Morocco - Maroc-Phosopore Phosphate Fertilizer Expansion Project : Loan 1625 - Shareholders" Guarantee Agreement - Conformed

CONFORMED COPY LOAN NUMBER 1625 MOR Shareholders' Guarantee Agreement for the Maroc-Phosphore Phosphate Fertilizer Expansion Project financed by the World Bank in the Kingdom of Morocco and for amending and complementing the Shareholders' Guarantee Agreement entered into among the parties hereto with respect to Loan No. 1017 MOR among INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and OFFICE CHERIFIEN DES PHOSPHATES and MAROC-PHOSPHORE Dated October 27, 1978 LOAN NUMBER 1625 MOR SHAREHOLDERS' GUARANTEE AGREEMENT AGREEMENT, dated October 27, 1978, among INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank), the OFFICE CHERIFIEN DES PHOSPHATES (hereinafter called OCP) and MAROC-PHOSPHORE (hereinafter called the Borrower). WHEREAS by the Loan Agreement of even date herewith between the Bank and the Borrower, the Bank has agreed to lend to the Borrower an amount in various currencies equivalent to fifty million dollars ($50,000,000) to assist in financing the con- struction of facilities for the production and exportation of phosphoric acid, as more fully described in Schedule 2 to such Loan Agreement; WHEREAS such Loan of the Bank is guaranteed by the Kingdom of Morocco (hereinafter called the Guarantor) pursuant to the Guarantee Agreement of even date herewith between the Kingdom of Morocco and the Bank; WHEREAS the Bank has so agreed to make the Loan only on condition that the OCP, as shareholder of the Borrower, undertake certain obligations toward the Bank and toward the Borrower; and WHEREAS the OCP, in consideration of the granting of the Loan, is willing to undertake such obligations as and under the terms and conditions hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated March 15, 1974, with the same force and effect as if they were fully set forth herein, subject, however, to the modifications thereof set forth in Schedule 5 to the Loan Agreement (said General Conditions, as so modified, being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the Loan - 2 - Agreement and in the General Conditions have the respective meanings therein set forth. ARTICLE II Section 2.01. (a) In order to ensure the availability to the Borrower of sufficient funds to carry out the Project, the OCP shall subscribe for, and pay in, not later than December 31, 1981 (or such other date as the Bank may agree) an increase of the share capital of the Borrower which shall amount to not less than DH200,000,000. (b) For the purpose of this Section the term "Project" shall include both the Project described in Schedule 2 to the Loan Agreement and the Project described in Schedule 2 to the 1974 Loan Agreement. Section 2.02. Whenever there is reasonable cause to believe that the funds available to the Borrower will be inadequate to meet the estimated expenditures required for the carrying out of the Project and fOL the carrying out of the operations of the Borrower in accordance with Section 4.01 of the Loan Agreement, the OCP shall make arrangements satisfactory to the Bank and the Borrower promptly to provide to the Borrower such additional funds as shall be necessary for the purpose. Section 2.03. In addition to the funds to be provided under Section 2.01 above and notwithstanding the generality of Section 2.02 above, the OCP shall promptly provide the Borrower, or cause the Borrower to be promptly provided, with any funds or other facilities necessary to ensure compliance by the Borrower with Sections 5.04 and 5.05 of the Loan Agreement. Any funds so provided by the OCP shall be provided either through loans on terms satisfactory to the Bank, or by cash contributions towards increases in the share capital of the Borrower or through interest-free advances. Section 2.04. The 1974 Shareholders' Guarantee Agreement is hereby amended, as from the Effective Date hereof, by (i) the deletion of all provisions included in, or all references to, Section 2.01 of such Agreement and (ii) the substitution therefor, and the consequential incorporation therein, of Section 2.01 hereof. - 3 - Section 2.05. If any provision included in the 1974 Share- holders' Giiarantee Agreement is inconsistent with any provision hereof, the pertinent provision included herein shall govern. ARTICLE III Section 3.01. (a) The Bank and the OCP shall cooperate fully to assure that the purposes of the Loan will be accom- plished. To Lhat end, the Bank and the OCP shall from time to time, at the request of either party, exchange views through their representatives with regard to the performance by the Borrower of its obligations under the Loan Agreement and by the OCP of its obligations under this Agreement and to other matters relating to the purposes of the Loan. (b) The OCP shall furnish or cause to be furnished to the Bank all such information as shall be reasonably requested concerning the matters specified in paragraph (a) of this Section. (c) The OCP shall promptly inform the Bank of any con- dition which interferes with, or threatens to interfere with, the accomplishment of the purposes of the Loan, the maintenance of the service thereof, the performance by the Borrower of its obligations under the Loan Agreement or the performance by the OCP of its obligations under this Shareholders' Guarantee Agree- ment. Section 3.02. The OCP shall furnish to the Bank prior infor- maation on any proposed future intermediate and finished phosphate fertilizer plants in the area of Safi and on any other proposed major industrial investment by the OCP in such area. Section 3.03. Until the Loan Agreement shall have terminated, the OCP shall not, without the prior approval of the Bank: (a) sell, pledge or otherwise dispose of any of its shares of the Borrower or permit a change in the percentage of its holding of such shares, if such action would reduce its share- holdings to less than 75% of the total shares of the Borrower; or (b) permit the modification of the Statuts of the Borrower. ARTICLE IV Section 4.01. This Agreement shall come into force and effect on the Effective Date of the Loan Agreement. Section 4.02. This Agreement and the respective obligations of the parties hereunder shall terminate when the Loan Agreement shall terminate in accordance with its terms. Section 4.03. Any notice or request required or permitted to be given or made under this Agreement and any agreement between any of the parties contemplated by this Agreement 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 or by mail, telegram, cable, telex or radiogram to the party to which it is required or permitted to be given or made at such party's address hereinafter specified, or at such other address as such party shall have designated by notice to the party giving such notice or making such request. Section 4.04. The obligations of the OCP under this Agreement shall not be discharged except by performance and then only to the extent of such performance. Such obligations shall not be subject to any prior notice to, demand upon or action against the Borrower or the Guarantor or to any prior notice to, or demand upon the OCP, and shall not be impaired by any of the following: any extension of time, forbearance or concession given to the Borrower or the Guarantor, any assertion of, or failure to assert, or delay in asserting any right, power or remedy against the Borrower or the Guarantor or in respect of any security for the Bank's Loan; any modification or amplification of the provisions of the Loan Agreement or of the Guarantee Agreement contemplated by the terms thereof; or any failure of the Borrower to comply with any requirement of any law, regulation or order of the Guarantor or of any political subdivision or agency of the Guarantor. Section 4.05. The OCP shall furnish to the Bank sufficient evidence of the authority of the person or persons who will, on behalf of the OCP, take any action or execute any documents - 5 - required or permitted to be taken or executed by the OCP under this Agreement and the authenticated specimen signature of each such person. Section 4.06. The following addresses are specified for the purposes of Section 4.03 of this Agreement: For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) For OCP: Office Cherifien des Phosphates 305, Avenue Mohammed V Rabat, Morocco Cable address: Telex: PHOSPHAT 31012 Rabat For the Borrower: Maroc-Phosphore 305, Avenue Mohammed V Rabat, Morocco Cable address: Telex: PHOSPHAT 31012 Rabat -6- IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Shareholders' Guarantee Agreement to be signed in their respective names and delivered in the District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Maurice P. Bart Regional Vice President Europe, Middle East and North Africa OFFICE CHERIFIEN DES PHOSPHATES By Is/ Sellam M'Hamedi Authorized Representative MAROC-PHOSPHORE By /s/ Sellam M'Hamedi Authorized Representative