Conformed Copy - L2902 - Shidiya Phosphate Mine Project - Guarantee Agreement

Page 1 LOAN NUMBER 2902 JO (Shidiya Phosphate Mine Project) between HASHEMITE KINDGOM OF JORDAN and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated , 1988 GUARANTEE AGREEMENT AGREEMENT, dated February 10, 1988, between HASHEMITE KINGDOM OF JORDAN (the Guarantor) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank). WHEREAS (A) the Guarantor and the Jordan Phosphate Mines Co., Ltd. (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; and (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 thirty-one million dollars ($31,000,000), 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; and WHEREAS the Guarantor, in consideration of the Bank's enter- ing 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 Page 2 Section 1.01. The "General Conditions Applicable to Loan and Guarantee Agreements" of the Bank, dated January 1, 1985, with the last sentence of Section 3.02 deleted (the General Conditions) constitute an integral part of this Agreement. Section 1.02. Unless the context otherwise requires, the several terms defined in the General Conditions and in 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, without limitation or restriction upon any of its other obligations under the Guarantee Agreement, 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. (a) Without limitation or restriction upon the provisions of Section 2.01 of this Agreement, the Guarantor specifically undertakes, that if by December 31, 1988 the value of the Borrower's equity is not equal to or greater than eighty million Jordanian Dinars (JD 80,000,000), the Guarantor shall promptly subscribe to a new issue of capital stock of the Borrower in order to increase the Borrower's equity to such amount. (b) For purposes of this Section, the term "equity" means the sum of the total unimpaired paid-up capital, retained earnings and reserves of the Borrower not allocated to cover specific liabilities. Section 2.03. Without limitation or restriction upon the provisions of Section 2.01 of this Agreement, the Guarantor shall: (a) promptly take or cause to be taken all such action as shall be necessary to transfer to JPMC all such land and rights in respect of land and water as shall be required for carrying out of the Project; (b) cause the Ministry of Public Works to carry out Part B (1) of the Project by December 31, 1988 with due diligence and efficiency and in conformity with appropriate administrative, financial, and engineering practices; and (c) cause Jordan Electricity Authority to (i) carry out Part B (2) of the Project by December 31, 1988 with due diligence and efficiency and in conformity with appropriate administrative, financial and engineering practices, and (ii) provide one-half of the costs required therefor. Section 2.04. The Guarantor shall charge and collect from the Borrower the guarantee fee referred to in Section 2.08 of the Loan Agreement. ARTICLE III Representative of the Guarantor; Addresses Section 3.01. The Minister of Planning 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: Page 3 For the Guarantor: Minister of Planning P.O. Box 555 Amman Hashemite Kingdom of Jordan Cable address: Telex: Ministry of Planning 21319 JO Amman 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) 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. HASHEMITE KINDGOM OF JORDAN By /s/ Mohamad Kamal Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ A. Stoutjesdijk Acting Regional Vice President Europe, Middle East and North Africa