<PAGE>

10.5  Loan Agreement relating to the Paranasan Financing between the state of
      Parana and Japan Bank for International Cooperation
<PAGE>
                                                                    EXHIBIT 10.5


                                                                      RESTRICTED
                                                                         COPY

                                                                          14

LOAN AGREEMENT NO. BZ-P13

                                 LOAN AGREEMENT

                                      For

                 PARANA STATE ENVIRONMENTAL IMPROVEMENT PROJECT

                                    Between

                 THE OVERSEAS ECONOMIC COOPERATION FUND, JAPAN

                                      And

                          THE STATE OF PARANA, BRAZIL

                             Dated January 8, 1998
<PAGE>

                               Table of Contents

<TABLE>
<S>               <C>
Article I         Loan

      Section 1.  Amount and Purpose of Loan
      Section 2.  Use of Process of Loan

Article II        Repayment and Interest

      Section 1.  Repayment of Principal
      Section 2.  Interest and Method of Payment thereof

Article III       Particular Covenants

      Section 1.  General Terms and Conditions
      Section 2.  Guarantee for Loan
      Section 3.  Procurement Procedure
      Section 4.  Disbursement Procedure
      Section 5.  Administration of Loan
      Section 6.  Notices and Requests

      Schedule 1        Description of Project
      Schedule 2        Allocation of Proceeds of loan
      Schedule 3        Amortization Schedule
      Schedule 4        Procurement Procedure
      Schedule 5        Commitment Procedure
      Schedule 6        Reimbursement Procedure
      Schedule 7        Transfer Procedure
</TABLE>
<PAGE>

      Loan Agreement No. BZ-P13 dated January 8, 1998, between THE OVERSEAS
ECONOMIC COOPERATION FUND and THE STATE OF PARANA

      In the light of the contents of the Exchange of Notes between the
Government of Japan and the Government of the Federative Republic of Brazil
dated August 28, 1996, concerning Japanese loans to be extended with a view to
promoting development efforts and strengthening the economic stabilization of
the Federative Republic of Brazil, and the friendly relations between the two
countries,

      THE OVERSEAS ECONOMIC COOPERATION FUND (hereinafter referred to as "the
Fund" and THE STATE OF PARANA (hereinafter referred to as "the Borrower")
herewith conclude the following Loan Agreement (hereinafter referred to as "the
Loan Agreement", which includes all agreements supplemental hereto).

                                   Article I

                                      Loan

Section 1. Amount and Purpose of Loan

      The Fund agrees to lend the Borrower an amount not exceeding TWENTY THREE
BILLION SIX HUNDRED EIGHTY SIX MILLION Japanese Yen (Yen23,686,000,000) as
principal for the implementation of the Parana State Environmental Improvement
Project described in Schedule I attached hereto (hereinafter referred to as "the
Project"), on the terms and conditions set forth in the Loan Agreement and in
accordance with the relevant laws and regulations of Japan (hereinafter referred
to as "the Loan"), provided, however, that when the cumulative total of
disbursements under the Loan Agreement reaches the said limit, the Fund shall
make no further disbursements.

                                                                       Section 2


                                      -1-
<PAGE>

Section 2. Use of Proceeds of Loan

(1)   The Borrower shall cause the proceeds of the Loan to be used for the
      purchase of eligible goods and services necessary for the implementation
      of the Project from suppliers, contractors or consultants (hereinafter
      collectively referred to as "the Supplier(s)") of the eligible source
      countries described in Schedule 4 attached hereto (hereinafter referred to
      as "the Eligible Source Country(ies)" in accordance with the allocation
      described in Schedule 2 attached hereto.

(2)   The final disbursement under the Loan Agreement shall be made not later
      than the same day and month eight (8) years after the effective date of
      the Loan Agreement, and no further disbursement shall be made by the Fund
      thereafter, unless otherwise agreed upon between the Fund and the
      Borrower, who shall forward to the Fund the written Agreement of the
      Federative Republic of Brazil (hereinafter referred to as "the
      Guarantor").

                                   Article II

                             Repayment and Interest

Season 1. Repayment of Principal

      The Borrower shall repay the principal of the Loan to the Fund in
accordance with the Amortization Schedule set forth in Schedule 3 attached
hereto.

Section 2. Interest and Method of Payment thereof

(1)   The Borrower shall pay interest to the Fund semi-annually at the rate of
      four percent (4.0%) per annum on principal corresponding to categories
      (a), (b) and (c) below disbursed (hereinafter referred to as "Principal
      (I)") and outstanding:

      (a)   Principal disbursed out of the proceeds of the Loan allocated to
            Category (A) (provided for in Section 1 of Schedule 2, attached
            hereto);

      (b)   Service charges disbursed out of the proceeds of the Loan with
            respect to the disbursement of (1) (a) above;

      (c)   Any principal reallocated from Category (C) (provided for in Section
            1 of Schedule 2, attached hereto) and disbursed with respect to (1)
            (a) or (1) (b) above.

                                                                         (2) The


                                      -2-
<PAGE>

(2)   The Borrower shall pay interest to the Fund semi-annually at the rate of
      two and three tenth percent (2.3%) per annum on the principal
      corresponding to categories (a), (b) and (c) below disbursed (hereinafter
      referred to as "Principal (II)") and outstanding:

      (a)   Principal disbursed out of the proceeds of the Loan allocated to
            Category (B) (provided for in Section 1 of Schedule 2, attached
            hereto);

      (b)   Service charges disbursed out of the proceeds of the Loan with
            respect to the disbursement of (2) (a) above;

      (c)   Any principal reallocated from Category (C) (provided for in Section
            1 of Schedule 2, attached hereto) and disbursed with respect to (2)
            (a) or (2) (b) above.

(3)   The Borrower shall pay to the Fund on January 20 of each year the interest
      that has accrued up to January 19 of that year from July 20 of the
      preceding year, and on July 20 of each year the interest that has accrued
      up to July 19 from January 20 of that year, provided that, prior to the
      date of the final disbursement of the proceeds of the Loan, the Borrower
      shall pay to the Fund on February 20 of each year the interest that has
      accrued up to January 19 of that year from July 20 of the preceding year,
      and on August 20 of each year the interest that has accrued up to July 19
      from January 20 of that year.

                                  Article III

                              Particular Covenants

Section 1. General Terms and Conditions

      Other terms and conditions generally applicable to the Loan Agreement
shall be set forth in the Fund's General Terms and Conditions, dated November,
1987, with the following supplemental stipulations (hereinafter referred to as
"the General Terms and Conditions");

(1)   The term "principal" wherever mentioned in the General Terms and
      Conditions shall be replaced by "Principal (I) and Principal (II)";

(2)   When the Borrower makes repayment of principal or payment of interest or
      other charges without specifying the order of appropriation, the Fund may
      decide the order of appropriation among principal, interest or other
      charges for Principal (I) or Principal (II).

                                                            (3) After a contract


                                      -3-
<PAGE>

(3)   After a contract is determined to be eligible for the Fund's financing,
      the name of the Supplier(s) and the amount of the contact may be made
      public by the Fund.

(4)   The Loan Agreement shall be executed in triplicate in the English
      language, each copy being considered to be an original, one for the Fund,
      one for the Borrower and one for the Guarantor.

(5)   Section 3.05. of the General Terms and Conditions shall be disregarded and
      replaced by the following provision:

      "Should repayment of principal or payment of interest or any other charges
      required under the Loan Agreement be delayed the interest specified in
      Section 3.06. shall cease to accrue on such overdue amount of principal on
      and after the due date and an overdue charge calculated at a rate of one
      percent (1%) per annum over and above the interest rate specified in the
      Loan Agreement shall be payable on the overdue amount of principal,
      interest or other charges for a period from the due date to the day
      immediately preceding the day of actual payment thereof, both inclusive."

(6)   Section 6.05. of the General Terms and Conditions shall be disregarded and
      replaced by the following provision:

      "Regarding repayment of principal and payment of interest or any other
      charges required under the Loan Agreement, the Borrower and the Guarantor,
      if any, shall undertake not to treat debts to the Fund lose favorably than
      any other than short-term debts, and the agreements (as amended from time
      to time) implementing the Federative Republic of Brazil-1992 Financing
      Plan, dated November 29, 1993".

(7)   Section 8.08. of the General Terms and Conditions shall be disregarded and
      replaced by the following provision:

      "If within thirty (30) days of the sending of the Award documents to the
      parties, the Award shall not have been complied with, a party may require
      judgement upon the Award or institute proceedings for enforcement of the
      Award against the party with obligations to it under the Award in any
      court of competent jurisdiction, provided that nothing contained in this
      Agreement constitutes, under Japanese Law, a contractual consent by the
      Federative Republic of Brazil to the jurisdiction of any court outside
      Brazil except to the extent necessary to obtain judicial recognition of an
      arbitral award, including any proceeding required for the purposes of
      converting an arbitral award into a judgement. However, no other
      interference, legal or otherwise, with the enforcement of the Award shall
      be attempted."

                                                                      Section 2.


                                      -4-
<PAGE>

Section 2. Guarantee for Loan

      The Borrower shall, in accordance with Section 7.01. of the General Terms
and Conditions, cause a Guarantee for the Loan (hereinafter referred to as "the
Guarantee") executed by the Guarantor to be given to the Fund immediately after
the execution of the Loan Agreement.

Section 3. Procurement Procedure

      The guidelines for procurement and for the employment of consultants
mentioned in Section 4.01. of the General Terms and Conditions shall be as
stipulated in Procurement Procedure attached hereto as Schedule 4.

Section 4. Disbursement Procedure

      The disbursement procedure mentioned in Section 5.01. of the General Terms
and Conditions shall be as follows:

(1)   Commitment Procedure attached hereto as Schedule 5 shall apply in cases of
      disbursements to the Supplier(s) of the Eligible Source Countries other
      than the Federative Republic of Brazil with respect to the portion of
      contracts stated in a currency other than that of the Federative Republic
      of Brazil.

(2)   Reimbursement Procedure attached hereto as Schedule 6 shall apply in cases
      of disbursements to the Supplier(s) of the Federative Republic of Brazil,
      and to the Supplier(s) of the Eligible Source Countries other than the
      Federative Republic of Brazil with respect to the portion of contracts
      stated in the currency of the Federative Republic of Brazil.

(3)   Notwithstanding the provision of the paragraph (2) mentioned above.
      Transfer Procedure attached hereto as Schedule 7 may apply in cases of
      disbursements to the Supplier(s) of the Federative Republic of Brazil, and
      to the Supplier(s) of the Eligible Source Countries other than the
      Federative Republic of Brazil with respect to the portion of contracts
      stated in the currency of the Federative Republic of Brazil.

                                                                      Section 5.


                                      -5-
<PAGE>

Section 5. Administration of Loan

(1)   The Borrower shall authorize Companhia de Saneamento do Parana
      (hereinafter referred to as "the Executing Agency") to implement the
      Project.

(2)   The Borrower shall cause the Executing Agency to employ consultants for
      the implementation of the Project.

(3)   Should the funds available from the proceeds of the Loan be insufficient
      for the implementation of the Project, the Borrower shall make
      arrangements promptly to provide such funds as shall be needed.

(4)   The Borrower shall at all times operate and maintain, or cause to be
      operated and maintained, any facilities relevant to the Project, and
      promptly as needed, make or cause to be made all necessary repairs and
      replacements thereof.

(5)   The Borrower shall cause the Executing Agency to furnish the Fund with
      progress reports for the Project on a quarterly basis (as of March, June,
      September and December of each year) until the Project is completed, in
      such form and in such detail as the Fund may reasonably request.

(6)   Promptly, but in any event not later than six (6) months after completion
      of the Project, the Borrower shall cause the Executing Agency to furnish
      the Fund with a project completion report in such form and in such detail
      as the Fund may reasonably request.


                                                                      Section 6.


                                      -6-
<PAGE>

Section 6. Notices and Requests

      The following addresses are specified for the purpose of Section 9.03. of
the General Terms and Conditions:

For the Fund

            Postal address: THE OVERSEAS ECONOMIC COOPERATION FUND
                            Edificio Torre Rio Sul.
                            Rua Lauro Muller, 116/3505
                            Botafogo,
                            Rio de Janeiro-RJ-CEP 22290-160 BRASIL
            Attention:      Chief Representative
            Fax:            55-21-295-7840

For the Borrower

            Postal address: GOVERNO DO ESTADO DO PARANA
                            Praca Nossa Senhora de Salete s/n(0)
                            Centro Civico-CEP 80.530-914
                            Curitiba-PR-Brasil
            Attention:      Governador do Estado do Parana
            Fax:            55-41-243-4453/55-41-342-3762

For the Executing Agency

            Postal address: COMPANHIA DE SANEAMENTO DO PARANA
                            Rua Engenheiros Reboucas, 1376
                            Curitiba-Parana-Brazil 80215-100
            Attention:      Presidente
            Fax:            55-41-225-7878

      If the above addressee and/or names are changed, the party concerned shall
immediately notify the other party hereto in writing of the new addressee and/or
names.

                                                                      IN WITNESS


                                      -7-
<PAGE>

      IN WITNESS WHEREOF, the Fund and the Borrower, acting through their duly
authorized representatives, have caused the Loan Agreement to be duly executed
in their respective names and delivered at the office of THE OVERSEAS ECONOMIC
COOPERATION FUND, Chiyoda-ku, Tokyo, Japan, as of the day and year first above
written.

For                                     For

THE OVERSEAS ECONOMIC                   THE STATE OF PARANA
CORPORATION FUND


/s/ Akira Nishigaki                     /s/ Jaime Lerner
----------------------------------      ----------------------------------------
AKIRA NISHIGAKI                         JAIME LERNER
President                               Governor of the State of Parana
Chairman of the Board


                                      -8-
<PAGE>

                                   Schedule I

                             Description of Project

Section 1. Outline of the Project

(1)   Objective

      To improve water supply system, sewerage system and agrotoxic waste
management system, in order to improve social environment of the project area

(2)   Location

      Curitiba Metropolitan Area (hereinafter referred to as "CMA" and Coastal
area for the water supply and sewerage system. All over the state for the
agrotoxic waste management system

(3)   Executing Agency

      Companhia de Saneamento do Parana (SANEPAR).

(4)   Scope of Work

      (a)   Water supply system construction component

            (i)   Construction of water supply system in CMA

            (ii)  Construction of water supply system in coastal area

      (b)   Sewerage system construction component

            (i)   Construction of sewerage system in CMA

            (ii)  Construction of sewerage system in coastal area

      (c)   Water supply and sewerage system construction component in Areas of
            Influence

      (d)   Agrotoxic waste management system construction component

      (e)   Consulting services

      The proceeds of the Loan are available for items (a) through (e).

      Any balance remaining on the aforementioned item and all other items are
to be financed by the Borrower.

                                                                      Section 2.


                                      -1-
<PAGE>

Section 2. Estimated annual fund requirements are as shown below.

<TABLE>
<CAPTION>
             Calendar Year       For the Loan         For the project

                                 (in million          (in million
                                 Japanese Yen)        Japanese Yen)
<S>                                   <C>                  <C>
                  1998                 1,800                3,000
                  1999                 2,633                4,388
                  2000                 5,807                9,679
                  2001                 5,861                9,768
                  2002                 4,591                7,651
                  2003                 2,994                4,989

                                      ------               ------

                  Total               23,686               39,476
</TABLE>

            Disbursement of the proceeds of the Loan shall be made within the
      limit of the Japanese Government's annual budgetary appropriations for the
      Fund.

Section 3. The Project is expected to be completed by the end of 2003.


                                      -2-
<PAGE>

                                   Schedule 2


                         Allocation or Proceeds of Loan

Section 1. Allocation

<TABLE>
<CAPTION>
                           Amount of the Loan           % of expenditure
                                  Allocated             to be financed
                          (in million Japanese Yen)
<S>                                      <C>                       <C>
(A) Construction Works                   17,468                     65

(B) Consulting Services                   4,055                    100

(C) Contingencies                         2,163                     --

                                         ------

                  Total                  23,686
</TABLE>

      Note: Items not eligible for financing are as shown below

            (a) General administration expenses
            (b) Taxes and Duties
            (c) Purchase of land and other real property
            (d) Compensation
            (e) Other indirect items

            With regard to disbursement in each Category, the amount disbursed
      shall be calculated from the eligible expenditure by multiplying with the
      percentage of respective Category stipulated in this Section, unless
      otherwise agreed upon between the Fund and the Borrower.

                                                                      Section 2.


                                      -1-
<PAGE>

Section 2. Reallocation upon change in cost estimates

(1)   If the estimated cost of items included in any of Categories (A) and/or
      (B) shall decrease, the amount then allocated to, and no longer required
      for, such Category will be reallocated by the Fund to Category (C).

(2)   If the estimated cost of items included in any of Categories (A) and/or
      (B) shall increase, the amount equal to the portion, if any, of such
      increase to be financed out of the proceeds of the Loan, will be allocated
      by the Fund, at the request of the Borrower, to such Category from
      Category (C), subject, however, to the Funds consideration on the
      necessities for contingencies in respect of the cost of items in the other
      Category.


                                      -2-
<PAGE>

                                   Schedule 3

                             Amortization Schedule

1. Payment of Principal (I)

<TABLE>
<CAPTION>
Due Date                                                             Amount
                                                               (in Japanese Yen)
<S>                                                              <C>
On January 20, 2005                                              530,588,000

On each January 20 and July 20                                   530,567,000
      beginning July 20, 2005
      through January 20, 2023
</TABLE>

2. Payment of Principal (II)

<TABLE>
<CAPTION>
Due Date                                                             Amount
                                                               (in Japanese Yen)
<S>                                                              <C>
On January 20, 2008                                              109,616,000

On each January 20 and July 20                                   109,594,000
      beginning July 20, 2005
      through January 20, 2023
</TABLE>

3. Total of Payment (I) + (II)

<TABLE>
<CAPTION>
Due Date                                                             Amount
                                                               (in Japanese Yen)
<S>                                                              <C>
On January 20, 2005                                              640,204,000

On each January 20 and July 20                                   640,161,000
      beginning July 20, 2005
      through January 20, 2023
</TABLE>

<PAGE>

                                   Schedule 4

                             Procurement Procedure

Section 1. Guidelines to be used for procurement under the Loan

(1) Procurement of all goods and services, except consulting services to be
financed out of the proceeds of the Loan shall be in accordance with Guidelines
for Procurement under OECF Loans dated November, 1987 (hereinafter referred to
as "the Procurement Guidelines").

(2) Employment of consultants to be financed out of the proceeds of the Loan
shall be in accordance with Guidelines for the Employment of Consultants by OECF
dated November, 1987 (hereinafter referred to as "the Consultant Guidelines").

Section 2. Eligible Source Countries

      The Eligible Source Countries for procurement of all goods and services,
including consulting services, to be financed out of the proceeds of the Loan
are all countries and areas.

Section 3. The Fund's review of decisions relating to procurement of goods and
services (except consulting services)

      The following procedure shall, in accordance with Section 4.02 of the
General Terms and Conditions, be subject to the Fund's review and concurrence.

(1) With regard to any contract the value of which is estimated to be not less
than five hundred million Japanese Yen (Yen500,000,000.):

(a)   If the Borrower wishes to adopt procurement procedures other than
      International Competitive Bidding, the Borrower itself or through the
      Executing Agency shall submit to the Fund a Request for Review of
      Procurement Method(s) (as per Form No. 1 attached hereto). The Fund shall
      inform the Borrower or the Executing Agency on behalf of the Borrower its
      concurrence by means of a Notice regarding Procurement Method(s).

                                                                      (b) Before


                                      -1-
<PAGE>

(b)   Before advertisement and/or notification of prequalification, the Borrower
      itself or through the Executing Agency shall submit to the Fund, for its
      review and concurrence, the Prequalification Documents, together with a
      Request for Review of Prequalification Documents. When the Fund has no
      objection to the said documents, the Fund shall inform the Borrower or the
      Executing Agency on behalf of the Borrower accordingly by means of a
      Notice regarding Prequalification Documents. Any further modification of
      the said documents by the Borrower itself or through the Executing Agency
      requires prior concurrence by the Fund

(c)   When the prequalified firms have been selected, the Borrower itself or
      through the Executing Agency shall submit to the Fund, for its review and
      concurrence, a list of those firms and a report on the selection process
      with the reason for the choice made, attaching all relevant documents,
      together with a Request for Review of Result of Prequalification. When the
      Fund has no objection to the said documents, the Fund shall inform the
      Borrower or the Executing Agency on behalf of the Borrower accordingly by
      means of a Notice regarding Result of Prequalification.

(d)   Before inviting bids, the Borrower itself or through the Executing Agency
      shall submit to the Fund, for its review and concurrence, the notices and
      instructions to bidders, bid form, proposed draft contract, specifications
      drawings and all other documents related to the bidding, together with a
      Request for Review of Tender Documents. When the Fund has no objection to
      the said documents, the Fund shall inform the Borrower or the Executing
      Agency on behalf of the Borrower accordingly by means of a Notice
      regarding Tender Documents. When the Borrower itself or through the
      Executing Agency wishes to make any subsequent alteration to any of the
      said documents the Fund's concurrence is to be obtained before the
      documents are sent to prospective bidders.

(e)   Before sending a notice of award to the successful bidder, the Borrower
      itself or through the Executing Agency shall submit to the Fund, for its
      review and concurrence, the analysis of bids and proposal for award,
      together with a Request for Review of Analysis of Bids and Proposal for
      Award. When the Fund has no objection to the said documents, the Fund
      shall inform the Borrower or the Executing Agency on behalf of the
      Borrower accordingly by means of a Notice regarding Analysis of Bids and
      Proposal for Award.

                                                                        (f) When


                                      -2-
<PAGE>

(f)   When, as provided for in Section 5.10 of the Procurement Guidelines, the
      Borrower itself or through the Executing Agency wishes to reject all bids
      or to negotiate with one or two of the lowest bidders with a view to
      obtaining a satisfactory contract, the Borrower itself or through the
      Executing Agency shall inform the Fund of its reasons, requesting the
      Fund's prior review and concurrence. When the Fund has no objection, it
      shall inform the Borrower or the Executing Agency on behalf of the
      Borrower of its concurrence. In the case of re-bidding, all subsequent
      procedures shall be made substantially in accordance with the
      above-mentioned sub-paragraphs (a) through (e).

(g)   Promptly before executing a contract, the Borrower itself or through the
      Executing Agency shall submit to the Fund, for its review and concurrence,
      a certified copy of the Draft of the Contract, together with a Request for
      Review of the Draft of the Contract (as per Form No. 2 attached hereto).
      When the Fund determines the contract to be consistent with the Loan
      Agreement, the Fund shall inform the Borrower or the Executing Agency on
      behalf of the Borrower accordingly by means of a Notice regarding the
      Draft of the Contract which will be effective upon the receipt of a Report
      on the Execution of the contract. Promptly after executing a contract the
      Borrower itself or through the Executing Agency shall send to the Fund a
      Report on the Execution of the Contract with a duly certified copy of the
      contract (as per Form No. 4 attached hereto).

(h)   Any modification or cancellation of the contract reviewed by the Fund
      shall require the prior written concurrence of the Fund thereto, provided,
      however, that any change which does not constitute an important
      modification of the contract and which does not affect the contract price
      shall not require such concurrence of the Fund.

(2) With regard to any contract the value of which is estimated to be less than
five hundred million Japanese Yen (Yen500,000,000.):

(a)   Promptly before executing a contract, the Borrower itself or through the
      Executing Agency. shall submit to the Fund, for its review and concurrence
      a certified copy of the Draft of the Contract together with the Request
      for Review of the Draft of the Contract (as per Form No. 2 attached
      hereto). When the Fund determines the Draft of the Contract to he
      consistent with the Loan Agreement, the Fund shall inform the Borrower or
      the Executing Agency on behalf of the Borrower accordingly by means of a
      Notice regarding the Draft of the Contract which will be effective upon
      the receipt of the Report on the Execution of the contract. Promptly after
      executing a contract the Borrower itself or through the Executing Agency
      shall send to the Fund a Report on the Execution of the Contract with a
      duly certified copy of the contract (as per Form No. 4 attached hereto).

                                                                         (b) Any


                                      -3-
<PAGE>

(b)   Any modification or cancellation of a contract reviewed by the Fund shall
      require the prior written concurrence of the Fund thereto, provided,
      however, that any change which does not constitute an important
      modification of the contract and which does not affect the contract price
      shall not require such concurrence of the Fund.

Section 4. The Fund's review of decisions relating to employment of consultants

(1) With reference to Section 4.02 of the General Terms and Conditions, the
following procedures shall be subject to the Fund's review and concurrence.

(a)   Before proposals are invited from consultants, the Borrower itself or
      through the Executing Agency shall submit to the Fund, for the its review
      and concurrence, the Terms of Reference, Short List of Consultants and
      Letter of Invitation. together with a Request for Review of these
      documents. When the Fund has no objection to the said documents, the Fund
      shall inform the Borrower or the Executing Agency on behalf of the
      Borrower accordingly by means of a Notice regarding the Terms of
      Reference, Short List of Consultants and Letter of Invitation. Any further
      modification of the said documents by the Borrower itself or through the
      Executing Agency requires the prior concurrence of the Fund.

(b)   Before inviting the highest-ranked consultant to enter on contract
      negotiations, the Borrower itself or through the Executing Agency shall
      submit to the Fund, for its review and concurrence, the results of its
      evaluation of proposals received, together with a Request for Review of
      Evaluation Report on Consultants' Proposals. When the Fund has no
      objection to the said documents, the Fund shall inform the Borrower or the
      Executing Agency on behalf of the Borrower accordingly by means of a
      Notice regarding Evaluation Report on Consultants' Proposals.

(c)   When, as provided for in Section 3.07 (2) of the Consultant Guidelines,
      the Borrower itself or through the Executing Agency wishes to terminate
      the contract negotiations with the highest-ranked consultant and invite
      the second-ranked consultant to enter on negotiations, the Borrower itself
      or through the Executing Agency shall, in advance, inform the Fund of this
      fact, stating its reasons for the Fund's reference.

                                                                          (d) If


                                      -4-
<PAGE>

(d)   If the Borrower wishes, as provided for in Section 3.01 (2) of the
      Consultant Guidelines, to employ a specific consultant, the Borrower
      itself or through the Executing Agency shall inform the Fund in writing of
      its reasons, for its review and concurrence, together with the Letter of
      Invitation and Terms of Reference. After obtaining the concurrence of the
      Fund, the Borrower itself or through the Executing Agency may send the
      Letter of Invitation and Terms of Reference to the Consultant concerned.
      If the Borrower itself or through the Executing Agency finds the proposal
      of the consultant to be satisfactory, it may then negotiate the conditions
      (including the financial terms) of the contract.

(e)   Promptly before executing a contract, the Borrower itself or through the
      Executing Agency shall submit to the Fund, for its review and concurrence,
      a certified copy of the Draft of the Contract, together with a Request for
      Review of the Draft of the Contract (as per Form No. 3 attached hereto).
      When the Fund determines the Draft of the Contract to be consistent with
      the Loan Agreement, the Fund shall inform the Borrower or the Executing
      Agency on behalf of the Borrower accordingly by means of a Notice
      regarding the Draft of the Contract which will be effective upon the
      receipt of a Report on the Execution of the Contract. Promptly after
      executing a contract, the Borrower itself or through the Executing Agency
      shall send to the Fund a Report on the Execution of the Contract with a
      duly certified copy of the contract (as per Form No. 4 attached hereto).

(f)   Any modification or cancellation of a contract reviewed by the Fund shall
      require the prior written concurrence of the Fund thereto, provided,
      however, that any change which does not constitute an important
      modification of the contract and which does not affect the contract price
      shall not require such concurrence of the Fund.


                                      -5-
<PAGE>

                                                                      Form No. 1

                                                             Date:
                                                          Ref. No.

THE OVERSEAS ECONOMIC COOPERATION FUND
South America Regional Office

Attention:  Chief Representative

Gentlemen:

REQUEST FOR REVIEW OF PROCUREMENT METHOD(S)

Reference: Loan Agreement No. BZ-P13, dated January 8, 1998, for Parana State
           Environmental Improvement Project.

      In accordance with the relevant provisions of the Loan Agreement under
reference, we hereby submit for your review the Procurement Method(s) as per
attached sheet.

      We should be grateful if you would notify us of your concurrence.

                                   Very truly yours,

                              For:
                                  ------------------------------------
                                  (Name of the Borrower or the Executing Agency)


                              By:
                                  ------------------------------------
                                  (Authorized Signature)

<PAGE>

                                                      Attached Sheet No. _______

1.    Name of the Project

2.    Method(s) of Procurement

      (       ) Limited International Bidding

      (       ) International Shopping

      (       ) Direct Contracting

      (       ) Others (       )

3.    Reasons for Selection of Method(s) of Procurement in detail

      (For example: technical considerations, economic factors, experiences and
      capabilities)

4.    Name and Nationality of the Supplier

      (in the cases of Limited International Bidding and Direct Contracting)

5.    Estimated Contract Amount

      Foreign Currency

      Local Currency

6.    Main Items Covered by the Contract


7.    Type of Contract

      (       ) Turnkey Contract

      (       ) Procurement of Goods/Equipment/Materials

      (       ) Civil Works Contract

      (       ) Procurement of Services

      (       ) Others

8.    Schedule

      i)    Date of Execution of Contract

      ii)   Shipping Date and/or Date for Commencement of Works/Services

      iii)  Completion Date (for delivery or construction)

<PAGE>

                                                                      Form No. 2

                                                             Date:
                                                          Ref. No.

THE OVERSEAS ECONOMIC COOPERATION FUND
South America Regional Office

Attention:  Chief Representative

Gentlemen:

REQUEST FOR REVIEW OF THE DRAFT OF THE CONTRACT

      In accordance with the relevant provisions of the Loan Agreement No.
BZ-P13, dated January 8, 1998, we hereby submit for your review a certified copy
of the Draft of the Contract attached hereto. The details of the Draft of the
Contract are as follows:

            1.    Name and Nationality of the Supplier: _____________________

            2.    Name of the Purchaser: _____________________

            3.    Contract Price: _____________________

            4.    Amount of Financing Applied for: _____________________
                  (representing ____ % of eligible expenditure)

            5.    Description and origin of the goods: _____________________

      We should be grateful if you would notify us of your concurrence to the
Draft of the Contract by sending us a Notice regarding the Draft of the
Contract.

                                   Very truly yours,

                              For:
                                  ------------------------------------
                                  (Name of the Borrower or the Executing Agency)


                              By:
                                  ------------------------------------
                                  (Authorized Signature)

<PAGE>

                                                                      Form No. 3

                                                             Date:
                                                          Ref. No.

THE OVERSEAS ECONOMIC COOPERATION FUND
South America Regional Office

Attention:  Chief Representative

Gentlemen:

REQUEST FOR REVIEW OF THE DRAFT OF THE CONTRACT

      In accordance with the relevant provisions of the Loan Agreement No.
BZ-P13, dated January 8, 1998, we hereby submit for your review a certified copy
of the Draft of the Contract attached hereto. The details of the Draft of the
Contract are as follows:

            1. Name and Nationality of the Consultant: _________________

            2. Name of the Purchaser: _________________

            3. Contract Price: _________________

            4. Amount of Financing Applied for: _________________
               (representing ____% of eligible expenditure)

      We should be grateful if you would notify us of your concurrence to the
Draft of the Contract by sending us a Notice regarding the Draft of the
Contract.

                                   Very truly yours,

                              For:
                                  ------------------------------------
                                  (Name of the Borrower or the Executing Agency)


                              By:
                                  ------------------------------------
                                  (Authorized Signature)
<PAGE>

                                                                       Form No.4
                                                        Date:
                                                        Ref. No.
THE OVERSEAS ECONOMIC COOPERATION FUND
South America Regional Office

Attention: Chief Representative

Gentlemen:

REPORT ON THE EXECUTION OF THE CONTRACT

      In accordance with your concurrence to the Draft of the Contract, dated we
hereby submit a certified copy of the Contract attached hereto. The Contract was
not made any changes and/or modifications from the Draft of the Contract, and
was executed on _______, ______. The details of the Contract are as follows:

      1.    Number and Date of Contract:____________
      2.    Name and Nationality of the Consultant:_____________
      3.    Name of the Purchaser:___________________
      4.    Contract Price:_______________
      5.    Amount of Financing Applied for:___________ (representing ___% of
            eligible expenditure)

                                  Very truly yours,

                             For: __________________________________
                                  (Name of the Borrower or the Executing Agency)

                             By: ___________________________________
                                 (Authorized Signature)

<PAGE>

                                   Schedule 5

                              Commitment Procedure

      COMMITMENT PROCEDURE dated July, 1988, shall mutatis mutandis be applied
for disbursement of the proceeds of the Loan for the purchase of goods and
services from the Suppliers of the Eligible Source Countries other than the
Federative Republic of Brazil with respect to the portion of Contract stated in
the currency other than that of the Federative Republic of Brazil with the
following supplemental stipulations:

1. With regard to Section 1.(2) of COMMITMENT PROCEDURE, the Japanese Bank shall
be The Bank of Tokyo-Mitsubishi, Ltd., Tokyo, Japan.

2. With regard to Section l.(2) of COMMITMENT PROCEDURE, the Issuing Bank shall
be The Bank of Tokyo-Mitsubishi, Ltd., Tokyo, Japan.

3. (1) The Borrower shall pay to the Fund in Japanese Yen an amount equal to
       one-tenth percent (0.1%) of the amount of the Letter of Commitment as the
       Service charge thereof on the issuing date of the relative Letter of
       Commitment. The Fund shall issue to the Japanese Bank the Letter of
       Commitment upon receipt of the service charge from the Borrower.

   (2) The amount equal to such service charge shall be financed out of the
       proceeds of the Loan, and the Fund shall immediately pay such amount to
       itself as the service charge on the issuing date of the Letter of
       Commitment. Such disbursement out of the proceeds of the Loan shall
       constitute a valid and binding obligation upon the Borrower under the
       terms and conditions of the Loan Agreement.

<PAGE>

                                   Schedule 6

                             Reimbursement Procedure

      REIMBURSEMENT PROCEDURE dated September, 1988, shall mutatis mutandis be
applied for disbursement of proceeds of the Loan for the payment made to the
Suppliers of the Federative Republic of Brazil, and to the Suppliers of the
Eligible Source Countries other than Federative Republic of Brazil with respect
to the portion of contract stated in the currency of the Federative Republic
Brazil, with the following supplemental stipulations:

1. The authorized foreign exchange bank in Tokyo wherever mentioned in this
Schedule, including REIMBURSEMENT PROCEDURE, shall be The Bank of
Tokyo-Mitsubishi, Ltd., Tokyo, Japan.

2. The authorized foreign exchange bank in the territories of the Borrower
mentioned in REIMBURSEMENT PROCEDURE shall be Banco do Estado do Parana S.A.

3. The supporting documents evidencing each payment and its usage, as mentioned
in 1.(b) of REIMBURSEMENT PROCEDURE, shall be as follows:

a)    For payments to suppliers against delivery/shipment of goods and/or
      services-
      i)    bill of lading or similar document evidencing shipment/delivery of
            the goods and/or services listed on the invoice;

      ii)   bill of exchange or similar document evidencing the date and amount
            of payment made to the supplier; a simple receipt from the supplier
            showing the date and amount of payment would also suffice.

b)    For payments to suppliers made prior to delivery/shipment of goods and/or
      services-
            bill of exchange or similar document evidencing the date and amount
            of payment made to the supplier; a simple receipt from the supplier
            showing the date and amount of payment would also suffice.

                                                                 c) For payments


                                      -1-
<PAGE>

c)    For payments for consultants' services-

      i)    the claim put in by the consultants indicating, in sufficient
            details, the services rendered, period covered, and amount payable
            to them;

      ii)   cancelled bank check, demand draft or similar document evidencing
            the date and amount of payment made to the consultants: a simple
            receipts from the consultants showing the date and amount of payment
            would also suffice.

d)    For payments for other services rendered-

      i)    the bill, claim or invoice specifying the nature of services
            rendered and amounts charged therefore;

      ii)   cancelled bank check, demand draft or similar document evidencing
            the date and amount of payment made; a simple receipt showing the
            date and amount of payment would also suffice. If such services
            related to importation of goods (e.g. freight, insurance payments)
            adequate references shall be given to enable the Fund to relate each
            of these items to the specific goods the cost of which has been or
            is to be financed by the Fund.

e)    For payments under civil works contracts-

      i)    the claim, bill or invoice of the contractor showing, in sufficient
            detail, the work performed by the contractor and amount claimed
            therefore;

      ii)   a certificate to the effect that the work performed by the
            contractor is satisfactory and in accordance with the terms of the
            relevant contract; such certificate shall be signed by the chief
            engineering officer of the Borrower assigned to the Project;

      iii)  canceled bank check or similar document evidencing the date and
            amount of payment made to the contractor; a simple receipt from the
            contractor showing the date and amount of payment would also
            suffice.

                                                                (1) The Borrower


                                       -2-
<PAGE>

4.    (1)   The Borrower shall pay to the Fund in Japanese Yen an amount equal
            to one-tenth percent (0.1%) of the amount of the disbursement for
            the Borrower as the service charge thereof on the date of such
            disbursement. The Fund's disbursement under this procedure shall be
            made upon receipt of the service charge from the Borrower.

      (2)   The amount equal to such service charge shall be financed out of the
            proceeds of the Loan, and the Fund shall immediately pay such amount
            to itself as the service charge on the date of the disbursement for
            the Borrower. Such disbursement out of the proceeds of the Loan
            shall constitute a valid and binding obligation upon the Borrower
            under the terms and conditions of the Loan Agreement.

5. The currency and the conversion rate(s) used in the Request for
Reimbursement, as mentioned in 3. of REIMBURSEMENT PROCEDURE, shall be as
follows:

(1)   The amount in the Request for Reimbursement shall be expressed in Japanese
      Yen or U.S. Dollars.

(2)   When the amount in the Request for Reimbursement is expressed in Japanese
      Yen or U.S. Dollars, such amount shall be converted at the T/T buying rate
      quoted by Banco do Estado do Parana BA on the day immediately preceding
      the day on which the Request for Reimbursement is made.

6. Form OECF-SSP attached hereto shall be substituted for Form OECF-SSP attached
to the REIMBURSEMENT PROCEDURE.


                                      -3-
<PAGE>

                                                                 (Form OECF-SSP)

                            Summary Sheet of Payment

                                                        Date:
                                                        Serial No.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
  1          2         3         4         5      6         7       8         9
Trans-  Purchaser  Supplier  *          **        ***       Origin  Contract  Date of
action                       National-  Descrip-  Category          Amount    Payment
                             ity of     tion
                             Supplier


-------------------------------------------------------------------------------------
<S>     <C>        <C>       <C>        <C>       <C>       <C>     <C>       <C>
1.
2.
3.
4.

-------------------------------------------------------------------------------------
Total
-------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
-----------------------------------------------------------
  1       10         11       12        13       14
Trans-    ****       *****    ******    ****     *******
action    Amount of  Nature   Method    Amount   Disburse-
          Payment    of       Procure-  Applied  ment
                     Payment  ment      for      Ratio
                                        Financ-
                                        ing
-----------------------------------------------------------
<S>       <C>        <C>      <C>       <C>      <C>
1.
2.
3.
4.

-----------------------------------------------------------
Total
-----------------------------------------------------------
</TABLE>

      The undersigned certifies that the Supplier(s) and goods and/or services
stated above are eligible under the Loan Agreement.

*      Note for      4. Nationality of Supplier: Country in which the Supplier
                        is incorporated and registered.

**     Note for      5. Description of goods and/or services: In the case of the
                        Commodity Loan, use SITC Code (Rev.2) No.

***    Note for      6. Category: Indicate the Category in Section 1., Schedule
                        2 of the Loan Agreement.

****   Note for 10.&13. Amount of Payment: If not in Japanese Yen, state both
                        the amount in the currency in which the payment was made
                        to the Supplier, and its converted amount(s) calculated
                        in accordance with 3. of REIMBURSEMENT PROCEDURE, as
                        well as the conversion rate(s).

*****  Note for     11. Nature of Payment: A down payment, an installment
                        payment or a final payment, etc.

****** Note for     12. Method of Procurement: State reasons for choice where
                        other than international competitive bidding.

*******Note for     14. Disbursement Ratio: Ratio of Amount Applied for
                        Financing (column 13.) against Amount of Payment
                        (column 10.) in the Currency in which the payment was
                        made to the Supplier.

                                                For The Borrower

                                                  By:___________________________
                                                     (Authorized Signature)
<PAGE>

                                   Schedule 7

                               Transfer Procedure

      TRANSFER PROCEDURE set forth herein may be applied for disbursement of the
proceeds of the loan for the purchase of goods and services from suppliers of
the Federative Republic of Brazil, and Suppliers of Eligible Source Countries
other than the Federative Republic of Brazil, with respect to the portion of a
contract stated in the currency of the Federative Republic of Brazil.

1. When the Borrower receives Claims for Payment from the Suppliers (as per Form
CFP attached hereto), the Borrower shall submit to the Fund a Request for
Disbursement (as per Form DRP attached hereto) signed by the Borrower or the
Executing Agency with a Summary Sheet (as per Form TRF-a attached hereto)
accompanied by documents including the Claims for Payment evidencing the amount
to be paid to the Suppliers, a copy of the Transfer Instruction sent to the
Paying Bank (as per Form OECF-TI) and the following documents evidencing each
payment and its usage:

      (i)   For payments to suppliers against delivery/shipment of goods and/or
            services

            - bill of lading or similar document evidencing shipment/delivery of
              the goods and/or services listed on the invoice;

      (ii)  For payments for consultant's services the

            - claim put in by the consultants indicating, in sufficient detail,
              the services rendered, period covered, and amount payable to them;

      (iii) For payments under civil works contacts

            - the claim, bill or invoice of the contractor showing, in
              sufficient detail, the work performed by the contractor and amount
              claimed therefore.

            - a certificate to the effect that the work performed by the
              contractor is satisfactory and in accordance with the terms of the
              relevant contract; such certificate shall be signed by the chief
              engineering or project officer of the Executing Agency assigned to
              the Project.

                                                                        2. Where


                                      -1-
<PAGE>

2. Where the contract price is fixed and payable in the currency of the
Federative Republic of Brazil, the amount of the Request for Disbursement shall
be stated in Japanese yen or U.S. dollars. The exchange rate for Japanese yen or
US dollars against the currency of the Federative Republic of Brazil shall be
the T/T buying rate quoted by Banco Central do Brasil on the day immediately
preceding the day when the Request for Disbursement is made.

3. When the Fund, after examination, finds the Request for Disbursement in order
and in conformity with the provisions of the Loan Agreement and the terms of the
Contract concerned, the Fund shall make disbursement in Japanese yen within
fifteen (15) business days from the date of receipt of the Request by crediting
to the non-resident Yen account to be opened by the Borrower with The Bank of
Tokyo-Mitsubishi Ltd., Tokyo (hereinafter referred to as "BOTM")

4. In case where the amount raised in the Request for Disbursement is in United
States dollars, the amount of disbursement in Japanese Yen shall be calculated
as the T/T selling rates quoted by the Paying Bank two business days before the
day when the disbursement is made.

5. The Borrower shall pay to the Fund in Japanese Yen an amount equal to
one-tenth percent (0.1%) of the amount of the disbursement for the Borrower as
the service charge thereof on the date of such disbursement. The Fund's
disbursement under this procedure shall be made upon receipt of the service
charge from the Borrower.

6. The amount equal to such service charge shall be financed out of the proceeds
of the Loan, and the Fund shall immediately pay such amount to itself as the
service charge on the date of disbursement for the Borrower. Such disbursement
out of the proceeds of the Loan shall constitute a valid and binding obligation
upon the Borrower under the terms and conditions of the Loan Agreement.

7. After receiving cable advice from BOTM, the Borrower shall immediately
withdraw the disbursed amount and remit the claimed amount from the Supplier in
the currency of the Federative Republic of Brazil into the account of the
Supplier.

8. The Borrower shall submit to the Fund a copy of the Credit Order crediting
the Supplier's account with the claimed amount within 30 days.


                                      -2-
<PAGE>

                                                                        Form CFP

                               Claims for Payment

                                                        Date:

                                                        Loan No.: BZ-P13

To: ____________________________

      We hereby submit Claims for Payment to you for the progress of the work in
the following content.

1.    Contract No. and date:____________

2.    Description of goods and services accomplished:____________

3.    Covered Period: ___________

4.    Claimed amount: _____________

5.    Accumulated amount already paid:________________

6.    Total amount (4. + 5.): ______________

      Please pay the amount claimed in 4. above into our account

__________________________________ with ______________________________________
(beneficiary's name & account number)  (name and address of a commercial bank)


                                  ************

                             (Name of the Supplier)

                            By:______________________
                                  (Signature)

<PAGE>

                                                                      Form : DRP

Request for Disbursement

                                                        Date:
                                                        Loan No. :BZ-P13
                                                        App. Serial No.:

THE OVERSEAS ECONOMIC
COOPERATION FUND
Tokyo, Japan

Attention: Managing Director, Operations Department IV

Gentlemen:

1. Pursuant to the Loan Agreement No. BZ-P13, dated January 8, 1998, between THE
OVERSEAS ECONOMIC COOPERATION FUND (hereinafter referred to as "the Fund") and
THE STATE OF PARANA, the undersigned hereby requests for disbursement under the
said Loan Agreement, of the sum of Japanese Yen ______(say ___________) for the
percent (___%) of payment of expenditures as described in the Summary Sheet(s)
attached hereto.

2. The undersigned has not previously requested for disbursement of any amount
from the Loan for the purpose of meeting the expenditures described in the
Summary Sheet(s). The undersigned has not obtained nor will obtain funds for
such purpose out of the proceeds of any other loan, credit or grant available to
the undersigned except short-term loans or credits, if any, established in
anticipation of the disbursement requested for herein and to be repaid pro-tanto
with the funds disbursed hereunder and any charges, commission or interest paid
or payable under such anticipatory short-term credit are not included in the
amount herein requested to be disbursed.

3. The undersigned certifies that

      a)    the expenditures described in the Summary Sheet(s) are made for the
            purposes specified in the Loan Agreement;

      b)    the goods and services purchased with these expenditures have been
            procured in accordance with the applicable procurement procedures
            agreed with the Fund pursuant to the said Loan Agreement and the
            cost and terms of purchase thereof are reasonable;

      c)    the said goods and services were or will be supplied by the
            supplier(s) specified in the attached Summary Sheet(s) and were or
            will be produced in (or, in the case of services, supplied from) the
            eligible source country(ies) for the Fund's loan.

4. Please disburse the amount requested for herein by paying into the
non-resident Yen account of _______________ with The Bank of Tokyo-Mitsubishi,
Ltd., Tokyo.

5. This request consists of __ page(s) and ___ signed and summary sheet(s), with
the supporting documents.

             For the (Name of the Borrower or the Executing Agency)


                      ------------------------------------
                             (Authorized Signature)

<PAGE>

                                                               (Form OECF-TRF-a)

                                                               Date:
                            Summary Sheet of Payment           Serial No.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
1.      2.        3.           4.               5.        6.        7.        8.       9.
                  *                             **                                     ***
Trans-  supplier  Nationality  Description of   Category  Origin    Contract  Claimed  Amount
action            of Supplier  goods                                Amount    Amount   of
                               and/or services                                         Payment
-----------------------------------------------------------------------------------------------
<S>     <C>       <C>          <C>              <C>       <C>       <C>       <C>
1.
2.
3.
-
-
-

-------------------------------------------------------------------------------------
TOTAL
-------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
--------------------------------------------------------
1.        10.      11.       12.             13.
          ****     *****     ***             ******
Trans-    Nature   Method    Amount          Disburse-
action    of       of        applied         ment
          Payment  Payment   for Financing   Ratio
--------------------------------------------------------
<S>       <C>      <C>       <C>             <C>
1.
2.
3.
-
-
-

--------------------------------------------------------
TOTAL
--------------------------------------------------------
</TABLE>

      The undersigned certifies that the Supplier(s) and goods and/or services
stated above are eligible under the Loan Agreement.

*      Note for      3. Nationality of Supplier: Country in which the Supplier
                        is incorporated and registered.

**     Note for      5. Category: Category described in Section 1 of Schedule 2.

***    Note for      9. Amount of Payment: If not in Japanese Yen, state both
                  & 12. the amount in the currency in which the payment will be
                        made to the Supplier, and its converted amount(s)
                        calculated in accordance with 2. of TRANSFEER PROCEDURE,
                        as well as the conversion rate(s).

****   Note for     10. Nature of Payment: State reasons for choice other than
                        international competitive bidding.

*****  Note for     13. Disbursement Ratio: Ratio of Amount Applied for
                        Financing against Amount of Payment in the currency in
                        which the Payment will be made to the Supplier.

                                                  _____________________________
                                                     (Authorized Signature)

<PAGE>

                                                                   Form: OECF-TI

                              Transfer Instructions

                                                Date:

                                                Loan Agreement No.: BZ-P13

                                                App. Serial No.;

To: The Bank of Tokyo-Mitsubishi, Ltd. Tokyo

      Pursuant to the Banking Arrangement between The Bank of Tokyo-Mitsubishi,
Ltd., Tokyo, and __________ dated _______, we hereby request you to transfer the
amount disbursed by the Fund against our Request for Disbursement No. _________
dated to the account of the relevant Supplier mentioned in the Claims for
Payment No. dated ____ attached to the Request for Disbursement mentioned above.


                  --------------------------------------------
                       (Name and Address of the Borrower)


                  --------------------------------------------
                                   (Signature)

encl. Request for Disbursement
      Claims for Payment

<PAGE>

================================================================================
[DECF Logo]

                              THE OVERSEAS ECONOMIC
                                COOPERATION FUND

                          General Terms and Conditions

                                    Nov. 1987

================================================================================

<PAGE>

                         Overseas Representative Offices

<TABLE>
<S>                                                             <C>
BANGKOK OFFICE                                                  ISLAMABAD OFFICE
   17th Floor, Thai Farmers Bank Building, 400,                    World Bank Building, 20-A, Bank Road,
   Phaholyothin Avenue, Bangkok, 10400,                            G/5-1, Islamabad, PAKISTAN
   THAILAND                                                            Telephone: Islamabad 819781~6(W.B.)
       Telephone: Bangkok 270-1001-3,                                     (ext. 409)
           271-2035, 2828, 4682                                        Telex: Call Number 9254528
       Telex: Call Number 8682968                                          Answer Back Code OECFPK
           Answer Back Code OECFBKKTH                                  Facsimile: +92-51-822546
       Facsimile: +66-2-271-3535


SEOUL OFFICE                                                     COLOMBO OFFICE
   22nd Floor, Lotte Building, 1, Sogong-Dong,                     3rd Floor, National Development Bank Building,
   Chung-ku, Seoul, Republic of KOREA                              40, Navam Mawatha, Colombo 2, SRI LANKA
   C.P.O. Box 1291, Seoul, KOREA                                      Telephone: Colombo 422255, 422260, 422264
   Telephone: Seoul 755-9042, 752-5964                                Facsimile: +94-1-422272
   Facsimile: +82-2-753-6605

JAKARTA OFFICE                                                  PARIS OFFICE
   New Summitmas 8th Floor, J1.Jenderal                            8, Rue Sainte-Anne, 75001, Paris, FRANCE
    Sudirman, Kav. 61-62, Jakarta Selatan, Jarkarta,                   Telephone: Paris 4261-4147
   INDONESIA                                                           Telex: Call Number 42214622
       Telephone: Jakarta 5200226, 5200948, 5220693, 5251350               Answer Back Code OECF 214622F
       Facsimile: +62-21-5200975                                       Facsimile: +33-1-4703-3236

MANILA OFFICE                                                   LONDON OFFICE
   25th Floor, Pacific Star Building,                              9-15, Sackville Street, London, WIX 1DE, U.K.
    Makati Ave. cor. Gil J. Puyat Ave.                                 Telephone: London (071)734-3565
   1200 Makati, Metro Manila,                                          Facsimile: +44-71-734-3569
   PHILIPPINES
       Telephone:  Manila 810-4826
       Facsimile: +63-2-815-1799

NEW DELHI OFFICE                                                NAIROBI OFFICE
   D.L.F. Centre, 2nd Floor, Sansad Marg, New Delhi,               6th Floor, International House, Mama Ngina Street,
   110001                                                          P.O. Box 49526, Nairobi, KENYA
   INDIA                                                               Telephone: Nairobi 254-2-221420, 221637
       Telephone:  New Delhi 3714362, 3714363, 3717090                 Telex: Call Number 98722094
       Telex: Call Number 813166767                                        Answer Back Code OECFKE
           Answer Back Code OECFIN                                     Facsimile: +254-2-221569
       Facsimile: +91-11-371-5066

BEIJING OFFICE                                                  CAIRO OFFICE
   1215-17, China World Trade Center,                              Nile Hilton Hotel Commercial Center,
   No. 1 Jian Guo, Men Wai Avenue, Beijing,                        No. 30 Tahrir Square, Cairo, EGYPT
   The People's Republic of CHINA                                      Telephone: Cairo 5748708, 5748709
       Telephone:  Beijing 505-1196, 1197, 4538                            Nile Hilton Cairo
       Telex: Call Number 8522694                                          765666(ext. 3031)
           Answer Back Code OECFBCN                                    Telex: Call Number 9193148
       Facsimile: +86-1-505-1198                                           Answer Back Code OECFUN
                                                                       Facsimile: +20-2-5741594

KUALA LUMPUR OFFICE                                             WASHINGTON OFFICE
   22nd Floor, UBN Tower, Letter Box No. 59                        2100 Pennsylvania Avenue, N.W.
   Jalan P. Ramlee 50250, Kuala Lumpur,                            Washington, D.C., 20037 U.S.A.
   MALAYSIA                                                            Telephone: Washington (202) 463-7492
       Telephone: Kuala Lumpur 2323255, 2322201,                       Facsimile: +1-202-463-7496
           2322202
       Facsimile: +60-3-2322115

DHAKA OFFICE                                                    SOUTH AMERICA REGIONAL OFFICE
   Sonargaon Hotel Room No.351-354                                 Edifici Torre Rio Sul,
   107, Kazi Nazrul Islam Avenue, Dhaka                            Rua Lauro Muller, 116/3005
   BANGLADESH                                                      Botafogo; Rio de Janeiro-RJ-CEP 22290-160, BRAZIL
       Telephone: Dhaka 811463, 811005,                                Telephone:  Rio de Janeiro 295-5942, 8596
           8/2001 (Hotel)(Ex. 4351-4)                                  Telex: Call Number 2130937
           814081, 816700(Direct)                                  Answer Back Code OECFBR
                                                                       Facsimile: +55-21-295-7840

                                                                HANOI OFFICE
                                                                   5th FLOOR, 41B LY THAI TO STREET, HANOI,
                                                                   VIET NAM
                                                                       Telephone: 844-248934-6
                                                                       Facsimile: 844-248937
</TABLE>
<PAGE>

                          GENERAL TERMS AND CONDITIONS

                                Table of Contents

<TABLE>
<CAPTION>
Article Number                             Heading                            Page

<S>                                                                             <C>
Article I     Introduction; Inconsistency...................................     1
       Section 1.01.    Introduction........................................     1
       Section 1.02.    Inconsistency with Loan Agreement...................     1
Article II    Definitions; References to Articles and
              Sections; Headings ...........................................     1
       Section 2.01.    Definitions.........................................     1
       Section 2.02.    References to Articles and Sections.................     2
       Section 2.03.    Headings                                                 2
Article III   Loan; Repayment; Interest; Overdue Charge;
              Method of Payment; Currency ..................................     2
       Section 3.01.    Amount of Loan......................................     2
       Section 3.02.    Repayment...........................................     2
       Section 3.03.    Interest............................................     2
       Section 3.04.    Financing of Part of Banking Charges and/or Fees....     3
       Section 3.05.    Overdue Charge......................................     3
       Section 3.06.    Computation of Interest and Overdue Charge..........     3
       Section 3.07.    Method of Payment...................................     3
       Section 3.08.    Currency in which Principal, Interest and
                        other Charges are Payable...........................     3
       Section 3.09.    Notice Given by the Fund............................     3
Article IV    Fund's Review and Misprocurement .............................     3
       Section 4.01.    General.............................................     3
       Section 4.02.    Fund's Review.......................................     3
       Section 4.03.    Misprocurement......................................     4
Article V     Disbursement .................................................     4
       Section 5.01.    Disbursement Procedure..............................     4
       Section 5.02.    Constitution of Obligation..........................     4
       Section 5.03.    Adequacy of Documents...............................     4
       Section 5.04.    Additional Documents................................     4
       Section 5.05.    Notice of Disbursement..............................     4
       Section 5.06.    Notice of Completion of Disbursement................     4
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
Article Number                             Heading                            Page

<S>                                                                             <C>
Article VI    Remedies; Failure to Exercise Rights;
              Non-Exemption; Prohibition of Assignment;
              Non-Discrimination; Administration ...........................     5
      Section 6.01. Remedies of the Fund....................................     5
      Section 6.02. Failure to Exercise Rights..............................     5
      Section 6.03. Non-Exemption of the Borrower from Obligations..........     5
      Section 6.04. Prohibition of Assignment...............................     5
      Section 6.05. Non-Discrimination......................................     5
      Section 6.06. Administration of Loan..................................     6
Article VII   Guarantee for Loan ...........................................     7
      Section 7.01. Guarantee for Loan......................................     7
      Section 7.02. Additional Guarantee....................................     7
Article VIII  Arbitration ..................................................     7
      Section 8.01. Arbitral Tribunal.......................................     7
      Section 8.02. Panics to Arbitration...................................     7
      Section 8.03. Arbitrators.............................................     7
      Section 8.04. Arbitration Proceedings.................................     8
      Section 8.05. Arbitral Award..........................................     8
      Section 8.06. Costs of Arbitral Tribunal..............................     9
      Section 8.07. Dissolution of Arbitral Tribunal........................     9
      Section 8.08. Enforcement of Award....................................     9
Article IX    Applicable Laws; Taxes and Expenses;
              Notices and Requests; Execution ..............................     9
      Section 9.01. Applicable Laws ........................................     9
      Section 9.02. Taxes and Expenses .....................................    10
      Section 9.03. Notices and Requests ...................................    10
      Section 9.04. Execution ..............................................    10
      Section 9.05. Fractions ..............................................    10
Article X     Effectiveness and Termination of
              Loan Agreement ...............................................    10
      Section 10.01  Evidence of Authority and Specimen Signatures .........    10
      Section 10.02  Legal Opinion .........................................    11
      Section 10.03  Effective Date ........................................    11
      Section 10.04  Termination of Loan Agreement .........................    11
</TABLE>

<PAGE>

                          GENERAL TERMS AND CONDITIONS

                                    Article I

                           Introduction; Inconsistency

Section 1.01. Introduction

            The purpose of these General Terms and Conditions (hereinafter
      referred to as "the General Terms and Conditions") is to set forth the
      terms and conditions generally applicable to loans made by the Fund.

Section 1.02. Inconsistency with Loan Agreement

            If any provision of the General Terms and Conditions is inconsistent
      with any provision of the Loan Agreement, of which the General Terms and
      Conditions constitute an integral part, or with any provision of the
      Guarantee, if any, such provision of the Loan Agreement or the Guarantee
      shall govern.

                                   Article II

            Definition; Reference to Articles and Sections; Headings

Section 2.01. Definitions

            The following terms have the following meanings wherever used in the
      General Terms and Conditions.

            (a)   "Fund" means THE OVERSEAS ECONOMIC COOPERATION FUND.

            (b)   "Loan Agreement" means the particular loan agreement, as that
                  agreement may from time to time be amended, to which the
                  General Terms and Conditions apply. Loan Agreement includes
                  the General Terms and Conditions as applicable thereto and all
                  schedules and agreements supplemental to the Loan Agreement.

            (c)   "Loan" means the loan provided for in the Loan Agreement.

            (d)   "Borrower" means the party to the Loan Agreement to which the
                  Loan is made.

            (e)   "Guarantee" means a written promise to the Fund, made by an
                  entity in the country of the Borrower other than the Borrower
                  constituting a guarantee for the Loan.

            (f)   "Guarantor" means the entity referred to in item (e) above.

            (g)   "Project" means the project or program for which the Loan is
                  granted, as described in the Loan Agreement and as the
                  description thereof may from time to time be amended by
                  agreement


                                      -1-
<PAGE>

                  between the Fund and the Borrower.

            (h)   "Letter of Commitment" means an undertaking given by the Fund
                  to make disbursement to the issuing bank of a letter of credit
                  for the procurement of goods and services under the Loan.

Section 2.02. References to Articles and Sections

            References in the General Terms and Conditions to Articles or
      Sections are to Articles or Sections of the General Terms and Conditions.

Section 2.03. Headings

            The headings of Articles and Sections of the General Terms and
      Conditions are inserted for convenient reference only and are not a part
      of the General Terms and Conditions.

                                   Article III

                   Loan; Repayment; Interest; Overdue Charge;
                           Method of Payment; Currency

Section 3.01. Amount of Loan

            The Amount of the Loan, expressed in Japanese Yen, shall be
      stipulated in the Loan Agreement. The proceeds of the Loan shall be
      disbursed by the Fund within the limit of that amount in accordance with
      the disbursement procedure provided for in Article V.

Section 3.02. Repayment

            (1) The principal of the Loan shall be repayable in accordance with
      the amortization schedule attached to the Loan Agreement.

            (2) When all disbursements to be made under the Loan Agreement have
      been completed and the cumulative total of such disbursements is less than
      the full amount of the Loan stipulated therein, the difference between
      such amount of the Loan and the cumulative total of all disbursements
      shall be deducted proportionately from all subsequent instalments of
      repayment of principal, as indicated in the amortization schedule attached
      to the Loan Agreement, provided, however, that all fractions of ONE
      THOUSAND Japanese Yen (Y1,000.) of such instalments of principal shall be
      added to the immediately subsequent instalment of principal.

            (3) The Borrower may, upon giving not less than thirty (30) days'
      notice in writing to the Fund, prepay in whole or in part the principal of
      the Loan then outstanding together with the interest accrued thereon. Any
      such prepayment shall be applied to the instalments in inverse order of
      maturity.

Section 3.03. Interest

            Interest at the rate specified in the Loan Agreement shall be
      payable semi-annually on the principal disbursed and outstanding. Interest
      shall accrue from the respective dates on which the proceeds of the Loan
      are disbursed.


                                      -2-
<PAGE>

Section 3.04. Financing of Part of Banking Charges and/or Fees

            For the purpose of financing part of banking charges and/or fees for
      disbursement of the proceeds of the Loan as referred to in Section 9.02
      (2), the Fund agrees to lend the Borrower up to a cumulative amount of one
      tenth of one percent (0.1%) of the amount of each Letter of Commitment
      and/or disbursement effected in accordance with a procedure other than
      Letter of Commitment.

Section 3.05. Overdue Charge

            Should repayment of principal or payment of interest or any other
      charges required under the Loan Agreement be delayed, the interest
      specified in Section 3.03. shall cease to accrue on such overdue amount of
      principal on and after the due date and an overdue charge calculated at a
      rate of three percent (3%) per annum over and above the interest rate
      specified in the Loan Agreement shall be payable on the overdue amount of
      principal, interest or other charges for a period from the due date to the
      day immediately preceding the day of actual payment thereof, both
      inclusive.

Section 3.06. Computation of Interest and Overdue Charge

            Interest and overdue charge shall be computed on the basis of a
      365-day year.

Section 3.07. Method of Payment

            The Borrower shall have all payments of principal and of interest
      and other charges on the Loan credited to the Fund's account with The Bank
      of Tokyo, Ltd., Uchisaiwai-cho Office, Tokyo, Japan.

Section 3.08. Currency in which Principal, Interest and Other
              Charges are Payable

            Repayment of principal and payment of interest and other charges
      shall be made in Japanese Yen.

Section 3.09. Notice Given by the Fund

            The Fund may, when it deems it necessary, send the Borrower a Notice
      concerning Interest and Principal (Form No. I attached hereto).

                                   Article IV

                        Fund's Review and Misprocurement

Section 4.01. General

            Goods and services (the term "services" as used in this General
      Terms and Conditions includes consulting services), to be financed out of
      the proceeds of the Loan shall be procured in accordance with the
      guidelines for procurement and the guidelines for the employment of
      consultants.

Section 4.02. Fund's Review

            The Fund may review the Borrower's procurement procedures, documents
      and decisions. The Loan Agreement will specify the extent to which review
      procedures will apply in respect of goods and services to be financed


                                     -3-
<PAGE>

      out of the proceeds of the Loan.

Section 4.03. Misprocurement

            The Fund does not finance expenditures for goods and services which
      have not been procured in accordance with the agreed procedures and the
      Fund will cancel that portion of the Loan allocated to goods and services
      that have been misprocured. The Fund may, in addition, exercise other
      remedies under the Loan Agreement.

                                    Article V

                                  Disbursement

Section 5.01. Disbursement Procedure

            The proceeds of the Loan shall be disbursed by the Fund as the
      progress of the Project renders it necessary and in accordance with the
      disbursement procedure.

Section 5.02. Constitution of Obligation

            A disbursement effected in accordance with the disbursement
      procedure shall constitute a valid and binding obligation upon the
      Borrower under the terms of the Loan Agreement with relation to such
      disbursement as from the date of disbursement.

Section 5.03. Adequacy of Documents

            All documents or evidence required under the disbursement procedure
      must be adequate in form and substance to satisfy the Fund that the
      proceeds of the Loan to be disbursed are to be used solely for the purpose
      specified in the Loan Agreement.

Section 5.04. Additional Documents

            The Borrower shall provide the Fund with any additional documents or
      evidence in support of the documents or evidence mentioned in the
      preceding Section which the Fund may reasonably request.

Section 5.05. Notice of Disbursement

            After effecting a disbursement, the Fund shall send the Borrower a
      Notice of Disbursement (Form No. 2 attached hereto).

Section 5.06. Notice of Completion of Disbursement

            (1) After effecting the final disbursement under the Loan Agreement,
      the Fund shall send the Borrower a Notice of Completion of Disbursement
      (Form No. 3 attached hereto) in duplicate.

            When the cumulative total of disbursements is less than the amount
      of the Loan and no further disbursement is required for the Project, the
      Borrower shall notify the Fund of the fact in order that the Fund may know
      that the final disbursement has been made.

            (2) The Borrower shall immediately return to the Fund one copy of
      the Notice of Completion of Disbursement signed by a duly authorized
      person.


                                       -4-
<PAGE>

                                   Article VI

              Remedies; Failure to Exercise Rights; Non-Exemption;
         Prohibition of Assignment; Non-Discrimination; Administration

Section 6.01. Remedies of the Fund

            When any of the following shall occur and be continuing, the Fund
      may by notice to the Borrower and the Guarantor, if any, suspend in whole
      or in part the rights of the Borrower, and/or demand that the Borrower
      and/or the Guarantor, if any, fully remedy whichever of the following has
      occurred. If the following shall have continued for a period of thirty
      (30) days from the date of such notice, the Fund may terminate
      disbursement and/or may declare all the principal then outstanding, with
      the interest and any other charges thereon, to be due and payable
      immediately, and upon such declaration such principal, interest and other
      charges shall become immediately due and payable:

            (a) Default in repayment of principal and/or payment of interest or
            any other charges required under the Loan Agreement and/or any
            other loan agreement between the Fund and the Borrower;

            (b) Default in the performance of any other terms and conditions,
            covenant or agreement on the part of the Borrower or the Guarantor,
            if any, under the Loan Agreement or the Guarantee, if any;

            (c) Exceptional circumstances beyond the control of the parties
            (including war, civil war, earthquake, flood, etc.) which make it
            improbable, in the opinion of the Fund, that the Borrower or the
            Guarantor, if any, will be able to perform its obligations under the
            Loan Agreement or the Guarantee, if any.

Section 6.02. Failure to Exercise Rights

            No failure on the part of the Fund to exercise, or delay in
      exercising, any of its rights under the Loan Agreement or the Guarantee,
      if any, shall be construed to be a waiver thereof, nor shall any single or
      partial exercise by the Fund of any of its rights under the Loan Agreement
      or the Guarantee, if any, impair the Fund's further exercise of such
      right(s) or of any other right.

Section 6.03. Non-Exemption of the Borrower from Obligations

            All claims or disputes in connection with the contract shall be
      settled among the parties thereto, and no such claims or disputes shall
      exempt the Borrower from any obligation incurred under the Loan Agreement.

Section 6.04. Prohibition of Assignment

            The Borrower shall not assign or transfer any rights or obligations
      under the Loan Agreement.

Section 6.05. Non-Discrimination

            Regarding repayment of principal and payment of interest or any
      other charges required under the Loan Agreement, the Borrower and the
      Guarantor, if any, shall undertake not to treat debts to the Fund less
      favorably than any other debts other than short-term debts.


                                       -5-
<PAGE>

Section 6.06. Administration of Loan

            (1) The Borrower shall carry out the Project, or cause it to be
      carried out, with all due diligence and efficiency, and in conformity with
      sound engineering and financial practices.

            (2) The Borrower shall cause all goods and services financed out of
      the proceeds of the Loan to be used solely for the implementation of the
      Project under the Loan Agreement.

            (3) The Borrower shall keep, or cause to be kept, books, accounts
      and records adequate to identify goods and services financed out of the
      proceeds of the Loan, to show the use made thereof in the Project, to
      record the progress of the Project, and to reflect, in accordance with
      sound and consistent accounting practice, the operations and financial
      situation of the Borrower or other beneficiaries of the Loan.

            (4) The Borrower shall enable, or take such steps as may be
      necessary to enable, the Fund's representatives to visit any facilities
      and construction sites included in the Project and to examine goods and
      services financed out of the proceeds of the Loan and any plant,
      installation, site, works, building, property, equipment, books, accounts,
      records and documents relevant to the performance of the obligations of
      the Borrower under the Loan Agreement.

            (5) The Borrower shall, in the interests of the sound administration
      of the Loan, furnish the Fund with, or cause to be furnished with, to the
      Fund all such information, at such times, in such form and in such detail,
      as the Fund shall reasonably request. Such information may include
      information with respect to the financial and economic situation in the
      country of the Borrower and its international balance of payments
      position.

            (6) Should any circumstances arise which prevent, or threaten to
      prevent, the execution and completion of the Project on schedule, the
      Borrower shall promptly notify the Fund of such circumstances.

            (7) The Borrower shall send, or cause to be sent, to the Fund,
      promptly upon formulation, details of all plans which would result in any
      important modification of the Project and these shall be the subject of
      agreement between the Fund and the Borrower.

            (8) Each party to the Loan shall, from time to time, as the other
      party thereto shall reasonably request, afford the other party all
      reasonable opportunity for exchange of views between the Fund and the
      Borrower with regard to any and all matters relating to the Loan.


                                      -6-
<PAGE>

                                   Article VII

                               Guarantee for Loan

Section 7.01. Guarantee for Loan

            When the Fund requires a guarantee for the Loan, the Borrower shall
      deliver the Guarantee to the Fund, signed by a Guarantor acceptable to the
      Fund, immediately after the execution of the Loan Agreement. The Guarantee
      shall be made substantially in the form given in Form No. 4 attached
      hereto.

Section 7.02. Additional Guarantee

            When the amount of the Loan is to be increased, the Borrower shall
      deliver to the Fund, an additional Guarantee signed by the Guarantor
      acceptable to the Fund, immediately after the Fund and the Borrower have
      agreed upon such increase.

                                  Article VIII

                                   Arbitration

Section 8.01. Arbitral Tribunal

            All disputes arising from the Loan Agreement or the Guarantee, if
      any, which cannot be settled amicably between the Fund and the Borrower
      (together with the Guarantor, if any), shall be decided, finally and
      exclusively, by an Arbitral Tribunal as hereinafter provided.

Section 8.02. Parties to Arbitration

            The parties to such arbitration shall be the Fund on the one hand
      and the Borrower and the Guarantor, if any, on the other.

Section 8.03. Arbitrators

            (1) The Arbitral Tribunal shall consist of three arbitrators
      appointed as follows:

            One arbitrator shall be appointed by the Fund, a second by the
      Borrower and the Guarantor, if any, (where the Borrower and the Guarantor
      are unable to reach agreement on the choice of an arbitrator, then by the
      Guarantor) and a third arbitrator (hereinafter referred to as "the
      Umpire") shall be appointed by agreement of the parties or, if they are
      unable to agree, by an appropriate organ for the settlement of
      international disputes. If either party shall fail to appoint an
      arbitrator, that arbitrator shall be appointed by the Umpire.

            (2) When any arbitrator appointed pursuant to the preceding
      paragraph shall resign, die or otherwise become unable to act as an
      arbitrator, a successor shall be appointed without delay 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 the original
      arbitrator.


                                       -7-
<PAGE>

            (3) No person who has a personal or direct financial interest in the
      matter(s) submitted for arbitration shall be appointed as an arbitrator.
      The Umpire shall settle all disputes which may arise under this paragraph.

            (4) The Umpire shall not be a person of the same nationality as
      either of the parties to arbitration.

            (5) Any and all arbitrators appointed in accordance with the
      provisions hereof shall be bound by the provisions of this Article and
      shall arbitrate in accordance therewith.

Section 8.04, Arbitration Proceedings

            (1) Arbitration proceedings shall be conducted in the English
      language and shall be instituted by the sending of a written request for
      arbitration by one party to the other. Such request shall contain a
      statement setting forth the nature of the dispute and the relief sought
      and/or the solution desired or proposed. Within forty (40) days of the
      sending of the request, each party shall notify the other of the full
      name, occupation, address, career and nationality of the arbitrator
      appointed by it.

            (2) If, within sixty (60) days of the sending of such request, the
      parties have not agreed upon the appointment of the Umpire, the Fund shall
      request an appropriate organ for the settlement of international disputes
      to appoint the Umpire, as provided for in Section 8.03., paragraph (1).

            (3) The place of meeting of the Arbitral Tribunal shall be
      determined by agreement between the parties, or, if they are unable to
      agree, by the Umpire.

            Within thirty (30) days of the appointment of the Umpire or after
      the appointment of an arbitrator by the Umpire as provided for in Section
      8.03., paragraph (1), the Umpire shall notify the parties concerned of the
      place, date and time of the first sitting of the Arbitral Tribunal. The
      places, dates and times of the second and subsequent sittings of the
      Arbitral Tribunal shall be fixed by the Arbitral Tribunal.

            (4) The Arbitral Tribunal may, at any stage of the arbitration
      proceedings, request the parties to present such witnesses, documents,
      etc., as are considered necessary.

            The Arbitral Tribunal shall decide all questions relating to its
      competence and shall determine its procedure. The parties shall, in any
      case, be afforded an oral hearing in a sitting of the Tribunal.

Section 8.05. Arbitral Award

            (1) The Arbitral Tribunal shall make an arbitral award (hereinafter
      referred to as "the Award") within one hundred and twenty (120) days of
      the date of the first sitting of the Arbitral Tribunal, provided, however,
      that the Arbitral Tribunal may extend this period if it considers it
      necessary.

            (2) The Award and all other matters requiring decisions by the
      Arbitral Tribunal shall be decided by majority vote and shall be final and
      binding upon the parties, and each party shall abide by, and comply with
      the Award. Any arbitrator who disagrees with the majority may append his
      views on the Award to the documents issued by the Arbitral Tribunal.


                                       -8-
<PAGE>

            (3) A copy of the Award documents, signed by all three arbitrators,
      shall be sent without delay to each party.

            (4) The Award shall not be made public without the consent of the
      panics.

Section 8.06. Costs of Arbitral Tribunal

            (1) The costs of the Arbitral Tribunal shall consist of the
      following:

            (a) Remuneration of the arbitrators and any other persons whose
      services may be required in the course of the arbitration proceedings;

            (b) Expenditures incurred by the Arbitral Tribunal, including the
      expenditures incurred in connection with the notice provided for in
      Section 8.04;

            (c) Any expenses paid by the parties and deemed by the Arbitral
      Tribunal to be costs of the Arbitral Tribunal.

            (2) The amount of the remuneration of an arbitrator other than the
      Umpire shall be fixed by the party which appoints that arbitrator. The
      amount of the remuneration of the Umpire shall be fixed by an agreement
      between both parties, or if they fail to agree, by the Arbitral Tribunal.

            (3) The Arbitral Tribunal may, before it commences its activities,
      collect equal sums from both parties in such amounts as may be considered
      necessary to cover its costs.

            The costs of the Arbitral Tribunal provided for in paragraph (1)
      above shall finally be borne by one or both parties according to the terms
      of the Award.

Section 8.07. Dissolution of Arbitral Tribunal

            The Arbitral Tribunal shall not be considered dissolved until the
      signed copies of the Award documents provided for in Section 8.05,,
      paragraph (1) shall have been dispatched to the parties and the costs of
      the Arbitral Tribunal paid in full.

Section 8.08. Enforcement of Award

            If within thirty (30) days of the sending of the Award documents to
      the parties, the Award shall not have been complied with, a party may
      require judgement upon the Award or institute proceedings for enforcement
      of the Award against the party with obligations to it under the Award in
      any court of competent jurisdiction. However, no other interference, legal
      or otherwise, with the enforcement of the Award shall be attempted.

                                   Article IX

                   Applicable Lam; Taxes and Expenses; Notices
                             and Requests; Execution

Section 9.01. Applicable Laws

            The validity, interpretation and performance of the Loan Agreement


                                       -9-
<PAGE>

      and the Guarantee, if any, shall be governed by the laws and regulations
      of Japan.

Section 9.02. Taxes and Expenses

            (1) The Borrower and/or other beneficiaries of the Loan shall pay
      all taxes, charges and other expenses imposed upon the Fund within the
      country of the Borrower in connection with the Loan and its
      implementation.

            (2) The Borrower shall pay, or cause to be paid, all banking charges
      and/or fees for disbursement of the proceeds of the Loan, repayment of
      principal or payment of interest or any other charges on the Loan.

Section 9.03. Notices and Requests

            Any notice or request required to be given or made or which one or
      both parties have the right to give or make under the Loan Agreement or
      the Guarantee, if any, shall be in writing. Such notice or request shall
      be deemed to have been duly given or made when it shall have been
      delivered by hand, received by mail or dispatched by registered airmail,
      cable or telex to the party to which it is to be given or made at such
      party's address specified in the Loan Agreement or at such other address
      as that party shall have designated by notice to the party giving the
      notice or making the request.

Section 9.04. Execution

            The Loan Agreement shall be executed in duplicate in the English
      language, each copy being considered to be an original.

Section 9.05. Fractions

            Any fraction of ONE Yen ((Yen)1.00) which may appear in the
      computation of interest or any other charges under the Loan Agreement
      shall be disregarded.

                                    Article X

                 Effectiveness and Termination of Loan Agreement

Section 10.01. Evidence of Authority and Specimen Signatures

            (1) The Borrower shall furnish the Fund with satisfactory evidence
      of authority for the person(s) who will make, sign and deliver documents
      necessary for the implementation of the Loan Agreement, together with an
      authenticated specimen signature of each such person.

            (2) When any change has been made relevant to the evidence of
      authority mentioned in the preceding paragraph, the Borrower shall notify
      the Fund in writing of the fact, providing the Fund with satisfactory new
      evidence of authority.

            (3) When a person(s) has been appointed to replace a person(s)
      specified in the evidence of authority referred to in paragraph (1) above,
      the Borrower shall notify the Fund in writing of the fact, providing the
      Fund with an authenticated specimen signature of the newly appointed
      person(s).


                                      -10-
<PAGE>

Section 10.02. Legal Opinion

            (1) The Borrower shall provide the Fund with a Legal Opinion(s),
      made substantially in the form given in Form No. 5 and where required No.
      6 attached hereto and prepared and certified by a person acceptable to the
      Fund showing:

            (a)   With regard to the Borrower, that the Loan Agreement has been
                  duty authorized by and executed and delivered on behalf of the
                  Borrower and constitutes a valid and binding obligation upon
                  the Borrower with regard to all its terms and conditions, and
                  that the authorizations and all other procedures necessary for
                  the implementation of the Loan Agreement have been duly
                  effected and completed;

            (b)   With regard to the Guarantor, if any, that the Guarantee has
                  been duly authorized by and executed and delivered on behalf
                  of the Guarantor and constitutes a valid and binding
                  obligation upon the Guarantor with regard to ail its terms and
                  conditions.

            (2) After the Loan Agreement becomes effective, the Borrower shall
      provide the Fund with such additional legal opinion(s) prepared and
      certified by the person mentioned above, on matters relating to the Loan
      Agreement and the Guarantee, if any, as the Fund may from time to time
      request.

Section 10.03. Effective Date

            The Loan Agreement shall become effective on the date on which the
      Fund declares itself satisfied with the evidence of authority and the
      specimen signatures referred to in Section 10.01., paragraph (1), the
      Legal Opinion mentioned in Section 10.02, paragraph (1), and the
      Guarantee, if any.

            The Fund shall immediately notify the Borrower in writing of the
      effective date of the Loan Agreement.

Section 10.04. Termination of Loan Agreement

            (1) If the Loan Agreement shall not have become effective within one
      hundred and twenty (120) days (commencing with the date of signature), the
      Loan Agreement and the Guarantee, if any, shall terminate, unless the
      Fund, after consideration of the reasons for the delay, sets a later date
      for the purpose of this Section. The Fund shall promptly notify the
      Borrower of such later date.

            (2) When the entire amount of the principal of the Loan shall have
      been repaid and all interest and other charges which shall have accrued on
      the Loan shall have been paid, the Loan Agreement and the Guarantee, if
      any, shall forthwith terminate.


                                      -11-
<PAGE>

                                                                    (Form No. 1)

                                                        Date:

                                                        Ref. No.

_________________________________

_________________________________
(Name and address of Borrower)

Attention:

NOTICE CONCERNING INTEREST AND PRINCIPAL

Loan Agreement No.
             Date:

Due Date at Tokyo:

Principal Repayable: ___________________________

Interest Payable:    ___________________________

Total:               ___________________________

Interest Computation: As per attached sheet.

Note: Please credit the said amount to THE OVERSEAS ECONOMIC CO-OPERATION FUND's
      account with The Bank of Tokyo, Ltd., Uchisaiwai-cho Office, Tokyo, Japan
      by the due date at Tokyo.


                                                     ---------------------------
                                                       (Authorized Signature)

Encl:


                                      -12-
<PAGE>

                                                                     (Form No.2)

(Name and address of Borrower)

                                                        Date:

                                                        Ref. No.:

Attention:

Gentlemen:

NOTICE OF DISBURSEMENT

We hereby notify you that from _________ to ______________ (as per attachment)
we have made disbursements totalling ___________________________.

                                                Very truly yours,


                                                --------------------------------


                                      -13-
<PAGE>

                                                                    (Form No. 3)

                                                        Date:
                                                        Ref. No.:
______________________________

______________________________
(Name and address of Borrower)

Attention:

Gentlemen:

NOTICE OF COMPLETION OF DISBURSEMENT

With reference to Loan Agreement No. ___ dated _______, we hereby notify
you that all disbursements under the said Loan Agreement have been completed.
The details of disbursements under the Loan Agreement are as follows:

      1.    Loan Limit (A):                             (Yen) __________________
      2.    Cumulative Total of Disbursements (B):      (Yen) __________________
      3.    Unused Balance (A - B):                     (Yen) __________________
      4.    Date of the Final Disbursement:
      5.    Date of Completion of Disbursement:

We also wish to notify you that the said Loan Agreement shall be implemented
henceforth as follows:

      1.    Amortization Schedule:
      2.    Due Dates of Interest Payments:
            (1)   Due Date of Next Payment:
            (2)   Due Date thereafter:

In confirmation of this Notice, please return to us immediately one copy, signed
by a duly authorized person.

                                Very truly yours,


                                            ------------------------------------
                                                    (Authorized Signature)

(Please do not detach.).........................................................

                                                   Date:

We hereby acknowledge receipt of this Notice and confirm that the Loan Agreement
shall be implemented as stated above.

                                                        __________________
                                                        (Name of Borrower)


                                      -14-
<PAGE>

                                                                     (Form No.4)

                                                        Date:
                                                        Ref. No.:

THE OVERSEAS ECONOMIC
COOPERATION FUND
Tokyo, Japan

Attention: Chairman

Gentlemen:

GUARANTEE FOR THE LOAN

In consideration of the Loan of _____________________________ Japanese Yen
((Yen)________) to be extended to (Name of Borrower) (hereinafter referred to as
"the Borrower") by THE OVERSEAS ECONOMIC COOPERATION FUND (hereinafter referred
to as "the Fund") under Loan Agreement No.___, dated ________,between the
Borrower and the Fund (hereinafter referred to as "the Loan Agreement"), I, the
undersigned, acting for and on behalf of (Name of Guarantor) (hereinafter
referred to as "the Guarantor"), hereby affirm:

1.    That the Guarantor has accepted all the provisions of the Loan Agreement
      and agrees to guarantee jointly and severally with the Borrower any and
      all liabilities arising from or in connection with the obligations of the
      Borrower under the Loan Agreement.

2.    That the Guarantor, furthermore, agrees that:

      (1)   The Guarantor guarantees the due and punctual payment of the
            principal of and the interest and any other charges on the Loan as
            provided for in the Loan Agreement;

      (2)   The Guarantor shall not be exempted from any of its liabilities
            under this Guarantee by reason of any extension of maturity,
            forbearance or concession given to the Borrower, any exercise of
            right or remedy against the Borrower, or any modification or
            amplification of the provisions of the Loan Agreement (provided that
            if the principal of the Loan is thereby increased, the Guarantor
            shall be exempted from its liabilities to the extent of such
            increase);


                                      -15-
<PAGE>

                                                        Date:

      (3)   So long as any part of the Loan under the Loan Agreement shall be
            outstanding and unpaid, the Guarantor shall:

            i)    Not take any action which would prevent or interfere with the
                  performance by the Borrower or any other beneficiaries of the
                  Loan, if any, of obligations under the Loan Agreement, and

            ii)   Not, without prior consent of the Fund in writing, take any
                  action for the dissolution or disestablishment of the Borrower
                  or any other beneficiaries of the Loan, if any, or for the
                  suspension of their activities.

3.    That the Guarantor waives notice of acceptance of this Guarantee, notice
      of any liability to which it may apply notice concerning principal and
      interest, and notice of dishonor or non-payment of any such liabilities.

IN WITNESS WHEREOF, I, the undersigned, have hereunto set my hand and affixed my
official seal, this ____ day of _________.

                                        Very truly yours,

                                              ----------------------------------
                                                      (Name of Guarantor)

                                              ----------------------------------
                                                    (Authorized signature)


                                      -16-
<PAGE>

                                                                    (Form No. 5)

                                                        Date:
                                                        Ref. No.:

THE OVERSEAS ECONOMIC
COOPERATION FUND
Tokyo. Japan

Attention: Chairman

Gentlemen:

LEGAL OPINION ON LOAN AGREEMENT

With respect to the Loan extended by THE OVERSEAS ECONOMIC CO-OPERATION FUND
(hereinafter referred to as "the Fund") to (Name of Borrower) (hereinafter
referred to as "the Borrower") in an aggregate mount of the Loan not exceeding
_______________________ Japanese Yen ((Yen) ________) as principal in accordance
with the terms and conditions of Loan Agreement No.______, dated __, between the
Borrower and the Fund and other agreements supplemental thereto (hereinafter
referred to as "the Loan Agreement"), I, the undersigned, acting as legal
counsel for the Borrower, certify as follows:

I have considered and examined, among other things, the following documents:

      (a)   The Exchange of Notes between the Government of __________ and the
            Government of Japan, dated ______;
      (b)   The Loan Agreement;
      (c)   Evidence of Authority and Specimen Signatures, dated __________,
            issued by__________________;
      (d)   Other documents;
      (e)   All the laws and regulations in the country of the Borrower relevant
            to the power and authority of the Borrower to make, sign and deliver
            the Loan Agreement.

Based upon the foregoing, I hereby certify as follows:

1.    That the Loan Agreement has been made, signed and delivered by (Name and
      Title of Authorized Person), who has the power and authority to make, sign
      and deliver under (Laws or Regulations);


                                      -17-
<PAGE>

                                                        Date:

2.    That the Borrower is authorized to borrow foreign currency funds from
      abroad under (Laws or Regulations) and that the terms and conditions of
      the Loan Agreement are in compliance with the provisions of (Laws or
      Regulations);

3.    That, therefore, the Loan Agreement has been duly authorized by and made,
      signed and delivered on behalf of the Borrower and constitutes a valid and
      binding obligation upon the Borrower with regard to all its terms and
      conditions; and

4.    That the authorization and any other procedures necessary for
      implementation of the Loan Agreement have been duly effected and
      completed.

IN WITNESS WHEREOF, I, the undersigned, have hereunto set my hand and affixed my
official seal, this      day of

                                         Very truly yours,


                                         ---------------------------------------
                                         (Minister of Justice, Attorney-General
                                         or Other Competent Authority)


                                      -18-
<PAGE>

                                                                    (Form No. 6)

                                                        Date:
                                                        Ref. No.:

THE OVERSEAS ECONOMIC
COOPERATION FUND
Tokyo, Japan

Attention: Chairman

Gentlemen:

LEGAL OPINION ON GUARANTEE

Referring to the Guarantee given by (Name of Guarantor) in respect of the Loan
extended by THE OVERSEAS ECONOMIC COOPERATION FUND (hereinafter referred to as
"the Fund") to (Name of Borrower) (hereinafter referred to as "the Borrower") in
an aggregate amount of the Loan not exceeding _____________ Japanese Yen
((Yen)_______) as principal in accordance with the terms and conditions of Loan
Agreement No.____, dated __________ , between the Borrower and the Fund and
other agreements supplemental thereto (hereinafter referred to as "the Loan
Agreement"), I, the undersigned, acting as legal counsel for (Name of Guarantor)
(hereinafter referred to as "the Guarantor"), certify as follows:

I have considered and examined, among other things, the following documents:

      (a)   The Exchange of Notes between the Government of ________________ and
            the Government of Japan, dated _____________;
      (b)   The Loan Agreement;
      (c)   The Guarantee, dated _______ (hereinafter referred to as "the
            Guarantee"); and
      (d)   All the laws and regulations in the country of the Borrower relevant
            to the power and authority of the Guarantor to make, sign and
            deliver the Guarantee.

Based upon the foregoing. I hereby certify as follows:

1.    That the Guarantor has the full power and authority to guarantee the Loan
      made by the Fund to the Borrower in accordance with the terms and
      conditions of the Loan Agreement under (Laws or Regulations);


                                      -19-
<PAGE>

                                                        Date:

2.    That the Guarantee was made and signed on (Date), by (Name and Title), who
      is authorized to make and sign it for and on behalf of the Guarantor under
      (Laws or Regulations);

3.    That, therefore, the Guarantee has been duly authorized by and made,
      signed and delivered on behalf of the Guarantor and constitutes a valid
      and binding obligation upon the Guarantor with regard to all its terms and
      conditions; and

4.    That neither legislation nor any other procedure is required for the
      effectiveness of the Guarantee.

IN WITNESS WHEREOF, I, the undersigned, have hereunto set my hand and affixed my
official seal, this _______ day of_____.

                               Very truly yours,


                                          --------------------------------------
                                          (Minister of Justice, Attorney-General
                                          or Other Competent Authority)


                                      -20-
<PAGE>

                         Overseas Representative Offices

<TABLE>
<S>                                                             <C>
BANGKOK OFFICE                                                  ISLAMABAD OFFICE
   17th Floor, Thai Farmers Bank Building, 400,                    World Bank Building, 20-A, Bank Road
   Phaholyothin Avenue, Bangkok, 10400,                            G/5-1, Islamabad, PAKISTAN
   THAILAND                                                            Telephone: Islamabad 819781~6(W.B.)
       Telephone: Bangkok 270-1001-3,                                      (ext. 409)
           271-2035, 2828, 4682                                        Telex: Call Number 9254528
       Telex: Call Number 8682968                                          Answer Back Code OECFPK
           Answer Back Code OECFBKKTH                                  Facsimile: +92-51-822546
       Facsimile: +66-2-271-3535

SEOUL OFFICE                                                     COLOMBO OFFICE
   22nd Floor, Lotte Building, 1, Sogong-Dong,                     3rd Floor, National Development Bank Building,
   Chung-ku, Seoul, Republic of KOREA                              40, Navam Mawatha, Colombo 2, SRI LANKA
   C.P.O. Box 1291, Seoul, KOREA                                      Telephone: Colombo 422255, 422260, 422264
       Telephone: Seoul 755-9042, 752-5964                            Facsimile: +94-1-422272
       Facsimile: +82-2-753-6605

JAKARTA OFFICE                                                  PARIS OFFICE
   New Summitmas 8th Floor, J1.Jenderal                            8, Rue Sainte-Anne, 75001, Paris, FRANCE
   Sudirman, Kav. 61-62, Jakarta Selatan, Jarkarta,                    Telephone: Paris 4261-4147
   INDONESIA                                                           Telex: Call Number 42214622
       Telephone: Jakarta 5200226, 5200948, 5220693, 5251350               Answer Back Code OECF 214622F
       Facsimile: +62-21-5200975                                       Facsimile: +33-1-4703-3236

MANILA OFFICE                                                   LONDON OFFICE
   25th Floor, Pacific Star Building,                              9-15, Sackville Street, London, WIX 1DE, U.K.
   Makati Ave. cor. Gil J. Puyat Ave.                                  Telephone: London (071)734-3565
   1200 Makati, Metro Manila,                                          Facsimile: +44-71-734-3569
   PHILIPPINES
       Telephone:  Manila 810-4826
       Facsimile: +63-2-815-1799

NEW DELHI OFFICE                                                NAIROBI OFFICE
   D.L.F. Centre, 2nd Floor, Sansad Marg, New Delhi,               6th Floor, International House, Mama Ngina Street,
   110001                                                          P.O. Box 49526, Nairobi, KENYA
   INDIA                                                               Telephone: Nairobi 254-2-221420, 221637
       Telephone:  New Delhi 3714362, 3714363, 3717090                 Telex: Call Number 98722094
       Telex: Call Number 813166767                                        Answer Back Code OECFKE
           Answer Back Code OECFIN                                     Facsimile: +254-2-221569
       Facsimile: +91-11-371-5066

BEIJING OFFICE                                                  CAIRO OFFICE
   1215-17, China World Trade Center,                              Nile Hilton Hotel Commercial Center,
   No. 1 Jian Guo, Men Wai Avenue, Beijing,                        No. 30 Tahrir Square, Cairo, EGYPT
   The People's Republic of CHINA                                      Telephone: Cairo 5748708, 5748709
       Telephone:  Beijing 505-1196, 1197, 4538                            Nile Hilton Cairo
       Telex: Call Number 8522694                                          765666(ext. 3031)
           Answer Back Code OECFBCN                                    Telex: Call Number 9193148
       Facsimile: +86-1-505-1198                                           Answer Back Code OECFUN
                                                                       Facsimile: +20-2-5741594

KUALA LUMPUR OFFICE                                             WASHINGTON OFFICE
   22nd Floor, UBN Tower, Letter Box No. 59                        2100 Pennsylvania Avenue, N.W.
   Jalan P. Ramlee 50250, Kuala Lumpur,                            Washington, D.C., 20037 U.S.A.
   MALAYSIA                                                            Telephone: Washington (202) 463-7492
       Telephone: Kuala Lumpur 2323255, 2322201,                       Facsimile: +1-202-463-7496
           2322202
       Facsimile: +60-3-2322115

DHAKA OFFICE                                                    SOUTH AMERICA REGIONAL OFFICE
   Sonargaon Hotel Room No.351-354                                 Edifici Torre Rio Sul,
   107, Kazi Nazrul Islam Avenue, Dhaka                            Rua Lauro Muller, 116/3005
   BANGLADESH                                                      Botafogo, Rio de Janeiro-RJ-CEP 22290-160, BRAZIL
       Telephone: Dhaka 811463, 811005,                                Telephone:  Rio de Janeiro 295-5942, 8596
           812001 (Hotel)(Ex.4351-4)                                   Telex: Call Number 2130937
           814081, 816700(Direct)                                          Answer Back Code OECFBR
                                                                       Facsimile: +55-21-295-7840

                                                                HANOI OFFICE
                                                                   5th FLOOR, 41B LY THAI TO STREET, HANOI,
                                                                   VIET NAM
                                                                       Telephone: 844-248934-6
                                                                       Facsimile: 844-248937
</TABLE>