Conformed Copy - L3361 - Kolubara B Thermal Power and Lignite Mine Project - Guarantee Agreement

Page 1 CONFORMED COPY LOAN NUMBER 3361 YU (Kolubara B Thermal Power and Lignite Mine Project) between SOCIALIST FEDERAL REPUBLIC OF YUGOSLAVIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated September 12, 1991 LOAN NUMBER 3361 YU GUARANTEE AGREEMENT AGREEMENT, dated September 12, 1991, between SOCIALIST FEDERAL REPUBLIC OF YUGOSLAVIA (the Guarantor) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank). WHEREAS (A) the Guarantor and the Elektroprivreda of Serbia (the Borrower), having been satisfied as to the feasibility and priority of the Project described in Schedule 2 to the Loan Agreement, have requested the Bank to assist in the financing of the Project; (B) by the Loan Agreement of even date herewith between the Bank and the Borrower, the Bank has agreed to extend to the Borrower a loan in various currencies equivalent to three hundred million dollars ($300,000,000), on the terms and conditions set forth in the Loan Agreement, but only on condition that the Guarantor agree to guarantee the obligations of the Borrower in respect of such loan as provided in this Agreement; Page 2 (C) by an agreement (the Agreement with Serbia) of even date herewith between the Bank and the Republic of Serbia (Serbia), Serbia has agreed to undertake such obligations toward the Bank as are set forth in the Serbia Agreement; (D) by an agreement (the EP(S) Agreement) of even date herewith between the Bank and the Electricity Generation Company of Serbia (EP(S)), EP(S) has agreed to undertake such obligations toward the Bank as are set forth in the EP(S) Agreement; and WHEREAS the Guarantor, in consideration of the Bank's entering into the Loan Agreement with the Borrower, has agreed so to guarantee such obligations of the Borrower; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The "General Conditions Applicable to Loan and Guarantee Agreements" of the Bank, dated January 1, 1985, with the modifications set forth in the Loan Agreement (the General Condi- tions), constitute an integral part of this Agreement. Section 1.02. Unless the context otherwise requires, the several terms defined in the General Conditions, in the Preamble to this Agreement and in the Preamble to and Section 1.02 of the Loan Agreement have the respective meanings therein set forth. ARTICLE II Guarantee Section 2.01. The Guarantor declares its commitment to the objectives of the Project as set forth in Schedule 2 to the Loan Agreement, and, to this end, hereby unconditionally guarantees, as primary obligor and not as surety merely, the due and punctual payment of the principal of, and interest and other charges on, the Loan, and the premium, if any, on the prepayment of the Loan, all as set forth in the Loan Agreement. Section 2.02. The Guarantor covenants that: (a) it shall not take, or cause or permit to be taken any action which would prevent or interfere with the performance by the Borrower or by EP(S) or by Serbia of their respective obligations contained in the Loan Agreement or the EP(S) Agreement or the Agreement with Serbia, respectively; and (b) within the limits of its legal powers, it shall take or cause to be taken all reasonable action necessary or appropriate to enable the Borrower, EP(S) and Serbia to perform such obligations. ARTICLE III Representatives of the Guarantor; Addresses Section 3.01. The Federal Secretary of Finance of the Guarantor is designated as representative of the Guarantor for the purposes of Section 11.03 of the General Conditions. Section 3.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Guarantor: Savezni Sekretarijat za Finansije Omladinskih Brigada 1 11070 Belgrade Yugoslavia Page 3 Cable address: Telex: SAVEZNI SEKRETARIJAT 12804 SIV ZA FINANSIJE Belgrade 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 248423 (RCA), Washington, D.C. 82987 (FTCC), 64145 (WUI) or 197688 (TRT) IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, have caused this Agreement to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. SOCIALIST FEDERAL REPUBLIC OF YUGOSLAVIA By /s/ D. Mujezinovic Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ W. Wapenhans Regional Vice President Europe, Middle East and North Africa