereof and its substitution by the following: "A. Sub-loans 1. Sub-loans will be denominated and repayable in dollars. 2. Interest on the principal amount of Sub-loans, withdrawn and outstanding from time to time shall be payable at any of the following rates to be determined by the Borrower in the case of each Sub-loan: (i) at a rate of 14.1% per annum (the fixed rate), provided, however, that the Bank and the Borrower shall review and, if necessary revise, the fixed rate to put it in line with the interest rate referred to in sub-paragraph (ii) below when the fixed rate shall have departed by more than two percentage points from the rate referred to in sub-paragraph (ii) below; or (ii) at a rate to be adjusted semi-annually equal to LIBOR plus at least 2.5 percentage points, provided, however, that the said rate shall not be at any time less than 12.1% per annum. For purposes of this sub-paragraph "LIBOR" means the average of the rate per annum at which term deposits in dollars maturing in a 90-day period are offered in the London inter-bank market at 11:00 a.m. (London time) two business days before

18 the date a semi-annual adjustment is due, inclusive of all commissions, taxes and any charges thereon as published by Reuter's World News Service or such other publication, agreed upon between the Bank and the Borrower; and for this purpose *business day' means a day of the year on which dealings in dollar deposits between banks may be carried on in London, England. 3. Sub-loans will be repayable in a period not exceeding nine years. 4. Sub-loans made by Provincial Banks will be subject to prior approval of the Borrower." (ii) By the deletion of paragraphs 1 and 3 of Part B thereof and their substitution by the following: "1. Loans to the Provincial Banks shall be denominated and repayable in dollars.' 03. Interest on the principal amount of the loans made to Provincial Banks outstanding from time to time shall be payable semi-annually at a rate of 11.6% per annum.' (iii) By the addition of a new Part C: "C. Working Capital Loans. 1. Working Capital Loan shall be denominated and repayable in dollars. 2. Interest on Working Capital Loans shall be paid in the same terms as interesl on Sub-loans as such terms are set forth in Part A.2 of this Schedule. 3. Working Capital Loans will be repayable in a period of not less than one hundred and eighty days and not exceeding three years, including, in respect of loans repayable in a period of more than one year, a grace period of up to one year.

19 B. Amendments to the Guarantee Agreement The Guarantee Agreement is amended by the addition after Section 3.04 of the following new Sections 3.05 and 3.06: "Section The Guarantor shall take all actions necessary to enable the Borrower to purchase dollars with the proceeds of payments made to the Borrower by Working Capital Beneficiaries in pesos at the same rate of exchange at which such Working Capital Beneficiaries may discharge their repayment obligations under the respective Working Capital Loans and Second Round Working Capital Loans. Section The Guarantor shall bear, and prpmptly compensate the Borrower for, any loss incurred by the Borrower on account of fluctuations on the rates of exchange between the dollar and the currencies in which the principal of the Loan is repayable." C. Effectiveness of this Agreement 1. This Agreement shall not become effective until the Bank shall have been furnished legal opinions, satisfactory to the Bank, on behalf of the Borrower and the Guarantor, of counsel acceptable to the Bank, showing that the foregoing amendments to the Loan and Guarantee Agreements have been duly authorized by the Borrower and the Guarantor and that such amendments are legally binding upon the Borrower and the Guarantor in accordance with their terms. 2. This Agreement and the amendments contained herein shall come into force and effect on the date upon which the Bank dispatches notice to the Guarantor and the Borrower of its acceptance of the legal opinions referred to in paragraph 1 above. 3. If this Agreement shall not have come into force and effect by January 31, 1985, this Agreement and all obligations of the parties hereunder shall terminate, unless the Bank establishes a later date for purposes of this paragraph. If this Agreement shall terminate under the provisions of this paragraph, the Loan Agreement and the Guarantee Agreement shall continue in full force and effect, as if this Agreement had not been executed.

20 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 the Distrist of Columbia, United States of America, as of the day and year first above written. THE ARGENTINE REPUBLIC By Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Regional Vice President Latin America and the Caribbean BANCO NACIONAL DE DESARROLLO By Authorized Representative

21 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the International Bank for Reconstruction and Development. In witness whereof I have signed this Certificate and affixed the Seal of the Bank thereunto this day of A V FOR SECRETARY