LOAN AGREEMENT (DREDGING PROJECT) BETWEEN THE REPUBLIC OF THE PHILIPPINES AND THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

Bilateral July 26, 1961

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Note: The Agreement entered Into force, October 10, 1961.

Reference: This Agreement is also published in 414 UNTS, p. 253.

AGREEMENT, dated July 26, 1961, between REPUBLIC OF
THE PHILIPPINES (hereinafter called the Borrower) and INTERNATIONAL
BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter Galled the Bank).

ARTICLE I

LOAN REGULATIONS

SECTION 1.01. The parties to this Loan Agreement
accept all the provisions of Loan Regulations No. 3 of the Bank dated
February 15,1961 (said Loan Regulations No. 3 being hereinafter called
the Loan Regulations), with the same force and effect as if they were
fully set forth herein.

ARTICLE II

THE LOAN

SECTION 2.01. The Bank agrees to lend to the
Borrower, on the terms and conditions in this Agreement set forth or
referred to, an amount in various currencies equivalent to eight million
five hundred thousand dollars ($8,500,000).

SECTION 2.02. The Bank shall open a Loan Account on
its books in the name of the Borrower and shall credit to such Account
the amount of the Loan. The amount of the Loan may be withdrawn from the
Loan Account as provided in, and subject to the rights of cancellation
and suspension set forth in, the Loan Regulations.

SECTION 2.03. The Borrower shall pay to the Bank a
commitment charge at the rate of three-fourths of one per cent (3/4 of
1%) per annum on the principal amount of the Loan not so withdrawn from
time to time. Such commitment charge shall accrue from a date sixty days
after the date of this Agreement to the respective dates on which
amounts shall be withdrawn by the Borrower from the Loan Account as
provided in or shall be cancelled pursuant to the Loan Regulations.

SECTION 2.04. The Borrower shall pay interest at
the rate of five and three-fourths per cent (5 3/4%) per annum on the
principal amount of the Loan so withdrawn and outstanding from time to
time.

SECTION 2.05. Except as the Borrower and the Bank
shall otherwise agree, the charge payable for special commitments
entered into by the Bank at the request of the Borrower pursuant to
section 4.02 of the Loan Regulations shall be at the rate of one-half of
one per cent (1/2 of 1%) per annum on the principal amount of any such
special commitments outstanding from time to time.

SECTION 2.06. Interest and other charges shall be payable semi-annually on March 15 and September 15 in each year.

SECTION 2.07. The Borrower shall repay the
principal of the Loan in accordance with the amortization schedule set
forth in Schedule 1 to this Agreement.

ARTICLE III

USE OF PROCEEDS OF THE LOAN

SECTION 3.01. The Borrower shall cause the proceeds
of the Loan to be applied exclusively to financing the cost of goods
required to carry out the Project described in Schedule 2 to this
Agreement. The specific goods to be financed out of the proceeds of the
Loan shall be determined by agreement between the Borrower and the Bank,
subject to modification by further agreement between them.

SECTION 3.02. Except as the Borrower and the Bank
shall otherwise agree, the Borrower shall cause all goods financed out
of the proceeds of the Loan to be used in the territories of the
Borrower exclusively in the carrying out of the Project.

ARTICLE IV

BONDS

SECTION 4.01. The Borrower shall execute and
deliver Bonds representing the principal amount of the Loan as provided
in the Loan Regulations.

SECTION 4.02. The Governor of Central Bank of the
Philippines and such person or persons as he shall appoint in writing
are designated as authorized representatives of the Borrower for the
purposes of section 6.12 of the Loan Regulations.

ARTICLE V

PARTICULAR COVENANTS

SECTION 5.01. (a) The Borrower shall cause the
Project to be carried out with due diligence and efficiency and in
conformity with sound engineering and financial practices.

(b) The Borrower shall at all times make available,
promptly as needed, all sums which shall be required for the carrying
out of the Project.

(c) Upon request from time to time by the Bank, the
Borrower shall promptly furnish or cause to be furnished to the Bank
the plans, specifications and work schedules for the Project including
the Borrower’s dredging program and any material modifications
subsequently made therein, in such detail as the Bank shall request.
Should it become necessary to make any substantial changes in the
dredging program, the Borrower will consult with the Bank before these
changes are made.

(d) The Borrower shall maintain or cause to be
maintained records adequate to identify the goods financed out of the
proceeds of the Loan, to disclose the use thereof in the Project, and to
record the progress of the Project (including the cost thereof) and to
reflect in accordance with consistently maintained sound accounting
practices the operations and financial condition of the agency or
agencies responsible for the carrying out of the Project or any part
thereof ; shall enable the Bank’s representatives to inspect the
Project, the goods and any relevant records and documents; and shall
furnish to the Bank all such information as the Bank shall reasonably
request concerning the expenditure of the proceeds of the Loan, the
Project, and the goods, and the operations and financial condition of
the agency or agencies of the Borrower responsible for the Project or
any part thereof.

SECTION 5.02. The Borrower shall cause the goods
purchased with the proceeds of the Loan to be efficiently operated and
adequately maintained and shall cause all necessary repairs thereof to
be made, all in accordance with sound engineering practices.

SECTION 5.03. (a) The Borrower and the Bank shall
cooperate fully to assure that the purposes of the Loan will be
accomplished. To that end, each of them shall furnish to the other all
such information as it shall reasonably request with regard to the
general status of the Loan. On the pail of the Borrower, such,
information shall include information with respect to financial and
economic conditions in the territories of the Borrower and the
international balance of payments position of the Borrower.

(b) The Borrower and the Bank shall from time to
time exchange views through their representatives with regard to matters
relating to the purposes of the Loan and the maintenance of the service
thereof. The Borrower shall promptly inform the Bank of any condition
which interferes with, or threatens to interfere with, the
accomplishment of the purposes of the Loan or the maintenance of the
service thereof.

(c) The Borrower shall afford all reasonable
opportunity for accredited representatives of the Bank to visit any part
of the territories of the Borrower for purposes related to the Loan.

SECTION 5.04. It is the mutual intention of the
Borrower and the Bank that no other external debt shall enjoy any
priority over the Loan by way of a lien on governmental assets. To that
end, the Borrower undertakes that, except as the Bank otherwise agree,
if any lien shall be created on any assets of the Borrower as security
for any external debt, such lien will ipso facto equally and ratably
secure the payment of the principal of, and interest and other charges
on, the Loan and the Bonds, and that in the creation of any such lien
express provision will be made to that effect, provided, however, that
the foregoing provisions of this section shall not apply to: (i) any
lien created on property at the time of purchase thereof, solely as
security for the payment of the purchase price of such property; (h) any
lien on commercial goods to secure a debt maturing not more than one
year after the date on which it is originally incurred and to be paid
out of the proceeds of sale of such commercial goods; or (iii) any lien
arising in the ordinary course of banking transactions and securing a
debt maturing not more than one year after its date.

The term “assets of the Borrower” as used in this
section includes assets of the Borrower or of any of its political
subdivisions or of any agency of the Borrower or of any such political
subdivision, including Central Bank of the Philippines or any other
institution performing the functions of a central bank.

SECTION 5.05. The principal of, and interest and
other charges on, the Loan and the Bonds shall be paid without deduction
for, and free from, any taxes or fees imposed under the laws of the
Borrower or laws in effect in its territories; provided, however, that
the provisions of this section shall not apply to taxation of, or fees
upon, payments under any Bond to a holder thereof other than the Bank
when such Bond is beneficially owned by an individual or corporate
resident of the Borrower.

SECTION 5.06. The Loan Agreement and the Bonds
shall be free from any taxes or fees that shall be imposed under the
laws of the Borrower or laws in effect in its territories on or in
connection with the execution, issue, delivery or registration thereof
and the Borrower shall pay all such taxes and fees, if any, imposed
under the laws of the country or countries in whose currency the Loan
and the Bonds arc payable or laws in effect in the territories of such
country or countries.

SECTION 5.07. The principal of, and interest and
other charges on, the Loan and the Bonds shall be paid free from all
restrictions imposed under the laws of the Borrower or laws in effect in
its territories.

SECTION 5.08. (a) The Borrower shall satisfy the
Bank that adequate arrangements have been made to insure the goods
financed out of the proceeds of the Loan against damage or loss during
their construction outside of, and importation into, the territories of
the Borrower; such insurance shall be consistent with sound commercial
practice and shall be payable in the currency in which the cost of the
goods insured thereunder shall be payable.

(b) Except as the Borrower and the Bank shall
otherwise agree, the Borrower shall, in addition to the insurance
provided for in subparagraph (a) of this section, take out or cause to
be taken out, and maintain or cause to be maintained, insurance with a
commercial insurer on the floating equipment financed out of the
proceeds of the Loan against such risks and in such amount, as shall be
consistent with sound commercial practice; such insurance shall be
payable in the currency in which the cost of the goods insured
thereunder shall be payable.

ARTICLE VI

REMEDIES OF THE BANK

SECTION 6.01. (i) If any event specified in
paragraph (a) or paragraph (b) of section 5.02 of the Loan Regulations
shall occur and shall continue for a period of thirty days, or (ii) if
any event specified in paragraph (c) of section 5.02 of the Loan
Regulations shall occur and shall continue for a period of sixty days
after notice thereof shall have been given by the Bank to the Borrower,
then at any subsequent time during the continuance thereof, the Bank, at
its option, may declare the principal of the Loan and of all the Bonds
then outstanding to be due and payable immediately, and upon any such
declaration such principal shall become due and payable immediately,
anything in the Loan Agreement or in the Bonds to the contrary
notwithstanding.

ARTICLE VII

MISCELLANEOUS

SECTION 7.01. The Closing Date shall be August 31,
1963, or such other date as shall be agreed upon by the Borrower and
the Bank.

SECTION 7.02. A date sixty days after the date of
this Agreement is hereby specified for the purposes of section 9.04 of
the Loan Regulations.

SECTION 7.03. The following addresses are specified for the purposes of section 8.01 of the Loan Regulations :

For the Borrower :

The Director of Public Works
Bureau of Public Works
Manila, Philippines

For the Bank :

International Bank for Reconstruction and Development
1818 H Street, N. W.
Washington 25, D. C.
United States of America

Alternative address for cablegrams and radiograms :

Intbafrad
Washington, D. C.

SECTION 7.04. The Director of Public Works of the
Borrower is designated for the purposes of section 8.03 of the Loan
Regulations.

In witness whereof, the parties hereto, acting
through their representatives thereunto duly authorized, have caused
this Loan 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 first above written.

Republic of the Philippines :

By Florencio Moreno

Authorized Representative

International Bank for Reconstruction and Development :

By W. A. B. ILIFF
Vice President

___________________

SCHEDULE 1

AMORTIZATION SCHEDULE

Date Payment Due	Payment of Principal (expressed in dollars)^*	Date Payment Due	Payment of Principal (expressed in dollars)^*
September 15, 1963	$174,000	September 15, 1971	$273,000
March 15, 1964	179,000	March 15, 1972	281,000
September 15, 1964	184,000	September 15, 1972	289,000
March 15, 1965	189,000	March 15, 1973	297,000
September 15, 1965	194,000	September 15, 1973	306,000
March 15, 1966	200,000	March 15, 1974	315,000
September 15, 1966	206,000	September 15, 1974	324,000
March 15, 1967	212,000	March 15, 1975	333,000
September 15, 1967	218,000	September 15, 1975	343,000
March 15, 1968	224,000	March 15, 1976	353,000
September 15, 1968	230,000	September 15, 1976	363,000
March 15, 1969	237,000	March 15, 1977	373,000
September 15, 1969	244,000	September 15, 1977	384,000
March 15, 1970	251,000	March 15, 1978	395,000
September 15, 1970	258,000	September 15, 1978	406,000
March 15, 1971	265,000

PREMIUMS ON PREPAYMENT AND REDEMPTION

The following percentages are specified as the
premiums payable on repayment in advance of maturity of any part of the
principal amount of the Loan pursuant to section 2.05 (b) of the Loan
Regulations or on the redemption of any Bond prior to its maturity
pursuant to section 6.16 of the Loan Regulations :

Time of Prepayment or Redemption	Premium
Not more than 3 years before maturity	1/2 of 1 %
More than 3 years but not more than 6, years before maturity	2 %
More than 6 years but not more than 11 years before maturity	3 ½ %
More than 11 years but not more than 15 years before maturity	4 3/4%
More than 15 years before maturity	5 3/4%

SCHEDULE 2

DESCRIPTION OF THE PROJECT

The Project is the dredging of the Borrower’s
public ports to provide depths of water adequate for the navigational
needs of inter-islands and ocean-going shipping, and dredging thereafter
to maintain such depths. To this end, the Borrower will, inter alia:

1. Acquire, operate, maintain and repair

a. One hopper dredge of approximately 1,000 cu. yd. hopper capacity;

b. One 20-in. cutter-suction dredge with pipeline;

c. Three 14-in. cutter-suction dredges with pipelines;

d. One self propelled grab hopper dredge;

e. One work launch;

f. Two dredge tenders;

g. One floating crane of 40 tons capacity; and

h. Echo sounding equipment.

2. Procure spare parts for this equipment.

3. Design, construct and operate a slipway and
workshop for repair of the dredging equipment of the Borrower’s
Department of Public Works Communications and Transportation.

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

LOAN REGULATIONS NO. 3, DATED 15 FEBRUARY 1961

LOAN REGULATIONS APPLICABLE TO LOANS MADE BY THE BANK TO BORROWERS OTHER THAN MEMBER GOVERNMENTS

ARTICLE I

PURPOSE; APPLICATION TO LOAN AGREEMENTS

SECTION 1.01. Purpose. The purpose of these
Regulations is to set forth certain terms and conditions generally
applicable to loans made by the Bank directly to its members.

SECTION 1.02. Application of Regulations. Any loan
agreement between the Bank and a member may provide that the parties
thereto accept the provisions of these Regulations. To the extent so
provided, these Regulations shall apply to such agreement and shall
govern the rights and obligations thereunder of the parties thereto with
the same force and effect as if they were fully set forth therein. No
revocation or amendment of these Regulations shall be effective in
respect of any loan agreement unless the parties thereto shall so agree.

SECTION 1.03. Inconsistency with Loan Agreements.
If any provision of a loan agreement is inconsistent with a provision of
these Regulations, the provision of the loan agreement shall govern.

ARTICLE II

LOAN ACCOUNT; INTEREST AND OTHER CHARGES REPAYMENT; PLACE OF PAYMENT

SECTION 2.01. Loan Account. The amount of the Loan
shall be credited to a Loan Account which the Bank shall open on its
books in the name of the Borrower. The amount of the Loan may be
withdrawn from the Loan Account as provided in the Agreement and in
these Regulations.

SECTION 2.02. Commitment Charge. A commitment
charge at the rate specified in the Loan Agreement shall be payable on
the unwithdrawn amount of the Loan. Such commitment charge shall accrue
from a date 60 days after the date of the Loan Agreement to the
respective dates on which amounts shall be withdrawn by the Borrower
from the Loan Account or shall be cancelled.

SECTION 2.03. Interest. Interest at the rate
specified in the Loan Agreement shall be payable on the amount of the
Loan withdrawn from the Loan Account and outstanding from time to time.
Interest shall accrue from the respective dates on which amounts shall
be so withdrawn.

SECTION 2.04. Computation of Interest and Other
Charges. Interest and all other charges shall be computed on the basis
of a 360-day year of twelve 30-day months.

SECTION 2.05. Repayment, (a) The principal amount
of the Loan withdrawn from the Loan Account shall be repayable in
accordance with the amortization schedule to the Loan Agreement.

(b) The Borrower shall have the right, upon payment
of all accrued interest and payment of the premium specified in said
amortization schedule, and upon not less than 45 day’s notice to the
Bank, to repay in advance of maturity (i) all of the principal amount of
the Loan at the time outstanding or (ii) all of the principal amount of
any one or more maturities, provided that on the date of such
prepayment there shall not be outstanding any portion of the Loan
maturing after the portion to be prepaid. However, if Bonds snail have
been delivered pursuant to Article VI in respect of any portion of the
Loan to be prepaid, the terms and conditions of prepayment of that
portion of the Loan shall be those set forth in section 6.16 and in such
Bonds.

(c) It is the policy of the Bank to encourage the
repayment prior to maturity of portions of its loans retained by the
Bank for its own account. Accordingly, the Bank will sympathetically
consider, in the light of all circumstances then existing, any request
of the Borrower that the Bank waive the payment of any premium payable
under paragraph (b) of this section or under section 6.16 on repayment
of any portions of the Loan or Bonds which the Bank has not sold or
agreed to sell.

SECTION 2.06. Place of Payment. The principal
(including premium, if any) of, and interest and other charges on, the
Loan shall be paid at such places as the Bank shall reasonably request.
The principal of the Bonds, the interest accruing thereon and the
premium, if any, on the redemption thereof shall be paid at the places
specified in the Bonds, except that payments under any Bonds held by the
Bank shall be made at such places as the Bank shall reasonably request.

ARTICLE III

CURRENCY PROVISIONS

SECTION 3.01. Denomination of the Loan. Where the amount of the Loan is expressed in either of the following manners :

(a) in a specified currency (e.g. “_______________dollars”), or

(b) in various currencies equivalent to an amount
in a specified currency (e.g. “an amount in various currencies
equivalent to _____________ dollars”),

then the Loan shall be deemed to be denominated in such specified currency (dollars in each of the above examples).

SECTION 3.02. Currencies in Which Withdrawals Are
to Be Made. The Borrower shall use reasonable efforts to assure that the
cost of goods financed out of the Loan is payable in the respective
currencies of the countries from which such goods are acquired. Except
as the Bank and the Borrower shall otherwise agree, withdrawals shall be
made either in the respective currencies in which the cost of goods has
been paid or is payable or in the currency in which the Loan is
denominated, as the Bank may from time to time elect.

SECTION 3.03. Currency in Which Principal and
Premium Are Payable ; Maturities. (a) The principal of the Loan shall be
repayable in the several currencies withdrawn from the Loan Account and
the amount repayable in each currency shall be the amount withdrawn in
that currency. The foregoing provision is subject to one exception,
namely : if withdrawal shall be made in any currency which the Bank
shall have purchased with another currency for the purpose of such
withdrawal, the portion of the Loan so withdrawn shall be repayable in
such other currency and the amount so repayable shall be the amount paid
by the Bank on such purchase.

(b) Any premium payable under section 2.05 on
prepayment of any portion of the Loan, or under section 6.16 on
redemption of any Bond, shall be payable in currency in which the
principal of such portion of the Loan, or of such Bond, is repayable.

(c) Except as the Bank and the Borrower shall otherwise agree, the
portion of the Loan to be repaid, under the provisions of this section,
in any particular currency shall be repayable in such instalments, not
inconsistent with the instalments set forth in the amortization schedule
to the Loan Agreement, as the Bank shall from time to time specify.

SECTION 3.04. Currency in Which Interest Is
Payable. Interest on any portion of the Loan shall be payable in the
currency in which the principal of such portion of the Loan is
repayable.

SECTION 3.05. Currency in Which Commitment Charge
Is Payable. The commitment charge and the charge for any special
commitment pursuant to SECTION 4.02 shall be payable in the currency in
which the Loan is denominated.

SECTION 3.06. Purchase of Currencies. The Bank
will, at the request of the Borrower and on such terms and conditions as
the Bank shall determine, purchase any currency needed by the Borrower
for payment of principal, interest and other charges required under the
Loan Agreement upon payment by the Borrower of sufficient funds therefor
in a currency or currencies to be specified by the Bank from time to
time. In purchasing the currencies required the Bank shall be acting as
agent of the Borrower and the Borrower shall be deemed to have made any
payment required under the Loan Agreement only when and to the extent
that the Bank has received such payment in the currency or currencies
required.

SECTION 3.07. Valuation of Currencies. Whenever it
shall be necessary for the purposes of the Loan Agreement to determine
the value of one currency in terms of another, such value shall be as
reasonably determined by the Bank.

SECTION 3.08. Exchange Restrictions. Any payment
required under the Loan Agreement to be made to the Bank in the currency
of any country shall be made in such manner, and in currency acquired
in such manner, as shall be permitted under the laws of such country for
the purpose of making such payment and effecting the deposit of such
currency to the account of the Bank with a depository of the Bank in
such country.

ARTICLE IV

WITHDRAWAL OF PROCEEDS OF LOANS

SECTION 4.01. Withdrawal from the Loan Account. The
Borrower shall be entitled to withdraw from the Loan Account (i) such
amounts as shall have been paid for the reasonable cost of goods to be
financed under the Loan Agreement; and (ii), if the Bank shall so agree,
such amounts as shall be required to meet payments to be made for the
reasonable cost of such goods. Except as shall be otherwise agreed
between the Bank and the Borrower, no withdrawals shall be made on
account of (a) expenditures prior to the Effective Date or (b)
expenditures in the currency of the Borrower or for goods produced in
(including services supplied from) the territories of the Borrower or
(c) expenditures in the territories of any country which is not a member
of the Bank (other than Switzerland) or for goods produced in
(including services supplied from) such territories.

SECTION 4.02. Special Commitments by the Bank. Upon
the Borrower’s request and upon such terms and conditions as shall be
agreed upon between the Bank and the Borrower, the Bank may enter into
special commitments in writing to pay amounts to the Borrower or others
in respect of the cost of goods notwithstanding any subsequent
suspension or cancellation.

SECTION 4.03. Applications for Withdrawal or for
Special Commitment. When the Borrower shall desire to withdraw any
amount from the Loan Account or to request the Bank to enter into a
special commitment pursuant to section 4.02, the Borrower shall deliver
to the Bank a written application in such form, and containing such
statements and agreements, as the Bank shall reasonably request.
Applications for withdrawal, with the necessary documentation as
hereinafter in this Article provided, shall, except as the Bank and the
Borrower shall otherwise agree, be made promptly in relation to
expenditures for the Project.

SECTION 4.04. Supporting Evidence. The Borrower
shall furnish to the Bank such documents and other evidence in support
of the application as the Bank shall reasonably request, whether before
or after the Bank shall have permitted any withdrawal requested in the
application.

SECTION 4.05. Sufficiency of Applications and
Documents. Each application and the accompanying documents and other
evidence must be sufficient in form and substance to satisfy the Bank
that the Borrower is entitled to withdraw from the Loan Account the
amount applied for and that the amount to be withdrawn from the Loan
Account is to be used only for the purposes specified in the Loan
Agreement.

SECTION 4.06. Payment by the Bank. Payment by the
Bank of amounts which the Borrower is entitled to withdraw from the Loan
Account shall be made to or on the order of the Borrower.

ARTICLE V

CANCELLATION AND SUSPENSION

SECTION 5.01. Cancellation by the Borrower. The
Borrower may by notice to the Bank cancel any amount of the Loan which
the Borrower shall not have withdrawn prior to the giving of such
notice, except that the Borrower may not so cancel any amount of the
Loan in respect of which the Bank shall have entered into a special
commitment pursuant to section 4.02.

SECTION 5.02. Suspension by the Bank, If any of the
following events shall have happened and be continuing, the Bank may by
notice to the Borrower suspend in whole or in part the right of the
Borrower to make withdrawals from the Loan Account:

(a) A default shall have occurred in the payment of
principal or interest or any other payment required under the Loan
Agreement or the Bonds.

(b) A default shall have occurred in the payment of
principal or interest or any other payment required under any other
loan agreement or under any guarantee agreement between the Borrower and
the Bank or under any delivered pursuant to any such agreement.

(c) A default shall have occurred in the
performance of any other covenant or agreement on the part of the
Borrower under the Loan Agreement or the Bonds.

(d) An extraordinary situation shall have arisen
which shall make it improbable that the Borrower will be able to perform
its obligations under the Loan Agreement or the Bonds.

(e) The Borrower shall have been suspended from membership in or ceased to be a member of the Bank.

(f) The Borrower shall have ceased to be a member
of the International Monetary Fund or shall have become ineligible to
use the resources of said Fund under section 6 of Article IV of the
Articles of Agreement of said Fund or shall have been declared
ineligible to use said resources under section 5 of Article V, section 1
of Article VI or section 2 (a) of Article XV of the Articles of
Agreement of said Fund.

(g) After the date of the Loan Agreement and prior
to the Effective Date any event shall have occurred which would have
entitled the Bank to suspend the Borrower’s right to make withdrawals
from the Loan Account if the Loan Agreement had been effective on the
date such event occurred.

(h) Any other event specified in the Loan Agreement for the purposes of this section shall have occurred.

The right of the Borrower to make withdrawals from
the Loan Account shall continue to be suspended in whole or in part, as
the case may be, until the event or events which gave rise to such
suspension shall have ceased to exist or until the Bank shall have
notified the Borrower that the right to make withdrawals has been
restored, whichever is the earlier; provided, however, that in the case
of any such notice of restoration, the right to make withdrawals shall
be restored only to the extent and subject to the conditions specified
in such notice, and no such notice shall affect or impair any right,
power or remedy of the Bank in respect of any other or subsequent event
described in this section.

SECTION 5.03. Cancellation by the Bank. If (a) the
right of the Borrower to make withdrawals from the Loan Account shall
have been suspended with respect to any amount of the Loan for a
continuous period of thirty days, or (b) by the date specified in the
Loan Agreement as the Closing Date an amount of the Loan shall remain
unwithdrawn from the Loan Account, the Bank may by notice to the
Borrower terminate the right of the Borrower to make withdrawals with
respect to such amount. Upon the giving of such notice such amount of
the Loan shall be cancelled.

SECTION 5.04. Amounts Subject to Special Commitment
Not Affected by Cancellation or Suspension by the Hank. No cancellation
or suspension by the Bank shall apply to amounts subject to any special
commitment entered into by the Bank pursuant to Section 4.02 except as
expressly provided in such commitment.

SECTION 5.05. Application of Cancellation to
Maturities of the Loan. Except as otherwise agreed between the Bank and
the Borrower, any cancellation shall be applied pro rata to the several
maturities of the principal amount of the Loan as set forth in the
amortization schedule to the Loan Agreement, except that the principal
amount of any such maturity so cancelled shall not exceed the amount of
such maturity remaining after deducting the principal amount of Bonds of
such maturity theretofore delivered or requested pursuant to Article VI
and the Bonds or portions of the Loan of such maturity theretofore sold
or agreed to be sold by the Bank.

SECTION 5.06. Effectiveness of Provisions after
Suspension or Cancellation. Notwithstanding any cancellation or
suspension, all the provisions of these Regulations and the Loan
Agreement shall continue in full force and effect except as in this
Article specifically provided.

ARTICLE VI

BONDS

SECTION 6.01. Delivery of Bonds. The Borrower shall
execute and deliver Bonds representing the principal amount of the
Loan, as hereinafter in this Article provided.

SECTION 6.02. Payments on Bonds. The payment of the
principal of any Bonds shall pro tanto discharge the obligation of the
Borrower to repay the principal of the Loan; and the payment of interest
on any Bonds and of the service charge; if any, provided for in section
6.04, shall pro tanto discharge the obligation of the Borrower to pay
interest on the Loan.

SECTION 6.03. Time of Delivery of Bonds. If and as
the Bank shall from time to time request, the Borrower shall, as soon as
practicable and within such period not less than 60 days after the date
of any request therefor as the Bank shall specify in such request,
execute and deliver to or on the order of the Bank Bonds in the
aggregate principal amount specified in such request, not exceeding,
however, the aggregate principal amount of the Loan which shall have
been withdrawn and shall be outstanding at the time of such request and
for which Bonds shall not theretofore have been so delivered or
requested.

SECTION 6.04. Interest on Bonds ; Service Charge.
The Bonds shall bear interest at such rate or rates as the Bank shall
request, not in excess, however, of the rate of interest on the Loan. If
the rate of interest on any Bond shall be less than the rate of
interest on the Loan, the Borrower shall, in addition to the interest
payable on such Bond, pay to the Bank a service charge on the principal
amount of the Loan represented by such Bond at a rate equal to the
difference between the interest rate on the Loan and the interest rate
on such Bond. Such service charge shall be payable on the dates on which
and in the currency in which such interest is payable.

SECTION 6.05. Currency in Which Bonds Are Payable.
The Bonds shall be payable as to principal and interest in the several
currencies in which the Loan is repayable. Each Bond delivered pursuant
to any request under section 6.03 or under section 6.11 shall be payable
in such currency as the Bank shall specify in such request except that
the aggregate principal amount of Bonds payable in any currency shall at
no time exceed the outstanding amount of the Loan repayable in such
currency.

SECTION 6.06. Maturities of Bonds. The maturities
of the Bonds shall correspond to the maturities of instalments of the
principal amount of the Loan set forth in the amortization schedule to
the Loan Agreement. The Bonds delivered pursuant to any request under
section 6.03 or under SECTION 6.11 shall have such maturities as the
Bank shall specify in such request except that the aggregate principal
amount of Bonds of any maturity shall at no time exceed the
corresponding instalment of the principal amount of the Loan.

SECTION 6.07. Form of Bonds. The Bonds shall be
fully registered bonds without coupons {hereinafter sometimes called
registered Bonds) or bearer bonds with coupons for semi-annual interest
attached (hereinafter sometimes called coupon Bonds). Bonds delivered to
the Bank shall be registered Bonds or coupon Bonds as the Bank shall
request. Registered Bonds payable in dollars shall be substantially in
the form set forth in Schedule 1 to these Regulations. Coupon Bonds
payable in dollars and the coupons attached thereto shall be
substantially in the forms set forth in Schedule 2 to these Regulations.
Bonds payable in any currency other than dollars shall be substantially
in the forms set forth in Schedule 1 or 2 these Regulations, as the
case may be, except that they shall (a) provide for payment of
principal, interest and premium on redemption, if any, in such other
currency, (b) provide for such place of payment as the Bank shall
specify, and (c) contain such other modifications as the Bank shall
reasonably request in order to conform to the laws or to the financial
usage of the place where they are payable.

SECTION 6.08. Printing or Engraving of Bonds.
Except as the Bank and the Borrower shall otherwise agree and subject to
the provisions of section 6.11 (b), the Bonds shall be either (a)
printed or lithographed on an engraved base having an engraved border or
(b) fully engraved in conformity with the requirements of the leading
securities exchange in the country in whose currency such Bonds are
payable.

SECTION 6.09. Date of Bonds. Each registered Bond
shall be dated the semi-annual interest payment date on which or next
preceding the date on which it shall be executed and delivered. Each
coupon Bond shall be dated six months prior to the first semiannual
interest payment date after the Effective Date except as the Bank and
the Borrower shall otherwise agree, and shall be delivered with all
unmatured coupons attached. Upon any delivery of Bonds appropriate
adjustment shall be made so that there shall be no loss to the Bank or
to the Borrower in respect of commitment charge or interest and service
charge, if any, on the principal amount of the Loan represented by such
Bonds.

SECTION 6.10. Denominations of Bonds. The Borrower
shall authorize the issuance of Bonds in such denominations as the Bank
shall reasonably request. The Bonds delivered pursuant to any request
under section 6.03 or under section 611 shall be in such authorized
denominations as the Bank shall specify in such request.

SECTION 6.11. Exchange of Bonds. The Borrower
shall, as soon as practicable after the Bank shall so request, execute
and deliver to or on the order of the Bank, in exchange for Bonds
theretofore executed and delivered to it, new Bonds in accordance with
the following provisions:

(a) Bonds bearing interest at one rate may be
exchanged for Bonds bearing interest at any other rate not in excess of
the rate of interest on the Loan.

(b) Bonds initially issued which are not fully
engraved in accordance with the provisions of section 6.08 (6) may be
exchanged for such fully engraved Bonds.

(c) Bonds payable in one currency may, subject to
the provisions of sections 6.05 and 6.06, be exchanged for a like
aggregate principal amount of Bonds payable in the same or any other
currency in which the Loan is repayable.

(d) The Bank shall reimburse the Borrower for the
reasonable cost of any exchange made pursuant to paragraphs (a) or (c)
above. Any exchange made pursuant to paragraph (b) above or any exchange
by the Bank of registered Bonds in large denominations for registered
or coupon Bonds in smaller authorized denominations for purposes of sale
by the Bank shall be without charge to the Bank.

The foregoing rights of exchange are in addition to
any rights of exchange provided in the Bonds. Except as in this section
expressly provided, exchanges of Bonds pursuant to this section shall
be subject to all provisions of the Bonds relating to exchanges.

SECTION 6.12. Execution of Bonds. The Bonds shall
be signed in the name and on behalf of the Borrower by its authorized
representative or representatives designated in the Loan Agreement for
the purposes of this section. The signature of any such representative
may be a facsimile signature if the Bonds are also manually
countersigned by an authorized representative of the Borrower. Coupons
attached to coupon Bonds shall be authenticated by the facsimile
signature of an authorized representative of the Borrower. If any
authorized representative of the Borrower whose manual or facsimile
signature shall be affixed to any Bond or coupon shall cease to be such
authorized representative, such Bond or coupon may nevertheless be
delivered, and shall be valid and binding on the Borrower, as though the
person whose manual or facsimile signature shall have been affixed to
such Bond or coupon had not ceased to be such authorized representative.

SECTION 6.13. Registration and Transfer of
Registered Bonds. The Borrower shall maintain, or cause to be
maintained, books for the registration and transfer of registered Bonds.

SECTION 6.14. Qualification and Listing of Bonds.
The Borrower shall promptly furnish to the Bank such information and
execute such applications and other documents as the Bank shall
reasonably request in order to enable the Bank to sell any of the Bonds
in any country, or to list any of the Bonds on any securities exchange,
in compliance with applicable laws and regulations. To the extent
necessary to comply with requirements of any such exchange, the Borrower
shall, if the Bank shall so request, appoint and maintain an agency for
authentication of such Bonds.

SECTION 6.15. Guarantee by the Bank of Payments on
Bonds. If the Bank shall sell any Bond and shall guarantee any payment
thereunder, the Borrower shall reimburse the Bank for any amount paid by
the Bank under such guarantee by reason of any failure of the Borrower
to make payment in accordance with the terms of such Bond.

SECTION 6.16. Redemption of Bonds, (a) The Bonds
shall be subject to redemption prior to their maturity by the Borrower
in accordance with their terms, at a redemption price equal to the
principal amount thereof plus the interest accrued and unpaid thereon to
the date fixed for the redemption thereof plus as a premium the
percentages of said principal amount specified in the amortization
schedule to the Loan Agreement.

(b) If any Bond so to be redeemed shall bear
interest at a rate less than the rate of interest on the Loan, the
Borrower shall pay to the Bank on the date fixed for redemption the
service charge provided for in section 6.04 accrued and unpaid to such
date on the principal amount of the Loan represented by such Bond.

SECTION 6.17. Rights of Holders of Bonds. No holder
(other than tne Bank) of any Bond shall, by virtue of being the holder
thereof, be entitled to exercise any rights under the Loan Agreement or
be subject to any of the conditions or obligations imposed upon the Bank
thereby. The provisions of this section shall not impair or affect any
rights or obligations under the terms of any Bond.

SECTION 6.18. Delivery of Promissory Notes in Lieu
of Bonds. At the request of the Bank the Borrower shall execute and
deliver to the Bank promissory notes in lieu of Bonds. Each note shall
be payable to the order of such payee or payees, and at such place
within the country in which the note is payable, as the Bank shall
specify, and shall be dated the interest payment date next preceding the
date of its delivery. Such note shall be in such customary form as the
Bank and the Borrower shall mutually agree upon in order to conform to
the laws or financial usage of the place where it is payable. Except as
otherwise expressly provided in this section or where the context
otherwise requires, references in these Regulations and the Loan
Agreement to Bonds shall include any promissory notes executed and
delivered under this section.

SECTION 6.19. Legal Opinions. Upon the execution
and delivery of any Bonds pursuant to this Article, the Borrower shall
promptly at the Bank’s request furnish to the Bank an opinion or
opinions of counsel acceptable to the Bank confirming as of the date of
delivery of such Bonds that such Bonds constitute valid and binding
obligations of the Borrower in accordance with their terms.

ARTICLE VII

ENFORCEABILITY OF LOAN AGREEMENT; FAILURE TO EXERCISE RIGHTS; ARBITRATION

SECTION 7.01. Enforceability. The rights and
obligations of the Bank and the Borrower under the Loan Agreement and
the Bonds shall be valid and enforceable in accordance with their terms
notwithstanding the law of any state, or political subdivision thereof,
to the contrary. Neither the Bank nor the Borrower shall be entitled in
any proceeding under this Article to assert any claim that any provision
of these Regulations or the Loan Agreement or the Bonds is invalid or
unenforceable because of any provision of the Articles of Agreement of
the Bank or for any other reason.

SECTION 7.02. Failure to Exercise Rights. No delay
in exercising, or omission to exercise, any right, power or remedy
accruing to either party under the Loan Agreement upon any default shall
impair any such right, power or remedy or be construed to be a waiver
thereof or an acquiescence in such default; not shall the action of such
party in respect of any default, or any acquiescence in any default,
affect or impair any right, power or remedy of such party in respect of
any other or subsequent default.

SECTION 7.03. Arbitration. (a) Any controversy
between the parties to the Loan Agreement and any claim by either such
party against the other arising under the Loan Agreement or the Bonds
which shall not be determined by agreement of the parties shall be
submitted to arbitration by an Arbitral Tribunal as hereinafter
provided.

(b) The parties to such arbitration shall be the Bank and the Borrower.

(c) The Arbitral Tribunal shall consist of three
arbitrators appointed as follows: one arbitrator shall be appointed by
the Bank; a second arbitratoi shall be appointed by the Borrower; and
the third arbitrator (hereinafter sometimes called the Umpire) shall be
appointed by agreement of the parties or, if they shall not agree, by
the President of the International Court of Justice or, failing
appointment by him, by the Secretary-General of the United Nations. If
either of the parties shall fail to appoint an arbitrator, such
arbitrator shall be appointed by the Umpire. In case any arbitrator
appointed in accordance with this section shall resign, die or become
unable to act, a successor arbitrator shall be appointed in the same
manner as herein prescribed for the appointment of the original
arbitrator and such successor shall have all the powers and duties of
such original arbitrator.

(d) An arbitration proceeding may be instituted
under this section upon notice by the party instituting such proceeding
to the other party. Such notice shall contain a statement setting forth
the nature of the controversy or claim to be submitted to arbitration,
the nature of the relief sought, and the name of the arbitrator
appointed by the party instituting such proceeding. Within 30 days after
the giving of such notice, the adverse party shall notify the party
instituting the proceeding of the name of the arbitrator appointed by
such adverse party.

(e) If within 60 days after the giving of such
notice instituting the arbitration proceeding the parties shall not have
agreed upon an Umpire, either party may request the appointment of an
Umpire as provided in paragraph (c) of this section.

(f) The Arbitral Tribunal shall convene at such
time and place as shall be fixed by the Umpire. Thereafter, the Arbitral
Tribunal shall determine where and when it shall sit.

(g) Subject to the provisions of this section and
except as the parties shall otherwise agree, the Arbitral Tribunal shall
decide all questions relating to its competence and shall determine its
procedure. All decisions of the Arbitral Tribunal shall be by majority
vote.

(h) The Arbitral Tribunal shall afford to all
parties a fair hearing and shall render its award in writing. Such award
may be rendered by default. An award signed by a majority of the
Arbitral Tribunal shall constitute the award of such Tribunal. A signed
counterpart of the award shall be transmitted to each party. Any such
award rendered in accordance with the provisions of this section shall
be final and binding upon the parties to the Loan Agreement. Each party
shall abide by and comply with any such award rendered by the Arbitral
Tribunal in accordance with the provisions of this section.

(i) The parties shall fix the amount of the
remuneration of the arbitrators and such other persons as shall be
required for the conduct of the arbitration proceedings. If the parties
shall not agree on such amount before the Arbitral Tribunal shall
convene, the Arbitral Tribunal shall fix such amount as shall be
reasonable under the circumstances. Each Party shall defray its own
expenses in the arbitration proceedings. The costs of the Arbitral
Tribunal shall be divided between and borne equally by the party. Any
question concerning the division of the costs of the Arbitral Tribunal
or the procedure for payment of such costs shall be determined by the
Arbitral Tribunal.

(j) The provisions for arbitration set forth in
this section shall be in lieu of any other procedure for the
determination of controversies between the parties to the Loan Agreement
and any claim by either party against the other party arising thereund
or under the Bonds.

(k) The Bank shall not be entitled to enter
judgment against the Borrower upon the award, to enforce the award
against the Borrower by execution or to pursue any other remedy against
the Borrower for the enforcement of the award, except as such procedure
may be available against the Borrower otherwise than by reason of the
provisions of this section. If within 30 days after counterparts of the
award shall be delivered to the parties the award shall not be complied
with by the Bank, the Borrower may take any such action for the
enforcement of the award against the Bank.

(l) Service of any notice or process in connection
with any proceeding under this section or (to the extent that such
remedy shall be available) in connection with any proceeding to enforce
any award rendered pursuant to this section may be made in the manner
provided in section 8.01. The parties to the Loan Agreement waive any
and all other requirements for the service of any such notice or
process.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

SECTION 8.01. Notices and Requests. Any notice or
request required or permitted to be given or made under the Loan
Agreement and any agreement between any of the parties contemplated by
the Loan Agreement shall be in writing. Except as otherwise provided in
section 9.03, such notice or request shall be deemed to have been duly
given or made when it shall be delivered by hand or by mail, telegram,
cable or radiogram to the party to which it is required or permitted to
be given or made at such party’s address specified in the Loan
Agreement, or at such other address as such party stall have designated
by notice to the party giving such notice or making such request.

SECTION 8.02. Evidence of Authority. The Borrower
shall furnish to the Bank sufficient evidence of the authority of the
person or persons who will sign the applications provided for in Article
IV and the Bonds or who will, on behalf of the Borrower, take any other
action or execute any other documents required or permitted to be taken
or executed by the Borrower under the Loan Agreement, and the
authenticated specimen signature of each such person.

SECTION 8.03. Action on Behalf of the Borrower. Any
action required or permitted to be taken, and any documents required or
permitted to be executed, under the Loan Agreement on behalf of the
Borrower may be taken or executed by the representative of the Borrower
designated in the Loan Agreement for the purposes of this section or any
person thereunto authorized in writing by him. Any modification or
amplification of the provisions of the Loan Agreement may be agreed to
on behalf of the Borrower by written instrument executed on behalf of
the Borrower by the representative so designated or any person thereunto
authorized in writing by him ; provided that, in the opinion of such
representative, such modification or amplification is reasonable in the
circumstances and will not substantially increase the obligations of the
Borrower under the Loan Agreement. The Bank may accept the execution by
such representative or other person of any such instrument as
conclusive evidence that in the opinion of such representative any
modification or amplification of the provisions of the Loan Agreement
effected by such instrument is reasonable fn the circumstances and will
not substantially increase the obligations of the Borrower thereunder.

SECTION 8.04. Execution in Counterparts. The Loan
Agreement may be executed in several counterparts, each of which shall
be an original. All such counterparts shall collectively be but one
instrument.

ARTICLE IX

EFFECTIVE DATE; TERMINATION

SECTION 9.01. Conditions Precedent to Effectiveness
of Loan Agreement. The Loan Agreement shall not become effective until
evidence satisfactory to the Bank shall have been furnished to the Bank
that

(a) the execution and delivery of the Loan
Agreement on behalf of the Borrower have been duly authorized or
ratified by all necessary governmental action, and

(b) all other events specified in the Loan Agreement as conditions to its effectiveness have occurred.

SECTION 9.02. Legal Opinions. As part of the
evidence to be furnished pursuant to section 9.01, the Borrower shall
furnish to the Bank an opinion or opinions satisfactory to the Bank of
counsel acceptable to the Bank showing:

(a) that the Loan Agreement has been duly
authorized or ratified by, and executed and delivered on behalf of, the
Borrower and constitutes a valid and binding obligation of the Borrower
in accordance with its terms;

(b) that the Bonds when executed and delivered in
accordance with the Loan Agreement will constitute valid and binding
obligations of the Borrower in accordance with their terms and that,
except as stated in such opinion, no further signatures or formalities
are required for that purpose; and

SECTION 9.03. Effective Date. Except as shall be
otherwise agreed by the Bank and the Borrower, the Loan Agreement shall
come into force and eflect on the date upon which the Bank dispatches to
the Borrower notice of its acceptance of the evidence required by
section 9.01.

SECTION 9.04. Termination of Loan Agreement for
Delay in Becoming Effective. If all acts required to be performed
pursuant to section 9.01 shall not have been performed before the date
specified in the Loan Agreement for the purposes of this section or such
other date as shall be agreed upon by the Bank and the Borrower, the
Bank may at any time thereafter at its option terminate the Loan
Agreement by notice to the Borrower. Upon the giving of such notice the
Loan Agreement and all obligations of the parties thereunder shall
forthwith terminate.

SECTION 9.05. Termination of Loan Agreement on Full
Payment. If and when the entire principal amount of the Loan and the
Bonds and the premium, if any, on the prepayment of the Loan and on the
redemption of all Bonds called for redemption (as the case may be) and
all interest and other charges which shall have accrued on the Loan and
the Bonds shall have been paid, the Loan Agreement and all obligations
of the parties thereunder shall forthwith terminate.

ARTICLE X

DEFINITIONS; HEADINGS

SECTION 10.01. Definitions. Except where the
context otherwise requires, the following terms have the following
meanings wherever used in these Regulations or any Schedule hereto or in
a loan agreement to which these Regulations have been made applicable:

1. The term “Bank” means International Bank for Reconstruction and Development.

2. The term “member” means a member of the Bank.

3. The term “Loan Agreement” means the particular
loan agreement to which these Regulations shall have been made
applicable, as amended from time to time; and such term includes these
Regulations as thus made applicable, all agreements supplemental to the
Loan Agreement and all schedules to the Loan Agreement.

4. The term “Loan” means the loan provided for in the Loan Agreement.

5. The term “Borrower” means the member of the Bank to which the Loan is made.

6. The term “currency” means such coin or currency
as at the time referred to is legal tender for the payment of public and
private debts in the territories of the government referred to, whether
or not such government is a member. Whenever reference is made to the
currency of the Borrower, the term “currency” includes the currencies of
all colonies and territories on whose behalf at the time referred to
the Borrower has accepted membership in the Bank.

7. The term “dollars” and the sign “$” mean dollars in currency of the United States of America.

8. The term “Bonds” means bonds executed and
delivered by the Borrower pursuant to the Loan Agreement; and such term
includes any such bonds issued in exchange for, or on transfer of. Bonds
as herein defined.

9. The term “Loan Account” means the account on the
books of the Bank to which the amount of the Loan is to be credited as
provided in section 2.01.

10. The term “Project” means the project or
projects or program or programs for which the Loan is granted, as
described in the Loan Agreement and as the description thereof shall be
amended from time to time by agreement between the Bank and the
Borrower.

11. The term “goods” means equipment, supplies and
services which are required for the Project. Wherever reference is made
to the cost of any goods, such cost shall be deemed to include the cost
of importing such goods into the territories of the Borrower.

12. The term “external debt” means any debt payable
in any medium other than currency of the Borrower, whether such debt is
or may become payable absolutely or at the option of the creditor in
such other medium.

13. The term “Effective Date” means the date on
which the Loan Agreement shall come into force and effect as provided in
section 9.03.

14. The term “lien” shall include mortgages, pledges, charges, privileges and priorities of any kind.

15. The term “assets” shall include revenues and property of any kind.

16. The terms “tax” and “taxes” shall include
imposts, levies, fees and duties of any nature, whether in effect at the
date of the Loan Agreement or thereafter imposed.

17. Wherever reference is made to the incurring of debt such reference shall include the assumption and guarantee of debt.

References in these Regulations to Articles or
sections are to Articles or sections of these Regulations; references in
a loan agreement to Articles or sections are to Article; or sections of
such loan agreement.

SECTION 10.02. Headings. The headings of the
Articles and sections and the Table of Contents 1 are inserted for
convenience of reference only and are not a part of these Regulations.

SCHEDULE 1

FORM OF REGISTERED BOND WITHOUT COUPONS PAYABLE IN DOLLARS

$ 000	$ 000
No. 000	No. 000

[NAME OF BORROWER]

Serial Bond due _____________

[NAME OF BORROWER] (hereinafter called [the
Borrower]), for value received, hereby, promises to pay to ________, or
registered assigns, on the _____ day of _________, 19 _________, at the
office or agency of [the Borrower] in the Borough of Manhattan, in The
City of New York, the sum of _______ dollars in such coin or currency of
the United States of America as at the time of payment is legal tender
for public and private debts, and to pay interest thereon from the date
hereof at said office or agency in like coin or currency at the rate of
per centum (____%) per annum, payable semi-annually on _______ and
_______ until payment of said principal sum has been made or duly
provided for.

This Bond is one of an authorized issue of bonds in
various currencies equivalent to an aggregate principal amount of
__________, known as the Serial Bonds of [the Borrower] (hereinafter
called the Bonds), issued or to be issued under a Loan Agreement dated
_________ between [the Borrower] and International Bank for
Reconstruction and Development (hereinafter called the Bank). No
reference herein to the Loan Agreement shall confer upon the holder
hereof any rights thereunder or impair the obligation of [the Borrower],
which is absolute and unconditional, to pay the principal and interest
on this Bond at the times and place and in the amounts and in the
currency herein prescribed.

This Bond is transferable by the registered holder
hereof, or by his attorney duly authorized in writing, at said office or
agency of [the Borrower] in the Borough of Manhattan, upon payment, if
[the Borrower] shall so require, of a charge calculated to reimburse
[the Borrower] for the cost of the transfer and upon surrender of this
Bond for cancellation, duly endorsed or accompanied by a proper
instrument or instruments of assignment and transfer. Upon any such
transfer a new fully registered Bond or Bonds, without coupons, of
authorized denominations, of the same maturity, payable in the same
currency, and in the same aggregate principal amount, will be issued to
the transferee in exchange for this Bond.

Upon payment, if [the Borrower] shall so require,
of a charge calculated to reimburse [the Borrower] for the cost of the
exchange (1) bearer Bonds with interest coupons attached (hereinafter
called coupon Bonds) of any maturity, together with all unmatured
coupons thereto appertaining, may be exchanged upon presentation and
surrender thereof at said office or agency in the Borough of Manhattan
for coupon Bonds of other authorized denominations with all unmatured
coupons thereto appertaining, or for fully registered Bonds without
coupons (hereinafter called registered Bonds) of any authorized
denominations, or both, of the same maturity, payable in the same
currency, and in the same aggregate principal amount; and (2) registered
Bonds of any maturity may be exchanged upon presentation and surrender
at said office or agency, duly endorsed or accompanied by a proper
instrument or instruments of assignment and transfer, for registered
Bonds of other authorized denominations or for coupon Bonds of any
authorized denominations with all unmatured coupons thereto
appertaining, or both, of the same maturity, payable in the same
currency, and in the same aggregate principal amount.

[The Borrower] shall not be required to make
transfers or exchanges of any Bonds for a period of ten days next
preceding any interest payment date thereof or of any Bonds called for
redemption.

The Bonds are subject to redemption at the election
of [the Borrower], as hereinafter provided, at a redemption price for
each Bond equal to the principal amount thereof, plus the interest
accrued and unpaid thereon to the date fixed for the redemption thereof,
plus as a premium the following respective percentages of such
principal amount: [insert percentages set forth in the amortization
schedule to the Loan Agreement]. All the Bonds at the time outstanding
of any one or more maturities may be so redeemed at any time, provided
that, at the date fixed for the redemption of such Bonds, there shall
not be outstanding any Bonds or any portion of the Loan provided for in
said Loan Agreement maturing after the Bonds to be redeemed. If [the
Borrower] shall elect to redeem Bonds it shall give notice of intention
to redeem all the Bonds, or all the Bonds of one or more designated
maturities as hereinabove provided, as the case may be. Such notice
shall designate the redemption date and shall state the redemption price
or prices, determined as hereinbefore provided. Such notice shall be
given by publication in two daily newspapers printed in the English
language and published and of general circulation in said Borough of
Manhattan at least once a week for three successive weeks, the first
publication to be not less than 45 nor more than 60 days prior to said
redemption date, Notice of election to redeem having been given as above
provided, the Bonds so called for redemption shall become due and
payable on said redemption date at their redemption price or prices, and
upon presentation and surrender thereof on or after such date at said
office or agency in said Borough of Manhattan, together with any
appurtenant coupons maturing after said redemption date, shall be paid
at the redemption price or prices aforesaid. All unpaid interest
instalments represented by coupons which shall have matured on or prior
to said redemption date shall continue to be payable to the bearers of
such coupons severally and respectively, and the redemption price
payable to the holders of coupon Bonds presented for redemption shall
not include such unpaid instalments of interest unless coupons
representing such instalments shall accompany the Bonds presented for
redemption. From and after said redemption date, if payment is made or
duly provided for pursuant thereto, the Bonds so called for redemption
shall cease to bear interest and any appurtenant coupons maturing after
said redemption date shall be void.

In certain events provided in said Loan Agreement,
the Bank, at its option, may declare the principal of all the Bonds then
outstanding (if not already due) to be due and payable immediately, and
upon any such declaration such principal shall be due and payable
immediately.

The principal of the Bonds, the interest accruing
thereon and the premium, if any, on the redemption thereof shall be paid
without deduction for and free from any taxes, imposts, levies, fees or
duties of any nature or any restrictions now or at any time hereafter
imposed under the laws of [the Borrower] or laws in effect in its
territories ; provided, However, that the provisions of this paragraph
shall not apply to the taxation of payments made under the provisions of
any Bond to a holder thereof than the Bank when such Bond is
beneficially owned by an individual or corporate resident of [the
Borrower].

[The Borrower] may deem and treat the bearer of any
coupon Bond, and the bearer of any coupon for interest on any Bond, and
the registered owner of any registered Bond, as the absolute owner
thereof for all purposes whatsoever notwithstanding any notice to the
contrary ; and all payments to such bearer or to or on the order of such
registered owner, as the case may be, shall be valid and effectual to
discharge the liability of [the Borrower] upon such coupon Bond, such
coupon or such registered Bond to the extent of the sum or sums so paid.

This Bond shall not be valid or become obligatory
for any purpose until it shall have been [insert appropriate reference
to authentication, signature or attestation].

[Signature, attestation, authentication, as may be appropriate]

Dated ____________

Note: Italicized provisions may be omitted if Borrower desires.

__________________

FORM OF ASSIGNMENT AND TRANSFER

FOR VALUE RECEIVED
_______________________________________________________ hereby sell,
assign and transfer unto _______________________ the within Bond issued
by [NAME OF BORROWER] and hereby irrevocably authorize said [Borrower]
to transfer said Bond on its books.

Dated _____________

Witness : ________________

__________________

SCHEDULE 2

FORM OF COUPON BOND PAYABLE IN DOLLARS

$ 000	$ 000
No. 000	No. 000

[NAME OF BORROWER]

Serial Bond due _____________

[NAME OF BORROWER] (hereinafter called [the
Borrower]), for value received, hereby promises to pay to the bearer
hereof, on the _____ day of _______, 19______, at the office or agency
of [the Borrower] in the Borough of Manhattan, in The City of New York,
the sum of _______________ dollars in such coin or currency of the
United States of America as at the time of payment is legal tender for
public and private debts, and to pay interest thereon from the date
hereof at said office or agency in like coin or currency at the rate of
_________ per centum (___%) per annum, payable semi-annually on
_________ and ________ until payment of said principal sum has been made
or duly provided for, but until the maturity hereof only upon
presentation and surrender of the coupons hereto attached as they
severally mature.

This Bond is one of an authorized issue of bonds in
various currencies equivalent to an aggregate principal amount of
__________________, known as the Serial Bonds of [the Borrower]
(hereinafter called the Bonds), issued or to be issued under a Loan
Agreement dated ________________ between [the Borrower] and
International Bank for Reconstruction and Development (hereinafter
called the Bank). No reference herein to the Loan Agreement shall confer
upon the holder hereof any rights thereunder or impair the obligation
of [the Borrower], which is absolute and unconditional, to pay the
principal and interest on this Bond at the times and place and in the
amounts and in the currency herein prescribed.

[The Borrower] shall not be required to make
transfers or exchanges of any Bonds for a period of ten days next
preceding any interest payment date thereof or of any Bonds called for
redemption.

The Bonds are subject to redemption at the election
of [the Borrower], as hereinafter provided, at a redemption price for
each Bond equal to the principal amount thereof, plus the interest
accrued and unpaid thereon to the date fixed for the redemption thereof,
plus as a premium the following respective percentages of such
principal amount: [insert percentages set forth in the amortization
schedule to the Loan Agreement]. All the Bonds at the time outstanding
of any one or more maturities may be so redeemed at any time. provided
that, at the date fixed for the redemption of such Bonds, there shall
not be outstanding any Bonds or any portion of the Loan provided for in
said Loan Agreement maturing after the Bonds to be redeemed. If [the
Borrower] shall elect to redeem Bonds it shall give notice of intention
to redeem all the Bonds, or all the Bonds of one or more designated
maturities as hereinabove provided, as the case may be. Such notice
shall designate the redemption date and shall state the redemption price
or prices, determined as hereinbefore provided. Such notice shall be
given by publication in two daily newspapers printed in the English
language and published and of general circulation in said Borough of
Manhattan at least once a week for three successive weeks, the first
publication to be not less than 45 nor more than 60 days prior to said
redemption date. Notice of election to redeem having been given as above
provided, the Bonds so called for redemption shall become due and
payable on said redemption date at their redemption price or prices, and
upon presentation and surrender thereof on or after such date at said
office or agency in said Borough of Manhattan, together with any
appurtenant coupons maturing after said redemption date, shall be paid
at the redemption price or prices aforesaid. All unpaid interest
instalments represented by coupons which shall have matured on or prior
to said redemption date shall continue to be payable to the bearers of
such coupons severally and respectively, and the redemption price
payable to the holders of coupon Bonds presented for redemption shall
not include such unpaid instalments of interest unless coupons
representing such instalments shall accompany the Bonds presented for
redemption. From and after said redemption date, if payment is made or
duly provided for pursuant thereto, the Bonds so called for redemption
shall cease to bear interest and any appurtenant coupons maturing after
said redemption date shall be void.

The principal of the Bonds, the interest accruing
thereon and the premium, if any, on the redemption thereof shall be paid
without deduction for and free from any taxes, imposts, levies, fees or
duties of any nature or any restrictions now or at any time hereafter
imposed under the laws of [the Borrower] or laws in effect in its
territories; provided, however, that the provisions of this paragraph
shall not apply to the taxation of payments made under the provisions of
any Bond to a holder thereof other than the Bank when such Bond is
beneficially owned by an individual or corporate resident of [the
Borrower].

[The Borrower] may deem and treat the bearer of any
coupon Bond, and the bearer of any coupon for interest on any Bond, and
the registered owner of any registered Bond, as the absolute owner
thereof for all purposes whatsoever notwithstanding any notice to the
contrary : and all payments to such bearer or to or on the order of such
registered owner, as the case may be, shall be valid and effectual to
discharge the liability of [the Borrower] upon such coupon Bond, such
coupon or such registered Bond to the extent of the sum or sums so paid.

This Bond shall not be valid or become obligatory
for any purpose until it shall have been [insert appropriate reference
to authentication, signature or attestation].

IN WITNESS WHEREOF [the Borrower] has caused this
Bond to be signed in its name by [here insert reference to official or
officials signing Bonds, to countersignatures, attestation and seal, if
used, and, if any signature is a facsimile signature, make reference
thereto] and the coupons for said interest bearing the facsimile
signature of its [insert title or name of official] to be attached
hereto.

[Signature, attestation, authentication, as may be appropriate]

Dated __________

Note : Italicized provisions may be omitted if Borrower desires.

FORM OF COUPON

On the ________ day of ___________, 19 _____,
unless the Bond mentioned below shall have been called for previous
redemption and payment duly provided therefor, [NAME OF BORROWER] will
pay to bearer, upon surrender of this coupon, at the office or agency of
said [BORROWER] in the Borough of Manhattan in The City of New York
____________ dollars in such coin or currency of the United States of
America as at the time of payment is legal tender for public and private
debts, being six months’ interest then due on its Serial Bond, No.
________ due ______________________.

[facsimile signature]

* To the extent that any part of the Loan
is repayable in a currency other than dollars (see Loan Regulations,
section 3.03), the figures in this column represent dollar equivalents
determined as for purposes of withdrawal.

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