Amending Agreement to Loan and Guarantee Agreements

Transcription

1 Public Disclosure Authorized UL;, LOAN NUMBER 2031 AR Public Disclosure Authorized Amending Agreement to Loan and Guarantee Agreements (Oil and Gas Credit Project) Public Disclosure Authorized between THE ARGENTINE REPUBLIC and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and Public Disclosure Authorized BANCO NACIONAL DE DESARROLLO Dated I C-, 1986

2 - 3 - Beneficiary pursuant to Section 3.04 of this Agreement providing for a Second Round Working Capital Loan;" "(m) "Special Account" means the account to be opened in accordance with the provisions of Section 2.09 of this Agreement;" "(n) "Initial Deposit" means the initial deposit into the Special Account equivalent to $10,000,000, or such greater amount as the Bank shall determine upon the Borrower's request, to be withdrawn from the Loan Account pursuant to paragraph (b) of Section 2.09 of this Agreement under Category (ii) of paragraph (a) of Section 2.02 of this Agreement;" "(o) "Project Account" means the account to be opened and maintained by the Borrower in accordance with the provisions of Section 3.08 of this Agreement;" and "(p) "Account Bank" means the 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is amended by: (a) deleting paragraph (a) and substituting it by the following: "(a) The amount of the Loan may be withdrawn f rom the Loan Account as hereinafter provided, for: (i) amounts paid (or, if the Bank shall so agree, for amounts to be paid) by the Borrower on account of: (A) withdrawals made by an Investment Enterprise under a sub-loan or payments made by the Borrower under an investment to meet the following percentages of the reasonable cost of goods *required for the Investment Project in respect of which the withdrawal from the Loan Account is requested: (1) 100% of the foreign currency cost of directly

3 -4- imported goods, (2) 60% of the cost in Pesos of imported goods purchased in Argentina, (3) 45% of the cost in Pesos of locally produced goods, and (4) 100% of the foreign currency cost and 45% of the cost in Pesos of services; (B) 90% of the reasonable cost of consultants' services; (C) 100% of the reasonable foreign currency cost of training the Borrower's staff; and (D) withdrawals made by a Working Capital Beneficiary under a Working Capital Loar; to meet 100% of the reasonable foreign currency cost of directly-imported goods or services supplied from other than the territory of the Guarantor and 45% of the reasonable cost of goods or services procured in, or supplied from, within the territories of the Guarantor; provided, however, that no withdrawal shall be made in respect of a sub-loan or investment or Working Capital Loan unless the sub-loan or investment shall have been approved by the Bank or the amount of such sub-loan or investment together with any other sub-loans and investments made for the same Investment Project shall not exceed the equivalent of twenty million dollars ($20,000,000) or the sub-loan shall be a free-limit sub-loan or a Working Capital Loan for which the Bank shall have authorized withdrawals from the Loan Account or 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 does not exceed the amount of $5,000,000 equivalent; and (ii) the Initial Deposit." (b) Adding the following new paragraph (e): "(e) Except as the Bank shall otherwise agree, the proceeds of the Loan shall be allocated as follows:

4 -2- proposes to make or has made a sub-loan or a loan for a Second Round Investment Project (as hereinafter defined) or in which it proposes to make or has made an investment;" "(d) "Investment Project" means a specific project consisting of oil or gas exploration, or primary production or secondary recovery of oil or gas, or related transport systems, or related gas treatment plants or the acquisition of equipment for the provision of services to enterprises in the oil and gas sector to be carried out by an Investment Enterprise utilizing the proceeds of a Sub-loan, and the term "Second Round Investment Project" means an Investment Project to be carried out by an Investment Enterprise utilizing funds from the Project Account (as the term is defined below);" (b) adding the following new paragraphs (j), (k), (1), (m), (n), (o), (p) and (q): "(j) "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 goods, to be utilized as production inputs, or of services required for exploration or production of oil or gas and "Second Round Working Capital Loan" means a loan made or to be made for the same purposes of a Working Capital Loan to a Working Capital Beneficiary out of funds withdrawn from the Project Account (as said term is defined below);" "(k) "Working Capital Beneficiary" means an Investment Enterprise or an ente:prise owned or controlled by Argentinian Nationals which is providing services related to the exploration or production of oil and gas in Argentina, selected by the Borrower in accordance with 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;" "(1) "Working Capital Loan Agreement" means the agreement to be entered into between the Borrower and a Working Capital Beneficiary pursuant to Section 3.04 of this Agreement providing for a Working Capital Loan, and "Second Round Working Capital Loan Agreement" means an agreement to be entered into between the Borrower and a Working Capital

5 LOAN NUMER 2031 AR AMENDING AGREEMENT TO LOAN AND GUARANTEE AGREEMANTS AGREEMENT, dated j(it i, 1986, between the Argentine Republic (hereinafter called the Guarantor) and INTERNATIONAL 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 October 2, 1981, 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 Agreement, 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 October 2, 1981, 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 and local 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: (a) deleting paragraphs (c) and (d) and their substitution by the following: "(c) "Investment Enterprise" means an enterprise controlled by Argentinian Nationals to which the Borrower

6 -5- Category (i) Sub-loans and investments Amount of the Loan Allocated $ 54,000,000 equivalent (ii) Technical Assistance $ 1,000,000 equivalent and training under Part B of the Project (iii) Working Capital Loans $ 35,000,000 equivalent (iv) Initial Deposit $ 10,000,000 equivalent TOTAL $100,000,000 equivalent provided, however, that after December 31, 1986, unless the Bank shall otherwise agree the amounts allocated to Category (iii) which have not been committed by the Borrower as of such date shall be reallocated to Category 1." 3. Section 2.03 is amended by: (a) adding after subparagraph (ii) of paragraph (a) the following new subparagraph (iii) "a report by consultants on the Investment Project when deemed necessary by the Bank"; (b) renumbering current subparagraph (iii) as subparagraph (iv); (c) adding at the end of paragraph (b) the following new subparagraphs (iii) and (iv): "(iii) a report by consultants regarding reserves, production plan, investment plan, and the technical capacity of the Investment Enterprise to carry.out the Investment Project, when deemed necessary by the Bank; and (iv) all such other information as the Bank shall reasonably request"; and (d) 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

7 -6- goods and services to be financed thereunder; and (iii) terms and conditions thereof; and" the (e) the addition of "(b) and (bb)" after the letter (a) in paragraph (c) of such Section 2.03 and the substitution of the date December 31, 1984 referred to therein by December 31, The date December 31, 1985 set forth in Section 2.04 of the Loan Agreements is substituted by December 31, Section 2.08 of the Loan Agreement is amended: (a) by deleting paragraph (a) and substituting it by the following: "(a) The iorrower shall repay the principal amount of the Loan in accordance with the amortization Schedule set forth in Schedule 1 to this Agreement." (b) by deleting the words "and not exceeding five years in the case of investments" and substituting in paragraph (b)(i) the words "15 years" by "10 years." (c) deleting paragraph (d) and substituting it by the following: "(d) If a sub-loan or any part thereof shall be repaid to the Borrower in advance of maturity or if a sub-loan or an investment or any part thereof shall be sold, transferred, assigned or otherwise disposed of for value by the Borrower, the Borrower shall promptly notify the Bank, and shall deposit the proceeds of such repayment or disposal into the Project Account to finance projects similar to the Investment Projects." (d) deleting paragraphs (e) and (f). 6. The following new Section 2.09 is added: "Section (a) The Borrower shall cause to be opened and 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 reasonable cost of goods and services required to carry out the Project and to

8 -7- be financed by the Bank under this Agreement in accordance with the provisions of Section 2.02 of this Agreement. (b) The Bank shall, withdraw on behalf of the Borrower from the Loan Account and deposit into the Special Account an amount in dollars of $10,000,000 or such greater amount as the Bank shall determine upon the Borrower's request. 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. (d) Prior to or at the time of each request for a deposit by the Bank into the Special Account, the Account

9 -8- 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 (1) was made for any expenditure or in any amount not eligible for financing by withdrawals from 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 $80,000,000 or such other amount as the Bank shall determine if the original Initial Deposit is increased as provided in paragraph (b) of this Section. Withdrawal from the Loan Accoiint 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 the Project eligible for financing under the Loan, the Borrower shall promptly

10 -9- 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 the addition of the following Part C: "Part C. Financing of Working Capital Loans to Investment Enterprises and service enterprises in the oil and gas sectors at Argentina, in furtherance of the corporate purposes of the Borrower as are provided in the Statutes and Statement of Policy." 8. Section 3.02 of the Loan Agreement is deleted and substituted by the following: "Section In order to assist the Borrower in the carrying out of Parts A and B of the Project and the Investment Enterprises in preparing and carrying out Investment Projects, the 3orrower shall employ, or cause Investment Enterprises to employ, when required, consultants whose qualifications, experience, and terms and conditions of employment shall be satisfactory to the Bank." 9. Section 3.03 of the Loan Agreement is amended by deleting its current wording and substituting it by the following: "Section (a) (i) Sub-loans shall be denominated and repayable in dollars; (ii) sub-loans shall bear an interest rate of not less than 12% per annum on their outstanding principal, such rate to be reviewed from time to time at the request of either party taking into account, inter alia, international market conditions for fixed rate long-term funds and similar alternative sources of funds for the Borrower, and such rate to be revised, if required by such review, by agreement between the Bank and the Borrower". "(b) Unless the Bank shall otherwise agree, Working Capital Loans shall: (i) be denominated and repayable in dollars; (ii) 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; and (iii) bear an interest rate of not less than 12% per annum on

11 their adjusted outstanding principal, such rate to be reviewed from time to time at the request of either party taking into account, inter alia, international market conditions for fixed rate long-term funds and similar alternative sources of funds for the Borrower, and such rate to be revised if required by such review, by agreement between the Bank and the Borrower. (c) The Borrower shall make loans out of the proceeds of the Project Account for purposes of financing Second Round Investment Projects and Second Round Working Capital Loans on the same terms and conditions set forth for Subloans and Working Capital Loans in paragraphs (a) and (b) of this Section." 10. Section 3.04 of the Loan Agreement is deleted and substituted by the following: "Section (a) The Borrower undertakes that, 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) require 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 Investment Enterprise or Working Capital Beneficiary: (A) maintains a separate account in respect of the Investment Project; (B) causes such account to be audited each year by independent auditors acceptable to the Borrower; and (C) furnishes to the Borrower, not later than six months after the end of each year, a report of such audit by said auditors; (2) the goods, civil works and services to be financed out of the proceeds of the Loan or out of the Project Account be purchased at a reasonable price, in accordance with sound industry practices, and in the case of contracts for goods and services costing more than $1,000,000 equivalent, after at least 3 price quotations

12 have been obtained, account being taken also of other relevant factors such as time of delivery and efficiency and reliability of thq goods, requirements of equipment standarization 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; and (3) 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, 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 financed out of the proceeds of the Loan or of the funds of the 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 su6h goods; (v) obtain all such information as the Bank or the Borrower shall reasonably request relating to the foregoing and to the administration, operatins 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 Enterprise or Working Capital Beneficiary to perform its obligations to the Borrower. (b) The Borrower shall exercise its rights in relation to each Investment Project or Second Round Investment Project or Working Capital Loan or Second Round Working Capital Loan in such manner as to: (i) protect the interests

13 of the Bank and the Borrower; (ii) comply with its obligations under this Agreement; and (iii) achieve the purposes of the Project." 11. Paragraphs (a) and (b) of Section 3.05 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 Investment Projects" after the word "Projects" in such paragraph (b). 12. The additions after Section 3.07 of the following Section 3.08: "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 or under loans for the financing of Second Round Investment Projects, provided, however, that no withdrawals shall be made out of the Project Account in respect of Second Round Working Capital Loans committed by the Borrower after December 31, (d) The Borrower shall submit for the Bank's prior approval loans for the financing of Second Round Investment Projects when the amounts committed from the Project Account for such purposes shall have reached the equivalent of $50,000,000.

14 (e) Starting on July 1, 1986, the Borrower shall furnish to the Bank quarterly reports, of such scope and detail as the Bank shall reasonably request, on the deposits, balance and application of the proceeds of the Project Account." 13. Section 4.01 is hereby amended by 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 second parenthesis. 14. Section 4.02 is hereby amended by the designation of the existing paragraph under said Section as paragraph (a) and 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 4.06 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 pezformance 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." 15. Section 4.06 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 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; (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,

15 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) "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 originelly incurred; (iii) "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 of, 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 valuatici, obtainable by the Borrower for the purposes of servicing such debt; (vi) "subsidiary" means any company of which, a majority of the outstanding voting stock or other proprietary interest is owned or

16 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, jr probable losses on the outstanding amount of all loans and investments made, or guarantees given, by the Borrower." 16. The following new Section 4.10 is added to the Loan Agreement: "Section 4.10 (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 information concerning such Special Account and the audit thereof as the Bank shall reasonably request."

17 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. 18. Paragraph (b) of Section 5.02 of the Loan Agreement is amended by adding the words "or paragraph (f)" after the words "paragraph (e)". 19. The Amortization Schedule in Schedule 1 to the Loan Agreement is deleted and substituted by the following: "Amortization Schedule" Date Payment Due Payment of Principal (expressed in dollars)* On each January 1 and July 1 beginning on January 1, 1985: from January 1, 1985 through July 1, ,000 from January 1, 1988 through July 1, ,000,000 from January 1, 1992 through July 1, ,783, Schedule 2 to the Loan Agreement is amended as follows: (i) by the addition of the phrase "and expenditures financed under Working Capital Loans" after the word "Projects" in paragraph (1) thereof; and (ii) by the addition of the words "or paragraph (bb)" after the words "or paragraph (b)" in paragraph (2) thereof." * The figures in this column represent dollar equivalent determined as of the respective dates of withdrawal; (see General Conditions, Section 4.04).

18 B. Ahendments to the Guarantee Agreement The Guarantee Agreement is amended by the addition after Section 3.02 of the following new Sections 3.03 and 3.04; 1. "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." 2. "Section The Guarantor shall bear, and promptly compensate the Borrower for, any loss incurred by the Borrower on account of fluctuations on the rates of exchange between the Peso 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 May 30, 1986, 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.

19 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 District 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 Regional Vice President Latin America and the Caribbean BANCO NACIONAL DE DESARROLLO By/O Authorized Representative

20 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 4 - day of ) e&d ), 198 L. FOR SECRETARY